Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2019 | Feb. 13, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SHINECO, INC. | |
Entity Central Index Key | 0001300734 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Document Type | 10-Q | |
Document Fiscal Period Focus | Q2 | |
Document Period End Date | Dec. 31, 2019 | |
Document Fiscal Year Focus | 2020 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 27,333,428 | |
Entity File Number | 001-37776 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
CURRENT ASSETS: | ||
Cash | $ 42,087,793 | $ 35,330,676 |
Accounts receivable, net | 9,689,266 | 9,683,074 |
Due from related parties | 122,734 | 188,453 |
Inventories | 2,618,043 | 2,215,559 |
Advances to suppliers, net | 4,316,821 | 11,833,994 |
Other current assets | 1,771,627 | 1,710,619 |
TOTAL CURRENT ASSETS | 60,606,284 | 60,962,375 |
Property and equipment, net | 9,949,225 | 10,667,730 |
Land use right, net of accumulated amortization | 1,229,692 | 1,264,309 |
Investments | 6,696,183 | 6,650,944 |
Distribution rights | 1,059,128 | 1,074,736 |
Long-term deposit and other noncurrent assets | 100,020 | 103,864 |
Right of use assets | 3,105,286 | |
Prepaid leases | 2,857,344 | |
Deferred tax assets | 326,890 | 158,171 |
TOTAL ASSETS | 83,072,708 | 83,739,473 |
CURRENT LIABILITIES: | ||
Short-term loans | 1,722,159 | 2,410,147 |
Accounts payable | 155,456 | 220,119 |
Advances from customers | 6,776 | 382,091 |
Due to related parties | 495,555 | 234,500 |
Other payables and accrued expenses | 3,884,148 | 3,893,027 |
Operating lease liabilities - current | 411,280 | |
Taxes payable | 3,347,354 | 3,341,872 |
TOTAL CURRENT LIABILITIES | 10,022,728 | 10,481,756 |
Income tax payable - noncurrent portion | 625,603 | 625,603 |
Operating lease liabilities - non-current | 3,132 | |
TOTAL LIABILITIES | 10,651,463 | 11,107,359 |
Commitments and contingencies | ||
EQUITY: | ||
Common stock; par value $0.001, 100,000,000 shares authorized; 27,333,428 and 22,871,772 shares issued and outstanding at December 31, 2019 and June 30, 2019 | 27,333 | 22,872 |
Additional paid-in capital | 27,277,758 | 24,759,356 |
Statutory reserve | 4,198,107 | 4,198,107 |
Retained earnings | 45,055,036 | 46,735,190 |
Accumulated other comprehensive loss | (5,279,389) | (4,184,024) |
Total Stockholders' equity of Shineco, Inc. | 71,278,845 | 71,531,501 |
Non-controlling interest | 1,142,400 | 1,100,613 |
TOTAL EQUITY | 72,421,245 | 72,632,114 |
TOTAL LIABILITIES AND EQUITY | $ 83,072,708 | $ 83,739,473 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Jun. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per shares) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 27,333,428 | 22,871,772 |
Common stock, shares outstanding | 27,333,428 | 22,871,772 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (loss) and Comprehensive Income (loss) (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||||
REVENUE | $ 7,868,612 | $ 8,381,932 | $ 14,915,393 | $ 15,971,013 |
COST OF REVENUE | ||||
Cost of product and services | 5,488,425 | 5,957,257 | 10,882,848 | 11,421,721 |
Business and sales related tax | 15,200 | 24,596 | 27,663 | 38,286 |
Total cost of revenue | 5,503,625 | 5,981,853 | 10,910,511 | 11,460,007 |
GROSS PROFIT | 2,364,987 | 2,400,079 | 4,004,882 | 4,511,006 |
OPERATING EXPENSES | ||||
General and administrative expenses | 2,092,314 | 1,562,745 | 5,446,957 | 3,089,931 |
Selling expenses | 73,269 | 289,846 | 195,155 | 487,181 |
Total operating expenses | 2,165,583 | 1,852,591 | 5,642,112 | 3,577,112 |
INCOME (LOSS) FROM OPERATIONS | 199,404 | 547,488 | (1,637,230) | 933,894 |
OTHER INCOME (EXPENSE) | ||||
Income from equity method investments | 70,683 | 145,742 | 140,582 | 288,877 |
Purchase rebate income | 225,187 | 517,626 | ||
Other income | 48,211 | 51,730 | 38,457 | 104,299 |
Interest income (expense), net | 2,818 | (2,836) | (308) | (10,610) |
Total other income | 121,712 | 419,823 | 178,731 | 900,192 |
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | 321,116 | 967,311 | (1,458,499) | 1,834,086 |
PROVISION FOR INCOME TAXES | 169,175 | 225,363 | 164,392 | 444,146 |
NET INCOME (LOSS) | 151,941 | 741,948 | (1,622,891) | 1,389,940 |
Net income attributable to non-controlling interest | 39,458 | 18,068 | 57,263 | 33,236 |
NET INCOME (LOSS) ATTRIBUTABLE TO SHINECO, INC. | 112,483 | 723,880 | (1,680,154) | 1,356,704 |
COMPREHENSIVE INCOME (LOSS) | ||||
Net income (loss) | 151,941 | 741,948 | (1,622,891) | 1,389,940 |
Other comprehensive gain (loss): foreign currency translation gain (loss) | 1,747,696 | 30,097 | (1,110,841) | (2,627,235) |
Total comprehensive income (loss) | 1,899,637 | 772,045 | (2,733,732) | (1,237,295) |
Less: comprehensive income (loss) attributable to non-controlling interest | 66,147 | 17,985 | 41,787 | (3,643) |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHINECO, INC. | $ 1,833,490 | $ 754,060 | $ (2,775,519) | $ (1,233,652) |
Weighted average number of shares basic and diluted | 27,333,428 | 22,871,772 | 25,760,163 | 22,079,624 |
Basic and diluted earnings (loss) per common share | $ 0 | $ 0.03 | $ (0.07) | $ 0.06 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Equity - USD ($) | Common Stock | Additional Paid-In Capital | Statutory Reserve | Retained Earnings | Accumulated Other Comprehensive Loss | Non- Controlling Interest | Total |
Balance at Jun. 30, 2018 | $ 21,234 | $ 23,171,102 | $ 4,085,819 | $ 46,051,289 | $ (1,509,212) | $ 1,053,449 | $ 72,873,681 |
Balance, shares at Jun. 30, 2018 | 21,234,072 | ||||||
Stock issuance | $ 1,638 | 1,588,254 | 1,589,892 | ||||
Stock issuance, shares | 1,637,700 | ||||||
Net income (loss) for the year | 1,356,704 | 33,236 | 1,389,940 | ||||
Appropriation of statutory reserve | 83,523 | (83,523) | |||||
Foreign currency translation loss | (2,590,356) | (36,879) | (2,627,235) | ||||
Balance at Dec. 31, 2018 | $ 22,872 | 24,759,356 | 4,169,342 | 47,324,470 | (4,099,568) | 1,049,806 | 73,226,278 |
Balance, shares at Dec. 31, 2018 | 22,871,772 | ||||||
Balance at Sep. 30, 2018 | $ 22,872 | 24,759,356 | 4,141,955 | 46,627,977 | (4,129,748) | 1,030,360 | 72,452,772 |
Balance, shares at Sep. 30, 2018 | 22,871,772 | ||||||
Net income (loss) for the year | 723,880 | 18,068 | 741,948 | ||||
Appropriation of statutory reserve | 27,387 | (27,387) | |||||
Foreign currency translation loss | 30,180 | 1,378 | 31,558 | ||||
Balance at Dec. 31, 2018 | $ 22,872 | 24,759,356 | 4,169,342 | 47,324,470 | (4,099,568) | 1,049,806 | 73,226,278 |
Balance, shares at Dec. 31, 2018 | 22,871,772 | ||||||
Balance at Jun. 30, 2019 | $ 22,872 | 24,759,356 | 4,198,107 | 46,735,190 | (4,184,024) | 1,100,613 | 72,632,114 |
Balance, shares at Jun. 30, 2019 | 22,871,772 | ||||||
Stock issuance | $ 4,461 | 2,518,402 | 2,522,863 | ||||
Stock issuance, shares | 4,461,656 | ||||||
Net income (loss) for the year | (1,680,154) | 57,263 | (1,622,891) | ||||
Foreign currency translation loss | (1,095,365) | (15,476) | (1,110,841) | ||||
Balance at Dec. 31, 2019 | $ 27,333 | 27,277,758 | 4,198,107 | 45,055,036 | (5,279,389) | 1,142,400 | 72,421,245 |
Balance, shares at Dec. 31, 2019 | 27,333,428 | ||||||
Balance at Sep. 30, 2019 | $ 27,333 | 27,277,758 | 4,198,107 | 44,942,553 | (7,000,396) | 1,076,253 | 70,521,608 |
Balance, shares at Sep. 30, 2019 | 27,333,428 | ||||||
Net income (loss) for the year | 39,458 | 151,941 | |||||
Foreign currency translation loss | 1,721,007 | 26,689 | 1,747,696 | ||||
Balance at Dec. 31, 2019 | $ 27,333 | $ 27,277,758 | $ 4,198,107 | $ 45,055,036 | $ (5,279,389) | $ 1,142,400 | $ 72,421,245 |
Balance, shares at Dec. 31, 2019 | 27,333,428 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ (1,622,891) | $ 1,389,940 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 664,380 | 326,844 |
Loss from disposal of property and equipment | 59,974 | |
Provision for doubtful accounts | 2,556,565 | 964,614 |
Provision for (Reversal of) inventory reserve | 173,948 | (38,002) |
Deferred tax benefit | (169,510) | (23,903) |
Income from equity method investments | (140,582) | (288,877) |
Value of shares issued to IFG Fund for equity, we subsequently cancelled | 434,000 | |
Restricted shares issued for management | 1,022,661 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (650,613) | 3,486,213 |
Advances to suppliers | 5,305,586 | (2,469,378) |
Inventories | (604,780) | (55,295) |
Other receivables | (740,709) | 369,576 |
Prepaid expense and other assets | 429,782 | 283,428 |
Due from related parties | 62,427 | |
Right of use assets | (102,123) | |
Prepaid leases | 229,594 | |
Accounts payable | (60,925) | (1,305,922) |
Advances from customers | (366,510) | (10,058) |
Other payables | 256,188 | 584,425 |
Taxes payable | 40,610 | 239,007 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 6,113,478 | 4,116,206 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisitions of property and equipment | (1,494) | (87,750) |
Proceeds from disposal of property and equipment | 79,233 | |
Payment for construction in progress | (41,439) | |
Advances of loans to third parties | (56,857) | (396,388) |
Loan advances to related party | 249,362 | |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 20,882 | (276,215) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from short-term loans | 284,499 | 988,724 |
Repayment of short-term loans | (924,621) | (1,080,811) |
Repayment of other short-term loans | (7,112) | |
Proceeds from issuance of common stock | 1,500,203 | 1,589,892 |
Proceeds from (repayments of) advances from related parties | 262,132 | (7,824) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,115,101 | 1,489,981 |
EFFECT OF EXCHANGE RATE CHANGE ON CASH | (492,344) | (1,156,716) |
NET INCREASE IN CASH | 6,757,117 | 4,173,256 |
CASH - Beginning of the Period | 35,330,676 | 31,487,053 |
CASH - End of the Period | 42,087,793 | 35,660,309 |
SUPPLEMENTAL CASH FLOW DISCLOSURES: | ||
Cash paid for income taxes | 139,906 | 339,607 |
Cash paid for interest | 58,266 | 58,544 |
SUPPLEMENTAL NON-CASH OPERATING ACTIVITY: | ||
Right-of-use assets obtained in exchange for operating lease obligations | $ 413,009 |
Organization and Nature of Oper
Organization and Nature of Operations | 6 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND NATURE OF OPERATIONS | Shineco, Inc. (“Shineco” or the “Company”) was incorporated in the State of Delaware on August 20, 1997. The Company is a holding company whose primary purpose is to develop business opportunities in the People’s Republic of China (“PRC” or “China”). On December 30, 2004, the Company acquired all of the issued and outstanding shares of Beijing Tenet-Jove Technological Development Co., Ltd. (“Tenet-Jove”), a PRC company, in exchange for restricted shares of the Company’s common stock, and the sole operating business of the Company became that of its subsidiary, Tenet-Jove. Tenet-Jove was incorporated on December 15, 2003 under the laws of China. Consequently, Tenet-Jove became a 100% owned subsidiary of Shineco and was officially granted the status of a Wholly Foreign-Owned Entity (“WFOE”) by Chinese authorities on July 14, 2006. This transaction was accounted for as a recapitalization. Tenet-Jove owns 90% interest of Tianjin Tenet Huatai Technological Development Co., Ltd. (“Tenet Huatai”). On December 31, 2008, June 11, 2011 and May 24, 2012, Tenet-Jove entered into a series of contractual agreements including an Executive Business Cooperation Agreement, a Timely Reporting Agreement, an Equity Interest Pledge Agreement and Executive Option Agreement (collectively, the “VIE Agreements”), with each one of the following entities, Ankang Longevity Pharmaceutical (Group) Co., Ltd. (“Ankang Longevity Group”), Yantai Zhisheng International Freight Forwarding Co., Ltd. (“Zhisheng Freight”), Yantai Zhisheng International Trade Co., Ltd. (“Zhisheng Trade”), Yantai Mouping District Zhisheng Agricultural Produce Cooperative (“Zhisheng Agricultural”) and Qingdao Zhihesheng Agricultural Produce Services., Ltd. (“Qingdao Zhihesheng”). On February 24, 2014, Tenet-Jove entered into the same series of contractual agreements with Shineco Zhisheng (Beijing) Bio-Technology Co., Ltd. (“Zhisheng Bio-Tech”), which was incorporated in 2014. Zhisheng Bio-Tech, Zhisheng Freight, Zhisheng Trade, Zhisheng Agricultural, and Qingdao Zhihesheng are collectively referred to herein as the “Zhisheng Group”. Pursuant to the VIE Agreements, Tenet-Jove has the exclusive right to provide to the Zhisheng Group and Ankang Longevity Group consulting services related to their business operations and management. All the above contractual agreements obligate Tenet-Jove to absorb a majority of the risk of loss from the Zhisheng Group and Ankang Longevity Group’s activities and entitle Tenet-Jove to receive a majority of their residual returns. In essence, Tenet-Jove has gained effective control over the Zhisheng Group and Ankang Longevity Group. Therefore, the Zhisheng Group and Ankang Longevity Group are treated as Variable Interest Entities (“VIEs”) under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 “Consolidation”. Accordingly, the accounts of these entities are consolidated with those of Tenet-Jove. Since Shineco is effectively controlled by the majority shareholders of the Zhisheng Group and Ankang Longevity Group, Shineco owns 100% of Tenet-Jove. Accordingly, Shineco, Tenet-Jove, and its VIEs, the Zhisheng Group and Ankang Longevity Group are effectively controlled by the same majority shareholders. Therefore, Shineco, Tenet-Jove and its VIEs are considered under common control. The consolidation of Tenet-Jove and its VIEs into Shineco was accounted for at historical cost and prepared on the basis as if the aforementioned exclusive contractual agreements between Tenet-Jove and its VIEs had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements. On April 19, 2017, Tenet-Jove established Xinjiang Tiankunrunze Biological Engineering Co., Ltd. (“Tiankunrunze”) with registered capital of RMB 50.0 million (US$ 7,262,000) and owns 65% interest of Tiankunrunze. On April 28, 2017, Tiankunrunze established Xinjiang Tianzhuo Technology Development Co., Ltd. (“Tianzhuo”) with registered capital of RMB 10.0 million (US$ 1,450,233). On May 22, 2017, Tiankunrunze established Xinjiang Tianhuihechuang Agriculture Development Co., Ltd. (“Tianhuihechuang”) with registered capital of RMB 10.0 million (US$ 1,452,294). On May 23, 2017, Tiankunrunze established Xinjiang Tianxintongye Biotechnology Development Co., Ltd. (“Tianxintongye”) with registered capital of RMB 10.0 million (US$ 1,451,615). Therefore, Tenet-Jove controls Tiankunrunze and its wholly owned subsidiaries. On May 2, 2017, the Company entered into a Strategic Cooperation Agreement with Beijing Zhongke Biorefinery Engineering Technology Co., Ltd. (“Biorefinery”), a leading high-tech biomass refining company financially backed by the Chinese Academy of Sciences Institute of Process Engineering, to establish the Institute of Chinese Apocynum Industrial Technology Research (“ICAITR”). Pursuant to the Strategic Cooperation Agreement the two parties agreed to establish the ICAITR, the Company and Biorefinery own 80% and 20% of the equity interests of ICAITR, respectively. Shineco invested RMB 5.0 million (US$ 737,745) as the registered capital, and Biorefinery will invest a technology patent named “Steam Explosion Degumming”. On September 30, 2017, Tenet-Jove established Xinjiang Shineco Taihe Agriculture Technology Ltd. (“Xinjiang Taihe”) with registered capital of RMB 10.0 million (US$ 1,502,650). On September 30, 2017, Tenet-Jove established Xinjiang Tianyi Runze Bioengineering Co., Ltd. (“Runze”) with registered capital of RMB 10.0 million (US$ 1,502,650). Xinjiang Taihe and Runze became wholly-owned subsidiaries of Tenet-Jove. On December 10, 2016, Tenet-Jove entered into a purchase agreement with Tianjin Tajite E-Commerce Co., Ltd. (“Tianjin Tajite”), an online e-commerce company based in Tianjin, China, specializing in distributing Luobuma related products and branded products of Daiso 100-yen shops, pursuant to which Tenet-Jove would acquire a 51% equity interest in Tianjin Tajite for cash consideration of RMB 14,000,000 (approximately US$ 2.1 million). On December 25, 2016, the Company paid the full amount as the deposit to secure the deal. In May, 2017, the Company amended the agreement that required Tianjin Tajite to satisfy certain preconditions related to product introductions into China. On October 26, 2017, the Company completed the acquisition for 51% of the shares in Tianjin Tajite. On October 27, 2017, the Company, through its subsidiary Tianjin Tajite E-Commerce Co., Ltd. (“Tianjin Tajite”), obtained contractual rights to distribute branded products of Daiso Industries Co., Ltd. (“Daiso”), a large franchise of 100-yen shops founded in Japan, via JD.com (“JD”), one of the largest e-commerce companies and one of the largest retailers in China. On November 3, 2017, the Company further developed the cooperation with Daiso by entering into a supply and purchase agreement (the “Daiso Agreement”) for the purpose of establishing a continuous supply and sale of Daiso’s products in China. Pursuant to the Daiso Agreement, the Company planned to purchase Daiso Products in the amount of approximately RMB 20 million by August, 2018 and add orders as circumstance requires. The term of the Daiso Agreement is for one year, and it renews for an additional one-year at the end of each term unless terminated by written notice by either Tianjin Tajite or Daiso. Due to the policy of China Customs, many of the bestselling products of Daiso are not allowed to be imported through the general form of trade model, but only through cross-border e-commence business model. As a result, the Company and Daiso agreed to suspend the cooperation temporarily and wait for the opening of the China-Japan-South Korea Free Trade Zone. On November 1, 2017, the Company established an Apocynum Industrial Park in Xinjiang, China. The industrial park is focusing on planting and purchasing Bluish Dogbane, processing and distributing Bluish Dogbane preliminary products. On March 13, 2019, Tenet-Jove established Beijing Tenjove Newhemp Biotechnology Co., Ltd. (“TNB”) with registered capital of RMB 10.0 million (US$ 1,502,650). TNB became a wholly-owned subsidiary of Tenet-Jove. The business operation of Tiankunrunze and its wholly owned subsidiaries was ceased in July 2019. On August 22, 2019, Tenet-Jove established Shineco Zhong Hemp Group Co., Ltd. (“Zhong Hemp”) with registered capital of RMB 200.0 million (US$ 28,237,022) and owns 60% interest of Zhong Hemp. The Company, its subsidiaries, its VIEs and its VIEs’ subsidiaries (collectively the “Group”) operate three main business segments: 1) Tenet-Jove is engaged in manufacturing and selling of Bluish Dogbane and related products, also known in Chinese as “Luobuma”, including therapeutic clothing and textile products made from Luobuma; 2) Zhisheng Group is engaged in the business of planting, processing and distributing of green agricultural produce as well as providing domestic and international logistic services for agricultural products (“Agricultural Products”); and, 3) Ankang Longevity Group manufactures traditional Chinese medicinal herbal products as well as other retail pharmaceutical products. These different business activities and products can potentially be integrated and benefit from one another. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information pursuant to the rules of the SEC and have been consistently applied. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended June 30, 2019, which was filed on September 27, 2019. The unaudited condensed consolidated financial statements of the Company reflect the principal activities of the Company, its subsidiaries, its VIEs and its VIEs’ subsidiaries. The non-controlling interest represents the minority shareholders’ interest in the Company’s majority owned subsidiaries and VIEs. All intercompany accounts and transactions have been eliminated in consolidation. Consolidation of Variable Interest Entities VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. All VIEs and their subsidiaries with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. The carrying amount of the VIEs and their subsidiaries’ consolidated assets and liabilities are as follows: December 31, June 30, Current assets $ 57,539,496 $ 57,328,097 Plant and equipment, net 8,562,202 8,965,671 Other non-current assets 11,382,612 11,028,775 Total assets 77,484,310 77,322,543 Total liabilities (5,301,117 ) (6,090,955 ) Net assets $ 72,183,193 $ 71,231,588 Non-controlling Interests US GAAP requires that non-controlling interests in subsidiaries and affiliates be reported in the equity section of a company’s balance sheet. In addition, the amounts attributable to the non-controlling interests in the net income (loss) of these entities are reported separately in the unaudited condensed consolidated statements of income and comprehensive income. Risks and Uncertainties The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environment in the PRC, as well as by the general state of the PRC economy. The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among other factors, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC, and by changes in governmental policies or interpretations with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations, changes could affect the Company’s interest in these entities and its operations in the PRC. Members of the current management team own controlling interests in the Company and are also the owners of the VIEs in the PRC. The Company only controls the VIEs through contractual arrangements which obligate it to absorb the risk of loss and to receive the residual expected returns. As such, the controlling shareholders of the Company and the VIEs could cancel these agreements or permit them to expire at the end of the agreement terms, as a result of which the Company would not retain control of the VIEs. In addition, should these agreements be challenged or litigated, they would also be subject to the laws and courts of the PRC legal system which could make enforcing the Company’s rights difficult. Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements as well as the reported amounts of revenue and expenses during the reporting periods. Significant estimates required to be made by management include, but are not limited to, useful lives of property, plant, and equipment, and intangible assets, the recoverability of long-lived assets and the valuation of accounts receivable, deferred taxes and inventory reserves. Actual results could differ from those estimates. Revenue Recognition The Company previously recognized revenue from sales of Luobuma products, Chinese medicinal herbal products and agricultural products, as well as providing logistic services and other processing services to external customers. The Company recognized revenue when all of the following have occurred: (i) there was persuasive evidence of an arrangement with a customer; (ii) delivery had occurred or services had been rendered; (iii) the sales price was fixed or determinable; and (iv) the Company’s collection of such fees was reasonably assured. These criteria, as related to the Company’s revenue, were considered to have been met as follows: Sales of products: Revenue from the rendering of services With the adoption of ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when all of the following five steps are met: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied. The Company adopted the new revenue standard beginning July 1, 2018, and adopted a modified retrospective approach upon adoption. The Company believes that its previous revenue recognition policies are generally consistent with the new revenue recognition standards set forth in ASC 606. Potential adjustments to input measures are not expected to be pervasive to the majority of the Company’s contracts. There is no significant impact upon adoption of the new guidance. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, cash on deposit and other highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when purchased. The Company maintains cash with various financial institutions mainly in the PRC. As of December 31, 2019 and June 30, 2019, the Company had no cash equivalents. Under PRC law, it is generally required that a commercial bank in the PRC that holds third party cash deposits protect the depositors’ rights over and interests in their deposited money. PRC banks are subject to a series of risk control regulatory standards, and PRC bank regulatory authorities are empowered to take over the operation and management of any PRC bank that faces a material credit crisis. The Company monitors the banks utilized and has not experienced any problems. Accounts Receivable Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as necessary. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, the customers’ historical payment history, their current credit-worthiness and current economic trends. The fair value of long-term receivables is determined using a present value technique by discounting the future expected contractual cash flows using current rates at which similar instruments would be issued at the measurement date. As of December 31, 2019 and June 30, 2019, the allowance for doubtful accounts was US$ 4,769,928 and US$ 4,323,141, respectively. Accounts are written off against the allowance after efforts at collection prove unsuccessful. Inventories Inventories, which are stated at the lower of cost or net realizable value, consist of raw materials, work-in-progress, and finished goods related to the Company’s products. Cost is determined using the first in first out (“FIFO”) method. Agricultural products that the Company farms are recorded at cost, which includes direct costs such as seed selection, fertilizer, labor cost and contract fees that are spent in growing agricultural products on the leased farmland, and indirect costs which include amortization of prepayments of farmland leases and farmland development costs. All the costs are accumulated until the time of harvest and then allocated to the harvested crops costs when they are sold. The Company periodically evaluates its inventory and records an inventory reserve for certain inventories that may not be saleable or whose cost exceeds net realizable value. Advances to Suppliers Advances to suppliers consist of payments to suppliers for materials that have not been received. Advances to suppliers are reviewed periodically to determine whether their carrying value has become impaired. As of December 31, 2019 and June 30, 2019, the Company had an allowance for uncollectible advances to suppliers of US$ 2,417,959 and US$ 431,646, respectively. Business Acquisitions Business acquisitions are accounted for under the acquisition method. The acquisition method requires the reporting entity to identify the acquirer, determine the acquisition date, recognize and measure the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity, and recognize and measure goodwill or a bargain gain from the purchase. The acquiree’s results are included in the Company’s consolidated financial statements from the date of acquisition. Assets acquired and liabilities assumed are recorded at their fair values on the date acquired and the excess of the purchase price over the amounts assigned is recorded as goodwill, or if the fair value of the net assets acquired exceeds the purchase price consideration, a bargain purchase gain is recorded. Adjustments to fair value assessments are generally recorded to goodwill over the measurement period (not longer than twelve months). The acquisition method also requires that acquisition-related transaction and post-acquisition restructuring costs be charged to expense as committed, and requires the Company to recognize and measure certain assets and liabilities including those arising from contingencies and contingent consideration in a business combination. Goodwill Goodwill represents the excess of the purchase price over the fair value of assets acquired. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. For each of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation techniques, including a discounted cash flow methodology. To corroborate the discounted cash flow analysis performed at each reporting unit, a market approach is utilized using observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). Leases The Company adopted ASU 2016-02, “Leases” on July 1, 2019 and used the alternative transition approach which permits the effects of adoption to be applied at the effective date. The new standard provides a number of optional practical expedients in transition. The Company elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The Company also elected the short-term lease exemption and combining the lease and non-lease components practical expedients. The most significant impact upon adoption relates to the recognition of new Right-of-use (“ROU”) assets and lease liabilities on the Company’s balance sheet for office space operating leases. Upon adoption, the Company recognized additional operating liabilities of approximately US$ 0.4 million, with corresponding ROU assets of US$ 3.2 million based on the present value of the remaining rental payments under current leasing standards for existing operating leases. There was no cumulative effect of adopting the standard. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Expenditures for additions, major renewals and betterments are capitalized, and expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is provided on a straight-line basis, less estimated residual value, if any, over an asset’s estimated useful life. Farmland leasehold improvements are amortized over the shorter of lease term or estimated useful lives of the underlying assets. The estimated useful lives of the Company’s property and equipment are as follows: Estimated Buildings 20-50 years Machinery equipment 5-10 years Motor vehicles 5-10 years Office equipment 5-10 years Farmland leasehold improvements 12-18 years Land Use Rights According to Chinese laws and regulations regarding land use rights, land in urban districts is owned by the State, while land in the rural areas and suburban areas, except otherwise provided for by the State, is collectively owned by individuals designated as resident farmers by the State. In accordance with the legal principle that land ownership is separate from the right to the use of the land, the government grants individuals and companies the rights to use parcels of land for a specified period of time. Land use rights, which are usually prepaid, are stated at cost less accumulated amortization. Amortization is provided over the life of the land use rights, using the straight-line method. The useful life is 50 years, based on the term of the land use rights. Long-lived Assets Finite-lived assets and intangibles are reviewed for impairment testing when circumstances require. For purposes of evaluating the recoverability of long-lived assets, when undiscounted future cash flows will not be sufficient to recover an asset’s carrying amount, the asset is written down to its fair value. The long-lived assets of the Company that are subject to evaluation consist primarily of property, plant and equipment, land use rights, investments and long-term prepaid leases. For the six and three months ended December 31, 2019 and 2018, the Company did not recognize any impairment of its long-lived assets. Fair Value of Financial Instruments The Company follows the provisions of ASC 820, “Fair Value Measurements and Disclosures.” ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs , other than quoted prices in level, that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the asset or liability. The carrying value of financial instruments included in current assets and liabilities approximate their fair values because of the short-term nature of these instruments. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the unaudited condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This ASC also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Company does not have any uncertain tax positions at December 31, 2019 and June 30, 2019. The Company has not provided deferred taxes for undistributed earnings of non-U.S. subsidiaries at December 31, 2019, as it is the Company’s policy to indefinitely reinvest these earnings in non-U.S. operations. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested earnings is not practicable. The statute of limitations for the Company’s U.S. federal income tax returns and certain state income tax returns remains open for tax year 2015 and thereafter. As of December 31, 2019, the tax years ended December 31, 2014 through December 31, 2019 for the Company’s People’s Republic of China (“PRC”) subsidiaries remain open for statutory examination by PRC tax authorities. On December 22, 2017, the “Tax Cuts and Jobs Act” (“The Act”) was enacted. Under the provisions of The Act, the U.S. corporate tax rate decreased from 35% to 21%. As the Company has a June 30 fiscal year end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of approximately 28% for our fiscal year ended June 30, 2018, and 21% for subsequent fiscal years. Additionally, The Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The change in rate has caused us to re-measure the Company’s income tax liability and record an estimated income tax expense of US$ 744,766 for the year ended June 30, 2018. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. In accordance with SAB 118, additional work is necessary to do a more detailed analysis of the Act as well as potential correlative adjustments. Any subsequent adjustment to these amounts will be recorded to current tax expense in fiscal 2019 when the analysis is complete. The Company elects to pay the transition tax over an eight-year period using specified percentages (eight percent per year for the first five years, 15 percent in year six, 20 percent in year seven, and 25 percent in year eight). Value Added Tax Sales revenue represents the invoiced value of goods, net of a Value-Added Tax (“VAT”). Before May 1, 2018, all of the Company’s products that were sold in the PRC were subject to a Chinese value-added tax at a rate of 17% of the gross sales price. After May 1, 2018, the Company subject a tax rate of 16%, and after April 1, 2019, the tax rate was further reduced to 13% based on the new Chinese tax law. This VAT may be offset by VAT paid by the Company is on raw materials and other materials included in the cost of producing finished products or acquiring finished products. The Company records a VAT payable or VAT receivable in the accompanying unaudited condensed consolidated financial statements. Foreign Currency Translation The Company uses the United States dollar (“U.S. dollars”, “USD” or “US$”) for financial reporting purposes. The Company’s subsidiaries and VIEs maintain their books and records in their functional currency of Renminbi (“RMB”), the currency of the PRC. In general, for consolidation purposes, the Company translates the assets and liabilities of its subsidiaries and VIEs into U.S. dollars using the applicable exchange rates prevailing at the balance sheet date, and the statements of income and cash flows are translated at average exchange rates during the reporting periods. As a result, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the financial statements of the subsidiaries and VIEs are recorded as accumulated other comprehensive income (loss). The balance sheet amounts, with the exception of equity, at December 31, 2019 and June 30, 2019 were translated at 1 RMB to 0.1435 USD and at 1 RMB to 0.1456 USD, respectively. The average translation rates applied to the income and cash flow statement amounts for the six months ended December 31, 2019 and 2018 were at 1 RMB to 0.1422 USD and at 1 RMB to 0.1454 USD, respectively. The average translation rates applied to income and cash flow statement amounts for the three months ended December 31, 2019 and 2018 were at 1 RMB to 0.1420 USD and at 1 RMB to 0.1446 USD, respectively. Comprehensive Income (loss) Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to USD is reported in other comprehensive income (loss) in the unaudited condensed consolidated statements of income (loss) and comprehensive income (loss). Equity Investment An investment in which the Company has the ability to exercise significant influence, but does not have a controlling interest, is accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock between 20% and 50%, and other factors, such as representation on the Board of Directors, voting rights and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. Earnings per Share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., outstanding convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. There is no anti-dilutive effect for the six and three months ended December 31, 2019 and 2018. New Accounting Pronouncements In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220). The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this update also require certain disclosures about stranded tax effects. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including interim periods within those years. The Company expects that the adoption of this ASU will not have a material impact on its financial statements. In June 2018, the FASB issued ASU No. 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” or ASU 2018-07. ASU 2018-07 simplifies the accounting for share-based payments made to nonemployees so the accounting for such payments is substantially the same as those made to employees. Under this ASU, share based awards to nonemployees will be measured at fair value on the grant date of the awards, entities will need to assess the probability of satisfying performance conditions if any are present, and awards will continue to be classified according to Accounting Standards Codification (“ASC”) 718 upon vesting which eliminates the need to reassess classification upon vesting, consistent with awards granted to employees. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company expects that the adoption of this ASU will not have a material impact on its financial statements. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” to improve the effectiveness of disclosures in the notes to financial statements related to recurring or nonrecurring fair value measurements by removing amounts and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, policies for timing of transfers between different levels for fair value measurements, and the valuation processes for Level 3 fair value measurements. The new standard requires disclosure of the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company expects that the adoption of this ASU will not have a material impact on its financial statements In August 2018, the FASB issued ASU No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” (ASU 2018-15), to align the requirements for capitalizing implementation costs in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs relating to internal-use software. The update requires entities in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset and which costs to expense. ASU 2018-15 is effective for the Corporation on January 1, 2020 and may be applied using either the retrospective or prospective approach. Early adoption is permitted. The Company expects that the adoption of this ASU will have a material impact on its financial statements. In October 2018, the FASB issued ASU No. 2018-17, “Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities”. The new standard changes how entities evaluate decision-making fees under the variable interest entity guidance. The new standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted in any interim period after issuance. The standard should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings at the beginning of the period of adoption. The Company expects that the adoption of this ASU will not have a material impact on its financial statements. In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses.” ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Accounting Standard Codification (“ASC”) 842, Leases. The Company expects that the adoption of this ASU will not have a material impact on its financial statements. In November 2019, the FASB issued ASU No. 2019-08, Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606). The guidance identifies, evaluates, and improves areas of GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided. The amendments in that Update expanded the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. For entities that have adopted the amendments in Update 2018-07, the updated guidance is effective for annual periods beginning after December 15, 2019, and is applicable to the Company in fiscal 2021. Early adoption is permitted. The Company expects that the adoption of this ASU will not have a material impact on its financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. The Board is issuing this Update as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The objective of the Simplification Initiative is to identify, evaluate, and improve areas of GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. The specific areas of potential simplification in this Update were submitted by stakeholders as part of the Simplification Initiative. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company expects that the adoption of this ASU will not have a material impact on its financial statements. The Company believes that other recent accounting pronouncement updates will not have a material effect on the Company’s condensed unaudited consolidated financial statements. |
Inventories
Inventories | 6 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 3 - INVENTORIES The inventories consist of the following: December 31, June 30, Raw materials $ 609,963 $ 974,639 Work-in-process 1,177,110 651,769 Finished goods 1,936,918 1,533,318 Less: inventory reserve (1,105,948 ) (944,167 ) Total $ 2,618,043 $ 2,215,559 Work-in-process includes direct costs such as seed selection, fertilizer, labor cost and subcontractor fees that are spent in growing agricultural products on the leased farmland, and indirect costs which include amortization of the prepayment of the farmland lease fees and farmland development costs. All the costs are accumulated until the time of harvest and then allocated to harvested crop costs when they are sold. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 - PROPERTY AND EQUIPMENT Property and equipment consist of the following: December 31, June 30, Buildings $ 11,693,729 $ 11,994,407 Building improvements - 79,628 Machinery and equipment 873,174 930,109 Motor vehicles 47,320 81,541 Construction in progress - 78,407 Office equipment 235,834 219,605 Farmland leasehold improvements 3,017,935 3,062,410 15,867,992 16,446,107 Less: accumulated depreciation and amortization (5,918,767 ) (5,778,377 ) Property and equipment, net $ 9,949,225 $ 10,667,730 Depreciation and amortization expense charged to operations was US$ 419,958 and US$ 307,772 for the six months ended December 31, 2019 and 2018, respectively. Depreciation and amortization expense charged to operations was US$ 241,743 and US$ 120,920 for the three months ended December 31, 2019 and 2018, respectively. Farmland leasehold improvements consist of following: December 31, June 30, Blueberry farmland leasehold improvements $ 2,318,512 $ 2,352,679 Yew tree planting base reconstruction 259,759 263,587 Greenhouse renovation 439,664 446,144 Total farmland leasehold improvements $ 3,017,935 $ 3,062,410 |
Land Use Rights
Land Use Rights | 6 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
LAND USE RIGHTS | NOTE 5 - LAND USE RIGHTS Land use rights are recognized at cost less accumulated amortization. According to the Chinese laws and regulations regarding land use rights, land in urban districts is owned by the State, while land in the rural areas and suburban areas, except otherwise provided for by the State, is collectively owned by individuals designated as resident farmers by the State. However, in accordance with the legal principle that land ownership is separate from the right to the use of the land, the government grants the user a “land use right” (the “Right”) to use the land. The Company has the Right to use the land for 50 years and amortizes the rights on a straight-line basis over the period of 50 years. December 31, June 30, Land use rights $ 1,596,295 $ 1,619,820 Less: accumulated amortization (366,603 ) (355,511 ) Land use rights, net $ 1,229,692 $ 1,264,309 For the six months ended December 31, 2019 and 2018, the Company recognized amortization expense of US$ 18,427 and US$ 19,072, respectively. For the three months ended December 31, 2019 and 2018, the Company recognized amortization expense of US$ 9,213 and US$ 9,434, respectively. The estimated future amortization expenses are as follows: Twelve months ending December 31: 2020 $ 31,926 2021 31,926 2022 31,926 2023 31,926 2024 31,926 Thereafter 1,070,062 Total $ 1,229,692 |
Distribution Rights
Distribution Rights | 6 Months Ended |
Dec. 31, 2019 | |
Distribution Rights [Abstract] | |
DISTRIBUTION RIGHTS | NOTE 6 - DISTRIBUTION RIGHTS The Company acquired distribution rights to distribute branded products of Daiso 100-yen shops through the acquisition of Tianjin Tajite. As this distribution right is difficult to acquire and will contribute significant revenue to Tianjin Tajite, such distribution rights were identified and valued as an intangible asset in the acquisition of Tianjin Tajite. The distribution rights, which have no expiration date, have been determined to have an indefinite life. Since the distribution rights have an indefinite life, the Company will evaluate them for impairment at least annually or earlier if determined necessary. As of December 31, 2019, the distribution rights were evaluated at RMB 7,380,000 (US$ 1,059,128). |
Investments
Investments | 6 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS | NOTE 7 - INVESTMENTS Ankang Longevity Group entered into two equity investment agreements with Shaanxi Pharmaceutical Group Pai’ang Medicine Co. Ltd. (“Shaanxi Pharmaceutical Group”), a Chinese state-owned pharmaceutical enterprise to invest a total of RMB 6.8 million (approximately US$ 1.0 million) for a 49% equity interest in a pharmacy retail company called Shaanxi Pharmaceutical Sunsimiao Drugstores Ankang Retail Chain Co., Ltd. (“Sunsimiao Drugstores”), and a 49% equity interest in a pharmaceutical wholesale distribution company named Shaanxi Pharmaceutical Holding Group Longevity Pharmacy Co., Ltd. (“Shaanxi Longevity Pharmacy”). These two equity investments were formed as new business entities to collaborate with Shaanxi Pharmaceutical Group to expand sales to regional hospitals and clinics and to establish the presence of retail pharmacies under the Brand name “Sunsimiao”. The investments are accounted for using the equity method because Ankang Longevity Group has significant influence, but no control of these two entities. Ankang Longevity Group recorded income of US$ 140,582 and US$ 288,877 for the six months ended December 31, 2019 and 2018, respectively and recorded income of US$ 70,683 and US$ 145,742 for the three months ended December 31, 2019 and 2018, respectively, from the investments, which was included in “Income from equity method investments” in the unaudited condensed consolidated statements of income and comprehensive income (see Note 11). Ankang Longevity Group entered into a supplemental agreement with Shaanxi Pharmaceutical Group. According to the supplemental agreement, new 49% equity investment companies established by Shaanxi Pharmaceutical Group and Ankang Longevity Group are required to exclusively purchase certain raw materials and drug products from Shaanxi Pharmaceutical Group. In return, Shaanxi Pharmaceutical Group has agreed to compensate Ankang Longevity Group with a purchase rebate of 7% of the total purchases made from Shaanxi Pharmaceutical Group. For the six months ended December 31, 2019 and 2018, a total of US$ Nil and US$ 517,626 was recognized by Ankang Longevity Group from this supplemental agreement in addition to its 49% share of the income from the equity investment companies, respectively. For the three months ended December 31, 2019, total income of US$ Nil was recognized by Ankang Longevity Group from this supplemental agreement, compared to US$ 225,187 in the same period in 2018. On October 21, 2013, the Company, through its controlled subsidiaries, Zhisheng Freight and Zhisheng Agricultural, entered into an agreement with an unrelated third party, Zhejiang Zhen’Ai Network Warehousing Services Co., Ltd. (“Zhen’Ai Network”), and invested RMB 14.5 million (approximately US$ 2.2 million) into Tiancang Systematic Warehousing project (“Tiancang Project”) operated by Zhen’Ai Network. The Tiancang Project is an online platform established to provide comprehensive warehousing and logistic solutions to companies involved in E-commerce. The Company is entitled to 29% of Tiancang Project’s after-tax net income annually, less 30% statutory reserve and a 10 % employee welfare fund contribution. When the amount of the accumulated statutory reserve reaches 30% of the total investment for the Tiancang Project, no additional appropriation to the statutory reserve is required. For the six and three months ended December 31, 2019 and 2018, the Company did not record investment income from this investment. On November 21, 2016, the Company (the “Investor”) entered into an agreement with Original Lab Inc., a California corporation (the “Investee”), and made a payment of US$ 200,000 in exchange for the right to acquire certain shares of the Investee’s common and preferred stock. The Company considered it’s unlikely to obtain any investment income in the near future, and decided the make a fully impairment on this investment during the year ended June 30, 2019. The Company’s investments in unconsolidated entities consist of the following: December 31, June 30, Shaanxi Pharmaceutical Holding Group Longevity Pharmacy Co., Ltd. (Ankang Longevity Pharmacy) $ 3,774,388 $ 3,717,277 Shaanxi Pharmaceutical Sunsimiao Drugstores Ankang Chain Co., Ltd. 840,853 822,058 Zhejiang Zhen’Ai Network Warehousing Services Co., Ltd. 2,080,942 2,111,609 Total $ 6,696,183 $ 6,650,944 Summarized financial information of unconsolidated entities is as follows: December 31, June 30, Current assets $ 38,714,700 $ 35,675,858 Noncurrent assets 220,420 241,580 Current liabilities 29,531,039 26,668,485 For the six months ended December 31, 2019 2018 Net sales $ 16,283,932 $ 16,306,851 Gross profit 1,674,366 2,020,501 Income from operations 287,432 665,455 Net income 286,902 589,545 |
Leases
Leases | 6 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
LEASES | NOTE 8 - LEASES Effective July 1, 2019, the Company adopted the new lease accounting standard using the optional transition method which allowed us to continue to apply the guidance under the lease standard in effect at the time in the comparative periods presented. In addition, the Company elected the package of practical expedients, which allowed us to not reassess whether any existing contracts contain a lease, to not reassess historical lease classification as operating or finance leases, and to not reassess initial direct costs. The Company has not elected the practical expedient to use hindsight to determine the lease term for its leases at transition. The Company has also elected the practical expedient allowing us to not separate the lease and non-lease components for all classes of underlying assets. Adoption of this standard resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities of $3,587,788 and $450,123, respectively, as of July 1, 2019 with no impact on accumulated deficit. Financial position for reporting periods beginning on or after July 1, 2019, are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with previous guidance. The Company leases offices space under non-cancelable operating leases, with terms ranging from one to three years. In addition, one of the Company’s controlled subsidiaries, Zhisheng Group entered into several farmland lease contracts with farmer cooperatives to lease farmland in order to plant and grow organic vegetables, fruit and Chinese yew trees. The lease terms vary from 5 years to 24 years. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payment is recognized on a straight-line basis over the lease term. Leases with initial term of 12 months or less are not recorded on the balance sheet. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company discount lease payments based on an estimate of its incremental borrowing rate. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The table below presents the operating lease related assets and liabilities recorded on the balance sheets. December 31, Rights of use lease assets $ 3,105,286 - Operating lease liabilities – current $ 411,280 Operating lease liabilities – non-current 3,132 Total operating lease liabilities $ 414,412 The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2019: December 31, Remaining lease term and discount rate: Weighted average remaining lease term (years) 9.74 Weighted average discount rate 5.0 % Rent expense totaled US$ 201,328 and US$ 295,460 for the six months ended December 31, 2019 and 2018, respectively. Rent expense totaled US$ 109,003 and US$ 136,109 for the three months ended December 31, 2019 and 2018, respectively. The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2019: 2020 $ 735,163 2021 310,101 2022 209,689 2023 209,163 2024 209,163 Thereafter 1,439,177 Total lease payments 3,112,456 Less: imputed interest (7,170 ) Less: prepayments (2,690,874 ) Present value of lease liabilities $ 414,412 |
Short-Term Loans
Short-Term Loans | 6 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
SHORT-TERM LOANS | NOTE 9 - SHORT-TERM LOANS Short-term loans consist of the following: Lender December 31, Maturity Int. Agricultural Bank of China-c 1,435,132 2020-2-25 5.66 % Agricultural Bank of China-c 287,027 2020-8-26 5.60 % Total $ 1,722,159 Lender June 30, Maturity Int. MY Bank-a 7,282 2019-8-29 * 15.80 % Agricultural Bank of China-b 291,256 2019-8-12 * 5.66 % Agricultural Bank of China-b 655,327 2019-11-13 3.92 % Agricultural Bank of China-c 1,456,282 2020-2-25 5.66 % Total $ 2,410,147 The loans outstanding were guaranteed by the following properties, entities or individuals: a. Not collateralized or guaranteed. b. Guaranteed by a commercial credit guaranty company, unrelated to the Company and also by Jiping Chen, a shareholder of the Company. c. Collateralized by the building owned by Xiaoyan Chen and Jing Chen, who are both related parties of the Company. Xiaoyan Chen is one of the shareholders of Ankang Longevity Group. Jing Chen is the sister of the Xiaoyan Chen but not a shareholder of Ankang Longevity Group. * The Company repaid the loan in full on maturity date. The Company recorded interest expense of US$ 58,266 and US$ 58,544 for the six months ended December 31, 2019 and 2018, respectively. The annual weighted average interest rates are 5.32% and 5.74% for the six months ended December 31, 2019 and 2018, respectively. The Company recorded interest expense of US$ 27,989 and US$ 27,172 for the three months ended December 31, 2019 and 2018, respectively. The annual weighted average interest rates are 5.52% and 5.77% for the three months ended December 31, 2019 and 2018, respectively. |
Acquisition
Acquisition | 6 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
ACQUISITION | NOTE 10 - ACQUISITION On December 12, 2016, the Company entered into a merger and acquisition agreement with Tianjin Tajite E-Commerce Co., Ltd. (“Tianjin Tajite”), a professional e-commerce company distributing Luobuma fabric commodities and branded products of Daiso 100-yen shops, based in Tianjin, China, to acquire a 51 % equity interest of Tianjin Tajite. Pursuant to the agreement, the Company made a payment of RMB 14,000,000 (approximately US$ 2.1 million) at the end of December, 2016 as the total consideration for the acquisition of Tianjin Tajite. On October 26, 2017, the Company completed the acquisition of Tianjin Tajite. The acquisition provides a unique opportunity for the Company to enter the market of Luobuma fabric commodities and branded products of Daiso 100-yen shops. The transaction was accounted for in accordance with the provisions of ASC 805-10, Business Combinations. The Company retained independent appraisers to advise management in the determination of the fair value of the various assets acquired and liabilities assumed. The values assigned in these financial statements represent management’s best estimate of fair values as of the Acquisition Date. As required by ASC 805-20, Business Combinations—Identifiable Assets and Liabilities, and Any Noncontrolling Interest, management conducted a review to reassess whether they identified all the assets acquired and all the liabilities assumed, and followed ASC 805-20’s measurement procedures for recognition of the fair value of net assets acquired. The following table summarizes the allocation of estimated fair values of net assets acquired and liabilities assumed: Accounts receivable, net 26,635 Inventory 57,275 Other current assets 182,056 Distribution rights 1,059,128 Property, plant and equipment 13,865 Advance from customers (77,127 ) Tax payable (16,648 ) Deferred tax liabilities (264,782 ) Salary payable (24,755 ) Accrued liabilities and other current liabilities (980,277 ) Non-controlling interest 1,406 Goodwill 2,010,649 Total purchase price for acquisition, net of US$ 21,761 of cash $ 1,987,425 The excess of the purchase price over the aggregate fair value of assets acquired was allocated to goodwill. The results of operations of Tianjin Tajite have been included in the unaudited condensed consolidated statements of operations from the date of acquisition. In June 2018, the management performed evaluation on the impairment of goodwill. Due to the lower than expected revenue and profit, and unfavorable business environment, the management fully recorded an impairment loss on goodwill of Tianjin Tajite. The fair value of distribution rights and its estimated useful lives is as follows: Preliminary Weighted Average Useful Life Distribution rights $ 1,059,128 (a) (a) The distribution rights with no expiration date has been determined to have an indefinite life. Under ASC 805-10, acquisition-related costs (i.e., advisory, legal, valuation and other professional fees) are not included as a component of consideration transferred, but are expensed in the periods in which the costs are incurred. Acquisition-related costs were nil in the six months ended December 31, 2019. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 - RELATED PARTY TRANSACTIONS DUE FROM RELATED PARTIES The Company had previously made temporary advances to certain shareholders of the Company and to other entities that are either owned by family members of those shareholders or to other entities that the Company has investments in. Those advances are due on demand, non-interest bearing. As of December 31, 2019 and June 30, 2019, the outstanding amounts due from related parties consist of the following: December 31, June 30, Yang Bin $ 43,054 $ 43,688 Beijing Huiyinansheng Asset Management Co., Ltd (a.) 21,556 21,873 Beijing Shengguang Tianyi Clothing Co., Ltd (b.) - 63,911 Wang Qiwei 58,124 58,981 $ 122,734 $ 188,453 a. This Company is wholly owned by one of the Company’s senior management. b. This Company is wholly owned by one of the Company’s shareholders. DUE TO RELATED PARTIES As of December 31, 2019 and June 30, 2019, the Company had related party payables of US$ 495,555 and US$ 234,500, respectively, mainly due to the principal shareholders or certain relatives of the shareholders of the Company who lend funds for the Company’s operations. The payables are unsecured, non-interest bearing and due on demand. December 31, June 30, Wu Yang $ 91,920 $ 93,275 Wang Sai 8,611 8,738 Chen Jiping - 989 Zhang Yuying - 2,913 Zhou Guocong 11,481 - Li Baolin 215,270 - Zhao Min 168,273 128,585 $ 495,555 $ 234,500 SALES TO RELATED PARTIES For the six and three months ended December 31, 2019, the Company recorded sales to Shaanxi Pharmaceutical Group, a related party (see Note 7), of US$ 1,545,849 and US$ 750,301, respectively. For the six and three months ended December 31, 2018, the Company recorded sales to Shaanxi Pharmaceutical Group, a related party, of US$ 1,801,787 and US$ 998,877, respectively. As of December 31, 2019 and June 30, 2019, the balance of accounts receivable due from Shaanxi Pharmaceutical Group was US$ 2,054,466 and US$ 2,706,111, respectively. |
Taxes
Taxes | 6 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
TAXES | NOTE 12 - TAXES (a) Corporate Income Taxes The Company is subject to income taxes on an entity basis on income arising in or derived from the location in which each entity is domiciled. Shineco is incorporated in the United States and has no operating activities. Tenet-Jove and its VIEs entities are governed by the Income Tax Laws of the PRC, and are currently subject to tax at a statutory rate of 25% on taxable income. Two VIE entities and Xinjiang Taihe receive a full income tax exemption from the local tax authority of the PRC as agricultural enterprises as long as the favorable tax policy remains unchanged. On December 22, 2017, the “Tax Cuts and Jobs Act” (“The Act”) was enacted, The Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The change in rate has caused us to re-measure the Company’s income tax liability and record an estimated income tax expense of US$ 744,766 for the year ended June 30, 2018. In accordance with SAB 118, additional work is necessary to do a more detailed analysis of the Act as well as potential correlative adjustments. Any subsequent adjustment to these amounts will be recorded to current tax expense in fiscal 2019 when the analysis is complete. The Company elects to pay the transition tax over an eight year period using specified percentages (eight percent per year for the first five years, 15 percent in year six, 20 percent in year seven, and 25 percent in year eight). i) The components of the income tax expense (benefit) are as follows: For the six months ended December 31, For the three months ended December 31, 2019 2018 2019 2019 Current income tax provision $ 333,902 $ 468,049 $ 193,061 $ 250,893 Deferred income tax benefit (169,510 ) (23,903 ) (23,886 ) (25,530 ) Total $ 164,392 $ 444,146 $ 169,175 $ 225,363 ii) The following table summarizes deferred tax assets resulting from differences between the financial reporting basis and tax basis of assets and liabilities: December 31, June 30, Deferred tax assets: Allowance for doubtful accounts $ 322,480 $ 197,962 Inventory reserve 269,192 228,893 Net operating loss carry-forwards 512,124 519,671 Total 1,103,796 946,526 Valuation allowance (512,124 ) (519,671 ) Total deferred tax assets 591,672 426,855 Deferred tax liability: Distribution rights (264,782 ) (268,684 ) Total deferred tax liability (264,782 ) (268,684 ) Deferred tax assets, net $ 326,890 $ 158,171 Movement of the valuation allowance: December 31, June 30, Beginning balance $ 519,671 $ 539,061 Current year addition - - Exchange difference (7,547 ) (19,390 ) Ending balance $ 512,124 $ 519,671 (b) Value Added Tax The Company is subject to a value added tax (“VAT”) for selling merchandise. The applicable VAT rate is 17% before May 1, 2018 for products sold in the PRC and decreased to 16% thereafter, and after April 1, 2019, the tax rate was further reduced to 13% based on the new Chinese tax law. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under commercial practice in the PRC, the Company pays VAT based on tax invoices issued. The tax invoices may be issued subsequent to the date on which revenue is recognized, and there may be a considerable delay between the date on which the revenue is recognized and the date on which the tax invoice is issued. In the event that the PRC tax authorities dispute the date on which revenue is recognized for tax purposes, the PRC tax office has the right to assess a penalty based on the amount of the taxes which are determined to be late or deficient, and will be expensed in the period if and when a determination is made by the tax authorities. There were no assessed penalties during the six and three months ended December 31, 2019 and 2018. (c) Taxes Payable Taxes payable consists of the following: December 31, June 30, Income tax payable $ 3,422,879 $ 3,425,080 Value added tax payable 542,600 536,486 Business tax and other taxes payable 7,478 5,909 Total 3,972,957 3,967,475 Less: current portion 3,347,354 3,341,872 Income tax payable - noncurrent portion $ 625,603 $ 625,603 |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 13 - SHAREHOLDERS' EQUITY Initial Public Offering On September 28, 2016, the Company completed its initial public offering of 1,713,190 shares of common stock at a price of US$ 4.50 per share for gross proceeds of US$ 7.7 million and net proceeds of approximately US$ 5.4 million. The Company's common shares began trading on September 28, 2016 on the NASDAQ Capital Market under the symbol "TYHT." Statutory Reserve The Company is required to make appropriations to reserve funds, comprising the statutory surplus reserve and discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC ("PRC GAAP"). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entities' registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. As of December 31, 2019 and June 30, 2019, the balance of the required statutory reserves was US$ 4,198,107 and US$ 4,198,107, respectively. On January 23, 2018, Shineco, Inc. entered into a Common Stock Purchase Agreement ("Purchase Agreement") with IFG Opportunity Fund LLC ("IFG Fund") whereby, upon the terms and subject to the conditions and limitations set forth therein, the Company had the right, from time to time in its sole discretion during the 24-month term of the Purchase Agreement, to direct IFG Fund to purchase up to a total of US$ 15,000,000 worth of shares of common stock. As consideration for IFG Fund to enter into the Purchase Agreement, the Company agreed to issue 200,000 shares of the Company's Common Stock (the "Commitment Shares") to IFG Fund. The Purchase Shares are being offered in an indirect primary offering consisting of an equity line of credit, in accordance with the terms and conditions of the Purchase Agreement. The total number of Purchase Shares shall not exceed 4,000,000. On January 23, 2018, the Company issued the Commitment Shares to IFG Fund. On July 3, 2018, the Company and IFG Fund entered into a termination agreement, dated July 3, 2018 (the "Termination Agreement") effective as of July 3, 2018, to terminate the Purchase Agreement and the Registration Rights Agreement. IFG retained the 200,000 commitment shares which were valued at US$ 434,000 and written off during the six months ended September 30, 2018. On September 27, 2018, the Company entered into a securities purchase agreement with selected investors whereby the Company agreed to sell up to 1,637,700 of common stock at a purchase price of US$ 1 per share, for gross proceeds to the Company of approximately US$ 1,637,700 (the "2018 Offering"). After deducting the offering cost, the net proceeds the Company received was US$ 1,589,892. The 2018 Offering closed on September 28, 2018. The 2018 Offering was made pursuant to the Company's effective registration statement on Form S-3 (Registration Statement No. 333-221711) previously filed with the Securities and Exchange Commission and a prospectus supplement thereunder. 1. Each smart contract is $ 0.1; 2. $1,000,000 can get 10,000,000 smart contracts. ($1,000,000 divided by 0.1 equals to 10,000,000 smart contracts.) 3. The conversion ratio of smart contracts to common stock is 20:1 4. Therefore,-10,000,000-smart-contracts-divided by 20 -equals-500,000-common stock. Shineco plans to issue no more than 4,000,000 shares in connection with this transaction, specifically for the exchange of smart contracts. On September 3, 2019, the Company granted 1,662,864 restricted shares to its employees as compensation cost for awards. The fair value of the restricted shares was US$ 1,022,661 based on the closing stock price US$ 0.615 at September 3, 2019. These restricted shares were vested immediately from the grant date. On September 5, 2019, the Company entered into a securities purchase agreement with select investors whereby the Company agreed to sell, and the investors agreed to purchase, up to 2,798,792 shares of common stock (the "Shares") at a purchase price of US$ 0.52 per Share. The net proceeds that the Company received was US$ 1,500,203. The offering is being made pursuant to the Company's effective registration statement on Form S-3 (Registration Statement No. 333-221711) previously filed with the Securities and Exchange Commission and a prospectus supplement thereunder. |
Concentrations and Risks
Concentrations and Risks | 6 Months Ended |
Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS AND RISKS | NOTE 14 - CONCENTRATIONS AND RISKS The Company maintains principally all bank accounts in the PRC. The cash balance held in the PRC bank accounts was US$ 42,070,119 and US$ 35,311,106 as of December 31, 2019 and June 30, 2019, respectively. During the six months ended December 31, 2019 and 2018, almost 100% of the Company's assets were located in the PRC and 100% of the Company's revenues were derived from its subsidiaries and VIEs located in the PRC. For the six months ended December 31, 2019, four customers accounted for approximately 13%, 11%, 10% and 10% of the Company's total sales, respectively. For the three months ended December 31, 2019, four customers accounted for approximately 12%, 10%, 10% and 10% of the Company's total sales, respectively. At December 31, 2019, five customers accounted for approximately 70% of the Company's accounts receivable. For the six months ended December 31, 2018, five customers accounted for approximately 14%, 11%, 11%, 11% and 11% of the Company's total sales, respectively. For the three months ended December 31, 2018, two customers accounted for approximately 15% and 12% of the Company's total sales, respectively. For the six months ended December 31, 2019, two vendors accounted for approximately 41% and 14% of the Company's total purchases, respectively. For the six months ended December 31, 2018, three vendors accounted for approximately 45%, 15% and 10% of the Company's total purchases, respectively. For the three months ended December 31, 2019, two vendor accounted for approximately 45% and 13% of the Company's total purchases, respectively. For the three months ended December 31, 2018, one vendor accounted for approximately 28% of the Company's total purchases, respectively. |
Commitments and Contigencies
Commitments and Contigencies | 6 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTIGENCIES | NOTE 15 - COMMITMENTS AND CONTIGENCIES Lease Commitments The Company sublets the above-mentioned farmland to a third party under a non-cancelable operating lease agreement through May 31, 2020. The future minimum sublease rental income to be received is as follows: Twelve months ending December 31: 2020 $ 85,350 Total $ 85,350 Sublease rental income totaled US$ 102,420 and US$ 104,688 for the six months ended December 31, 2019 and 2018, respectively. Sublease rental income totaled US$ 51,111 and US$ 51,784 for the three months ended December 31, 2019 and 2018, respectively. Legal Contingencies On May 16, 2017, Bonwick Capital Partners, LLC ("Plaintiff") commenced a lawsuit (Case No. 1:17-cv-03681-PGG) against the Company in the United States District Court for the Southern District of New York. Plaintiff alleges that the Company entered into an agreement with Plaintiff (the "Agreement"), pursuant to which Plaintiff was to provide the Company with financial advisory services in connection with the Company's initial public offering in the United States. Plaintiff alleges that the Company breached the Agreement and seeks money damages up to US$ 6 million. The Company believes that these claims are without merit and intends to vigorously defend its position. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 16 - SEGMENT REPORTING ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Group’s internal organizational management structure as well as information about geographical areas, business segments and major customers in for details on the Group’s business segments. The Company’s chief operating decision maker has been identified as the Chief Executive Officer who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of the Group. Based on management’s assessment, the Company has determined that it has three operating segments according to its major products and locations as follows: ● Developing, manufacturing and distributing of specialized fabrics, textile products and other by-products derived from an indigenous Chinese plant called Apocynum Venetum, commonly known as “Bluish Dogbane” or known in Chinese as “Luobuma” (referred to herein as Luobuma): The operating companies of this segment, namely Tenet-Jove and Tenet Huatai, specialize in Luobuma growing, development and manufacturing of relevant products, as well as purchasing Luobuma raw materials processing. This segment’s operations are focused in the north region of Mainland China, mostly carried out in Beijing, Tianjin and Xinjiang City. ● Processing and distributing of traditional Chinese medicinal herbal products as well as other pharmaceutical products (“Herbal products”): The operating companies of this segment, namely AnKang Longevity Group and its subsidiaries, process more than 600 kinds of Chinese medicinal herbal products with an established domestic sales and distribution network. Ankang Longevity Group is also engaged in the retail pharmacy business and the operating revenue, which is not material, is also included in this segment. ● Planting, processing and distributing of green and organic agricultural produce as well as growing and cultivating of Chinese Yew trees (“Other agricultural products”): The operating companies of this segment, the Zhisheng Group, is engaged in the business of growing and distributing green and organic vegetables and fruits as well as providing logistics services for distributing agricultural products. This segment has been focusing its efforts on the growing and cultivating of Chinese yew trees (formally known as “taxus media”), a small evergreen tree whose branches can be used for the production of medications believed to be anti-cancer and the tree itself can be used as an ornamental indoor bonsai tree, which are known to have the effect of purifying air quality. The operations of this segment are located in the East and North regions of Mainland China, mostly carried out in Shandong Province and in Beijing where the Zhisheng Group has newly developed over 100 acres of modern greenhouses for cultivating yew trees and other plants. The following table presents summarized information by segment for the six months ended December 31, 2019: For the six months ended December 31, 2019 Luobuma Herbal Other agricultural products products products Total Segment revenue $ 138,759 $ 6,839,600 $ 7,937,034 $ 14,915,393 Cost of revenue and related business and sales tax 269,157 5,227,120 5,414,234 10,910,511 Gross profit (130,398 ) 1,612,480 2,522,800 4,004,882 Gross profit % (94.0 )% 23.6 % 31.8 % 26.9 % The following table presents summarized information by segment for the six months ended December 31, 2018: For the six months ended December 31, 2018 Bluish Herbal Other agricultural dogbane products products Total Segment revenue $ 510,724 $ 6,797,904 $ 8,662,385 $ 15,971,013 Cost of revenue and related business and sales tax 221,786 5,154,956 6,083,265 11,460,007 Gross profit 288,938 1,642,948 2,579,120 4,511,006 Gross profit % 56.6 % 24.2 % 29.8 % 28.2 % The following table presents summarized information by segment for the three months ended December 31, 2019: For the three months ended December 31, 2019 Luobuma Herbal Other agricultural products products products Total Segment revenue $ 73,240 $ 3,539,279 $ 4,256,093 $ 7,868,612 Cost of revenue and related business and sales tax 37,653 2,627,716 2,838,256 5,503,625 Gross profit 35,587 911,563 1,417,837 2,364,987 Gross profit % 48.6 % 25.8 % 33.3 % 30.1 % The following table presents summarized information by segment for the three months ended December 31, 2018: For the three months ended December 31, 2018 Luobuma Herbal Other agricultural products products products Total Segment revenue $ 344,539 $ 3,499,581 $ 4,537,812 $ 8,381,932 Cost of revenue and related business and sales tax 167,357 2,580,690 3,233,806 5,981,853 Gross profit 177,182 918,891 1,304,006 2,400,079 Gross profit % 51.4 % 26.3 % 28.7 % 28.6 % Total Assets as of December 31, June 30, Luobuma products $ 4,971,200 $ 6,268,974 Herbal products 46,125,282 45,095,019 Other agricultural products 31,976,226 32,375,480 $ 83,072,708 $ 83,739,473 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 - SUBSEQUENT EVENTS These unaudited condensed consolidated financial statements were approved by management and available for issuance on February XX, 2019, and the Company has evaluated subsequent events through this date. No subsequent events required adjustments to or disclosure in these unaudited condensed consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information pursuant to the rules of the SEC and have been consistently applied. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended June 30, 2019, which was filed on September 27, 2019. The unaudited condensed consolidated financial statements of the Company reflect the principal activities of the Company, its subsidiaries, its VIEs and its VIEs’ subsidiaries. The non-controlling interest represents the minority shareholders’ interest in the Company’s majority owned subsidiaries and VIEs. All intercompany accounts and transactions have been eliminated in consolidation. |
Consolidation of Variable Interest Entities | Consolidation of Variable Interest Entities VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. All VIEs and their subsidiaries with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. The carrying amount of the VIEs and their subsidiaries’ consolidated assets and liabilities are as follows: December 31, June 30, Current assets $ 57,539,496 $ 57,328,097 Plant and equipment, net 8,562,202 8,965,671 Other non-current assets 11,382,612 11,028,775 Total assets 77,484,310 77,322,543 Total liabilities (5,301,117 ) (6,090,955 ) Net assets $ 72,183,193 $ 71,231,588 |
Non-controlling Interests | Non-controlling Interests US GAAP requires that non-controlling interests in subsidiaries and affiliates be reported in the equity section of a company’s balance sheet. In addition, the amounts attributable to the non-controlling interests in the net income (loss) of these entities are reported separately in the unaudited condensed consolidated statements of income and comprehensive income. |
Risks and Uncertainties | Risks and Uncertainties The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environment in the PRC, as well as by the general state of the PRC economy. The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among other factors, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC, and by changes in governmental policies or interpretations with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations, changes could affect the Company’s interest in these entities and its operations in the PRC. Members of the current management team own controlling interests in the Company and are also the owners of the VIEs in the PRC. The Company only controls the VIEs through contractual arrangements which obligate it to absorb the risk of loss and to receive the residual expected returns. As such, the controlling shareholders of the Company and the VIEs could cancel these agreements or permit them to expire at the end of the agreement terms, as a result of which the Company would not retain control of the VIEs. In addition, should these agreements be challenged or litigated, they would also be subject to the laws and courts of the PRC legal system which could make enforcing the Company’s rights difficult. |
Use of Estimates | Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements as well as the reported amounts of revenue and expenses during the reporting periods. Significant estimates required to be made by management include, but are not limited to, useful lives of property, plant, and equipment, and intangible assets, the recoverability of long-lived assets and the valuation of accounts receivable, deferred taxes and inventory reserves. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company previously recognized revenue from sales of Luobuma products, Chinese medicinal herbal products and agricultural products, as well as providing logistic services and other processing services to external customers. The Company recognized revenue when all of the following have occurred: (i) there was persuasive evidence of an arrangement with a customer; (ii) delivery had occurred or services had been rendered; (iii) the sales price was fixed or determinable; and (iv) the Company’s collection of such fees was reasonably assured. These criteria, as related to the Company’s revenue, were considered to have been met as follows: Sales of products: Revenue from the rendering of services With the adoption of ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when all of the following five steps are met: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied. The Company adopted the new revenue standard beginning July 1, 2018, and adopted a modified retrospective approach upon adoption. The Company believes that its previous revenue recognition policies are generally consistent with the new revenue recognition standards set forth in ASC 606. Potential adjustments to input measures are not expected to be pervasive to the majority of the Company’s contracts. There is no significant impact upon adoption of the new guidance. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, cash on deposit and other highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when purchased. The Company maintains cash with various financial institutions mainly in the PRC. As of December 31, 2019 and June 30, 2019, the Company had no cash equivalents. Under PRC law, it is generally required that a commercial bank in the PRC that holds third party cash deposits protect the depositors’ rights over and interests in their deposited money. PRC banks are subject to a series of risk control regulatory standards, and PRC bank regulatory authorities are empowered to take over the operation and management of any PRC bank that faces a material credit crisis. The Company monitors the banks utilized and has not experienced any problems. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as necessary. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, the customers’ historical payment history, their current credit-worthiness and current economic trends. The fair value of long-term receivables is determined using a present value technique by discounting the future expected contractual cash flows using current rates at which similar instruments would be issued at the measurement date. As of December 31, 2019 and June 30, 2019, the allowance for doubtful accounts was US$ 4,769,928 and US$ 4,323,141, respectively. Accounts are written off against the allowance after efforts at collection prove unsuccessful. |
Inventories | Inventories Inventories, which are stated at the lower of cost or net realizable value, consist of raw materials, work-in-progress, and finished goods related to the Company’s products. Cost is determined using the first in first out (“FIFO”) method. Agricultural products that the Company farms are recorded at cost, which includes direct costs such as seed selection, fertilizer, labor cost and contract fees that are spent in growing agricultural products on the leased farmland, and indirect costs which include amortization of prepayments of farmland leases and farmland development costs. All the costs are accumulated until the time of harvest and then allocated to the harvested crops costs when they are sold. The Company periodically evaluates its inventory and records an inventory reserve for certain inventories that may not be saleable or whose cost exceeds net realizable value. |
Advances to Suppliers | Advances to Suppliers Advances to suppliers consist of payments to suppliers for materials that have not been received. Advances to suppliers are reviewed periodically to determine whether their carrying value has become impaired. As of December 31, 2019 and June 30, 2019, the Company had an allowance for uncollectible advances to suppliers of US$ 2,417,959 and US$ 431,646, respectively. |
Business Acquisitions | Business Acquisitions Business acquisitions are accounted for under the acquisition method. The acquisition method requires the reporting entity to identify the acquirer, determine the acquisition date, recognize and measure the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity, and recognize and measure goodwill or a bargain gain from the purchase. The acquiree’s results are included in the Company’s consolidated financial statements from the date of acquisition. Assets acquired and liabilities assumed are recorded at their fair values on the date acquired and the excess of the purchase price over the amounts assigned is recorded as goodwill, or if the fair value of the net assets acquired exceeds the purchase price consideration, a bargain purchase gain is recorded. Adjustments to fair value assessments are generally recorded to goodwill over the measurement period (not longer than twelve months). The acquisition method also requires that acquisition-related transaction and post-acquisition restructuring costs be charged to expense as committed, and requires the Company to recognize and measure certain assets and liabilities including those arising from contingencies and contingent consideration in a business combination. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of assets acquired. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. For each of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation techniques, including a discounted cash flow methodology. To corroborate the discounted cash flow analysis performed at each reporting unit, a market approach is utilized using observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available). |
Leases | Leases The Company adopted ASU 2016-02, “Leases” on July 1, 2019 and used the alternative transition approach which permits the effects of adoption to be applied at the effective date. The new standard provides a number of optional practical expedients in transition. The Company elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The Company also elected the short-term lease exemption and combining the lease and non-lease components practical expedients. The most significant impact upon adoption relates to the recognition of new Right-of-use (“ROU”) assets and lease liabilities on the Company’s balance sheet for office space operating leases. Upon adoption, the Company recognized additional operating liabilities of approximately US$ 0.4 million, with corresponding ROU assets of US$ 3.2 million based on the present value of the remaining rental payments under current leasing standards for existing operating leases. There was no cumulative effect of adopting the standard. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation and amortization. Expenditures for additions, major renewals and betterments are capitalized, and expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is provided on a straight-line basis, less estimated residual value, if any, over an asset’s estimated useful life. Farmland leasehold improvements are amortized over the shorter of lease term or estimated useful lives of the underlying assets. The estimated useful lives of the Company’s property and equipment are as follows: Estimated Buildings 20-50 years Machinery equipment 5-10 years Motor vehicles 5-10 years Office equipment 5-10 years Farmland leasehold improvements 12-18 years |
Land Use Rights | Land Use Rights According to Chinese laws and regulations regarding land use rights, land in urban districts is owned by the State, while land in the rural areas and suburban areas, except otherwise provided for by the State, is collectively owned by individuals designated as resident farmers by the State. In accordance with the legal principle that land ownership is separate from the right to the use of the land, the government grants individuals and companies the rights to use parcels of land for a specified period of time. Land use rights, which are usually prepaid, are stated at cost less accumulated amortization. Amortization is provided over the life of the land use rights, using the straight-line method. The useful life is 50 years, based on the term of the land use rights. |
Long-lived Assets | Long-lived Assets Finite-lived assets and intangibles are reviewed for impairment testing when circumstances require. For purposes of evaluating the recoverability of long-lived assets, when undiscounted future cash flows will not be sufficient to recover an asset’s carrying amount, the asset is written down to its fair value. The long-lived assets of the Company that are subject to evaluation consist primarily of property, plant and equipment, land use rights, investments and long-term prepaid leases. For the six and three months ended December 31, 2019 and 2018, the Company did not recognize any impairment of its long-lived assets. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company follows the provisions of ASC 820, “Fair Value Measurements and Disclosures.” ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs , other than quoted prices in level, that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the asset or liability. The carrying value of financial instruments included in current assets and liabilities approximate their fair values because of the short-term nature of these instruments. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the unaudited condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This ASC also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Company does not have any uncertain tax positions at December 31, 2019 and June 30, 2019. The Company has not provided deferred taxes for undistributed earnings of non-U.S. subsidiaries at December 31, 2019, as it is the Company’s policy to indefinitely reinvest these earnings in non-U.S. operations. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested earnings is not practicable. The statute of limitations for the Company’s U.S. federal income tax returns and certain state income tax returns remains open for tax year 2015 and thereafter. As of December 31, 2019, the tax years ended December 31, 2014 through December 31, 2019 for the Company’s People’s Republic of China (“PRC”) subsidiaries remain open for statutory examination by PRC tax authorities. On December 22, 2017, the “Tax Cuts and Jobs Act” (“The Act”) was enacted. Under the provisions of The Act, the U.S. corporate tax rate decreased from 35% to 21%. As the Company has a June 30 fiscal year end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of approximately 28% for our fiscal year ended June 30, 2018, and 21% for subsequent fiscal years. Additionally, The Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The change in rate has caused us to re-measure the Company’s income tax liability and record an estimated income tax expense of US$ 744,766 for the year ended June 30, 2018. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. In accordance with SAB 118, additional work is necessary to do a more detailed analysis of the Act as well as potential correlative adjustments. Any subsequent adjustment to these amounts will be recorded to current tax expense in fiscal 2019 when the analysis is complete. The Company elects to pay the transition tax over an eight-year period using specified percentages (eight percent per year for the first five years, 15 percent in year six, 20 percent in year seven, and 25 percent in year eight). |
Value Added Tax | Value Added Tax Sales revenue represents the invoiced value of goods, net of a Value-Added Tax (“VAT”). Before May 1, 2018, all of the Company’s products that were sold in the PRC were subject to a Chinese value-added tax at a rate of 17% of the gross sales price. After May 1, 2018, the Company subject a tax rate of 16%, and after April 1, 2019, the tax rate was further reduced to 13% based on the new Chinese tax law. This VAT may be offset by VAT paid by the Company is on raw materials and other materials included in the cost of producing finished products or acquiring finished products. The Company records a VAT payable or VAT receivable in the accompanying unaudited condensed consolidated financial statements. |
Foreign Currency Translation | Foreign Currency Translation The Company uses the United States dollar (“U.S. dollars”, “USD” or “US$”) for financial reporting purposes. The Company’s subsidiaries and VIEs maintain their books and records in their functional currency of Renminbi (“RMB”), the currency of the PRC. In general, for consolidation purposes, the Company translates the assets and liabilities of its subsidiaries and VIEs into U.S. dollars using the applicable exchange rates prevailing at the balance sheet date, and the statements of income and cash flows are translated at average exchange rates during the reporting periods. As a result, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the financial statements of the subsidiaries and VIEs are recorded as accumulated other comprehensive income (loss). The balance sheet amounts, with the exception of equity, at December 31, 2019 and June 30, 2019 were translated at 1 RMB to 0.1435 USD and at 1 RMB to 0.1456 USD, respectively. The average translation rates applied to the income and cash flow statement amounts for the six months ended December 31, 2019 and 2018 were at 1 RMB to 0.1422 USD and at 1 RMB to 0.1454 USD, respectively. The average translation rates applied to income and cash flow statement amounts for the three months ended December 31, 2019 and 2018 were at 1 RMB to 0.1420 USD and at 1 RMB to 0.1446 USD, respectively. |
Comprehensive Income | Comprehensive Income (loss) Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to USD is reported in other comprehensive income (loss) in the unaudited condensed consolidated statements of income (loss) and comprehensive income (loss). |
Equity Investment | Equity Investment An investment in which the Company has the ability to exercise significant influence, but does not have a controlling interest, is accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock between 20% and 50%, and other factors, such as representation on the Board of Directors, voting rights and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. |
Earnings per Share | Earnings per Share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., outstanding convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. There is no anti-dilutive effect for the six and three months ended December 31, 2019 and 2018. |
New Accounting Pronouncements | New Accounting Pronouncements In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220). The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Consequently, the amendments eliminate the stranded tax effects resulting from the Tax Cuts and Jobs Act and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the Tax Cuts and Jobs Act, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The amendments in this update also require certain disclosures about stranded tax effects. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including interim periods within those years. The Company expects that the adoption of this ASU will not have a material impact on its financial statements. In June 2018, the FASB issued ASU No. 2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” or ASU 2018-07. ASU 2018-07 simplifies the accounting for share-based payments made to nonemployees so the accounting for such payments is substantially the same as those made to employees. Under this ASU, share based awards to nonemployees will be measured at fair value on the grant date of the awards, entities will need to assess the probability of satisfying performance conditions if any are present, and awards will continue to be classified according to Accounting Standards Codification (“ASC”) 718 upon vesting which eliminates the need to reassess classification upon vesting, consistent with awards granted to employees. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company expects that the adoption of this ASU will not have a material impact on its financial statements. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” to improve the effectiveness of disclosures in the notes to financial statements related to recurring or nonrecurring fair value measurements by removing amounts and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, policies for timing of transfers between different levels for fair value measurements, and the valuation processes for Level 3 fair value measurements. The new standard requires disclosure of the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company expects that the adoption of this ASU will not have a material impact on its financial statements In August 2018, the FASB issued ASU No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” (ASU 2018-15), to align the requirements for capitalizing implementation costs in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs relating to internal-use software. The update requires entities in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset and which costs to expense. ASU 2018-15 is effective for the Corporation on January 1, 2020 and may be applied using either the retrospective or prospective approach. Early adoption is permitted. The Company expects that the adoption of this ASU will have a material impact on its financial statements. In October 2018, the FASB issued ASU No. 2018-17, “Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities”. The new standard changes how entities evaluate decision-making fees under the variable interest entity guidance. The new standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted in any interim period after issuance. The standard should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings at the beginning of the period of adoption. The Company expects that the adoption of this ASU will not have a material impact on its financial statements. In November 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses.” ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Accounting Standard Codification (“ASC”) 842, Leases. The Company expects that the adoption of this ASU will not have a material impact on its financial statements. In November 2019, the FASB issued ASU No. 2019-08, Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606). The guidance identifies, evaluates, and improves areas of GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided. The amendments in that Update expanded the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. For entities that have adopted the amendments in Update 2018-07, the updated guidance is effective for annual periods beginning after December 15, 2019, and is applicable to the Company in fiscal 2021. Early adoption is permitted. The Company expects that the adoption of this ASU will not have a material impact on its financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. The Board is issuing this Update as part of its initiative to reduce complexity in accounting standards (the Simplification Initiative). The objective of the Simplification Initiative is to identify, evaluate, and improve areas of GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. The specific areas of potential simplification in this Update were submitted by stakeholders as part of the Simplification Initiative. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company expects that the adoption of this ASU will not have a material impact on its financial statements. The Company believes that other recent accounting pronouncement updates will not have a material effect on the Company’s condensed unaudited consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of the VIEs and their subsidiaries' consolidated assets and liabilities | December 31, June 30, Current assets $ 57,539,496 $ 57,328,097 Plant and equipment, net 8,562,202 8,965,671 Other non-current assets 11,382,612 11,028,775 Total assets 77,484,310 77,322,543 Total liabilities (5,301,117 ) (6,090,955 ) Net assets $ 72,183,193 $ 71,231,588 |
Schedule of estimated useful lives of property and equipment | Estimated Buildings 20-50 years Machinery equipment 5-10 years Motor vehicles 5-10 years Office equipment 5-10 years Farmland leasehold improvements 12-18 years |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | December 31, June 30, Raw materials $ 609,963 $ 974,639 Work-in-process 1,177,110 651,769 Finished goods 1,936,918 1,533,318 Less: inventory reserve (1,105,948 ) (944,167 ) Total $ 2,618,043 $ 2,215,559 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | December 31, June 30, Buildings $ 11,693,729 $ 11,994,407 Building improvements - 79,628 Machinery and equipment 873,174 930,109 Motor vehicles 47,320 81,541 Construction in progress - 78,407 Office equipment 235,834 219,605 Farmland leasehold improvements 3,017,935 3,062,410 15,867,992 16,446,107 Less: accumulated depreciation and amortization (5,918,767 ) (5,778,377 ) Property and equipment, net $ 9,949,225 $ 10,667,730 |
Schedule of farmland leasehold improvements | December 31, June 30, Blueberry farmland leasehold improvements $ 2,318,512 $ 2,352,679 Yew tree planting base reconstruction 259,759 263,587 Greenhouse renovation 439,664 446,144 Total farmland leasehold improvements $ 3,017,935 $ 3,062,410 |
Land Use Rights (Tables)
Land Use Rights (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of land use rights | December 31, June 30, Land use rights $ 1,596,295 $ 1,619,820 Less: accumulated amortization (366,603 ) (355,511 ) Land use rights, net $ 1,229,692 $ 1,264,309 |
Schedule of estimated future amortization expenses | Twelve months ending December 31: 2020 $ 31,926 2021 31,926 2022 31,926 2023 31,926 2024 31,926 Thereafter 1,070,062 Total $ 1,229,692 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of investments in unconsolidated entities | December 31, June 30, Shaanxi Pharmaceutical Holding Group Longevity Pharmacy Co., Ltd. (Ankang Longevity Pharmacy) $ 3,774,388 $ 3,717,277 Shaanxi Pharmaceutical Sunsimiao Drugstores Ankang Chain Co., Ltd. 840,853 822,058 Zhejiang Zhen’Ai Network Warehousing Services Co., Ltd. 2,080,942 2,111,609 Total $ 6,696,183 $ 6,650,944 |
Schedule of financial information of unconsolidated entities | December 31, June 30, Current assets $ 38,714,700 $ 35,675,858 Noncurrent assets 220,420 241,580 Current liabilities 29,531,039 26,668,485 For the six months ended December 31, 2019 2018 Net sales $ 16,283,932 $ 16,306,851 Gross profit 1,674,366 2,020,501 Income from operations 287,432 665,455 Net income 286,902 589,545 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of operating lease related assets and liabilities | December 31, Rights of use lease assets $ 3,105,286 - Operating lease liabilities – current $ 411,280 Operating lease liabilities – non-current 3,132 Total operating lease liabilities $ 414,412 |
Schedule of weighted average remaining lease terms and discount rates for operating leases | December 31, Remaining lease term and discount rate: Weighted average remaining lease term (years) 9.74 Weighted average discount rate 5.0 % |
Schedule of maturities of lease liabilities | 2020 $ 735,163 2021 310,101 2022 209,689 2023 209,163 2024 209,163 Thereafter 1,439,177 Total lease payments 3,112,456 Less: imputed interest (7,170 ) Less: prepayments (2,690,874 ) Present value of lease liabilities $ 414,412 |
Short-Term Loans (Tables)
Short-Term Loans (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of short-term loans | Lender December 31, Maturity Int. Agricultural Bank of China-c 1,435,132 2020-2-25 5.66 % Agricultural Bank of China-c 287,027 2020-8-26 5.60 % Total $ 1,722,159 Lender June 30, Maturity Int. MY Bank-a 7,282 2019-8-29 * 15.80 % Agricultural Bank of China-b 291,256 2019-8-12 * 5.66 % Agricultural Bank of China-b 655,327 2019-11-13 3.92 % Agricultural Bank of China-c 1,456,282 2020-2-25 5.66 % Total $ 2,410,147 The loans outstanding were guaranteed by the following properties, entities or individuals: a. Not collateralized or guaranteed. b. Guaranteed by a commercial credit guaranty company, unrelated to the Company and also by Jiping Chen, a shareholder of the Company. c. Collateralized by the building owned by Xiaoyan Chen and Jing Chen, who are both related parties of the Company. Xiaoyan Chen is one of the shareholders of Ankang Longevity Group. Jing Chen is the sister of the Xiaoyan Chen but not a shareholder of Ankang Longevity Group. * The Company repaid the loan in full on maturity date. |
Acquisition (Tables)
Acquisition (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of estimated fair values of net assets acquired and liabilities assumed | Accounts receivable, net 26,635 Inventory 57,275 Other current assets 182,056 Distribution rights 1,059,128 Property, plant and equipment 13,865 Advance from customers (77,127 ) Tax payable (16,648 ) Deferred tax liabilities (264,782 ) Salary payable (24,755 ) Accrued liabilities and other current liabilities (980,277 ) Non-controlling interest 1,406 Goodwill 2,010,649 Total purchase price for acquisition, net of US$ 21,761 of cash $ 1,987,425 |
Schedule of estimated useful lives | Preliminary Weighted Average Useful Life Distribution rights $ 1,059,128 (a) (a) The distribution rights with no expiration date has been determined to have an indefinite life. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of outstanding amounts due from related parties | December 31, June 30, Yang Bin $ 43,054 $ 43,688 Beijing Huiyinansheng Asset Management Co., Ltd (a.) 21,556 21,873 Beijing Shengguang Tianyi Clothing Co., Ltd (b.) - 63,911 Wang Qiwei 58,124 58,981 $ 122,734 $ 188,453 a. This Company is wholly owned by one of the Company’s senior management. b. This Company is wholly owned by one of the Company’s shareholders. |
Schedule of due to related parties | December 31, June 30, Wu Yang $ 91,920 $ 93,275 Wang Sai 8,611 8,738 Chen Jiping - 989 Zhang Yuying - 2,913 Zhou Guocong 11,481 - Li Baolin 215,270 - Zhao Min 168,273 128,585 $ 495,555 $ 234,500 |
Taxes (Tables)
Taxes (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of the income tax expense | For the six months ended December 31, For the three months ended December 31, 2019 2018 2019 2019 Current income tax provision $ 333,902 $ 468,049 $ 193,061 $ 250,893 Deferred income tax benefit (169,510 ) (23,903 ) (23,886 ) (25,530 ) Total $ 164,392 $ 444,146 $ 169,175 $ 225,363 |
Schedule of financial reporting basis and tax basis of assets and liabilities | December 31, June 30, Deferred tax assets: Allowance for doubtful accounts $ 322,480 $ 197,962 Inventory reserve 269,192 228,893 Net operating loss carry-forwards 512,124 519,671 Total 1,103,796 946,526 Valuation allowance (512,124 ) (519,671 ) Total deferred tax assets 591,672 426,855 Deferred tax liability: Distribution rights (264,782 ) (268,684 ) Total deferred tax liability (264,782 ) (268,684 ) Deferred tax assets, net $ 326,890 $ 158,171 |
Schedule of movement of valuation allowance | December 31, June 30, Beginning balance $ 519,671 $ 539,061 Current year addition - - Exchange difference (7,547 ) (19,390 ) Ending balance $ 512,124 $ 519,671 |
Schedule of taxes payable | December 31, June 30, Income tax payable $ 3,422,879 $ 3,425,080 Value added tax payable 542,600 536,486 Business tax and other taxes payable 7,478 5,909 Total 3,972,957 3,967,475 Less: current portion 3,347,354 3,341,872 Income tax payable - noncurrent portion $ 625,603 $ 625,603 |
Commitments and Contigencies (T
Commitments and Contigencies (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum sublease rental income | Twelve months ending December 31: 2020 $ 85,350 Total $ 85,350 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of information by segment | For the six months ended December 31, 2019 Luobuma Herbal Other agricultural products products products Total Segment revenue $ 138,759 $ 6,839,600 $ 7,937,034 $ 14,915,393 Cost of revenue and related business and sales tax 269,157 5,227,120 5,414,234 10,910,511 Gross profit (130,398 ) 1,612,480 2,522,800 4,004,882 Gross profit % (94.0 )% 23.6 % 31.8 % 26.9 % For the six months ended December 31, 2018 Bluish Herbal Other agricultural dogbane products products Total Segment revenue $ 510,724 $ 6,797,904 $ 8,662,385 $ 15,971,013 Cost of revenue and related business and sales tax 221,786 5,154,956 6,083,265 11,460,007 Gross profit 288,938 1,642,948 2,579,120 4,511,006 Gross profit % 56.6 % 24.2 % 29.8 % 28.2 % For the three months ended December 31, 2019 Luobuma Herbal Other agricultural products products products Total Segment revenue $ 73,240 $ 3,539,279 $ 4,256,093 $ 7,868,612 Cost of revenue and related business and sales tax 37,653 2,627,716 2,838,256 5,503,625 Gross profit 35,587 911,563 1,417,837 2,364,987 Gross profit % 48.6 % 25.8 % 33.3 % 30.1 % For the three months ended December 31, 2018 Luobuma Herbal Other agricultural products products products Total Segment revenue $ 344,539 $ 3,499,581 $ 4,537,812 $ 8,381,932 Cost of revenue and related business and sales tax 167,357 2,580,690 3,233,806 5,981,853 Gross profit 177,182 918,891 1,304,006 2,400,079 Gross profit % 51.4 % 26.3 % 28.7 % 28.6 % December 31, June 30, Luobuma products $ 4,971,200 $ 6,268,974 Herbal products 46,125,282 45,095,019 Other agricultural products 31,976,226 32,375,480 $ 83,072,708 $ 83,739,473 |
Organization and Nature of Op_2
Organization and Nature of Operations (Details) | Aug. 22, 2019 | Mar. 13, 2019 | May 02, 2017 | Dec. 10, 2016USD ($) | Dec. 31, 2019Segments | Oct. 26, 2017 | Sep. 30, 2017USD ($) | Sep. 30, 2017CNY (¥) | May 23, 2017USD ($) | May 23, 2017CNY (¥) | May 22, 2017USD ($) | May 22, 2017CNY (¥) | Apr. 28, 2017USD ($) | Apr. 28, 2017CNY (¥) | Apr. 19, 2017USD ($) | Apr. 19, 2017CNY (¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 10, 2016CNY (¥) | Jul. 14, 2006 | Dec. 30, 2004 |
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Percentage of interest ownership | 49.00% | 100.00% | |||||||||||||||||||
Business acquisition interest, percentage | 51.00% | ||||||||||||||||||||
Tenet-Jove [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Majority interest ownership percentage | 100.00% | ||||||||||||||||||||
Number of segments | Segments | 3 | ||||||||||||||||||||
Xinjiang Taihe [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Registered capital | $ | $ 1,502,650 | ||||||||||||||||||||
Xinjiang Taihe [Member] | RMB [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Registered capital | ¥ | ¥ 10,000,000 | ||||||||||||||||||||
Runze [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Registered capital | $ | $ 1,502,650 | ||||||||||||||||||||
Runze [Member] | RMB [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Registered capital | ¥ | ¥ 10,000,000 | ||||||||||||||||||||
Tianxintongye [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Registered capital | $ | $ 1,451,615 | ||||||||||||||||||||
Tianxintongye [Member] | RMB [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Registered capital | ¥ | ¥ 10,000,000 | ||||||||||||||||||||
Tianhuihechuang [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Registered capital | $ | $ 1,452,294 | ||||||||||||||||||||
Tianhuihechuang [Member] | RMB [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Registered capital | ¥ | ¥ 10,000,000 | ||||||||||||||||||||
Tianzhuo [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Registered capital | $ | $ 1,450,233 | ||||||||||||||||||||
Tianzhuo [Member] | RMB [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Registered capital | ¥ | ¥ 10,000,000 | ||||||||||||||||||||
Tiankunrunze [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Percentage of interest ownership | 65.00% | 65.00% | |||||||||||||||||||
Registered capital | $ | $ 7,262,000 | ||||||||||||||||||||
Tiankunrunze [Member] | RMB [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Registered capital | ¥ | ¥ 50,000,000 | ||||||||||||||||||||
Tenet Huatai Technological Development Co., Ltd. [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Percentage of interest ownership | 90.00% | ||||||||||||||||||||
Tianjin Tajite [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Majority interest ownership percentage | 51.00% | 51.00% | |||||||||||||||||||
Registered capital | $ | $ 2,100,000 | ||||||||||||||||||||
Equity interest acquire, cash consideration amount | $ | $ 2,100,000 | ||||||||||||||||||||
Description of business combination | Tenet-Jove would acquire a 51% equity interest in Tianjin Tajite for cash consideration of RMB 14,000,000 (approximately US$ 2.1 million). On December 25, 2016, the Company paid the full amount as the deposit to secure the deal. In May, 2017, the Company amended the agreement that required Tianjin Tajite to satisfy certain preconditions related to product introductions into China. On October 26, 2017, the Company completed the acquisition for 51% of the shares in Tianjin Tajite. | ||||||||||||||||||||
Business acquisition interest, percentage | 51.00% | 51.00% | |||||||||||||||||||
Tianjin Tajite [Member] | RMB [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Registered capital | ¥ | ¥ 14,000,000 | ||||||||||||||||||||
Equity interest acquire, cash consideration amount | ¥ | ¥ 14,000,000 | ||||||||||||||||||||
Biorefinery Engineering Technology Co., Ltd [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Description of business combination | Pursuant to the Strategic Cooperation Agreement the two parties agreed to establish the ICAITR, the Company and Biorefinery own 80% and 20% of the equity interests of ICAITR, respectively. Shineco invested RMB 5.0 million (US$ 737,745) as the registered capital, and Biorefinery will invest a technology patent named "Steam Explosion Degumming". | ||||||||||||||||||||
Beijing Tenjove Newhemp Biotechnology Co., Ltd [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Description of business combination | Tenet-Jove established Beijing Tenjove Newhemp Biotechnology Co., Ltd. ("TNB") with registered capital of RMB 10.0 million (US$ 1,502,650). TNB became a wholly-owned subsidiary of Tenet-Jove. | ||||||||||||||||||||
Tenet-Jove established Shineco Zhong Hemp Group Co., Ltd [Member] | |||||||||||||||||||||
Organization and Nature of Operations (Textual) | |||||||||||||||||||||
Description of business combination | Tenet-Jove established Shineco Zhong Hemp Group Co., Ltd. (“Zhong Hemp”) with registered capital of RMB 200.0 million (US$ 28,237,022) and owns 60% interest of Zhong Hemp. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Variable Interest Entity [Line Items] | ||
Current assets | $ 57,539,496 | $ 57,328,097 |
Other non-current assets | 11,382,612 | 11,028,775 |
Total assets | 77,484,310 | 77,322,543 |
Total liabilities | (5,301,117) | (6,090,955) |
Net assets | 72,183,193 | 71,231,588 |
Plant and equipment, net [Member] | ||
Variable Interest Entity [Line Items] | ||
Total assets | $ 8,562,202 | $ 8,965,671 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 6 Months Ended |
Dec. 31, 2019 | |
Buildings [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 20 years |
Buildings [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 50 years |
Machinery equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Machinery equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 10 years |
Motor vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Motor vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 10 years |
Office equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Office equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 10 years |
Farmland leasehold improvements [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 12 years |
Farmland leasehold improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment estimated useful lives | 18 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Textual) - USD ($) | Dec. 22, 2017 | Dec. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jul. 02, 2019 |
Summary of Significant Accounting Policies (Textual) | |||||
Allowance for doubtful accounts | $ 4,769,928 | $ 4,323,141 | |||
Advances to suppliers | $ 2,417,959 | $ 431,646 | |||
Estimated useful life | 50 years | ||||
Foreign currency translation adjustment, description | The exception of equity, at December 31, 2019 and June 30, 2019 were translated at 1 RMB to 0.1435 USD and at 1 RMB to 0.1456 USD, respectively. The average translation rates applied to the income and cash flow statement amounts for the six months ended December 31, 2019 and 2018 were at 1 RMB to 0.1422 USD and at 1 RMB to 0.1454 USD, respectively. The average translation rates applied to income and cash flow statement amounts for the three months ended December 31, 2019 and 2018 were at 1 RMB to 0.1420 USD and at 1 RMB to 0.1446 USD, respectively. | ||||
U.S. statutory federal rate | 21.00% | 28.00% | |||
Value added tax rate description | Before May 1, 2018, all of the Company’s products that were sold in the PRC were subject to a Chinese value-added tax at a rate of 17% of the gross sales price. After May 1, 2018, the Company subject a tax rate of 16%, and after April 1, 2019, the tax rate was further reduced to 13% based on the new Chinese tax law. | ||||
Income tax expense | $ 744,766 | ||||
Additional operating liabilities | $ 411,280 | ||||
Right of use assets | $ 3,105,286 | $ 3,587,788 | |||
Transition tax payment, description | The Company elects to pay the transition tax over an eight-year period using specified percentages (eight percent per year for the first five years, 15 percent in year six, 20 percent in year seven, and 25 percent in year eight). | ||||
Land Use Rights [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Estimated useful life | 50 years | ||||
Minimum [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
U.S. corporate tax rate | 21.00% | ||||
Percentage of voting stock | 20.00% | ||||
Maximum [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
U.S. corporate tax rate | 35.00% | ||||
Percentage of voting stock | 50.00% |
Inventories (Details)
Inventories (Details) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 609,963 | $ 974,639 |
Work-in-process | 1,177,110 | 651,769 |
Finished goods | 1,936,918 | 1,533,318 |
Less: inventory reserve | (1,105,948) | (944,167) |
Total | $ 2,618,043 | $ 2,215,559 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 15,867,992 | $ 16,446,107 |
Less: accumulated depreciation and amortization | (5,918,767) | (5,778,377) |
Property and equipment, net | 9,949,225 | 10,667,730 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 11,693,729 | 11,994,407 |
Building improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 79,628 | |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 873,174 | 930,109 |
Motor vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 47,320 | 81,541 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 78,407 | |
Office equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 235,834 | 219,605 |
Farmland leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,017,935 | $ 3,062,410 |
Property and Equipment (Detai_2
Property and Equipment (Details 1) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Property, Plant and Equipment [Line Items] | ||
Total farmland leasehold improvements | $ 3,017,935 | $ 3,062,410 |
Blueberry farmland leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total farmland leasehold improvements | 2,318,512 | 2,352,679 |
Yew Tree Planting Base Reconstruction [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total farmland leasehold improvements | 259,759 | 263,587 |
Greenhouse Renovation [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total farmland leasehold improvements | $ 439,664 | $ 446,144 |
Property and Equipment (Detai_3
Property and Equipment (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property and Equipment (Textual) | ||||
Depreciation and amortization expense | $ 241,743 | $ 120,920 | $ 419,958 | $ 307,772 |
Land Use Rights (Details)
Land Use Rights (Details) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Land use rights | $ 1,596,295 | $ 1,619,820 |
Less: accumulated amortization | (366,603) | (355,511) |
Land use rights, net | $ 1,229,692 | $ 1,264,309 |
Land Use Rights (Details 1)
Land Use Rights (Details 1) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Twelve months ending September 30: | ||
2020 | $ 31,926 | |
2021 | 31,926 | |
2022 | 31,926 | |
2023 | 31,926 | |
2024 | 31,926 | |
Thereafter | 1,070,062 | |
Total | $ 1,229,692 | $ 1,264,309 |
Land Use Rights (Details Textua
Land Use Rights (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Land Use Rights (Textual) | ||||
Estimated useful life | 50 years | |||
Amortization expense | $ 9,123 | $ 9,434 | ||
Land Use Rights [Member] | ||||
Land Use Rights (Textual) | ||||
Estimated useful life | 50 years | |||
Amortization expense | $ 18,427 | $ 19,072 |
Distribution Rights (Details)
Distribution Rights (Details) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Jun. 30, 2019USD ($) |
Distribution Rights (Textual) | |||
Distribution right | $ | $ 1,059,128 | $ 1,074,736 | |
RMB [Member] | |||
Distribution Rights (Textual) | |||
Distribution right | ¥ | ¥ 7,380,000 |
Investments (Details)
Investments (Details) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Schedule of Equity Method Investments [Line Items] | ||
Total | $ 6,696,183 | $ 6,650,944 |
Shaanxi Pharmaceutical Holding Group Longevity Pharmacy Co., Ltd. (Ankang Longevity Pharmacy) [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Total | 3,774,388 | 3,717,277 |
Shaanxi Pharmaceutical Sunsimiao Drugstores Ankang Chain Co., Ltd. [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Total | 840,853 | 822,058 |
Zhejiang Zhen'Ai Network Warehousing Services Co., Ltd. [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Total | $ 2,080,942 | $ 2,111,609 |
Investments (Details 1)
Investments (Details 1) - USD ($) | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |||
Current assets | $ 38,714,700 | $ 35,675,858 | |
Noncurrent assets | 220,420 | 241,580 | |
Current liabilities | 29,531,039 | $ 26,668,485 | |
Net sales | 16,283,932 | $ 16,306,851 | |
Gross profit | 1,674,366 | 2,020,501 | |
Income from operations | 287,432 | 665,455 | |
Net income | $ 286,902 | $ 589,545 |
Investments (Details Textual)
Investments (Details Textual) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||
Oct. 21, 2013USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019CNY (¥) | Jun. 30, 2019USD ($) | Nov. 21, 2016USD ($) | Oct. 21, 2013CNY (¥) | Jul. 14, 2006 | |
Investments (Textual) | ||||||||||
Investor payments | $ 6,696,183 | $ 6,696,183 | $ 6,650,944 | |||||||
Percentage of ownership interest | 49.00% | 49.00% | 49.00% | 100.00% | ||||||
Recorded income | $ 140,582 | $ 288,877 | ||||||||
Percentage of purchase distribution | 49.00% | |||||||||
Income from equity method investments | ||||||||||
Profit sharing on income, percentage | 49.00% | |||||||||
Ankang Longevity Group [Member] | ||||||||||
Investments (Textual) | ||||||||||
Investor payments | $ 1,000,000 | $ 1,000,000 | ||||||||
Recorded income | $ 70,683 | $ 145,742 | $ 140,532 | 288,877 | ||||||
Ankang Longevity Group [Member] | RMB [Member] | ||||||||||
Investments (Textual) | ||||||||||
Investor payments | ¥ | ¥ 6,800,000 | |||||||||
Tiancang Systematic Warehousing Project [Member] | ||||||||||
Investments (Textual) | ||||||||||
Investor payments | $ 2,200,000 | |||||||||
Profit sharing on income, percentage | 29.00% | |||||||||
Deductible statutory reserve, percentage | 30.00% | |||||||||
Employee welfare fund, percentage | 10.00% | |||||||||
Statutory reserve, percentage | 30.00% | |||||||||
Tiancang Systematic Warehousing Project [Member] | RMB [Member] | ||||||||||
Investments (Textual) | ||||||||||
Investor payments | ¥ | ¥ 14,500,000 | |||||||||
Sunsimiao Drugstores [Member] | Ankang Longevity Group [Member] | ||||||||||
Investments (Textual) | ||||||||||
Percentage of ownership interest | 49.00% | 49.00% | 49.00% | |||||||
Shaanxi Pharmaceutical Group [Member] | Ankang Longevity Group [Member] | ||||||||||
Investments (Textual) | ||||||||||
Percentage of purchase distribution | 7.00% | |||||||||
Income from equity method investments | $ 225,187 | $ 517,626 | ||||||||
Original Lab Inc. [Member] | ||||||||||
Investments (Textual) | ||||||||||
Investor payments | $ 200,000 |
Leases (Details)
Leases (Details) - USD ($) | Dec. 31, 2019 | Jul. 02, 2019 | Jun. 30, 2019 |
Leases [Abstract] | |||
Rights of use lease assets | $ 3,105,286 | $ 3,587,788 | |
Operating lease liabilities - current | 411,280 | ||
Operating lease liabilities - non-current | 3,132 | ||
Total operating lease liabilities | $ 414,412 | $ 450,123 |
Leases (Details 1)
Leases (Details 1) | Dec. 31, 2019 |
Remaining lease term and discount rate: | |
Weighted average remaining lease term (years) | 9 years 8 months 26 days |
Weighted average discount rate | 5.00% |
Leases (Details 2)
Leases (Details 2) - USD ($) | Dec. 31, 2019 | Jul. 02, 2019 |
Prepaid Leases [Abstract] | ||
2020 | $ 735,163 | |
2021 | 310,101 | |
2022 | 209,689 | |
2023 | 209,163 | |
2024 | 209,163 | |
Thereafter | 1,439,177 | |
Total lease payments | 3,112,456 | |
Less: imputed interest | (7,170) | |
Less: prepayments | (2,690,874) | |
Present value of lease liabilities | $ 414,412 | $ 450,123 |
Leases (Details Textual)
Leases (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 02, 2019 | Jun. 30, 2019 | |
Prepaid Leases (Textual) | ||||||
Operating lease liability | $ 414,412 | $ 414,412 | $ 450,123 | |||
Lease term, description | Lease expense for lease payment is recognized on a straight-line basis over the lease term. Leases with initial term of 12 months or less are not recorded on the balance sheet. | |||||
Rent expense | 109,003 | $ 136,109 | $ 201,328 | $ 295,460 | ||
Right of use assets | $ 3,105,286 | $ 3,105,286 | $ 3,587,788 | |||
Maximum [Member] | ||||||
Prepaid Leases (Textual) | ||||||
Lease term | 24 years | |||||
Minimum [Member] | ||||||
Prepaid Leases (Textual) | ||||||
Lease term | 5 years |
Short-Term Loans (Details)
Short-Term Loans (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Jun. 30, 2019 | ||
Short-term loans, Total | $ 1,722,159 | $ 2,410,147 | |
MY Bank [Member] | |||
Short-term loans, Total | [1] | $ 7,282 | |
Maturity Date | [1],[2] | Aug. 29, 2019 | |
Int. Rate/Year | [1] | 15.80% | |
Agricultural Bank of China [Member] | |||
Short-term loans, Total | [3] | $ 291,256 | |
Maturity Date | [2],[3] | Aug. 12, 2019 | |
Int. Rate/Year | [3] | 5.66% | |
Agricultural Bank of China one [Member] | |||
Short-term loans, Total | [3] | $ 655,327 | |
Maturity Date | [3] | Nov. 13, 2019 | |
Int. Rate/Year | [3] | 3.92% | |
Agricultural Bank of China [Member] | |||
Short-term loans, Total | [4] | $ 1,435,132 | $ 1,456,282 |
Maturity Date | [4] | Feb. 25, 2020 | Feb. 25, 2020 |
Int. Rate/Year | [4] | 5.66% | 5.66% |
Agricultural Bank of China one [Member] | |||
Short-term loans, Total | [4] | $ 287,027 | |
Maturity Date | [4] | Aug. 26, 2020 | |
Int. Rate/Year | [4] | 5.60% | |
[1] | Not collateralized or guaranteed. | ||
[2] | The Company repaid the loan in full on maturity date. | ||
[3] | Guaranteed by a commercial credit guaranty company, unrelated to the Company and also by Jiping Chen, a shareholder of the Company. | ||
[4] | Collateralized by the building owned by Xiaoyan Chen and Jing Chen, who are both related parties of the Company. Xiaoyan Chen is one of the shareholders of Ankang Longevity Group. Jing Chen is the sister of the Xiaoyan Chen but not a shareholder of Ankang Longevity Group. |
Short-Term Loans (Details Textu
Short-Term Loans (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Short-Term Loans (Textual) | ||||
Interest expense | $ 27,989 | $ 27,172 | $ 58,266 | $ 58,544 |
Weighted average interest rate | 5.52% | 5.77% | 5.32% | 5.74% |
Acquisition (Details)
Acquisition (Details) - Tianjin Tajite [Member] | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | |
Accounts receivable, net | $ 26,635 |
Inventory | 57,275 |
Other current assets | 182,056 |
Distribution rights | 1,059,128 |
Property, plant and equipment | 13,865 |
Advance from customers | (77,127) |
Tax payable | (16,648) |
Deferred tax liabilities | (264,782) |
Salary payable | (24,755) |
Accrued liabilities and other current liabilities | (980,277) |
Non-controlling interest | 1,406 |
Goodwill | 2,010,649 |
Total purchase price for acquisition, net of US$ 22,076 of cash | $ 1,987,425 |
Acquisition (Details 1)
Acquisition (Details 1) - USD ($) | 6 Months Ended | ||
Dec. 31, 2019 | Jun. 30, 2019 | ||
Business Acquisition [Line Items] | |||
Preliminary Fair Value | $ 1,059,128 | $ 1,074,736 | |
Distribution Rights [Member] | Tianjin Tajite [Member] | |||
Business Acquisition [Line Items] | |||
Preliminary Fair Value | $ 1,059,128 | ||
Weighted Average Useful Life (in Years) | [1] | 0 years | |
[1] | The distribution rights with no expiration date has been determined to have an indefinite life. |
Acquisition (Details Textual)
Acquisition (Details Textual) - Tianjin Tajite [Member] | 6 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Dec. 12, 2016 | |
Acquisition (Textual) | ||||
Acquire equity interest percentage | 51.00% | |||
Payment of acquisition | $ 2,100,000 | |||
Total purchase price for acquisition, net of cash | $ 21,761 | |||
RMB [Member] | ||||
Acquisition (Textual) | ||||
Payment of acquisition | ¥ | ¥ 14,000,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 | |
Related Party Transaction [Line Items] | |||
Due from related parties | $ 122,734 | $ 188,453 | |
Yang Bin [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | 43,054 | 43,688 | |
Beijing Huiyinansheng Asset Management Co., Ltd [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | [1] | 21,556 | 21,873 |
Beijing Shengguang Tianyi Clothing Co., Ltd [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | [2] | 63,911 | |
Wang Qiwei [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | $ 58,124 | $ 58,981 | |
[1] | This Company is wholly owned by one of the Company's senior management. | ||
[2] | This Company is wholly owned by one of the Company's shareholders. |
Related Party Transactions (D_2
Related Party Transactions (Details 1) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Related Party Transaction [Line Items] | ||
Due to related parties | $ 495,555 | $ 234,500 |
Wu Yang [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 91,920 | 93,275 |
Wang Sai [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 8,611 | 8,738 |
Chen Jiping [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 989 | |
Zhang Yuying [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 2,913 | |
Zhou Guocong [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 11,481 | |
Li Baolin [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 215,270 | |
Zhao Min [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 168,273 | $ 128,585 |
Related Party Transactions (D_3
Related Party Transactions (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Related Party Transactions (Textual) | |||||
Due to related parties | $ 495,555 | $ 495,555 | $ 234,500 | ||
Shaanxi Pharmaceutical Group [Member] | |||||
Related Party Transactions (Textual) | |||||
Sales to related party | 750,301 | $ 998,877 | 1,545,849 | $ 1,801,787 | |
Accounts receivable due from related parties | $ 2,054,466 | $ 2,054,466 | $ 2,706,111 |
Taxes (Details)
Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Current income tax provision | $ 193,061 | $ 250,893 | $ 333,902 | $ 468,049 |
Deferred income tax provision (benefit) | (23,886) | (25,530) | (169,510) | (23,903) |
Total | $ 169,175 | $ 225,363 | $ 164,392 | $ 444,146 |
Taxes (Details 1)
Taxes (Details 1) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 |
Deferred tax assets: | ||||
Allowance for doubtful accounts | $ 322,480 | $ 197,962 | ||
Inventory reserve | 269,192 | 228,893 | ||
Net operating loss carry-forwards | 512,124 | 519,671 | ||
Total | 1,103,796 | 946,526 | ||
Valuation allowance | (512,124) | (519,671) | $ (519,671) | $ (539,061) |
Total deferred tax assets | 591,672 | 426,855 | ||
Deferred tax liability: | ||||
Distribution rights | (264,782) | (268,684) | ||
Total deferred tax liability | (264,782) | (268,684) | ||
Deferred tax assets, net | $ 326,890 | $ 158,171 |
Taxes (Details 2)
Taxes (Details 2) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Beginning balance | $ 519,671 | $ 539,061 |
Current year addition | ||
Exchange difference | (7,547) | (19,390) |
Ending balance | $ 512,124 | $ 519,671 |
Taxes (Details 3)
Taxes (Details 3) - USD ($) | Dec. 31, 2019 | Jun. 30, 2019 |
Income Tax Disclosure [Abstract] | ||
Income tax payable | $ 3,422,879 | $ 3,425,080 |
Value added tax payable | 542,600 | 536,486 |
Business tax and other taxes payable | 7,478 | 5,909 |
Total | 3,972,957 | 3,967,475 |
Less: current portion | 3,347,354 | 3,341,872 |
Income tax payable - noncurrent portion | $ 625,603 | $ 625,603 |
Taxes (Details Textual)
Taxes (Details Textual) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Jun. 30, 2018 | |
Taxes (Textual) | ||
Income taxes percentage, description | The Company elects to pay the transition tax over an eight year period using specified percentages (eight percent per year for the first five years, 15 percent in year six, 20 percent in year seven, and 25 percent in year eight). | |
Estimated income tax expense | $ 744,766 | |
Value added tax rate, description | The applicable VAT rate is 17% before May 1, 2018 for products sold in the PRC and decreased to 16% thereafter, and after April 1, 2019, the tax rate was further reduced to 13% based on the new Chinese tax law. | |
Statutory rate | 25.00% |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||||||
Sep. 05, 2019 | Sep. 03, 2019 | Sep. 27, 2018 | Jan. 23, 2018 | Sep. 28, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Shareholders' Equity (Textual) | ||||||||
Statutory surplus reserve percentage | 10.00% | |||||||
Registered capital reserve | 50.00% | |||||||
Statutory reserves | $ 4,198,107 | $ 4,198,107 | ||||||
Initial public offering, share | 2,798,792 | |||||||
Common stock at a price | $ 0.52 | $ 0.615 | ||||||
Net proceeds | $ 1,500,203 | 2,522,863 | $ 1,589,892 | |||||
Common stock purchase agreement description | The Company had the right, from time to time in its sole discretion during the 24-month term of the Purchase Agreement, to direct IFG Fund to purchase up to a total of US$ 15,000,000 worth of shares of common stock. As consideration for IFG Fund to enter into the Purchase Agreement, the Company agreed to issue 200,000 shares of the Company’s Common Stock (the “Commitment Shares”) to IFG Fund. The Purchase Shares are being offered in an indirect primary offering consisting of an equity line of credit, in accordance with the terms and conditions of the Purchase Agreement. The total number of Purchase Shares shall not exceed 4,000,000. On January 23, 2018, the Company issued the Commitment Shares to IFG Fund. On July 3, 2018, the Company and IFG Fund entered into a termination agreement, dated July 3, 2018 (the “Termination Agreement”) effective as of July 3, 2018, to terminate the Purchase Agreement and the Registration Rights Agreement. IFG retained the 200,000 commitment shares which were valued at US$ 434,000 and written off during the six months ended September 30, 2018. | |||||||
Granted restricted shares | 1,662,864 | |||||||
Restricted shares issued for management | $ 1,022,661 | $ 1,022,661 | ||||||
IPO [Member] | ||||||||
Shareholders' Equity (Textual) | ||||||||
Initial public offering, share | 1,637,700 | 1,713,190 | ||||||
Proceeds from initial public offering, net of offering costs | $ 1,589,892 | $ 5,400,000 | ||||||
Common stock at a price | $ 1 | $ 4.50 | ||||||
Net proceeds | $ 1,637,700 | $ 7,700,000 | ||||||
Private Placement [Member] | ||||||||
Shareholders' Equity (Textual) | ||||||||
Smart Contracts, Description | The minimum target amount in this private placement is $1,000,000.Once Shineco raises $1,000,000, investors will have the option to convert smart contracts that represent preferred stock into Shinceo's common stock. For this, smart contracts that shall be convertible into common stock at the following ratio of 20:1. If Shineco raises $1,000,000 in this private placement, then up to 500,000 shares of common stock will be issued pursuant to the following calculation if the smart contract holders choose to convert their smart contracts that represent preferred stock into Shinceo's common stock: 1. Each smart contract is $ 0.1; 2. $1,000,000 can get 10,000,000 smart contracts. ($1,000,000 divided by 0.1 equals to 10,000,000 smart contracts.) 3. The conversion ratio of smart contracts to common stock is 20:1 4. Therefore,-10,000,000-smart-contracts-divided by 20 -equals-500,000-common stock. Shineco plans to issue no more than 4,000,000 shares in connection with this transaction, specifically for the exchange of smart contracts. |
Concentrations and Risks (Detai
Concentrations and Risks (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Concentration and Risks (Textual) | |||||
Cash balance | $ 42,087,793 | $ 42,087,793 | $ 35,330,676 | ||
Total sales [Member] | Customer Four [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 10.00% | 10.00% | |||
Total sales [Member] | Customer One [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 12.00% | 15.00% | 13.00% | 14.00% | |
Total sales [Member] | Customer Two [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 10.00% | 12.00% | 11.00% | 11.00% | |
Total sales [Member] | Customer Three [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 10.00% | 10.00% | 11.00% | ||
Total sales [Member] | Customer Four [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 11.00% | ||||
Total sales [Member] | Customer Five [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 11.00% | ||||
Total purchases [Member] | Vendor One [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 45.00% | 28.00% | 41.00% | 45.00% | |
Total purchases [Member] | Vendor Two [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 13.00% | 14.00% | 15.00% | ||
Total purchases [Member] | Vendor Three [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 10.00% | ||||
Accounts Receivable [Member] | Customer One [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 70.00% | ||||
Accounts Receivable [Member] | Customer Two [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 70.00% | ||||
Accounts Receivable [Member] | Customer Three [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 70.00% | ||||
Accounts Receivable [Member] | Customer Four [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 70.00% | ||||
Accounts Receivable [Member] | Customer Five [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 70.00% | ||||
China [Member] | |||||
Concentration and Risks (Textual) | |||||
Cash balance | $ 42,070,119 | $ 42,070,119 | $ 35,311,106 | ||
China [Member] | Assets, Total [Member] | |||||
Concentration and Risks (Textual) | |||||
Concentration risk, percentage | 100.00% | 100.00% |
Commitments and Contigencies (D
Commitments and Contigencies (Details) | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 85,350 |
Total | $ 85,350 |
Commitments and Contigencies _2
Commitments and Contigencies (Details Textual) - USD ($) | May 16, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Commitments and Contigencies (Textual) | |||||
Sublease rental income | $ 51,111 | $ 51,784 | $ 102,420 | $ 104,688 | |
Damages amount | $ 6,000,000 |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | |||||
Segment revenue | $ 7,868,612 | $ 8,381,932 | $ 14,915,393 | $ 15,971,013 | |
Cost of revenue and related business and sales tax | 5,503,625 | 5,981,853 | 10,910,511 | 11,460,007 | |
Gross profit | $ 2,364,987 | $ 2,400,079 | $ 4,004,882 | $ 4,511,006 | |
Gross profit % | 30.10% | 28.60% | 26.90% | 28.20% | |
Assets | $ 83,072,708 | $ 83,072,708 | $ 83,739,473 | ||
Luobuma products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenue | 73,240 | $ 344,539 | 138,759 | $ 510,724 | |
Cost of revenue and related business and sales tax | 37,653 | 167,357 | 269,157 | 221,786 | |
Gross profit | $ 35,587 | $ 177,182 | $ (130,398) | $ 288,938 | |
Gross profit % | 48.60% | 51.40% | (94.00%) | 56.60% | |
Assets | $ 4,971,200 | $ 4,971,200 | 6,268,974 | ||
Herbal products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenue | 3,539,279 | $ 3,499,581 | 6,839,600 | $ 6,797,904 | |
Cost of revenue and related business and sales tax | 2,627,716 | 2,580,690 | 5,227,120 | 5,154,956 | |
Gross profit | $ 911,563 | $ 918,891 | $ 1,612,480 | $ 1,642,948 | |
Gross profit % | 25.80% | 26.30% | 23.60% | 24.20% | |
Assets | $ 46,125,282 | $ 46,125,282 | 45,095,019 | ||
Other agricultural products [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Segment revenue | 4,256,093 | $ 4,537,812 | 7,937,034 | $ 8,662,385 | |
Cost of revenue and related business and sales tax | 2,838,256 | 3,233,806 | 5,414,234 | 6,083,265 | |
Gross profit | $ 1,417,837 | $ 1,304,006 | $ 2,522,800 | $ 2,579,120 | |
Gross profit % | 33.30% | 28.70% | 31.80% | 29.80% | |
Assets | $ 31,976,226 | $ 31,976,226 | $ 32,375,480 |