1. Organization and Nature of Operation

12 Months Ended

Dec. 31, 2012

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. ORGANIZATION AND NATURE OF OPERATION

The accompanying consolidated financial statements include the financial statements of Feihe International, Inc. (the “Company” or “Feihe International”) and its subsidiaries. The Company and its subsidiaries are collectively referred to as the “Group.”

The Company was incorporated in the State of Utah on December 31, 1985, originally under the corporate name of Gaslight Inc. It was inactive until March 30, 1988 when it changed its corporate name to Lazarus Industries, Inc. and engaged in the business of manufacturing and marketing medical devices. This line of business was discontinued in 1991, and it became a non-operating public company shell.

Effective May 7, 2003, the Company acquired 100% of the issued and outstanding capital stock of American Flying Crane Corporation (“AFC”), a Delaware corporation. In connection with that acquisition, the Company changed its name to American Dairy, Inc. In October 2010, the Company changed its name to Feihe International, Inc.

AFC was incorporated in Delaware, with 50,000,000 shares of authorized common stock at a par value of $0.001 per share. AFC owns 100% of the registered capital of Heilongjiang Feihe Dairy Co., Limited (“Feihe Dairy”). Feihe Dairy in turn owns 99% of the registered capital of Baiquan Feihe Dairy Co. Limited (“Baiquan Dairy”), 95% of Beijing Feihe Biotechnology Scientific and Commercial Co., Limited (“Beijing Feihe”) and 99% of Qiqihaer Feihe Soybean Co., Limited (“Feihe Soybean”), 100% of Heilongjiang Aiyingquan International Trading Co., Limited (“Aiyingquan”) which was established in 2009, and 85% of the registered capital of Heilongjiang Flying Crane Trading Co., Limited (“Feihe Trading”), which was established in January 2010.

Feihe Dairy also owned Heilongjiang Feihe Kedong Feedlots Co., Limited (“Kedong Farms”) and Heilongjiang Feihe Gannan Feedlots Co., Limited (“Gannan Farms”, and together with Kedong Farms, the “Dairy Farms”). The Company completed the sale of these subsidiaries on October 31, 2011 and, as a result, they are accounted for as discontinued operations in the accompanying consolidated financial statements for the years ended December 31, 2011 and 2010. Accordingly, assets and liabilities, revenues and expenses, and cash flows related to the Dairy Farms business have been classified in the accompanying consolidated financial statements as discontinued operations for the years ended December 31, 2012, 2011 and 2010. Additional information with respect to the sale of the Dairy Farms is presented at Note 7.

From 2006 onwards, the Company has also owned 100% of the registered capital of Shanxi Feihesantai Biotechnology Scientific and Commercial Co., Limited (“Shanxi Feihe”), Langfang Flying Crane Dairy Products Co., Limited (“Langfang Feihe”) and Gannan Flying Crane Dairy Products Co., Limited (“Gannan Feihe”).

The core activities of the current subsidiaries included in the consolidated financial statements are as follows:

• Feihe China Nutrition Company (formerly known as American Flying Crane Corporation) - Investment holding

• Gannan Flying Crane Dairy Products Co., Limited - Manufacturing dairy products

• Heilongjiang Feihe Dairy Co., Limited - Manufacturing and distributing dairy products

• Beijing Feihe Biotechnology Scientific and Commercial Co., Limited - Marketing and distributing dairy products

• Shanxi Feihesantai Biotechnology Scientific and Commercial Co., Limited - Manufacturing and distributing walnut and soybean products

• Qiqihaer Feihe Soybean Co., Limited - Manufacturing and distributing soybean products

• Langfang Flying Crane Dairy Products Co., Limited - Packaging and distributing dairy products, ceased operations following the sale of the land use right and substantial fixed assets in November 2012

• Heilongjiang Aiyingquan International Trading Co., Limited - Marketing and distributing water and cheese, specifically marketed for consumption by children

• Baiquan Feihe Dairy Co., Limited - Produced dairy products until 2011, de-registered on May 23, 2012

• Heilongjiang Flying Crane Trading Co., Limited (“Feihe Trading”) - Distributing milk and soybean related products until business de-registered on May 23, 2012.

Apart from AFC, the subsidiaries’ principal country of operations is the People’s Republic of China (the “PRC”).