10-Q

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 2018

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from ____________ to ____________

Commission File Number 001-34260

CHINA GREEN AGRICULTURE, INC. 

(Exact name of registrant as specified in its charter)

Nevada	36-3526027
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)

3rd floor, Borough A, Block A. No. 181, South Taibai 

Road, Xi’an, Shaanxi province, PRC 710065 

(Address of principal executive offices) (Zip Code)

+86-29-88266368

(Issuer’s telephone number, including area code)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐  (Do not check if a smaller reporting company)	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 38,896,945 shares of common stock, $0.001 par value, as of November 14, 2018.

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION	1
Item 1.	Financial Statements	1
	Consolidated Condensed Balance Sheets As of September 30, 2018 (Unaudited) and June 30, 2018	1
	Consolidated Condensed Statements of Income and Comprehensive Income For the Three Months Ended September 30, 2018 and 2017 (Unaudited)	2
	Consolidated Condensed Statements of Cash Flows For the Three Months Ended September 30, 2018 and 2017 (Unaudited)	3
	Notes to Consolidated Condensed Financial Statements As of September 30, 2018 (Unaudited)	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33
PART II	OTHER INFORMATION	34
Item 6.	Exhibits	34
Signatures		35
Exhibits/Certifications		36

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30, 2018			June 30, 2018
ASSETS
Current Assets
Cash and cash equivalents	$	153,154,657		$	150,805,639
Accounts receivable, net		136,794,689			174,460,937
Inventories		85,975,555			53,784,814
Prepaid expenses and other current assets		3,791,349			2,945,247
Amount due from related parties		249,087			235,551
Advances to suppliers, net		18,497,101			25,194,463
Total Current Assets		398,462,437			407,426,651
Plant, Property and Equipment, Net		29,028,781			30,894,683
Other Assets		284,016			294,550
Other Non-current Assets		14,821,931			15,885,696
Intangible Assets, Net		19,163,847			20,317,914
Goodwill		7,874,421			8,166,467
Total Assets	$	469,635,433		$	482,985,960
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	22,463,673		$	27,128,921
Customer deposits		5,785,249			7,251,967
Accrued expenses and other payables		11,029,573			10,207,058
Amount due to related parties		3,232,715			3,271,619
Taxes payable		29,459,231			29,952,206
Short term loans		4,368,000			4,726,300
Interest payable		514,332			462,060
Derivative liability		333			66,143
Total Current Liabilities		76,853,106			83,066,274
Long-term Liabilities
Convertible notes payable		7,210,528			7,371,899
Total Liabilities	$	84,063,634		$	90,438,173
Stockholders' Equity
Preferred Stock, $.001 par value, 20,000,000 shares authorized, zero shares issued and outstanding		-			-
Common stock, $.001 par value, 115,197,165 shares authorized, 38,896,945 and 38,896,945, shares issued and outstanding as of September 30, 2018 and June 30, 2018, respectively		38,897			38,897
Additional paid-in capital		129,337,035			129,337,035
Statutory reserve		31,580,247			30,947,344
Retained earnings		244,201,627			235,822,726
Accumulated other comprehensive income		(19,586,007	)		(3,598,215	)
Total Stockholders' Equity		385,571,799			392,547,787
Total Liabilities and Stockholders' Equity	$	469,635,433		$	482,985,960

The accompanying notes are an integral part of these consolidated financial statements.

1

CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	Three Months Ended September 30,
	2018			2017
Sales
Jinong	$	22,496,533		$	26,773,760
Gufeng		17,473,251			18,222,066
Yuxing		2,387,546			1,792,643
VIEs - others		15,597,476			15,340,182
Net sales		57,954,806			62,128,651
Cost of goods sold
Jinong		11,203,172			13,112,756
Gufeng		15,304,863			15,986,429
Yuxing		2,047,163			1,392,553
VIEs - others		12,929,968			12,693,629
Cost of goods sold		41,485,166			43,185,367
Gross profit		16,469,640			18,943,284
Operating expenses
Selling expenses		3,420,427			5,154,197
Selling expenses - amortization of deferred asset
General and administrative expenses		2,309,359			6,914,802
Total operating expenses		5,729,786			12,068,999
Income from operations		10,739,854			6,874,285
Other income (expense)
Other income (expense)		(38,330	)		(7,211	)
Interest income		127,383			87,914
Interest expense		(162,686	)		(179,575	)
Total other income (expense)		(73,633	)		(98,872	)
Income before income taxes		10,666,221			6,775,413
Provision for income taxes		1,654,416			1,722,655
Net income from continuing operations		9,011,805			5,052,758
Net income from discontinued operation, net of tax		-			42,070
Net income		9,011,805			5,094,828
Other comprehensive income (loss)
Foreign currency translation gain (loss)		(15,987,792	)		240,218
Comprehensive income (loss)	$	(6,975,987	)	$	5,335,046
Basic weighted average shares outstanding		38,896,945			38,185,277
Basic net earnings per share-from continue operations	$	0.23		$	0.13
Basic net earnings per share-from discontinue operations		-			-
Diluted weighted average shares outstanding		38,896,945			38,185,277
Diluted net earnings per share-from continue operations	$	0.23			0.13
Diluted net earnings per share-from discontinue operations		-			-

The accompanying notes are an integral part of these consolidated financial statements.

2

CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)  

	Three Months Ended September 30,
	2018			2017
Cash flows from operating activities
Net income	$	9,011,805		$	5,094,828
Income from discontinued operations, net of income taxes		-			42,070
Income from continued operations, net of income taxes		9,011,805			5,052,758
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		1,226,500			1,900,626
Gain (Loss) on disposal of property, plant and equipment		4,451			15,109
Amortization of debt discount		103,219			105,293
Change in fair value of derivative liability		(101,807	)		(79,343	)
Changes in operating assets
Accounts receivable		31,722,160			37,881,192
Amount due from related parties		(22,165	)		(121,120	)
Other current assets		1,012,668			1,531,095
Inventories		(34,434,298	)		(41,278,460	)
Advances to suppliers		5,850,761			5,052,781
Other assets		(1,472,705	)		447,190
Changes in operating liabilities
Accounts payable		(3,737,493	)		4,461,065
Customer deposits		(1,218,707	)		(1,197,303	)
Tax payables		(457,945	)		(1,973,188	)
Accrued expenses and other payables		962,954			237,624
Interest payable		69,442			70,836
Net cash provided by continued operating activities		8,518,839			12,106,155
Net cash provided by (used in) discontinued operation		-			(10,782	)
Net cash provided by operating activities		8,518,839			12,095,373
Cash flows from investing activities
Purchase of plant, property, and equipment		(31,273	)		(5,929	)
Change in construction in process		-			(11,280	)
Net cash used in investing activities		(31,273	)		(17,209	)
Cash flows from financing activities
Proceeds from loans		-			1,802,500
Repayment of loans		(191,056	)		(3,156,300	)
Net cash used in financing activities		(191,056	)		(1,353,800	)
Effect of exchange rate change on cash and cash equivalents		(5,947,491	)		134,551
Net increase in cash and cash equivalents		2,349,019			10,858,915
Cash and cash equivalents, beginning balance		150,805,639			123,050,548
Cash and cash equivalents, ending balance	$	153,154,657		$	133,909,463
Supplement disclosure of cash flow information
Interest expense paid	$	106,597		$	725,317
Income taxes paid	$	2,118,026		$	3,695,843

The accompanying notes are an integral part of these consolidated financial statements.

3

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

China Green Agriculture, Inc. (the “Company”, “Parent Company” or “Green Nevada”), through its subsidiaries, is engaged in the research, development, production, distribution and sale of humic acid-based compound fertilizer, compound fertilizer, blended fertilizer, organic compound fertilizer, slow-release fertilizers, highly-concentrated water-soluble fertilizers and mixed organic-inorganic compound fertilizer and the development, production and distribution of agricultural products.

Unless the context indicates otherwise, as used in this Report, the following are the references herein of all the subsidiaries of the Company (i) Green Agriculture Holding Corporation (“Green New Jersey”), a wholly-owned subsidiary of Green Nevada, incorporated in the State of New Jersey; (ii) Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (“Jinong”), a wholly-owned subsidiary of Green New Jersey organized under the laws of the PRC; (iii) Xi’an Hu County Yuxing Agriculture Technology Development Co., Ltd. (“Yuxing”), a Variable Interest Entity (“VIE”) in the in the People’s Republic of China (the “PRC”) controlled by Jinong through a series of contractual agreements; (iv) Beijing Gufeng Chemical Products Co., Ltd., a wholly-owned subsidiary of Jinong in the PRC (“Gufeng”), and (v) Beijing Tianjuyuan Fertilizer Co., Ltd., Gufeng’s wholly-owned subsidiary in the PRC (“Tianjuyuan”).

On June 30, 2016 the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and a series of contractual agreements with the shareholders of the following six companies that are organized under the laws of the PRC and would be deemed VIEs: Shaanxi Lishijie Agrochemical Co., Ltd. (“Lishijie”), Songyuan Jinyangguang Sannong Service Co., Ltd. (“Jinyangguang”), Shenqiu County Zhenbai Agriculture Co., Ltd. (“Zhenbai”), Weinan City Linwei District Wangtian Agricultural Materials Co., Ltd. (“Wangtian”), Aksu Xindeguo Agricultural Materials Co., Ltd. (“Xindeguo”), and Xinjiang Xinyulei Eco-agriculture Science and Technology co., Ltd. (“Xinyulei”). On January 1, 2017, the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and a series of contractual agreements with the shareholders of the following two companies that are organized under the laws of the PRC and would be deemed VIEs, Sunwu County Xiangrong Agricultural Materials Co., Ltd. (“Xiangrong”), and Anhui Fengnong Seed Co., Ltd. (“Fengnong”).

On November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Zhenbai.

Yuxing, Lishijie, Jinyangguang, Wangtian, Xindeguo, Xinyulei, Xiangrong and Fengnong may also collectively be referred to as the “the VIE Companies”; Lishijie, Jinyangguang, Zhenbai, Wangtian, Xindeguo, Xinyulei, Xiangrong and Fengnong may also collectively be referred to as “the sales VIEs” or “the sales VIE companies”.

4

The Company’s corporate structure as of September 30, 2018 is set forth in the diagram below:

 

5

NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principle of consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Green New Jersey, Jinong, Gufeng, Tianjuyuan, and the VIE Companies. All significant inter-company accounts and transactions have been eliminated in consolidation.

Effective June 16, 2013, Yuxing was converted from being a wholly-owned foreign enterprise 100% owned by Jinong to a domestic enterprise 100% owned one natural person, who is not affiliated to the Company (“Yuxing’s Owner”). Effective the same day, Yuxing’s Owner entered into a series of contractual agreements with Jinong pursuant to which Yuxing became the VIE of Jinong.

VIE assessment

A VIE is an entity (1) that has total equity at risk that is not sufficient to finance its activities without additional subordinated financial support from other entities, (2) where the group of equity holders does not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance, or the obligation to absorb the entity’s expected losses or the right to receive the entity’s expected residual returns, or both, or (3) where the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. In order to determine if an entity is considered a VIE, the Company first performs a qualitative analysis, which requires certain subjective decisions regarding its assessments, including, but not limited to, the design of the entity, the variability that the entity was designed to create and pass along to its interest holders, the rights of the parties, and the purpose of the arrangement. If the Company cannot conclude after a qualitative analysis whether an entity is a VIE, it performs a quantitative analysis. The qualitative analysis considered the design of the entity, the risks that cause variability, the purpose for which the entity was created, and the variability that the entity was designed to pass along to its variable interest holders. When the primary beneficiary could not be identified through a qualitative analysis, we used internal cash flow models to compute and allocate expected losses or expected residual returns to each variable interest holder based upon the relative contractual rights and preferences of each interest holder in the VIE’s capital structure.

Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 consolidated financial statements and the amount of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those results.

Cash and cash equivalents and concentration of cash

For statement of cash flows purposes, the Company considers all cash on hand and in banks, certificates of deposit with state owned banks in the Peoples Republic of China (“PRC”) and banks in the United States, and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. The Company maintains large sums of cash in three major banks in China. The aggregate cash in such accounts and on hand as of September 30, 2018 and June 30, 2018 were $153,154,657 and $150,805,639, respectively. The Company had $153,141,535 and $150,785,737 in cash in banks in China, and $13,122 and $19,902 in cash in two banks in the United States as of September 30, 2018 and June 30, 2018, respectively. Cash overdrafts as of a balance sheet date will be reflected as liabilities in the balance sheet. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

Accounts receivable

The Company’s policy is to maintain reserves for potential credit losses on accounts receivable. Management regularly reviews the composition of accounts receivable and analyzes customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves at each year-end. Accounts considered uncollectible are written off through a charge to the valuation allowance. As of September 30, 2018, and June 30, 2018, the Company had accounts receivable of $136,794,689 and $174,460,937, net of allowance for doubtful accounts of $24,387,808 and $24,551,796, respectively.

6

Inventories

Inventory is valued at the lower of cost (determined on a weighted average basis) or market. Inventories consist of raw materials, work in process, finished goods and packaging materials. The Company reviews its inventories regularly for possible obsolete goods and establishes reserves when determined necessary. At September 30, 2018 and 2017, the Company had no reserve for obsolete goods.

Intangible Assets

The Company records intangible assets acquired individually or as part of a group at fair value. Intangible assets with definitive lives are amortized over the useful life of the intangible asset, which is the period over which the asset is expected to contribute directly or indirectly to the entity’s future cash flows. The Company evaluates intangible assets for impairment at least annually and more often whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. The Company has not recorded impairment of intangible assets as of September 30, 2018 and 2017 respectively.

Customer deposits

Payments received before all the relevant criteria for revenue recognition are satisfied are recorded as customer deposits. When all revenue recognition criteria are met, the customer deposits are recognized as revenue. As of September 30, 2018, and June 30, 2018, the Company had customer deposits of $5,785,249 and $7,251,967, respectively.

Earnings per share

Basic earnings per share are computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and stock awards.

The components of basic and diluted earnings per share consist of the following:

	Three Months Ended
	September 30,
	2018		2017
Net Income for Basic Earnings Per Share	$	9,011,805	$	5,094,828
Basic Weighted Average Number of Shares		38,896,945		38,185,277
Net Income Per Share – Basic	$	0.23	$	0.13
Net Income for Diluted Earnings Per Share	$	9,011,805	$	5,094,828
Diluted Weighted Average Number of Shares		38,896,945		38,185,277
Net Income Per Share – Diluted	$	0.23	$	0.13

7

Recent accounting pronouncements

Revenue Recognition:  In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for us in our first quarter of fiscal 2018 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09 (full retrospective method); or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09 (modified retrospective method). We are currently assessing the impact to our consolidated financial statements and have not yet selected a transition approach.

Disclosure of Going Concern Uncertainties:  In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15), to provide guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for us in our fourth quarter of fiscal 2017 with early adoption permitted. We do not believe the impact of our pending adoption of ASU 2014-15 on the Company’s financial statements will be material.

Financial instrument: In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The standard addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is not permitted. Accordingly, the standard is effective for us on September 1, 2018. We are currently evaluating the impact that the standard will have on our consolidated financial statements.

Leases: In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-2”), which provides guidance on lease amendments to the FASB Accounting Standard Codification. This ASU will be effective for us beginning in May 1, 2019. We are currently in the process of evaluating the impact of the adoption of ASU 2016-2 on our consolidated financial statements.

Stock-based Compensation: In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). ASU 2016-09 changes how companies account for certain aspects of stock-based awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for us in the first quarter of 2018, and earlier adoption is permitted. We are still evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

Financial Instruments - Credit Losses: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): The amendments in this Update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The amendments broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit loss, which will be more decision useful to users of the financial statements. ASU 2016-13 is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is allowed as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is still evaluating the effect that this guidance will have on the Company’s consolidated financial statements and related disclosures.

Statement of Cash Flows: In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): The amendments in this Update apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under Topic 230. The amendments in this Update provide guidance on the following eight specific cash flow issues. The amendments are an improvement to GAAP because they provide guidance for each of the eight issues, thereby reducing the current and potential future diversity in practice described above. ASU 2016-15 is effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is still evaluating the effect that this guidance will have on the Company’s consolidated financial statements and related disclosures.

Statement of Cash Flows: In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): “Restricted Cash” (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This update is effective in fiscal years, including interim periods, beginning after December 15, 2017 and early adoption is permitted. The adoption of this guidance will result in the inclusion of the restricted cash balances within the overall cash balance and removal of the changes in restricted cash activity, which are currently recognized in other financing activities, on the Statements of Consolidated Cash Flows. Furthermore, an additional reconciliation will be required to reconcile Cash and cash equivalents and restricted cash reported within the Consolidated Balance Sheets to sum to the total shown in the Statements of Consolidated Cash Flows. The Company anticipates adopting this new guidance effective July 1, 2018. The Company is currently evaluating this guidance and the impact it will have on the Consolidated Financial Statements and disclosures. 

8

Business Combination: In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. This guidance will be effective for us in the first quarter of 2018 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our consolidated financial statements.

Stock-based Compensation: In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock compensation (Topic 718): Scope of modification accounting” (“ASU 2017-09”). The purpose of the amendment is to clarify which changes to the terms or condition of a share-based payment award require an entity to apply modification accounting. For all entities that offer share-based payment awards, ASU 2017-09 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2017-09 on its condensed consolidated financial statements.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

NOTE 3 – INVENTORIES

Inventories consisted of the following:

	September 30,		June 30,
	2018		2018
Raw materials	$	30,149,050	$	13,154,465
Supplies and packing materials	$	523,992	$	566,254
Work in progress	$	386,158	$	417,130
Finished goods	$	54,916,355	$	39,646,965
Total	$	85,975,555	$	53,784,814

NOTE 4 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

	September 30,			June 30,
	2018			2018
Building and improvements	$	38,877,508		$	40,319,393
Auto		3,387,289			3,504,028
Machinery and equipment		18,097,309			18,765,192
Agriculture assets		741,044			768,528
Total property, plant and equipment		61,103,149			63,357,141
Less: accumulated depreciation		(32,074,369	)		(32,462,458	)
Total	$	29,028,781		$	30,894,683

NOTE 5 – INTANGIBLE ASSETS

Intangible assets consisted of the following:

	September 30,		June 30,
	2018		2018
Land use rights, net	$	9,516,800	$	9,930,420
Technology patent, net		3,334		3,570
Customer relationships, net		3,131,697		3,578,724
Non-compete agreement		586,096		659,500
Trademarks		5,925,920		6,145,700
Total	$	19,163,847	$	20,317,914

LAND USE RIGHT

On September 25, 2009, Yuxing was granted a land use right for approximately 88 acres (353,000 square meters or 3.8 million square feet) by the People’s Government and Land & Resources Bureau of Hu County, Xi’an, Shaanxi Province. The fair value of the related intangible asset was determined to be the respective cost of RMB73,184,895 (or $10,655,721). The intangible asset is being amortized over the grant period of 50 years using the straight-line method.

9

On August 13, 2003, Tianjuyuan was granted a certificate of Land Use Right for a parcel of land of approximately 11 acres (42,726 square meters or 459,898 square feet) at Ping Gu District, Beijing. The purchase cost was recorded at RMB1,045,950 (or $152,290). The intangible asset is being amortized over the grant period of 50 years.

On August 16, 2001, Jinong received a land use right as a contribution from a shareholder, which was granted by the People’s Government and Land & Resources Bureau of Yangling District, Shaanxi Province. The fair value of the related intangible asset at the time of the contribution was determined to be RMB7,285,099 (or $1,060,710). The intangible asset is being amortized over the grant period of 50 years.

The Land Use Rights consisted of the following:

	September 30,			June 30,
	2018			2018
Land use rights	$	11,868,721			12,308,907
Less: accumulated amortization		(2,351,921	)		(2,378,488	)
Total land use rights, net	$	9,516,800			9,930,419

TECHNOLOGY PATENT

On August 16, 2001, Jinong was issued a technology patent related to a proprietary formula used in the production of humic acid. The fair value of the related intangible asset was determined to be the respective cost of RMB 5,875,068 (or $855,410) and is being amortized over the patent period of 10 years using the straight-line method. This technology patent has been fully amortized.

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The fair value of the acquired technology patent was estimated to be RMB9,200,000 (or $1,339,520) and is amortized over the remaining useful life of six years using the straight-line method. As of June 30, 2018, this technology patent is fully amortized.

The technology know-how consisted of the following:

	September 30,			June 30,
	2018			2018
Technology know-how	$	2,199,715		$	2,276,335
Less: accumulated amortization		(2,199,715	))		(2,276,335	)
Total technology know-how, net	$	-		$	-

CUSTOMER RELATIONSHIPS

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The fair value of the acquired customer relationships was estimated to be RMB65,000,000 (or $9,464,000) and is amortized over the remaining useful life of ten years. On June 30, 2016 and January 1, 2017, the Company acquired the sales VIE Companies. The fair value of the acquired customer relationships was estimated to be RMB16,472,179 (or $2,398,349) and is amortized over the remaining useful life of seven to ten years.

	September 30,			June 30,
	2018			2018
Customer relationships	$	11,608,629		$	12,039,169
Less: accumulated amortization		(8,476,932	))		(8,460,445	))
Total customer relationships, net	$	3,131,697		$	3,578,724

NON-COMPETE AGREEMENT

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The fair value of the acquired non-compete agreement was estimated to be RMB1,320,000 (or $192,192) and is amortized over the remaining useful life of five years using the straight-line method. On June 30, 2016 and January 1, 2017, the Company acquired the sales VIE Companies. The fair value of the acquired non-compete agreements was estimated to be RMB6,150,683 (or $895,539) and is amortized over the remaining useful life of five years using the straight-line method.

	September 30,			June 30,
	2018			2018
Non-compete agreement	$	1,188,597		$	1,232,680
Less: accumulated amortization		(602,501	)		(573,180	)
Total non-compete agreement, net	$	586,096		$	659,500

TRADEMARKS

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The preliminary fair value of the acquired trademarks was estimated to be RMB40,700,000 (or $5,925,920) and is subject to an annual impairment test.

10

AMORTIZATION EXPENSE

Estimated amortization expenses of intangible assets for the next five twelve months periods ended September 30, are as follows:

Twelve Months Ended on September 30,	Expense ($)
2019		1,841,368
2020		1,563,540
2021		774,915
2022		583,475
2023		530,802

NOTE 6 – OTHER NON-CURRENT ASSETS

Other non-current assets mainly include advance payments related to leasing land for use by the Company. As of September 30, 2018, the balance of other non-current assets was $16,776,611, which was the lease fee advances for agriculture lands that the Company engaged in Shiquan County from 2018 to 2027.

In March 2017, Jinong entered into a lease agreement for approximately 3,400 mu, and 2600-hectare agriculture lands in Shiquan County, Shaanxi Province. The lease was from April 2017 and was renewable for every ten-year period up to 2066. The aggregate leasing fee was approximately RMB 13 million per annum, The Company had made 10-year advances of leasing fee per lease terms. The Company has amortized $.5 million as expenses for the three months ended September 30, 2018.

Estimated amortization expenses of the lease advance payments for the next four twelve-month periods ended September 30 and thereafter are as follows:

Twelve months ending September 30,
2019	$	1,954,680
2020	$	1,954,680
2021	$	1,954,680
2022	$	1,954,680
2023 and thereafter	$	8,957,891

NOTE 7 - ACCRUED EXPENSES AND OTHER PAYABLES

Accrued expenses and other payables consisted of the following:

	September 30,		June 30,
	2018		2018
Payroll payable	$	12,932	$	13,788
Welfare payable		149,479		155,023
Accrued expenses		6,373,325		5,368,348
Other payables		4,371,728		4,543,261
Other levy payable		122,109		126,638
Total	$	11,029,573	$	10,207,058

NOTE 8 - RELATED PARTIES TRANSACTIONS

At the end of December 2015, Yuxing entered into a sales agreement with the Company’s affiliate, 900LH.com Food Co., Ltd. (“900LH.com”, previously announced as Xi’an Gem Grain Co., Ltd) pursuant to which Yuxing is to supply various vegetables to 900LH.com for its incoming seasonal sales at the holidays and year ends (the “Sales Agreement”). The contingent contracted value of the Sales Agreement is RMB 25,500,000 (approximately $3,712,800). For the three months ended September 30, 2018 and 2017, Yuxing has sold approximately $71,962 and $133,690 products to 900LH.com.

The amount due from 900LH.com to Yuxing was $249,087 and $235,551 as of September 30, 2018 and June 30, 2018, respectively.

11

As of September 30, 2018, and June 30, 2018, the amount due to related parties was $3,232,715 and $3,271,619, respectively.  As of September 30, 2018, and June 30, 2018, $1,019,200 and $1,057,000, respectively were amounts that Gufeng borrowed from a related party, Xi’an Techteam Science & Technology Industry (Group) Co. Ltd., a company controlled by Mr. Zhuoyu Li, Chairman and CEO of the Company, representing unsecured, non-interest-bearing loans that are due on demand.  These loans are not subject to written agreements.

As of September 30, 2018, and June 30, 2018, the Company’s subsidiary, Jinong, owed 900LH.com $431,907 and $393,565, respectively.

On June 29, 2016, Jinong signed an office lease with Kingtone Information Technology Co., Ltd. (“Kingtone Information”), of which Mr. Tao Li, former Chairman and CEO of the Company, serves as Chairman of its board of directors. Pursuant to the lease, Jinong rented 612 square meters (approximately 6,588 square feet) of office space from Kingtone Information. The lease provides for a two-year term effective as of July 1, 2016 with monthly rent of RMB24,480 (approximately $3,564)

NOTE 9- LOAN PAYABLES

As of September 30, 2018, the short-term loan payables consisted of two loans which mature on dates ranging from May 21, 2019 through June 18, 2019 with interest rates ranging from 5.22% to 6.31%. Both loans are collateralized by Tianjuyuan’s land use right and building ownership right. .

No.	Payee	Loan period per agreement	Interest Rate			September 30, 2018
1	Bank of Beijing - Pinggu Branch	May 22, 2018-May 21, 2019		5.22	%		1,456,000
2	Postal Saving Bank of China - Pinggu Branch	June 19, 2018-June 18, 2019		6.31	%		2,912,000
	Total					$	4,368,000

The interest expense from short-term loans was $93,122 and $179,575 for the period ended September 30, 2018 and 2017 respectively.

12

NOTE 10 – CONVERTIBLE NOTES PAYABLE

Relating to the acquisition of the VIE Companies, the Company subsidiary, Jinong, issued to the VIE Companies shareholders convertible notes payable twice, in the aggregate notional amount of RMB 51,000,000 ($7,425,600) with a term of three years and an annual interest rate of 3%.

No.	Related Acquisitions of Sales VIEs	Issuance Date	Maturity Date	Notional Interest Rate		Conversion Price		Notional Amount (in RMB)
1	Wangtian, Lishijie, Xindeguo, Xinyulei, Jinyangguang	June 30, 2016	June 30, 2019	3	%	$	5.00		39,000,000
2	Fengnong, Xiangrong	January 1, 2017	December 31, 2019	3	%	$	5.00		12,000,000

The convertible notes take priority over the preferred stock and common stock of Jinong, and any other class or series of capital stocks Jinong issues in the future in terms of interests and payments in the event of any liquidation, dissolution or winding up of Jinong. On or after the third anniversary of the issuance date of the note, noteholders may request Jinong to process the note conversion to convert the note into shares of the Company’s common stock. The notes cannot be converted prior to the mature date. The per share conversion price of the notes is the higher of the following: (i) $5.00 per share or (ii) 75% of the closing price of the Company’s common stock on the date the noteholder delivers the conversion notice. Due to the discontinuation of VIE agreements with Zhenbai’s shareholders, certain convertible notes issued on June 30, 2016 with a face amount of RMB 12,000,000 ($1,747,200) were tendered back to the Company. All outstanding balance of unpaid principal and accrued interest in the tendered convertible notes were forfeited.

The Company determined that the fair value of the convertible notes payable was RMB 49,522,859 ($7,210,528) and RMB 48,820,525 ($7,108,268) as of September 30, 2018 and June 30, 2018, respectively. Aside from the forfeiture of the convertible notes previously issued to Zhenbai’s shareholders, the difference between the fair value of the notes and the face amount of the notes is being amortized to accretion implied interest expense over the three-year life of the notes. As of September 30, 2018, the accumulated amortization of this discount into accretion expenses was $1,025,268.

NOTE 11 – TAXES PAYABLE

Enterprise Income Tax

Effective January 1, 2008, the Enterprise Income Tax (“EIT”) law of the PRC replaced the tax laws for Domestic Enterprises (“DEs”) and Foreign Invested Enterprises (“FIEs”). The EIT rate of 25% replaced the 33% rate that was applicable to both DEs and FIEs. The two-year tax exemption and three-year 50% tax reduction tax holiday for production-oriented FIEs was eliminated. Since January 1, 2008, Jinong became subject to income tax in China at a rate of 15% as a high-tech company, because of the expiration of its tax exemption on December 31, 2007. Accordingly, it made provision for income taxes for the three-month period ended September 30, 2018 and 2017 of $1,041,180 and $1,013,134, respectively, which is mainly due to the operating income from Jinong. Gufeng is subject to 25% EIT rate and thus it made provision for income taxes of $395,255 and $511,796 for the three months ended September 30, 2018 and 2017, respectively.

Value-Added Tax

Certain fertilizer products that are produced and sold in the PRC were subject to a Chinese Value-Added Tax (VAT) of 13% of the gross sales price. On April 29, 2008, the PRC State of Administration of Taxation (SAT) released Notice #56, “Exemption of VAT for Organic Fertilizer Products”, which allows certain fertilizer products to be exempt from VAT beginning June 1, 2008. The Company submitted the application for exemption in May 2009, which was granted effective September 1, 2009. 

Income Taxes and Related Payables

	Sept 30,			June 30,
	2018			2018
VAT provision	$	(444,722	)	$	(449,140	)
Income tax payable		77,307			554,065
Other levies		821,723			836,747
Total	$	454,308		$	941,672

The provision for income taxes consists of the following

	September 30,		September 30,
	2018		2017
Current tax - foreign	$	1,654,416	$	1,722,655
Deferred tax		-		-
	$	1,654,416	$	1,722,655

13

Our effective tax rates were approximately 15.5% and 25.3% for the three months ended September 30, 2018 and 2017, respectively. Substantially all the Company’s income before income taxes and related tax expense are from PRC sources. Actual income tax benefit reported in the consolidated statements of income and comprehensive income differ from the amounts computed by applying the US statutory income tax rate of 34% to income before income taxes for the three months ended September 30, 2018 and 2017 for the following reasons:

September 30, 2018

Tax Rate Reconciliation

September 30, 2018

	China					United States
	15% - 25%					21%					Total
Pretax income (loss)	$	11,287,985					(621,765	)			$	10,666,220
Expected income tax expense (benefit)		2,821,996		25.0	%		(130,571	)	21.0	%		2,691,426
High-tech income benefits on Jinong		(1,041,180	)	(9.5	)%		-		-			(1,041,180	)
Losses from subsidiaries in which no benefit is recognized		(126,400	)	(1.1	)%		-		-			(126,400	)
Change in valuation allowance on deferred tax asset from US tax benefit		-					130,571		(21.0	)%		130,571
Actual tax expense	$	1,654,416		14.7	%	$	-		-	%	$	1,654,416		15.5	%

	China					United States
September 30, 2017	15% - 25%					34%					Total
Pretax income (loss)	$	7,015,501				$	(198,017	)			$	6,817,484
Expected income tax expense (benefit)		1,753,875		0.250			(67,326	)	34	%		1,686,549
High-tech income benefits on Jinong		(675,422	)	-0.096								(675,422	)
Losses from subsidiaries in which no benefit is recognized		644,202		0.092								644,202
Change in valuation allowance on deferred tax asset from US tax benefit		-					67,326		-34	%		67,326
Actual tax expense	$	1,722,655		24.6	%	$	-		0.00	%	$	1,722,655		25.3	%

NOTE 12 – STOCKHOLDERS’ EQUITY

Common Stock

There were no shares of common stock issued during the quarters ended September 30, 2018 and 2017, respectively.

As of September 30, 2018, and June 30, 2018, there were 38,896,945 and 38,896,945 shares of common stock issued and outstanding.

14

Preferred Stock

Under the Company’s Articles of Incorporation, the Board has the authority, without further action by stockholders, to designate up to 20,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges, qualifications and restrictions granted to or imposed upon the preferred stock, including dividend rights, conversion rights, voting rights, rights and terms of redemption, liquidation preference and sinking fund terms, any or all of which may be greater than the rights of the common stock. If the Company sells preferred stock under its registration statement on Form S-3, it will fix the rights, preferences, privileges, qualifications and restrictions of the preferred stock of each series in the certificate of designation relating to that series and will file the certificate of designation that describes the terms of the series of preferred stock the Company offers before the issuance of the related series of preferred stock.

As of September 30, 2018, the Company has 20,000,000 shares of preferred stock authorized, with a par value of $.001 per share, of which no shares are issued or outstanding.

NOTE 13 –CONCENTRATIONS

Market Concentration

All the Company’s revenue-generating operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC, and by the general state of the PRC’s economy.

The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among other things, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by, among other things, changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation.

Vendor and Customer Concentration

There were four vendors from each of which the Company purchased more than 10% of its raw materials, with the total of 47.6% of its raw materials for the three months ended September 30, 2018. Total purchases from these four vendors amounted to $26,676,809 for the three-month period ended September 30, 2018.

There were six vendors from each of which the Company purchased more than 10% of its raw materials, with the total of 64.6% of its raw materials for the three months ended September 30, 2017. Total purchases from these six vendors amounted to $52,430,050 for the three-month period ended September 30, 2017.

No customer accounted for over 10% of the Company’s sales for the three months ended September 30, 2018 and 2017.

NOTE 14 – SEGMENT REPORTING

As of September 30, 2018, the Company was organized into four main business segments based on location and product: Jinong (fertilizer production), Gufeng (fertilizer production), Yuxing (agricultural products production) and the sales VIEs. Each of the four operating segments referenced above has separate and distinct general ledgers. The chief operating decision maker (“CODM”) receives financial information, including revenue, gross margin, operating income and net income produced from the various general ledger systems to make decisions about allocating resources and assessing performance; however, the principal measure of segment profitability or loss used by the CODM is net income by segment.

15

	Three Months Ended September 30,
Revenues from unaffiliated customers:	2018			2017
Jinong	$	22,496,533		$	26,773,760
Gufeng		17,473,251			18,222,066
Yuxing		2,387,546			1,792,643
Sales VIEs		15,597,474			15,340,182
Consolidated	$	57,954,804		$	62,128,651
Operating income:
Jinong	$	6,928,090		$	6,766,075
Gufeng		1,609,052			2,106,213
Yuxing		193,177			175,473
Sales VIEs		2,631,299			(1,808,652	)
Reconciling item (1)		-			2
Reconciling item (2)		(621,764	)		(198,019	)
Consolidated	$	10,739,854		$	6,791,658
Net income:
Jinong	$	5,900,016		$	5,741,090
Gufeng		1,120,344			1,489,067
Yuxing		193,178			175,622
Sales VIEs		2,420,029			(2,070,864
Reconciling item (1)		2			2
Reconciling item (2)		(621,766	)		(198,019	)
Consolidated	$	9,011,805		$	5,052,758
Depreciation and Amortization:
Jinong	$	198,258		$	853,743
Gufeng		536,619			547,757
Yuxing		304,818			312,519
Sales VIEs		186,806			186,606
Consolidated	$	1,226,500		$	1,900,626
Interest expense:
Jinong		69,442			70,836
Gufeng		93,122			104,723
Sales VIEs		123			4,016
Consolidated	$	162,686		$	179,575
Capital Expenditure:
Jinong	$	3,036		$	3,341
Gufeng		26,988			13,868
Yuxing		1,249			-
Consolidated	$	31,273		$	17,209

	As of
	September 30,			June 30,
	2018			2018
Identifiable assets:
Jinong	$	224,480,929		$	226,335,489
Gufeng		160,920,365			168,572,947
Yuxing		-			-
Sales VIEs		83,654,118			87,567,782
Reconciling item (1)		582,901			512,622
Reconciling item (2)		(2,879	)		(2,879	)
Consolidated	$	469,635,433		$	482,985,960

(1) Reconciling amounts refer to the unallocated assets or expenses of Green New Jersey.

(2) Reconciling amounts refer to the unallocated assets or expenses of the Parent Company.

16

NOTE 15 – COMMITMENTS AND CONTINGENCIES

On June 29, 2018, Jinong renewed an office lease with Kingtone Information.  Pursuant to the lease, Jinong rented 612 square meters (approximately 6,588 square feet) of office space from Kingtone Information. The lease provided for a four-year term effective as of July 1, 2018 with monthly rent of $3,564 (approximately RMB 24,480). 

Accordingly, the Company recorded an aggregate of $11,985 and $14,716 as rent expenses from these committed property leases for the three-month periods ended September 30, 2018 and 2017, respectively. The contingent rent expenses herein for the next five twelve-month periods ended September 30, are as follows:

Years ending September 30,
2019	$	47,940
2020		47,940
2021		47,940
2022		47,940
2023		47,940

NOTE 16 – VARIABLE INTEREST ENTITIES

In accordance with accounting standards regarding consolidation of variable interest entities, VIEs are generally entities that lack enough equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs with which a 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.

Green Nevada through one of its subsidiaries, Jinong, entered into a series of agreements (the “VIE Agreements”) with Yuxing for it to qualify as a VIE, effective June 16, 2013.

The Company has concluded, based on the contractual arrangements, that Yuxing is a VIE and that the Company’s wholly-owned subsidiary, Jinong, absorbs majority of the risk of loss from the activities of Yuxing, thereby enabling the Company, through Jinong, to receive a majority of Yuxing expected residual returns.

On June 30, 2016 and January 1, 2017, the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and a series of contractual agreements to qualify as VIEs with the shareholders of the sales VIE Companies.

Jinong, the sales VIE Companies, and the shareholders of the sales VIE Companies also entered into a series of contractual agreements for the sales VIE Companies to qualify as VIEs (the “VIE Agreements”).

17

On November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, exited the VIE agreements with the shareholders of Zhenbai.

As a result of these contractual arrangements, with Yuxing and the sales VIE Companies the Company is entitled to substantially all the economic benefits of Yuxing and the VIE Companies. The following financial statement amounts and balances of the VIEs were included in the accompanying consolidated financial statements as of September 30, 2018 and June 30, 2018:

	September 30,		June 30,
	2018		2018
ASSETS
Current Assets
Cash and cash equivalents	$	1,347,720	$	982,312
Accounts receivable, net		35,129,065		38,295,505
Inventories		20,889,337		21,133,970
Other current assets		950,471		988,051
Related party receivable		249,087		(359,005	)
Advances to suppliers		814,358		848,458
Total Current Assets		59,380,038		61,889,291
Plant, Property and Equipment, Net		10,548,189		11,206,667
Other assets		218,549		226,654
Intangible Assets, Net		10,724,735		11,348,180
Goodwill		3,181,816		3,319,732
Total Assets	$	84,053,327	$	87,990,524
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Short-term loan	$	-	$	-
Accounts payable		20,951,481		25,584,614
Customer deposits		242,728		841,694
Accrued expenses and other payables		4,109,982		3,896,340
Amount due to related parties		41,903,021		43,339,286
Total Current Liabilities	$	67,207,212	$	73,661,934
Long-term Loan		-		-
Total Liabilities	$	67,207,212	$	73,661,934
Stockholders’ equity		16,846,115		14,328,590
Total Liabilities and Stockholders’ Equity		84,053,327	$	87,990,524

	Three Months Ended September 30,
	2018		2017
Revenue	$	17,985,020	$	17,132,823
Expenses		15,371,814		19,112,207
Net income	$	2,613,206	$	(1,979,384	)

18

NOTE 17 – BUSINESS COMBINATIONS

On June 30, 2016, the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and also into a series of contractual agreements to qualify as VIEs with the shareholders of Shaanxi Lishijie Agrochemical Co., Ltd., Songyuan Jinyangguang Sannong Service Co., Ltd., Shenqiu County Zhenbai Agriculture Co., Ltd., Weinan City Linwei District Wangtian Agricultural Materials Co., Ltd., Aksu Xindeguo Agricultural Materials Co., Ltd., and Xinjiang Xinyulei Eco-agriculture Science and Technology Co., Ltd.

Subsequently, on January 1, 2017, Jinong entered into similar strategic acquisition agreements and a series of contractual agreements to qualify as VIEs with the shareholders of Sunwu County Xiangrong Agricultural Materials Co., Ltd., and Anhui Fengnong Seed Co., Ltd.

On November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Zhenbai.

The VIE Agreements are as follows:

Entrusted Management Agreements

Pursuant to the terms of certain Entrusted Management Agreements dated June 30, 2016 and January 1, 2017, between Jinong and the shareholders of the sales VIE Companies (the “Entrusted Management Agreements”), the sales VIE Companies and their shareholders agreed to entrust the operations and management of its business to Jinong. According to the Entrusted Management Agreement, Jinong possesses the full and exclusive right to manage the sales VIE Companies’ operations, assets and personnel, has the right to control all the sales VIE Companies’ cash flows through an entrusted bank account, is entitled to the sales VIE Companies’ net profits as a management fee, is obligated to pay all the sales VIE Companies’ payables and loan payments, and bears all losses of the sales VIE Companies. The Entrusted Management Agreements will remain in effect until (i) the parties mutually agree to terminate the agreement; (ii) the dissolution of the sales VIE Companies; or (iii) Jinong acquires all the assets or equity of the sales VIE Companies (as more fully described below under “Exclusive Option Agreements”).

Exclusive Technology Supply Agreements

Pursuant to the terms of certain Exclusive Technology Supply Agreements dated June 30, 2016 and January 1, 2017, between Jinong and the sales VIE companies (the “Exclusive Technology Supply Agreements”), Jinong is the exclusive technology provider to the sales VIE companies. The sales VIE companies agreed to pay Jinong all fees payable for technology supply prior to making any payments under the Entrusted Management Agreement. The Exclusive Technology Supply Agreements shall remain in effect until (i) the parties mutually agree to terminate the agreement; (ii) the dissolution of the sales VIE companies; or (iii) Jinong acquires the sales VIE companies (as more fully described below under “Exclusive Option Agreements”).

Shareholder’s Voting Proxy Agreements

Pursuant to the terms of certain Shareholder’s Voting Proxy Agreements dated June 30, 2016 and January 1, 2017, among Jinong and the shareholders of the sales VIE companies (the “Shareholder’s Voting Proxy Agreements”), the shareholders of the sales VIE companies irrevocably appointed Jinong as their proxy to exercise on such shareholders’ behalf all of their voting rights as shareholders pursuant to PRC law and the Articles of Association of the sales VIE companies, including the appointment and election of directors of the sales VIE companies. Jinong agreed that it shall maintain a board of directors, the composition and appointment of which shall be approved by the Board of the Company. The Shareholder’s Voting Proxy Agreements will remain in effect until Jinong acquires all the assets or equity of the sales VIE companies.

19

Exclusive Option Agreements

Pursuant to the terms of certain Exclusive Option Agreements dated June 30, 2016 and January 1, 2017, among Jinong, the sales VIE companies, and the shareholders of the sales VIE companies (the “Exclusive Option Agreements”), the shareholders of the sales VIE companies granted Jinong an irrevocable and exclusive purchase option (the “Option”) to acquire the sales VIE companies’ equity interests and/or remaining assets, but only to the extent that the acquisition does not violate limitations imposed by PRC law on such transactions. The Option is exercisable at any time at Jinong’s discretion so long as such exercise and subsequent acquisition of the sales VIE companies does not violate PRC law. The consideration for the exercise of the Option is to be determined by the parties and memorialized in the future by definitive agreements setting forth the kind and value of such consideration. Jinong may transfer all rights and obligations under the Exclusive Option Agreements to any third parties without the approval of the shareholders of the sales VIE companies so long as a written notice is provided. The Exclusive Option Agreements may be terminated by mutual agreements or by 30 days written notice by Jinong.

Equity Pledge Agreements

Pursuant to the terms of certain Equity Pledge Agreements dated June 30, 2016 and January 1, 2017, among Jinong and the shareholders of the sales VIE companies (the “Pledge Agreements”), the shareholders of the sales VIE companies pledged all of their equity interests in the sales VIE companies to Jinong, including the proceeds thereof, to guarantee all of Jinong’s rights and benefits under the Entrusted Management Agreements, the Exclusive Technology Supply Agreements, the Shareholder’ Voting Proxy Agreements and the Exclusive Option Agreements. Prior to termination of the Pledge Agreements, the pledged equity interests cannot be transferred without Jinong’s prior written consent. The Pledge Agreements may be terminated only upon the written agreement of the parties.

Non-Compete Agreements

Pursuant to the terms of certain Non-Compete Agreements dated June 30, 2016 and January 1, 2017, among Jinong and the shareholders of the sales VIE companies (the “Non-Compete Agreements”), the shareholders of the sales VIE companies agreed that during the period beginning on the initial date of their services with Jinong, and ending five (5) years after termination of their services with Jinong, without Jinong’s prior written consent, they will not provide services or accept positions including but not limited to partners, directors, shareholders, managers, proxies or consultants, provided by any profit making organizations with businesses that may compete with Jinong. They will not solicit or interfere with any of the Jinong’s customers, or solicit, induce, recruit or encourage any person engaged or employed by Jinong to terminate his or her service or engagement. If the shareholders of the sales VIE companies breach the non-compete obligations contained therein, Jinong is entitled to all loss and damages; if the damages are difficult to determine, remedies bore the shareholders of the sales VIE companies shall be no less than 50% of the salaries and other expenses Jinong provided in the past.

The Company entered into these VIE Agreements as a way for the Company to have more control over the distribution of its products. The transactions are accounted for as business combinations in accordance with ASC 805. A summary of the purchase price allocations at fair value is below:

For acquisitions made on June 30, 2016:

Cash	$	708,737
Accounts receivable		6,422,850
Advances to suppliers		1,803,180
Prepaid expenses and other current assets		807,645
Inventories		7,787,043
Machinery and equipment		140,868
Intangible assets		270,900
Other assets		3,404,741
Goodwill		3,158,179
Accounts payable		(3,962,670	)
Customer deposits		(3,486,150	)
Accrued expenses and other payables		(4,653,324	)
Taxes payable		(16,912	)
Purchase price	$	12,385,087

20

A summary of the purchase consideration paid is below:

Cash	$	5,568,500
Convertible notes		6,671,769
Derivative liability		144,818
	$	12,385,087

The cash component of the purchase price for these acquisitions made on June 30, 2016 was paid in July and August 2016.

For acquisitions made on January 1, 2017:

Working Capital	$	941,192
Machinery and equipment		222,875
Intangible assets		1440
Goodwill		684,400
Customer Relationship		522,028
Non-compete Agreement		392,852
Purchase price	$	2,764,787

A summary of the purchase consideration paid is below:

Cash	$	1,201,888
Convertible notes		1,559,350
Derivative liability		3,549
	$	2,764,787

The cash component of the purchase price for these acquisitions made on January 1, 2017 was paid during March 2017.

On November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Zhenbai. In return, the shareholders of Zhenbai agreed to tender the whole payment consideration in the SAA back to the Company with early termination penalties. The convertible notes paid to Zhenbai’s shareholders and the accrued interest has been forfeited.

For the discontinuation of Zhenbai made on November 30, 2017, the Company gave up the control of the following assets in Zhenbai:

Working Capital	$	1,179,352
Intangible assets		896,559
Customer  Relationship		684,727
Non-compete Agreement		211,833
Goodwill		538,488
Total Asset	$	2,614,401

In return, the purchase consideration returned to the Company from Zhenbai’s shareholders is summarized below:

Cash	$	461,330
Interest Payable		83,039
Convertible notes		1,724,683
Derivative liability		13,353
Total Payback	$	2,282,406
Net Loss		(331,995	)

21

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contain forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as the slow-down of the macro-economic environment in China and its impact on economic growth in general, the competition in the fertilizer industry and the impact of such competition on pricing, revenues and margins, the weather conditions in the areas where our customers are based, the cost of attracting and retaining highly skilled personnel, the prospects for future acquisitions, and the factors set forth elsewhere in this report, our actual results may differ materially from those anticipated in these forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this report will in fact occur. You should not place undue reliance on the forward-looking statements contained in this report.

The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of this report and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices, and our assumptions as of such date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.

Unless the context indicates otherwise, as used in the notes to the financial statements of the Company, the following are the references herein of all the subsidiaries of the Company (i) Green Agriculture Holding Corporation (“Green New Jersey”), a wholly-owned subsidiary of Green Nevada incorporated in the State of New Jersey; (ii) Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (“Jinong”), a wholly-owned subsidiary of Green New Jersey organized under the laws of the PRC; (iii) Xi’an Hu County Yuxing Agriculture Technology Development Co., Ltd. (“Yuxing”), a Variable Interest Entity in the PRC (“VIE”) controlled by Jinong through contractual agreements; (iv) Shaanxi Lishijie Agrochemical Co., Ltd. (“Lishijie”), a VIE controlled by Jinong through contractual agreements; (v) Songyuan Jinyangguang Sannong Service Co., Ltd. (“Jinyangguang”), a VIE in the PRC controlled by Jinong through contractual agreements; (vi) Weinan City Linwei District Wangtian Agricultural Materials Co., Ltd. (“Wangtian”), a VIE controlled by Jinong through contractual agreements; (vii) Aksu Xindeguo Agricultural Materials Co., Ltd. (“Xindeguo”), a VIE controlled by Jinong through contractual agreements; (vii) Xinjiang Xinyulei Eco-agriculture Science and Technology Co., Ltd (“Xinyulei”), a VIE controlled by Jinong through contractual agreements; (ix) Sunwu County Xiangrong Agricultural Materials Co., Ltd. (“Xiangrong”), a VIE controlled by Jinong through contractual agreements; (x) Anhui Fengnong Seed Co., Ltd. (“Fengnong”), a VIE controlled by Jinong through contractual agreements; (xi) Beijing Gufeng Chemical Products Co., Ltd., a wholly-owned subsidiary of Jinong in the PRC (“Gufeng”); and (xii) Beijing Tianjuyuan Fertilizer Co., Ltd., Gufeng’s wholly-owned subsidiary in the PRC (“Tianjuyuan”). Yuxing, Lishijie, Jinyangguang, Wangtian, Xindeguo, Xinyulei, Xiangrong and Fengnong may also collectively be referred to as the “the VIE Companies”; Lishijie, Jinyangguang, Wangtian, Xindeguo, Xinyulei, Xiangrong and Fengnong may also collectively be referred to as “the sales VIEs” or “the sales VIE companies”.

Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$” are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.

Overview

We are engaged in research, development, production and sale of various types of fertilizers and agricultural products in the PRC through our wholly-owned Chinese subsidiaries, Jinong and Gufeng (including Gufeng’s subsidiary Tianjuyuan), and our VIE, Yuxing. Our primary business is fertilizer products, specifically humic-acid based compound fertilizer produced by Jinong and compound fertilizer, blended fertilizer, organic compound fertilizer, slow-release fertilizer, highly-concentrated water-soluble fertilizer and mixed organic-inorganic compound fertilizer produced by Gufeng. In addition, through Yuxing, we develop and produce various agricultural products, such as top-grade fruits, vegetables, flowers and colored seedlings. For financial reporting purposes, our operations are organized into three business segments: fertilizer products (Jinong), fertilizer products (Gufeng) and agricultural products production (Yuxing).

The fertilizer business conducted by Jinong and Gufeng generated approximately 69.0% and 71.7% of our total revenues for the three months ended September 30, 2018 and 2017, respectively. The sales VIEs generated 26.9% and 25.5% of our revenues for the three months ended September 30, 2018 and 2017, respectively. Yuxing serves as a research and development base for our fertilizer products.  

22

Fertilizer Products

As of September 30, 2018, we had developed and produced a total of 726 different fertilizer products in use, of which 142 were developed and produced by Jinong, 333 by Gufeng, and 251 by the VIE Companies.

Below is a table that shows the metric tons of fertilizer sold by Jinong and Gufeng and the revenue per ton for the periods indicated:

	Three Months Ended
	September 30,				Change 2017 to 2018
	2018		2017		Amount			%
	(metric tons)
Jinong		18,605		14,525		4,080			28.1	%
Gufeng		49,247		54,608		(5,361	)		-9.8	%
		67,851		69,133		(1,282	)		-1.9	%

	Three Months Ended September 30,
	2018		2017
	(revenue per tons)
Jinong	$	1,294	$	1,980
Gufeng		348		374

For the three months ended September 30, 2018, we sold approximately 67,851 metric tons of fertilizer products, as compared to 69,133 metric tons for the three months ended September 30, 2017. For the three months ended September 30, 2018, Jinong sold approximately 18,605 metric tons of fertilizer products, as compared to 14,525 metric tons for the three months ended September 30, 2017. For the three months ended September 30, 2018, Gufeng sold approximately 49,247 metric tons of fertilizer products, as compared to 54,608 metric tons for the three months ended September 30, 2017.

Our sales of fertilizer products to customers in five provinces within China accounted for approximately 37.5% of our fertilizer revenue for the three months ended September 30, 2018. Specifically, the provinces and their respective percentage contributing to our fertilizer revenues were: Shaanxi (12.5%), Heilongjiang (8.8%), Liaoning (6.5%), Inner Mongolia (5.7%) and Anhui (4.0%).

As of September 30, 2018, we had a total of 1,978 distributors covering 22 provinces, 4 autonomous regions and 4 central government-controlled municipalities in China. Jinong had 1,162 distributors in China. Jinong’s sales are not dependent on any single distributor or any group of distributors. Jinong’s top five distributors accounted for 2.88% of its fertilizer revenues for the three months ended September 30, 2018. Gufeng had 318 distributors, including some large state-owned enterprises. Gufeng’s top five distributors accounted for 63.6% of its revenues for the three months ended September 30, 2018.

Agricultural Products

Through Yuxing, we develop, produce and sell high-quality flowers, green vegetables and fruits to local marketplaces and various horticulture and planting companies. We also use certain of Yuxing’s greenhouse facilities to conduct research and development activities for our fertilizer products. The three PRC provinces and municipalities that accounted for 85.2% of our agricultural products revenue for the three months ended September 30, 2018 were Shaanxi (65.3%), Hebei (15.1%) and Sichuan (4.7%).

Recent Developments

New Products

During the three months ended September 30, 2018, Jinong did not launch any new fertilizer products but added 17 new distributors. During the three months ended September 30, 2018, Gufeng did not launch any new fertilizer products but added 2 new distributors.

Strategic Acquisitions

On June 30, 2016 and January 1, 2017, through Jinong, we entered into (i) Strategic Acquisition Agreements (the “SAA”), and (ii) Agreements for Convertible Notes (the “ACN”), with the shareholders of the companies as identified below (the “Targets”).

23

June 30, 2016:

		Cash		Principal of
		Payment for		Notes for
		Acquisition		Acquisition
Company Name	Business Scope	(RMB[1])		(RMB)
Shaanxi Lishijie Agrochemical Co., Ltd.	Sales of pesticides, agricultural chemicals, chemical fertilizers, agricultural materials; Manufacture and sales of mulches.		10,000,000		3,000,000
Songyuan Jinyangguang Sannong Service Co., Ltd.	Promotion and consulting services regarding agricultural technologies; Retail sales of chemical fertilizers (including compound fertilizers and organic fertilizers); Wholesale and retail sales of pesticides, agricultural machinery and accessories; Collection of agricultural information; Development of saline-alkali soil; Promotion and development of high-efficiency agriculture and related information technology solutions for agriculture, agricultural and biological engineering high technologies; E-commerce; Cultivation of freshwater fish, poultry, fruits, flowers, vegetables, and seeds; Recycling and complex utilization of straw and stalk; Technology transfer and training; Recycling of agricultural materials ; Ecological industry planning.		8,000,000		12,000,000
Shenqiu County Zhenbai Agriculture Co., Ltd.	Cultivation of crops; Storage, sales, preliminary processing and logistics distribution of agricultural by-products; Promotion and application of agricultural technologies; Purchase and sales of agricultural materials; Electronic commerce.		3,000,000		12,000,000
Weinan City Linwei District Wangtian Agricultural Materials Co., Ltd.	Promotion and application of new agricultural technologies; Professional prevention of plant diseases and insect pests; Sales of plant protection products, plastic mulches, material, chemical fertilizers, pesticides, agricultural medicines, micronutrient fertilizers, hormones, agricultural machinery and medicines, and gardening tools.		6,000,000		12,000,000
Aksu Xindeguo Agricultural Materials Co., Ltd.	Wholesale and retail sales of pesticides; Sales of chemical fertilizers, packaged seeds, agricultural mulches, micronutrient fertilizers, compound fertilizers, plant growth regulators, agricultural machineries, and water economizers; Consulting services for agricultural technologies; Purchase and sales of agricultural by- products.		10,000,000		12,000,000
Xinjiang Xinyulei Eco-agriculture Science and Technology Co., Ltd	Sales of chemical fertilizers, packaged seeds, agricultural mulches, micronutrient fertilizers, organic fertilizers, plant growth regulators, agricultural machineries, and water economizers; Purchase and sales of agricultural by-products; Cultivation of fruits and vegetables; Consulting services and training for agricultural technologies; Storage services; Sales of articles of daily use, food and oil; On-line sales of the above-mentioned products.
Total			37,000,000		51,000,000

(1)

The exchange rate between RMB and U.S. dollars on June 30, 2016 is RMB1=US$0.1508, according to the exchange rate published by Bank of China.

(2)

On November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Zhenbai. In return, the shareholders of Zhenbai agreed to tender the whole payment consideration in the SAA back to the Company with early termination penalties. The convertible notes paid to Zhenbai’s shareholders and the accrued interest has been forfeited.

24

January 1, 2017:

		Cash		Principal of
		Payment for		Notes for
		Acquisition		Acquisition
Company Name	Business Scope	(RMB[1])		(RMB)
Sunwu County Xiangrong Agricultural Materials Co., Ltd.	Sales of pesticides, agricultural chemicals, chemical fertilizers, agricultural materials; Manufacture and sales of mulches.		4,000,000		6,000,000
Anhui Fengnong Seed Co., Ltd.	Wholesale and retail sales of pesticides; Sales of chemical fertilizers, packaged seeds, agricultural mulches, micronutrient fertilizers, compound fertilizers and plant growth regulators		4,000,000		6,000,000
Total			8,000,000		12,000,000

⁽¹⁾ The exchange rate between RMB and U.S. dollars on January 1, 2017 is RMB1=US$0.144, according to the exchange rate published by Bank of China.

Pursuant to the SAA and the ACN, the shareholders of the Targets, while retaining possession of the equity interests and continuing to be the legal owners of such interests, agreed to pledge and entrust all of their equity interests, including the proceeds thereof but excluding any claims or encumbrances, and the operations and management of its business to Jinong, in exchange of an aggregate amount of RMB45,000,000 (approximately $6,731,600) to be paid by Jinong within three days following the execution of the SAA, ACN and the VIE Agreements, and convertible notes with an aggregate face value of RMB 63,000,000 (approximately $9,418,800) with an annual fixed compound interest rate of 3% and term of three years.

Jinong acquired the Targets using the VIE arrangement based on our need to further develop our business and comply with the regulatory requirements under the PRC laws.

As our business focuses on the production of fertilizer, all our business activities intertwine with those in the agriculture industry in China. Specifically, we deal with compliance, regulation, safety, inspection, and licenses in fertilizer production, farm land use and transfer, growing and distribution of agriculture goods, agriculture basic supplies, seeds, pesticides, and trades of grains. It is an industry in which heavy regulations get implemented and strictly enforced. In addition, E-commerce, which is also under strict government regulation in the PRC, has lately become a sales and distribution channel for agricultural products. Currently, we are developing an online platform to connect the physical distribution network we either own or lease.

Compared with the regulatory environment in other jurisdictions, the regulatory environment in the PRC is unique. For example, the “M&A Rules” purports to require that an offshore special purpose vehicle controlled directly or indirectly by PRC companies or individuals and formed for purposes of overseas listing through acquisition of PRC domestic interests held by such PRC companies or individuals obtain the approval of the China Securities Regulatory Commission (the “CSRC”) prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published procedures regarding its approval of overseas listings by special purpose vehicles.

For both e-commerce and agriculture industries, PRC regulators limit the investment from foreign entities and set particularly rules for foreign-owned entities to conduct business. We expect these limitations on foreign-owned entities will continue to exist in e-commerce and agriculture industries. The VIE arrangement, however, provides feasibility for obtaining administrative approval process and avoiding industry restrictions that can be imposed on an entity that is a wholly-owned subsidiary of a foreign entity. The VIE agreements reduce uncertainty and the current limitation risk. It is our understanding that the VIE agreements, as well as the control we obtained through VIE arrangement, are valid and enforceable. Such legal structure does not violate the known, published, and current PRC laws. While there are substantial uncertainties regarding the interpretation and application of PRC Laws and future PRC laws and regulations, and there can be no assurance that the PRC authorities will take a view that is not contrary to or otherwise different from our belief and understanding stated above, we believe the substantial difficulty that we experienced previously to conduct business in agriculture as a foreign ownership can be greatly reduced by the VIE arrangement. Further, as an integral part of the VIE arrangement, the underlying equity pledge agreements provide legal protection for the control we obtained. Pursuant to the equity pledge agreements, we have completed the equity pledge processes with the Targets to ensure the complete control of the interests in the Targets. The shareholders of the Targets are not entitled to transfer any shares to a third party under the exclusive option agreements. If necessary, they may transfer shares to our company without consideration.

While the VIE arrangement provides us with the feasibility to conduct our business in the E-Commerce and agriculture industries, validity and enforceability of VIE arrangement is subject to (i) any applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar laws affecting creditors’ rights generally, (ii) possible judicial or administrative actions or any PRC Laws affecting creditors’ rights, (iii) certain equitable, legal or statutory principles affecting the validity and enforceability of contractual rights generally under concepts of public interest, interests of the State, national security, reasonableness, good faith and fair dealing, and applicable statutes of limitation; (iv) any circumstance in connection with formulation, execution or implementation of any legal documents that would be deemed materially mistaken, clearly unconscionable, fraudulent, coercive at the conclusions thereof; and (v) judicial discretion with respect to the availability of indemnifications, remedies or defenses, the calculation of damages, the entitlement to attorney’s fees and other costs, and the waiver of immunity from jurisdiction of any court or from legal process. Validity and enforceability of VIE arrangement is also subject to risk derived from the discretion of any competent PRC legislative, administrative or judicial bodies in exercising their authority in the PRC. As a result, there can no assurance that any of such PRC Laws will not be changed, amended or replaced in the immediate future or in the longer term with or without retrospective effect.

25

Results of Operations

Three Months ended September 30, 2018 Compared to the Three Months ended September 30, 2017.

	2018			2017			Change $			Change %
Sales
Jinong		22,496,533			26,773,760			(4,277,227	)		-16.0	%
Gufeng		17,473,251			18,222,066			(748,815	)		-4.1	%
Yuxing		2,387,546			1,792,643			594,903			33.2	%
Sales VIEs		15,597,476			15,340,182			257,294			1.7	%
Net sales		57,954,806			62,128,651			(4,173,845	)		-6.7	%
Cost of goods sold
Jinong		11,203,172			13,112,756			(1,909,584	)		-14.6	%
Gufeng		15,304,863			15,986,429			(681,566	)		-4.3	%
Yuxing		2,047,163			1,392,553			654,610			47.0	%
Sales VIEs		12,929,968			12,693,629			236,339			1.9	%
Cost of goods sold		41,485,166			43,185,367			(1,700,201	)		-3.9	%
Gross profit		16,469,640			18,943,284			(2,473,644	)		-13.1	%
Operating expenses
Selling expenses		3,420,427			5,154,197			(1,733,770	)		-33.6	%
Selling expenses - amortization of deferred asset
General and administrative expenses		2,309,359			6,914,802			(4,605,443	)		-66.6	%
Total operating expenses		5,729,786			12,068,999			(6,339,213	)		-52.5	%
Income from operations		10,739,854			6,874,285			3,865,569			56,2	%
Other income (expense)
Other income (expense)		(38,330	)		(7,211	)		(31,119	)		431,5	%
Interest income		127,383			87,914			39,469			44.9	%
Interest expense		(162,686	)		(179,575	)		16,889			-9,4	%
Total other income (expense)		(73,633	)		(98,872	)		25,239			-25,5	%
Income before income taxes		10,666,221			6,775,413			3,890,808			57.4	%
Provision for income taxes		1,654,416			1,722,655			(68,239	)		-4.0	%
Net income  from continuing operations		9,011,805			5,052,758			3,959,047			78	%
Net income from discontinued operation, net of tax		-			42,070			(42,070	)		-100	%
Net income		9,011,805			5,094,828			3,916,977			77	%
Other comprehensive income (loss)
Foreign currency translation gain (loss)		(15,987,792	)		240,218			(16,228,010	)		-6755.5	%
Comprehensive income (loss)		(6,975,987	)		5,335,046			(12,268,963	)		-231.8	%

26

Net Sales

Total net sales for the three months ended September 30, 2018 were $57,954,806, a decrease of $4173,845 or 6.7%, from $62,128,651 for the three months ended September 30, 2017. This decrease was primarily due to a decrease in Jinong’s and Gufeng’s net sales.

For the three months ended September 30, 2018, Jinong’s net sales decreased $4,277,227, or 16.0%, to $22,496,533 from $26,773,760 for the three months ended September 30, 2017. This decrease was mainly attributable to the decrease in Jinong’s sales price in the last three months.

For the three months ended September 30, 2018, Gufeng’s net sales were $17,473,251, a decrease of $748,815, or 4.1% from $18,222,066 for the three months ended September 30, 2017. This decrease was mainly attributable to the decrease in Gufeng’s sales price in the last three months. 

For the three months ended September 30, 2018, Yuxing’s net sales were $2,387,546, an increase of $594,903 or 33.2%, from $1,792,643 for the three months ended September 30, 2017. The increase was mainly attributable to the increase in market demand and the higher prices on Yuxing’s top grade flowers during the three months ended September 30, 2018.

Cost of Goods Sold

Total cost of goods sold for the three months ended September 30, 2018 was $41,485,166, a decrease of $1,700,201, or 3.9%, from $43185,367 for the three months ended September 30, 2017. The increase was mainly due to the decrease in Jinong’s and Gufeng’s cost of goods sold which increased 14.6% and 4.3% respectively.

Cost of goods sold by Jinong for the three months ended September 30, 2018 was $11,203,172, a decrease of $1,909,584, or 14.6%, from $13,112,756 for the three months ended September 30, 2017. The decrease in cost of goods was primarily attributable to the 16.0% decrease in net sale during the last three months.

Cost of goods sold by Gufeng for the three months ended September 30, 2018 was $15,304,863, a decrease of $681,566, or 4.3%, from $15,986,429 for the three months ended September 30, 2017. This decrease was primarily attributable to the4.1% decrease in net sale during the last three months. 

For three months ended September 30, 2018, cost of goods sold by Yuxing was $2,047,163, an increase of $654,610, or 47.0%, from $1,392,553 for the three months ended September 30, 2017. This increase was mainly due to the increase in Yuxing’s net sales during the last three months. 

Gross Profit

Total gross profit for the three months ended September 30, 2018 decreased by $2,473,644, or 13.1%, to $16,469,640, as compared to $18,943,284 for the three months ended September 30, 2017. Gross profit margin was 28.4% and 30.5% for the three months ended September 30, 2018 and 2017, respectively.

Gross profit generated by Jinong decreased by $2,367,643, or 17.3%, to $11,293,361 for the three months ended September 30, 2018 from $13,661,004 for the three months ended September 30, 2017. Gross profit margin from Jinong’s sales was approximately 50.2% and 51.0% for the three months ended September 30, 2018 and 2017, respectively. The decrease in gross profit margin was mainly due to the lower sales prices.

For the three months ended September 30, 2018, gross profit generated by Gufeng was $2,168,388, a decrease of $67,249, or 3.0%, from $2,235,637 for the three months ended September 30, 2017. Gross profit margin from Gufeng’s sales was approximately 12.4% and 12.3% for the three months ended September 30, 2018 and 2017, respectively. The decrease in gross profit was mainly due to the increase in product costs and the decrease in sales prices.

For the three months ended September 30, 2018, gross profit generated by Yuxing was $340,383, a decrease of $59,707, or 14.9% from $400,090 for the three months ended September 30, 2017. The gross profit margin was approximately 14.3% and 22.3% for the three months ended September 30, 2018 and 2017, respectively. The decrease in gross profit percentage was mainly due to the increase in product costs and the decrease in sales prices.

Gross profit generated by VIEs increased by $20,955, or 0.8%, to $2,667,508 for the three months ended September 30, 2018 from $2,646,553 for the three months ended September 30, 2017. Gross profit margin from VIE’s sales was approximately 17.1% and 17.3% for the three months ended September 30, 2018 and 2017, respectively, which was slightly decreased.

27

Selling Expenses

Our selling expenses consisted primarily of salaries of sales personnel, advertising and promotion expenses, freight-out costs and related compensation. Selling expenses were $3,420,427, or 5.9%, of net sales for the three months ended September 30, 2018, as compared to $5,154,197, or 8.3% of net sales for the three months ended September 30, 2017, a decrease of $1,733,770, or 33.6%.

The selling expenses of Yuxing were $17,729 or 0.7% of Yuxing’s net sales for the three months ended September 30, 2018, as compared to $9,646 or 0.5% of Yuxing’s net sales for the three months ended September 30, 2017. The selling expenses of Gufeng were $76,764 or 0.4% of Gufeng’s net sales for the three months ended September 30, 2018, as compared to $95,776 or 0.5% of Gufeng’s net sales for the three months ended September 30, 2017. The selling expenses of Jinong for the three months ended September 30, 2018 were $3,071,231 or 13.7% of Jinong’s net sales, as compared to selling expenses of $4,843,178 or 18.1% of Jinong’s net sales for the three months ended September 30, 2017.

Selling Expenses – amortization of deferred assets

Our selling expenses - amortization of our deferred assets were 0 for the three months ended September 30, 2018, as compared to $649,496, or 1.0% of net sales for the three months ended September 30, 2017, a decrease of $649,496, or 100%. This decrease was due to that all deferred assets were fully amortized and therefore no amortization was recorded on the fully amortized assets for the fiscal year ended September 30, 2018. 

General and Administrative Expenses

General and administrative expenses consisted primarily of related salaries, rental expenses, business development, depreciation and travel expenses incurred by our general and administrative departments and legal and professional expenses including expenses incurred and accrued for certain litigation. General and administrative expenses were $2,309,359, or 4.0% of net sales for the three months ended September 30, 2018, as compared to $6,914,802, or 11.1% of net sales for the three months ended September 30, 2017, a decrease of $4,605,443, or 66.6%.

Total Other Expenses

Total other expenses consisted of income from subsidies received from the PRC government, interest income, interest expenses and bank charges. Total other expense for the three months ended September 30, 2018 was $73,633, as compared to $98,872 for the three months ended September 30, 2017, a decrease in expense of $25,239, or 25,5%. The decrease in total other expense was resulted from the decrease in net interest expenses.

Income Taxes

Jinong is subject to a preferred tax rate of 15% as a result of its business being classified as a High-Tech project under the PRC Enterprise Income Tax Law (“EIT”) that became effective on January 1, 2008. Jinong incurred income tax expenses of $1,046,844 for the three months ended September 30, 2018, as compared to $1,013,134 for the three months ended September 30, 2017, an increase of $33,710, or 3.3%.

Gufeng is subject to a tax rate of 25%, incurred income tax expenses of $395,255 for the three months ended September 30, 2018, as compared to $534,686 for the three months ended September 30, 2017, a decrease of $139,431, or 26.1%, which was primarily due to Gufeng’s decreased net income.

Yuxing has no income tax for the three months ended September 30, 2018 and 2017 as a result of being exempted from paying income tax due to its products fall into the tax exemption list set out in the EIT.

Net Income

Net income for the three months ended September 30, 2018 was $9,011,805, an increase of $3,959,047, or 78.4%, compared to $5,052,758 for the three months ended September 30, 2017. Net income as a percentage of total net sales was approximately 15.5% and 8.1% for the three months ended September 30, 2018 and 2017, respectively.

Discussion of Segment Profitability Measures

As of September 30, 2018, we were engaged in the following businesses: the production and sale of fertilizers through Jinong and Gufeng, the production and sale of high-quality agricultural products by Yuxing, and the sales of agriculture materials by the sales VIEs. For financial reporting purpose, our operations were organized into four main business segments based on locations and products: Jinong (fertilizer production), Gufeng (fertilizer production) and Yuxing (agricultural products production) and the sales VIEs. Each of the segments has its own annual budget about development, production and sales.

28

Each of the four operating segments referenced above has separate and distinct general ledgers. The chief operating decision maker (“CODM”) makes decisions with respect to resources allocation and performance assessment upon receiving financial information, including revenue, gross margin, operating income and net income produced from the various general ledger systems; however, net income by segment is the principal benchmark to measure profit or loss adopted by the CODM.

For Jinong, the net income increased by $191,028, or 3.3% to $5,932,118 for three months ended September 30, 2018, from $5,741,090 for the three months ended September 30, 2017. The increase was principally due to decreased in operating expense.

For Gufeng, the net income decreased by $483,713 or 30.2% to $1,120,344 for three months ended September 30, 2018 from $1,604,057 for three months ended September 30, 2017. The decrease was principally due to the decrease in net sales.

For Yuxing, the net income increased $17,788 or 10.1% to $193,178 for three months ended September 30, 2018 from $175,390 for three months ended September 30, 2017. The increase was mainly due to the increase in net sales.

For the sales VIEs, the net income was $2,379,635 for period ended September 30, 2018, increased by $4,534,641 or 210.4%, from $(2,155,006) for three months ended September 30, 2017. The increase was mainly due to the decrease in general and administrative expenses for the sales VIEs.

Liquidity and Capital Resources

Our principal sources of liquidity include cash from operations, borrowings from local commercial banks and net proceeds of offerings of our securities consummated in July 2009 and November/December 2009 (collectively the “Public Offerings”).

As of September 30, 2018, cash and cash equivalents were $153,154,657, an increase of $2,349,018, or 1.6%, from $150,805,639 as of June 30, 2018.

We intend to use some of the remaining net proceeds from the Public Offerings, as well as other working capital if required, to acquire new businesses, upgrade production lines and complete Yuxing’s new greenhouse facilities for agriculture products located on 88 acres of land in Hu County, 18 kilometers southeast of Xi’an city. Yuxing purchased a set of agricultural products testing equipment for the year of 2016. We believe that we have sufficient cash on hand and positive projected cash flow from operations to support our business growth for the next twelve months to the extent we do not have further significant acquisitions or expansions. However, if events or circumstances occur and we do not meet our operating plan as expected, we may be required to seek additional capital and/or to reduce certain discretionary spending, which could have a material adverse effect on our ability to achieve our business objectives. Notwithstanding the foregoing, we may seek additional financing as necessary for expansion purposes and when we believe market conditions are most advantageous, which may include additional debt and/or equity financings. There can be no assurance that any additional financing will be available on acceptable terms, if at all. Any equity financing may result in dilution to existing stockholders and any debt financing may include restrictive covenants.

The following table sets forth a summary of our cash flows for the periods indicated:

	Three Months Ended
	September 30,
	2018			2017
Net cash provided by continued operating activities	$	8518,839		$	12,106,155
Net cash provided by (used in) discontinued operation		-			(10,782	)
Net cash provided by operating activities		8,518,839			12,095,373
Net cash used in investing activities		(31,273	)		(17,209	)
Net cash provided by (used in) financing activities		(191,056	)		(1,353,800
Effect of exchange rate change on cash and cash equivalents		(5,947,491	)		134,551
Net increase in cash and cash equivalents		2,349,019			10,858,915
Cash and cash equivalents, beginning balance		150,805,639			123,050,548
Cash and cash equivalents, ending balance	$	153,154,657		$	133,909,463

Operating Activities

Net cash provided in operating activities was $8,518,839 for the three months ended September 30, 2018, a decrease of $3,587,316, or 29.6% from cash provided by operating activities of $12,106,155 for the three months ended September 30, 2017. The increase was mainly attributable to a decrease in accounts receivable, decrease in advances to suppliers and increase in retained earnings during the three months ended September 30, 2018 as compared to the same period in 2017.

29

Investing Activities

Net cash used in investing activities for the three months ended September 30, 2018 was $31,273, compared to cash used in investing activities of $17,209 for the three months ended September 30, 2017. The different was due to Company purchased more plant, property and equipment during the last three months compared to the same period last year.

Financing Activities

Net cash used by financing activities for the three months ended September 30, 2018 was $191,056, compared to $1,353,800 net cash provided in financing activities for the three months ended September 30, 2017, which was largely due to $191,056 in repayment of loans for the three months ended September 30, 2018, compared to $3,156,300 in the same period last year.

As of September 30, 2018, and June 30, 2018, our loans payables were as follows:

	September 30,		June 30,
	2018		2018
Short term loans payable:	$	4,368,000	$	4,726,300
Total	$	4,368,000	$	4,726,300

Accounts Receivable

We had accounts receivable of $136,794,689 as of September 30, 2018, as compared to $174,460,937 as of June 30, 2018, a decrease of $37,666,248 or 21.6%. The decrease was primarily attributable to Gufeng’s accounts receivable. As of September 30, 2018, Gufeng’s accounts receivable was $70,837,363, a decrease of $31,275,953 or 30.6% compared to $102,113,316 as of June 30, 2018.

Allowance for doubtful accounts in accounts receivable for the three months ended September 30, 2018 was $24,387,808, from $24,551,796 as of June 30, 2018. And the allowance for doubtful accounts as a percentage of accounts receivable was 15.1% as of September 30, 2018 and 12.3% as of June 30, 2018.

Deferred assets

We had no deferred assets as of September 30, 2018, as compared to $213,289 as of June 30, 2018. During the three months, we assisted the distributors in certain marketing efforts and developing standard stores to expand our competitive advantage and market shares. Based on the distributor agreements, the amount owed by the distributors in certain marketing efforts and store development will be expensed over three years if the distributors are actively selling our products. If a distributor defaults, breaches, or terminates the agreement with us earlier than the contractual terms, the unamortized portion of the amount owed by the distributor is payable to us immediately. The deferred assets had been fully amortized as of September 30, 2018.

Inventories

We had inventories of $85,975,555 as of September 30, 2018, as compared to $53,784,814 as of June 30, 2018, an increase of $32,190,741, or 59.9%. The increase was primarily attributable to Gufeng’s inventory. As of September 30, 2018, Gufeng’s inventory was $64,037,393, compared to $31,617,519 as of June 30, 2018, an increase of $32,419,874, or 102.5%.

Advances to Suppliers

We had advances to suppliers of $18,497,101 as of September 30, 2018 as compared to $25,194,463 as of June 30, 2018, representing a decrease of $6,697,362 or 26.6%. Our inventory level may fluctuate from time to time, depending how quickly the raw material is consumed and replenished during the production process, and how soon the finished goods are sold. The replenishment of raw material relies on management’s estimate of numerous factors, including but not limited to, the raw materials future price, and spot price along with its volatility, as well as the seasonal demand and future price of finished fertilizer products. Such estimate may not be accurate, and the purchase decision of raw materials based on the estimate can cause excessive inventories in times of slow sales and insufficient inventories in peak times.

30

Accounts Payable

We had accounts payable of $22,463,673 as of September 30, 2018 as compared to $27,128,921 as of June 30, 2018, representing a decrease of $4,665,248, or 17.2%. The decrease was primarily due to the decrease of accounts payable for VIEs. They have accounts payable of $20,756,643 as of September 30, 2018 as compared to $25,398,118 as of June 30, 2018, representing a decrease of $4,641,475, or 18.3%.

Unearned Revenue (Customer Deposits)

We had customer deposits of $5,785,249 as of September 30, 2018 as compared to $7,251,967 as of June 30, 2018, representing a decrease of $1,466,718, or 20.2%. The decrease was mainly attributable to Gufeng’s $4,535,050 unearned revenue as of September 30, 2018, compared to $5,149,905 unearned revenue as of June 30, 2018, decreased 614,855 or 11.9%, caused by the advance deposits made by clients. This decrease was due to seasonal fluctuation and we expect to deliver products to our customers during the next three months at which time we will recognize the revenue.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of its financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. Our financial statements reflect the selection and application of accounting policies which require management to make significant estimates and judgments. See Note 2 to our consolidated financial statements, “Basis of Presentation and Summary of Significant Accounting Policies.” We believe that the following paragraphs reflect the most critical accounting policies that currently affect our financial condition and results of operations:

Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 consolidated financial statements and the amount of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates.

Revenue recognition

Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, we have no other significant obligations and collectability is reasonably assured. Payments received before all the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.

Our revenue consists of invoiced value of goods, net of a value-added tax (VAT). No product return or sales discount allowance is made as products delivered and accepted by customers are normally not returnable and sales discounts are normally not granted after products are delivered.

Cash and cash equivalents

For statement of cash flows purposes, we consider all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

Accounts receivable

Our policy is to maintain reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Any accounts receivable of Jinong and Gufeng that are outstanding for more than 180 days will be accounted as allowance for bad debts, and any accounts receivable of Yuxing that are outstanding for more than 90 days will be accounted as allowance for bad debts.

31

Deferred assets

Deferred assets represent amounts the Company advanced to the distributors in their marketing and stores development to expand our competitive advantage and market shares. Based on the distributor agreements, the amount owed by the distributors in certain marketing efforts and store development will be expensed over three years if the distributors are actively selling our products. If a distributor defaults, breaches, or terminates the agreement with us earlier than the realization of the contractual terms, the unamortized portion of the amount owed by the distributor is to be refunded to us immediately. The deferred assets had been fully amortized as of September 30, 2018.

Segment reporting

FASB ASC 280 requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other way management disaggregates a company.

As of September 30, 2018, we were organized into ten main business units: Jinong (fertilizer production), Gufeng (fertilizer production), Yuxing (agricultural products production), Lishijie (agriculture sales), Jinyangguang (agriculture sales), Wangtian (agriculture sales), Xindeguo (agriculture sales), Xinyulei (agriculture sales), Fengnong (agriculture sales) and Xiangrong (agriculture sales). For financial reporting purpose, our operations were organized into four main business segments based on locations and products: Jinong (fertilizer production), Gufeng (fertilizer production) and Yuxing (agricultural products production) and the sales VIEs. Each of the segments has its own annual budget regarding development, production and sales. 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Disclosures About Market Risk

We may be exposed to changes in financial market conditions in the normal course of business. Market risk generally represents the risk that losses may occur as a result of movements in interest rates and equity prices. We currently do not, in the normal course of business, use financial instruments that are subject to changes in financial market conditions.

Currency Fluctuations and Foreign Currency Risk

Substantially all of our revenues and expenses are denominated in RMB. However, we use the U.S. dollar for financial reporting purposes. Conversion of RMB into foreign currencies is regulated by the People’s Bank of China through a unified floating exchange rate system. Although the PRC government has stated its intention to support the value of RMB, there can be no assurance that such exchange rate will not again become volatile or that RMB will not devalue significantly against U.S. dollar. Exchange rate fluctuations may adversely affect the value, in U.S. dollar terms, of our net assets and income derived from our operations in the PRC.

Our reporting currency is the U.S. dollar. Except for U.S. holding companies, all of our consolidated revenues, consolidated costs and expenses, and our assets are denominated in RMB. As a result, we are exposed to foreign exchange risk as our revenues and results of operations may be affected by fluctuations in the exchange rate between the U.S. dollars and RMB. If RMB depreciates against the U.S. dollar, the value of our RMB revenues, earnings and assets as expressed in our U.S. dollar financial statements will decline. Assets and liabilities are translated at the exchange rates as of the balance sheet dates, revenues and expenses are translated at the average exchange rates, and shareholders’ equity is translated at historical exchange rates. Any resulting translation adjustments are not included in determining net income but are included in determining other comprehensive income, a component of shareholders’ equity. As of September 30, 2018, our accumulated other comprehensive loss was $6.9 million. We have not entered into any hedging transactions in efforts to reduce our exposure to foreign exchange risk. The value of the RMB against the U.S. dollar and other currencies is affected by, among other things, changes in PRC’s political and economic conditions. Between July 1, 2018 and September 30, 2018, China’s currency dropped by a cumulative 3.6% against the U.S. dollar, making Chinese exports cheaper and imports into China more expensive by that percentage. The effect on trade can be substantial. Moreover, it is possible that in the future, the PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

Interest Rate Risk

We deposit surplus funds with Chinese banks earning daily interest. We do not invest in any instruments for trading purposes. All our outstanding debt instruments carry fixed rates of interest. The amount of short-term debt outstanding as of September 30, 2018 and June 30, 2018 was $4.4 million and $4.7 million, respectively. We are exposed to interest rate risk primarily with respect to our short-term bank loans. Although the interest rates, which are based on the banks’ prime rates with respect to our short-term loans, are fixed for the terms of the loans, the terms are typically three to twelve months for short-term bank loans and interest rates are subject to change upon renewal. There was no material change in interest rates for short-term bank loans renewed during the three months ended September 30, 2018. The original loan term on average is one year, and the remaining average life of the short term-loans is approximately nine months.

32

Management monitors the banks’ prime rates in conjunction with our cash requirements to determine the appropriate level of debt balances relative to other sources of funds. We have not entered into any hedging transactions in efforts to reduce our exposure to interest rate risk.

Credit Risk

We have not experienced significant credit risk, as most of our customers are long-term customers with superior payment records. Our receivables are monitored regularly by our credit managers.

Inflation Risk

Inflationary factors such as increases in the cost of our products and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of net revenues if the selling prices of our products do not increase with these increased costs.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), at the conclusion of the period ended September 30, 2018 we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this Report, our disclosure controls and procedures were effective and adequately designed to ensure that the information required to be disclosed by us in the reports we submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and that such information was accumulated and communicated to our Chief Executive Officer and Chief Financial Officer, in a manner that allowed for timely decisions regarding required disclosure.

(b) Changes in internal controls

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter ended September 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

33

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

There are no other actions, suits, proceedings, inquiries or investigations before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no unregistered sales of the Company’s equity securities during the three months ended September 30, 2018, that were not otherwise disclosed in a Current Report on Form 8-K.

Item 3. Defaults Upon Senior Securities

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

There is no other information required to be disclosed under this item which was not previously disclosed.

Item 6. Exhibits

The exhibits required by this item are set forth in the Exhibit Index attached hereto.

34

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CHINA GREEN AGRICULTURE, INC.
Date: November 14, 2018	By:	/s/ Zhuoyu “Richard” Li
	Name:	Zhuoyu “Richard” Li
	Title:	Chief Executive Officer
		(principal executive officer)
Date: November 14, 2018	By:	/s/ Yongcheng Yang
	Name:	Yongcheng Yang
	Title:	Chief Financial Officer
		(principal financial officer and  principal accounting officer)

35

EXHIBIT INDEX

No.	Description
21.1	List of subsidiaries
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1+	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2+	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

+ In accordance with the SEC Release 33-8238, deemed being furnished and not filed.

36

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF CHINA GREEN AGRICULTURE, INC.

Name	Place of Incorporation
Green Agriculture Holding Corporation	New Jersey
Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd.	People’s Republic of China
Beijing Gufeng Chemical Products Co., Ltd.	People’s Republic of China
Beijing Tianjuyuan Fertilizer Co., Ltd.	People’s Republic of China

VARIABLE INTEREST ENTITIES OF CHINA GREEN AGRICULTURE, INC.

Name	Place of Incorporation
Xi’an Hu County Yuxing Agriculture Technology Development Co, Ltd.	People’s Republic of China
Shaanxi Lishijie Agrochemical Co., Ltd.	People’s Republic of China
Songyuan Jinyangguang Sannong Service Co., Ltd	People’s Republic of China
Weinan City Linwei District Wangtian Agricultural Materials Co., Ltd.	People’s Republic of China
Aksu Xindeguo Agricultural Materials Co., Ltd.	People’s Republic of China
Xinjiang Xinyulei Eco-agriculture Science and Technology co., LTD	People’s Republic of China
Sunwu County Xiangrong Agricultural Materials Co., Ltd.	People’s Republic of China
Anhui Fengnong Seed Co., Ltd.	People’s Republic of China

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Zhuoyu Li certify that:

1. I have reviewed this Quarterly Report on Form 10-Q (this “Report”) of China Green Agriculture, Inc.;

2.  Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3.  Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;

4.   The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this Report based on such evaluation; and

(d)   Disclosed in this Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

(a)  all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2018

/s/ Zhuoyu Li

Name: Zhuoyu Li

Title: Chief Executive Officer

(principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Yongcheng Yang, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q (this “Report”) of China Green Agriculture, Inc.;

2.  Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3.  Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;

4.   The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this Report based on such evaluation; and

(d)   Disclosed in this Report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

(a)  all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2018

/s/ Yongcheng Yang

Name: Yongcheng Yang

Title: Chief Financial Officer

(principal financial officer and

principal accounting officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, 

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certifies, each in his capacity as an executive officer of China Green Agriculture, Inc. (the “Company”), for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2018 as filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2018

/s/ Zhuoyu Li

Name: Zhuoyu Li

Title: Chief Executive Officer

(principal executive officer)

This certification accompanies each Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Exchange Act, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, 

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certifies, each in his capacity as an executive officer of China Green Agriculture, Inc. (the “Company”), for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

1. The Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2018 as filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2018

/s/ Yongcheng Yang

Name: Yongcheng Yang

Title: Chief Financial Officer

(principal financial officer and

principal accounting officer)

This certification accompanies each Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Exchange Act, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Sep. 30, 2018	Nov. 14, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	China Green Agriculture, Inc.
Entity Central Index Key	0000857949
Amendment Flag	false
Trading Symbol	CGA
Current Fiscal Year End Date	--06-30
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2019
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding		38,896,945

XML

Consolidated Balance Sheets - USD ($)	Sep. 30, 2018	Jun. 30, 2018
Current Assets
Cash and cash equivalents	$ 153,154,657	$ 150,805,639
Accounts receivable, net	136,794,689	174,460,937
Inventories	85,975,555	53,784,814
Prepaid expenses and other current assets	3,791,349	2,945,247
Amount due from related parties	249,087	235,551
Advances to suppliers, net	18,497,101	25,194,463
Total Current Assets	398,462,437	407,426,651
Plant, Property and Equipment, Net	29,028,781	30,894,683
Other Assets	284,016	294,550
Other Non-current Assets	14,821,931	15,885,696
Intangible Assets, Net	19,163,847	20,317,914
Goodwill	7,874,421	8,166,467
Total Assets	469,635,433	482,985,960
Current Liabilities
Accounts payable	22,463,673	27,128,921
Customer deposits	5,785,249	7,251,967
Accrued expenses and other payables	11,029,573	10,207,058
Amount due to related parties	3,232,715	3,271,619
Taxes payable	29,459,231	29,952,206
Short term loans	4,368,000	4,726,300
Interest payable	514,332	462,060
Derivative liability	333	66,143
Total Current Liabilities	76,853,106	83,066,274
Long-term Liabilities
Convertible notes payable	7,210,528	7,371,899
Total Liabilities	84,063,634	90,438,173
Stockholders' Equity
Preferred Stock, $.001 par value, 20,000,000 shares authorized, zero shares issued and outstanding
Common stock, $.001 par value, 115,197,165 shares authorized, 38,896,945 and 38,896,945, shares issued and outstanding as of September 30, 2018 and June 30, 2018, respectively	38,897	38,897
Additional paid-in capital	129,337,035	129,337,035
Statutory reserve	31,580,247	30,947,344
Retained earnings	244,201,627	235,822,726
Accumulated other comprehensive income	(19,586,007)	(3,598,215)
Total Stockholders' Equity	385,571,799	392,547,787
Total Liabilities and Stockholders' Equity	$ 469,635,433	$ 482,985,960

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2018	Jun. 30, 2018
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	115,197,165	115,197,165
Common stock, shares issued	38,896,945	38,896,945
Common stock, shares outstanding	38,896,945	38,896,945

XML

Consolidated Statements of Income and Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Sales
Net sales	$ 57,954,806	$ 62,128,651
Cost of goods sold
Cost of goods sold	41,485,166	43,185,367
Gross profit	16,469,640	18,943,284
Operating expenses
Selling expenses	3,420,427	5,154,197
Selling expenses - amortization of deferred asset
General and administrative expenses	2,309,359	6,914,802
Total operating expenses	5,729,786	12,068,999
Income from operations	10,739,854	6,874,285
Other income (expense)
Other income (expense)	(38,330)	(7,211)
Interest income	127,383	87,914
Interest expense	(162,686)	(179,575)
Total other income (expense)	(73,633)	(98,872)
Income before income taxes	10,666,221	6,775,413
Provision for income taxes	1,654,416	1,722,655
Net income from continuing operations	9,011,805	5,052,758
Income from discontinued operations, net of income taxes		42,070
Net income	9,011,805	5,094,828
Other comprehensive income (loss)
Foreign currency translation gain (loss)	(15,987,792)	240,218
Comprehensive income (loss)	$ (6,975,987)	$ 5,335,046
Basic weighted average shares outstanding	38,896,945	38,185,277
Basic net earnings per share-from continue operations	$ 0.23	$ 0.13
Basic net earnings per share-from discontinue operations
Diluted weighted average shares outstanding	38,896,945	38,185,277
Diluted net earnings per share-from continue operations	$ 0.23	$ 0.13
Diluted net earnings per share-from discontinue operations
Jinong
Sales
Net sales	$ 22,496,533	$ 26,773,760
Cost of goods sold
Cost of goods sold	11,203,172	13,112,756
Gufeng
Sales
Net sales	17,473,251	18,222,066
Cost of goods sold
Cost of goods sold	15,304,863	15,986,429
Yuxing
Sales
Net sales	2,387,546	1,792,643
Cost of goods sold
Cost of goods sold	2,047,163	1,392,553
VIEs - others
Sales
Net sales	15,597,476	15,340,182
Cost of goods sold
Cost of goods sold	$ 12,929,968	$ 12,693,629

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities
Net income	$ 9,011,805	$ 5,094,828
Income from discontinued operations, net of income taxes		42,070
Income from continued operations, net of income taxes	9,011,805	5,052,758
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	1,226,500	1,900,626
Gain (Loss) on disposal of property, plant and equipment	4,451	15,109
Amortization of debt discount	103,219	105,293
Change in fair value of derivative liability	(101,807)	(79,343)
Changes in operating assets
Accounts receivable	31,722,160	37,881,192
Amount due from related parties	(22,165)	(121,120)
Other current assets	1,012,668	1,531,095
Inventories	(34,434,298)	(41,278,460)
Advances to suppliers	5,850,761	5,052,781
Other assets	(1,472,705)	447,190
Changes in operating liabilities
Accounts payable	(3,737,493)	4,461,065
Customer deposits	(1,218,707)	(1,197,303)
Tax payables	(457,945)	(1,973,188)
Accrued expenses and other payables	962,954	237,624
Interest payable	69,442	70,836
Net cash provided by continued operating activities	8,518,839	12,106,155
Net cash provided by (used in) discontinued operation		(10,782)
Net cash provided by operating activities	8,518,839	12,095,373
Cash flows from investing activities
Purchase of plant, property, and equipment	(31,273)	(5,929)
Change in construction in process		(11,280)
Net cash used in investing activities	(31,273)	(17,209)
Cash flows from financing activities
Proceeds from loans		1,802,500
Repayment of loans	(191,056)	(3,156,300)
Net cash used in financing activities	(191,056)	(1,353,800)
Effect of exchange rate change on cash and cash equivalents	(5,947,491)	134,551
Net increase in cash and cash equivalents	2,349,019	10,858,915
Cash and cash equivalents, beginning balance	150,805,639	123,050,548
Cash and cash equivalents, ending balance	153,154,657	133,909,463
Supplement disclosure of cash flow information
Interest expense paid	106,597	725,317
Income taxes paid	$ 2,118,026	$ 3,695,843

XML

Organization and Description of Business

3 Months Ended

Sep. 30, 2018

Organization and Description of Business [Abstract]

ORGANIZATION AND DESCRIPTION OF BUSINESS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

China Green Agriculture, Inc. (the “Company”, “Parent Company” or “Green Nevada”), through its subsidiaries, is engaged in the research, development, production, distribution and sale of humic acid-based compound fertilizer, compound fertilizer, blended fertilizer, organic compound fertilizer, slow-release fertilizers, highly-concentrated water-soluble fertilizers and mixed organic-inorganic compound fertilizer and the development, production and distribution of agricultural products.

Unless the context indicates otherwise, as used in this Report, the following are the references herein of all the subsidiaries of the Company (i) Green Agriculture Holding Corporation (“Green New Jersey”), a wholly-owned subsidiary of Green Nevada, incorporated in the State of New Jersey; (ii) Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (“Jinong”), a wholly-owned subsidiary of Green New Jersey organized under the laws of the PRC; (iii) Xi’an Hu County Yuxing Agriculture Technology Development Co., Ltd. (“Yuxing”), a Variable Interest Entity (“VIE”) in the in the People’s Republic of China (the “PRC”) controlled by Jinong through a series of contractual agreements; (iv) Beijing Gufeng Chemical Products Co., Ltd., a wholly-owned subsidiary of Jinong in the PRC (“Gufeng”), and (v) Beijing Tianjuyuan Fertilizer Co., Ltd., Gufeng’s wholly-owned subsidiary in the PRC (“Tianjuyuan”).

On June 30, 2016 the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and a series of contractual agreements with the shareholders of the following six companies that are organized under the laws of the PRC and would be deemed VIEs: Shaanxi Lishijie Agrochemical Co., Ltd. (“Lishijie”), Songyuan Jinyangguang Sannong Service Co., Ltd. (“Jinyangguang”), Shenqiu County Zhenbai Agriculture Co., Ltd. (“Zhenbai”), Weinan City Linwei District Wangtian Agricultural Materials Co., Ltd. (“Wangtian”), Aksu Xindeguo Agricultural Materials Co., Ltd. (“Xindeguo”), and Xinjiang Xinyulei Eco-agriculture Science and Technology co., Ltd. (“Xinyulei”). On January 1, 2017, the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and a series of contractual agreements with the shareholders of the following two companies that are organized under the laws of the PRC and would be deemed VIEs, Sunwu County Xiangrong Agricultural Materials Co., Ltd. (“Xiangrong”), and Anhui Fengnong Seed Co., Ltd. (“Fengnong”).

On November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Zhenbai.

Yuxing, Lishijie, Jinyangguang, Wangtian, Xindeguo, Xinyulei, Xiangrong and Fengnong may also collectively be referred to as the “the VIE Companies”; Lishijie, Jinyangguang, Zhenbai, Wangtian, Xindeguo, Xinyulei, Xiangrong and Fengnong may also collectively be referred to as “the sales VIEs” or “the sales VIE companies”.

The Company’s corporate structure as of September 30, 2018 is set forth in the diagram below:

 

XML

Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Sep. 30, 2018

Basis of Presentation and Summary of Significant Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principle of consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Green New Jersey, Jinong, Gufeng, Tianjuyuan, and the VIE Companies. All significant inter-company accounts and transactions have been eliminated in consolidation.

Effective June 16, 2013, Yuxing was converted from being a wholly-owned foreign enterprise 100% owned by Jinong to a domestic enterprise 100% owned one natural person, who is not affiliated to the Company (“Yuxing’s Owner”). Effective the same day, Yuxing’s Owner entered into a series of contractual agreements with Jinong pursuant to which Yuxing became the VIE of Jinong.

VIE assessment

A VIE is an entity (1) that has total equity at risk that is not sufficient to finance its activities without additional subordinated financial support from other entities, (2) where the group of equity holders does not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance, or the obligation to absorb the entity’s expected losses or the right to receive the entity’s expected residual returns, or both, or (3) where the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. In order to determine if an entity is considered a VIE, the Company first performs a qualitative analysis, which requires certain subjective decisions regarding its assessments, including, but not limited to, the design of the entity, the variability that the entity was designed to create and pass along to its interest holders, the rights of the parties, and the purpose of the arrangement. If the Company cannot conclude after a qualitative analysis whether an entity is a VIE, it performs a quantitative analysis. The qualitative analysis considered the design of the entity, the risks that cause variability, the purpose for which the entity was created, and the variability that the entity was designed to pass along to its variable interest holders. When the primary beneficiary could not be identified through a qualitative analysis, we used internal cash flow models to compute and allocate expected losses or expected residual returns to each variable interest holder based upon the relative contractual rights and preferences of each interest holder in the VIE’s capital structure.

Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 consolidated financial statements and the amount of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those results.

Cash and cash equivalents and concentration of cash

For statement of cash flows purposes, the Company considers all cash on hand and in banks, certificates of deposit with state owned banks in the Peoples Republic of China (“PRC”) and banks in the United States, and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. The Company maintains large sums of cash in three major banks in China. The aggregate cash in such accounts and on hand as of September 30, 2018 and June 30, 2018 were $153,154,657 and $150,805,639, respectively. The Company had $153,141,535 and $150,785,737 in cash in banks in China, and $13,122 and $19,902 in cash in two banks in the United States as of September 30, 2018 and June 30, 2018, respectively. Cash overdrafts as of a balance sheet date will be reflected as liabilities in the balance sheet. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

Accounts receivable

The Company’s policy is to maintain reserves for potential credit losses on accounts receivable. Management regularly reviews the composition of accounts receivable and analyzes customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves at each year-end. Accounts considered uncollectible are written off through a charge to the valuation allowance. As of September 30, 2018, and June 30, 2018, the Company had accounts receivable of $136,794,689 and $174,460,937, net of allowance for doubtful accounts of $24,387,808 and $24,551,796, respectively.

Inventories

Inventory is valued at the lower of cost (determined on a weighted average basis) or market. Inventories consist of raw materials, work in process, finished goods and packaging materials. The Company reviews its inventories regularly for possible obsolete goods and establishes reserves when determined necessary. At September 30, 2018 and 2017, the Company had no reserve for obsolete goods.

Intangible Assets

The Company records intangible assets acquired individually or as part of a group at fair value. Intangible assets with definitive lives are amortized over the useful life of the intangible asset, which is the period over which the asset is expected to contribute directly or indirectly to the entity’s future cash flows. The Company evaluates intangible assets for impairment at least annually and more often whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. The Company has not recorded impairment of intangible assets as of September 30, 2018 and 2017 respectively.

Customer deposits

Payments received before all the relevant criteria for revenue recognition are satisfied are recorded as customer deposits. When all revenue recognition criteria are met, the customer deposits are recognized as revenue. As of September 30, 2018, and June 30, 2018, the Company had customer deposits of $5,785,249 and $7,251,967, respectively.

Earnings per share

Basic earnings per share are computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and stock awards.

The components of basic and diluted earnings per share consist of the following:

	Three Months Ended
	September 30,
	2018		2017
Net Income for Basic Earnings Per Share	$	9,011,805	$	5,094,828
Basic Weighted Average Number of Shares		38,896,945		38,185,277
Net Income Per Share – Basic	$	0.23	$	0.13
Net Income for Diluted Earnings Per Share	$	9,011,805	$	5,094,828
Diluted Weighted Average Number of Shares		38,896,945		38,185,277
Net Income Per Share – Diluted	$	0.23	$	0.13

Recent accounting pronouncements

Revenue Recognition:  In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for us in our first quarter of fiscal 2018 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09 (full retrospective method); or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09 (modified retrospective method). We are currently assessing the impact to our consolidated financial statements and have not yet selected a transition approach.

Disclosure of Going Concern Uncertainties:  In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15), to provide guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for us in our fourth quarter of fiscal 2017 with early adoption permitted. We do not believe the impact of our pending adoption of ASU 2014-15 on the Company’s financial statements will be material.

Financial instrument: In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The standard addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is not permitted. Accordingly, the standard is effective for us on September 1, 2018. We are currently evaluating the impact that the standard will have on our consolidated financial statements.

Leases: In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-2”), which provides guidance on lease amendments to the FASB Accounting Standard Codification. This ASU will be effective for us beginning in May 1, 2019. We are currently in the process of evaluating the impact of the adoption of ASU 2016-2 on our consolidated financial statements.

Stock-based Compensation: In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). ASU 2016-09 changes how companies account for certain aspects of stock-based awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for us in the first quarter of 2018, and earlier adoption is permitted. We are still evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

Financial Instruments - Credit Losses: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): The amendments in this Update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The amendments broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit loss, which will be more decision useful to users of the financial statements. ASU 2016-13 is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is allowed as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is still evaluating the effect that this guidance will have on the Company’s consolidated financial statements and related disclosures.

Statement of Cash Flows: In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): The amendments in this Update apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under Topic 230. The amendments in this Update provide guidance on the following eight specific cash flow issues. The amendments are an improvement to GAAP because they provide guidance for each of the eight issues, thereby reducing the current and potential future diversity in practice described above. ASU 2016-15 is effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is still evaluating the effect that this guidance will have on the Company’s consolidated financial statements and related disclosures.

Statement of Cash Flows: In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): “Restricted Cash” (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This update is effective in fiscal years, including interim periods, beginning after December 15, 2017 and early adoption is permitted. The adoption of this guidance will result in the inclusion of the restricted cash balances within the overall cash balance and removal of the changes in restricted cash activity, which are currently recognized in other financing activities, on the Statements of Consolidated Cash Flows. Furthermore, an additional reconciliation will be required to reconcile Cash and cash equivalents and restricted cash reported within the Consolidated Balance Sheets to sum to the total shown in the Statements of Consolidated Cash Flows. The Company anticipates adopting this new guidance effective July 1, 2018. The Company is currently evaluating this guidance and the impact it will have on the Consolidated Financial Statements and disclosures. 

Business Combination: In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. This guidance will be effective for us in the first quarter of 2018 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our consolidated financial statements.

Stock-based Compensation: In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock compensation (Topic 718): Scope of modification accounting” (“ASU 2017-09”). The purpose of the amendment is to clarify which changes to the terms or condition of a share-based payment award require an entity to apply modification accounting. For all entities that offer share-based payment awards, ASU 2017-09 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2017-09 on its condensed consolidated financial statements.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

XML

Inventories

3 Months Ended

Sep. 30, 2018

Inventories [Abstract]

Inventories

NOTE 3 – INVENTORIES

Inventories consisted of the following:

	September 30,		June 30,
	2018		2018
Raw materials	$	30,149,050	$	13,154,465
Supplies and packing materials	$	523,992	$	566,254
Work in progress	$	386,158	$	417,130
Finished goods	$	54,916,355	$	39,646,965
Total	$	85,975,555	$	53,784,814

XML

Property, Plant and Equipment

3 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

NOTE 4 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

	September 30,			June 30,
	2018			2018
Building and improvements	$	38,877,508		$	40,319,393
Auto		3,387,289			3,504,028
Machinery and equipment		18,097,309			18,765,192
Agriculture assets		741,044			768,528
Total property, plant and equipment		61,103,149			63,357,141
Less: accumulated depreciation		(32,074,369	)		(32,462,458	)
Total	$	29,028,781		$	30,894,683

XML

Intangible Assets

3 Months Ended

Sep. 30, 2018

Intangible Assets [Abstract]

INTANGIBLE ASSETS

NOTE 5 – INTANGIBLE ASSETS

Intangible assets consisted of the following:

	September 30,		June 30,
	2018		2018
Land use rights, net	$	9,516,800	$	9,930,420
Technology patent, net		3,334		3,570
Customer relationships, net		3,131,697		3,578,724
Non-compete agreement		586,096		659,500
Trademarks		5,925,920		6,145,700
Total	$	19,163,847	$	20,317,914

LAND USE RIGHT

On September 25, 2009, Yuxing was granted a land use right for approximately 88 acres (353,000 square meters or 3.8 million square feet) by the People’s Government and Land & Resources Bureau of Hu County, Xi’an, Shaanxi Province. The fair value of the related intangible asset was determined to be the respective cost of RMB73,184,895 (or $10,655,721). The intangible asset is being amortized over the grant period of 50 years using the straight-line method.

On August 13, 2003, Tianjuyuan was granted a certificate of Land Use Right for a parcel of land of approximately 11 acres (42,726 square meters or 459,898 square feet) at Ping Gu District, Beijing. The purchase cost was recorded at RMB1,045,950 (or $152,290). The intangible asset is being amortized over the grant period of 50 years.

On August 16, 2001, Jinong received a land use right as a contribution from a shareholder, which was granted by the People’s Government and Land & Resources Bureau of Yangling District, Shaanxi Province. The fair value of the related intangible asset at the time of the contribution was determined to be RMB7,285,099 (or $1,060,710). The intangible asset is being amortized over the grant period of 50 years.

The Land Use Rights consisted of the following:

	September 30,			June 30,
	2018			2018
Land use rights	$	11,868,721			12,308,907
Less: accumulated amortization		(2,351,921	)		(2,378,488	)
Total land use rights, net	$	9,516,800			9,930,419

TECHNOLOGY PATENT

On August 16, 2001, Jinong was issued a technology patent related to a proprietary formula used in the production of humic acid. The fair value of the related intangible asset was determined to be the respective cost of RMB 5,875,068 (or $855,410) and is being amortized over the patent period of 10 years using the straight-line method. This technology patent has been fully amortized.

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The fair value of the acquired technology patent was estimated to be RMB9,200,000 (or $1,339,520) and is amortized over the remaining useful life of six years using the straight-line method. As of June 30, 2018, this technology patent is fully amortized.

The technology know-how consisted of the following:

	September 30,			June 30,
	2018			2018
Technology know-how	$	2,199,715		$	2,276,335
Less: accumulated amortization		(2,199,715	))		(2,276,335	)
Total technology know-how, net	$	-		$	-

CUSTOMER RELATIONSHIPS

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The fair value of the acquired customer relationships was estimated to be RMB65,000,000 (or $9,464,000) and is amortized over the remaining useful life of ten years. On June 30, 2016 and January 1, 2017, the Company acquired the sales VIE Companies. The fair value of the acquired customer relationships was estimated to be RMB16,472,179 (or $2,398,349) and is amortized over the remaining useful life of seven to ten years.

	September 30,			June 30,
	2018			2018
Customer relationships	$	11,608,629		$	12,039,169
Less: accumulated amortization		(8,476,932	))		(8,460,445	))
Total customer relationships, net	$	3,131,697		$	3,578,724

NON-COMPETE AGREEMENT

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The fair value of the acquired non-compete agreement was estimated to be RMB1,320,000 (or $192,192) and is amortized over the remaining useful life of five years using the straight-line method. On June 30, 2016 and January 1, 2017, the Company acquired the sales VIE Companies. The fair value of the acquired non-compete agreements was estimated to be RMB6,150,683 (or $895,539) and is amortized over the remaining useful life of five years using the straight-line method.

	September 30,			June 30,
	2018			2018
Non-compete agreement	$	1,188,597		$	1,232,680
Less: accumulated amortization		(602,501	)		(573,180	)
Total non-compete agreement, net	$	586,096		$	659,500

TRADEMARKS

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The preliminary fair value of the acquired trademarks was estimated to be RMB40,700,000 (or $5,925,920) and is subject to an annual impairment test.

AMORTIZATION EXPENSE

Estimated amortization expenses of intangible assets for the next five twelve months periods ended September 30, are as follows:

Twelve Months Ended on September 30,	Expense ($)
2019		1,841,368
2020		1,563,540
2021		774,915
2022		583,475
2023		530,802

XML

Other Non-Current Assets

3 Months Ended

Sep. 30, 2018

Other Non-Current Assets [Abstract]

OTHER NON-CURRENT ASSETS

NOTE 6 – OTHER NON-CURRENT ASSETS

Other non-current assets mainly include advance payments related to leasing land for use by the Company. As of September 30, 2018, the balance of other non-current assets was $16,776,611, which was the lease fee advances for agriculture lands that the Company engaged in Shiquan County from 2018 to 2027.

In March 2017, Jinong entered into a lease agreement for approximately 3,400 mu, and 2600-hectare agriculture lands in Shiquan County, Shaanxi Province. The lease was from April 2017 and was renewable for every ten-year period up to 2066. The aggregate leasing fee was approximately RMB 13 million per annum, The Company had made 10-year advances of leasing fee per lease terms. The Company has amortized $.5 million as expenses for the three months ended September 30, 2018.

Estimated amortization expenses of the lease advance payments for the next four twelve-month periods ended September 30 and thereafter are as follows:

Twelve months ending September 30,
2019	$	1,954,680
2020	$	1,954,680
2021	$	1,954,680
2022	$	1,954,680
2023 and thereafter	$	8,957,891

XML

Accrued Expenses and Other Payables

3 Months Ended

Sep. 30, 2018

Accrued Expenses and Other Payables [Abstract]

ACCRUED EXPENSES AND OTHER PAYABLES

NOTE 7 - ACCRUED EXPENSES AND OTHER PAYABLES

Accrued expenses and other payables consisted of the following:

	September 30,		June 30,
	2018		2018
Payroll payable	$	12,932	$	13,788
Welfare payable		149,479		155,023
Accrued expenses		6,373,325		5,368,348
Other payables		4,371,728		4,543,261
Other levy payable		122,109		126,638
Total	$	11,029,573	$	10,207,058

XML

Related Parties Transactions

3 Months Ended

Sep. 30, 2018

Related Parties Transactions [Abstract]

RELATED PARTIES TRANSACTIONS

NOTE 8 - RELATED PARTIES TRANSACTIONS

At the end of December 2015, Yuxing entered into a sales agreement with the Company’s affiliate, 900LH.com Food Co., Ltd. (“900LH.com”, previously announced as Xi’an Gem Grain Co., Ltd) pursuant to which Yuxing is to supply various vegetables to 900LH.com for its incoming seasonal sales at the holidays and year ends (the “Sales Agreement”). The contingent contracted value of the Sales Agreement is RMB 25,500,000 (approximately $3,712,800). For the three months ended September 30, 2018 and 2017, Yuxing has sold approximately $71,962 and $133,690 products to 900LH.com.

The amount due from 900LH.com to Yuxing was $249,087 and $235,551 as of September 30, 2018 and June 30, 2018, respectively.

As of September 30, 2018, and June 30, 2018, the amount due to related parties was $3,232,715 and $3,271,619, respectively.  As of September 30, 2018, and June 30, 2018, $1,019,200 and $1,057,000, respectively were amounts that Gufeng borrowed from a related party, Xi’an Techteam Science & Technology Industry (Group) Co. Ltd., a company controlled by Mr. Zhuoyu Li, Chairman and CEO of the Company, representing unsecured, non-interest-bearing loans that are due on demand.  These loans are not subject to written agreements.

As of September 30, 2018, and June 30, 2018, the Company’s subsidiary, Jinong, owed 900LH.com $431,907 and $393,565, respectively.

On June 29, 2016, Jinong signed an office lease with Kingtone Information Technology Co., Ltd. (“Kingtone Information”), of which Mr. Tao Li, former Chairman and CEO of the Company, serves as Chairman of its board of directors. Pursuant to the lease, Jinong rented 612 square meters (approximately 6,588 square feet) of office space from Kingtone Information. The lease provides for a two-year term effective as of July 1, 2016 with monthly rent of RMB24,480 (approximately $3,564)

XML

Loan Payables

3 Months Ended

Sep. 30, 2018

Loan Payables [Abstract]

LOAN PAYABLES

NOTE 9- LOAN PAYABLES

As of September 30, 2018, the short-term loan payables consisted of two loans which mature on dates ranging from May 21, 2019 through June 18, 2019 with interest rates ranging from 5.22% to 6.31%. Both loans are collateralized by Tianjuyuan’s land use right and building ownership right. .

No.	Payee	Loan period per agreement	Interest Rate			September 30, 2018
1	Bank of Beijing - Pinggu Branch	May 22, 2018-May 21, 2019		5.22	%		1,456,000
2	Postal Saving Bank of China - Pinggu Branch	June 19, 2018-June 18, 2019		6.31	%		2,912,000
	Total					$	4,368,000

The interest expense from short-term loans was $93,122 and $179,575 for the period ended September 30, 2018 and 2017 respectively.

XML

Convertible Notes Payable

3 Months Ended

Sep. 30, 2018

Convertible Notes Payable [Abstract]

CONVERTIBLE NOTES PAYABLE

NOTE 10 – CONVERTIBLE NOTES PAYABLE

Relating to the acquisition of the VIE Companies, the Company subsidiary, Jinong, issued to the VIE Companies shareholders convertible notes payable twice, in the aggregate notional amount of RMB 51,000,000 ($7,425,600) with a term of three years and an annual interest rate of 3%.

No.	Related Acquisitions of Sales VIEs	Issuance Date	Maturity Date	Notional Interest Rate		Conversion Price		Notional Amount (in RMB)
1	Wangtian, Lishijie, Xindeguo, Xinyulei, Jinyangguang	June 30, 2016	June 30, 2019	3	%	$	5.00		39,000,000
2	Fengnong, Xiangrong	January 1, 2017	December 31, 2019	3	%	$	5.00		12,000,000

The convertible notes take priority over the preferred stock and common stock of Jinong, and any other class or series of capital stocks Jinong issues in the future in terms of interests and payments in the event of any liquidation, dissolution or winding up of Jinong. On or after the third anniversary of the issuance date of the note, noteholders may request Jinong to process the note conversion to convert the note into shares of the Company’s common stock. The notes cannot be converted prior to the mature date. The per share conversion price of the notes is the higher of the following: (i) $5.00 per share or (ii) 75% of the closing price of the Company’s common stock on the date the noteholder delivers the conversion notice. Due to the discontinuation of VIE agreements with Zhenbai’s shareholders, certain convertible notes issued on June 30, 2016 with a face amount of RMB 12,000,000 ($1,747,200) were tendered back to the Company. All outstanding balance of unpaid principal and accrued interest in the tendered convertible notes were forfeited.

The Company determined that the fair value of the convertible notes payable was RMB 49,522,859 ($7,210,528) and RMB 48,820,525 ($7,108,268) as of September 30, 2018 and June 30, 2018, respectively. Aside from the forfeiture of the convertible notes previously issued to Zhenbai’s shareholders, the difference between the fair value of the notes and the face amount of the notes is being amortized to accretion implied interest expense over the three-year life of the notes. As of September 30, 2018, the accumulated amortization of this discount into accretion expenses was $1,025,268.

XML

Taxes Payable

3 Months Ended

Sep. 30, 2018

Taxes Payable [Abstract]

TAXES PAYABLE

NOTE 11 – TAXES PAYABLE

Enterprise Income Tax

Effective January 1, 2008, the Enterprise Income Tax (“EIT”) law of the PRC replaced the tax laws for Domestic Enterprises (“DEs”) and Foreign Invested Enterprises (“FIEs”). The EIT rate of 25% replaced the 33% rate that was applicable to both DEs and FIEs. The two-year tax exemption and three-year 50% tax reduction tax holiday for production-oriented FIEs was eliminated. Since January 1, 2008, Jinong became subject to income tax in China at a rate of 15% as a high-tech company, because of the expiration of its tax exemption on December 31, 2007. Accordingly, it made provision for income taxes for the three-month period ended September 30, 2018 and 2017 of $1,041,180 and $1,013,134, respectively, which is mainly due to the operating income from Jinong. Gufeng is subject to 25% EIT rate and thus it made provision for income taxes of $395,255 and $511,796 for the three months ended September 30, 2018 and 2017, respectively.

Value-Added Tax

Certain fertilizer products that are produced and sold in the PRC were subject to a Chinese Value-Added Tax (VAT) of 13% of the gross sales price. On April 29, 2008, the PRC State of Administration of Taxation (SAT) released Notice #56, “Exemption of VAT for Organic Fertilizer Products”, which allows certain fertilizer products to be exempt from VAT beginning June 1, 2008. The Company submitted the application for exemption in May 2009, which was granted effective September 1, 2009. 

Income Taxes and Related Payables

	Sept 30,			June 30,
	2018			2018
VAT provision	$	(444,722	)	$	(449,140	)
Income tax payable		77,307			554,065
Other levies		821,723			836,747
Total	$	454,308		$	941,672

The provision for income taxes consists of the following

	September 30,		September 30,
	2018		2017
Current tax - foreign	$	1,654,416	$	1,722,655
Deferred tax		-		-
	$	1,654,416	$	1,722,655

Our effective tax rates were approximately 15.5% and 25.3% for the three months ended September 30, 2018 and 2017, respectively. Substantially all the Company’s income before income taxes and related tax expense are from PRC sources. Actual income tax benefit reported in the consolidated statements of income and comprehensive income differ from the amounts computed by applying the US statutory income tax rate of 34% to income before income taxes for the three months ended September 30, 2018 and 2017 for the following reasons:

September 30, 2018

Tax Rate Reconciliation

September 30, 2018

	China					United States
	15% - 25%					21%					Total
Pretax income (loss)	$	11,287,985					(621,765	)			$	10,666,220
Expected income tax expense (benefit)		2,821,996		25.0	%		(130,571	)	21.0	%		2,691,426
High-tech income benefits on Jinong		(1,041,180	)	(9.5	)%		-		-			(1,041,180	)
Losses from subsidiaries in which no benefit is recognized		(126,400	)	(1.1	)%		-		-			(126,400	)
Change in valuation allowance on deferred tax asset from US tax benefit		-					130,571		(21.0	)%		130,571
Actual tax expense	$	1,654,416		14.7	%	$	-		-	%	$	1,654,416		15.5	%

	China					United States
September 30, 2017	15% - 25%					34%					Total
Pretax income (loss)	$	7,015,501				$	(198,017	)			$	6,817,484
Expected income tax expense (benefit)		1,753,875		0.250			(67,326	)	34	%		1,686,549
High-tech income benefits on Jinong		(675,422	)	-0.096								(675,422	)
Losses from subsidiaries in which no benefit is recognized		644,202		0.092								644,202
Change in valuation allowance on deferred tax asset from US tax benefit		-					67,326		-34	%		67,326
Actual tax expense	$	1,722,655		24.6	%	$	-		0.00	%	$	1,722,655		25.3	%

XML

Stockholders' Equity

3 Months Ended

Sep. 30, 2018

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 12 – STOCKHOLDERS’ EQUITY

Common Stock

There were no shares of common stock issued during the quarters ended September 30, 2018 and 2017, respectively.

As of September 30, 2018, and June 30, 2018, there were 38,896,945 and 38,896,945 shares of common stock issued and outstanding.

Preferred Stock

Under the Company’s Articles of Incorporation, the Board has the authority, without further action by stockholders, to designate up to 20,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges, qualifications and restrictions granted to or imposed upon the preferred stock, including dividend rights, conversion rights, voting rights, rights and terms of redemption, liquidation preference and sinking fund terms, any or all of which may be greater than the rights of the common stock. If the Company sells preferred stock under its registration statement on Form S-3, it will fix the rights, preferences, privileges, qualifications and restrictions of the preferred stock of each series in the certificate of designation relating to that series and will file the certificate of designation that describes the terms of the series of preferred stock the Company offers before the issuance of the related series of preferred stock.

As of September 30, 2018, the Company has 20,000,000 shares of preferred stock authorized, with a par value of $.001 per share, of which no shares are issued or outstanding.

XML

Concentrations

3 Months Ended

Sep. 30, 2018

Concentrations [Abstract]

CONCENTRATIONS

NOTE 13 –CONCENTRATIONS

Market Concentration

All the Company’s revenue-generating operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC, and by the general state of the PRC’s economy.

The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among other things, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by, among other things, changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation.

Vendor and Customer Concentration

There were four vendors from each of which the Company purchased more than 10% of its raw materials, with the total of 47.6% of its raw materials for the three months ended September 30, 2018. Total purchases from these four vendors amounted to $26,676,809 for the three-month period ended September 30, 2018.

There were six vendors from each of which the Company purchased more than 10% of its raw materials, with the total of 64.6% of its raw materials for the three months ended September 30, 2017. Total purchases from these six vendors amounted to $52,430,050 for the three-month period ended September 30, 2017.

No customer accounted for over 10% of the Company’s sales for the three months ended September 30, 2018 and 2017.

XML

Segment Reporting

3 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

SEGMENT REPORTING

NOTE 14 – SEGMENT REPORTING

As of September 30, 2018, the Company was organized into four main business segments based on location and product: Jinong (fertilizer production), Gufeng (fertilizer production), Yuxing (agricultural products production) and the sales VIEs. Each of the four operating segments referenced above has separate and distinct general ledgers. The chief operating decision maker (“CODM”) receives financial information, including revenue, gross margin, operating income and net income produced from the various general ledger systems to make decisions about allocating resources and assessing performance; however, the principal measure of segment profitability or loss used by the CODM is net income by segment.

	Three Months Ended September 30,
Revenues from unaffiliated customers:	2018			2017
Jinong	$	22,496,533		$	26,773,760
Gufeng		17,473,251			18,222,066
Yuxing		2,387,546			1,792,643
Sales VIEs		15,597,474			15,340,182
Consolidated	$	57,954,804		$	62,128,651
Operating income:
Jinong	$	6,928,090		$	6,766,075
Gufeng		1,609,052			2,106,213
Yuxing		193,177			175,473
Sales VIEs		2,631,299			(1,808,652	)
Reconciling item (1)		-			2
Reconciling item (2)		(621,764	)		(198,019	)
Consolidated	$	10,739,854		$	6,791,658
Net income:
Jinong	$	5,900,016		$	5,741,090
Gufeng		1,120,344			1,489,067
Yuxing		193,178			175,622
Sales VIEs		2,420,029			(2,070,864
Reconciling item (1)		2			2
Reconciling item (2)		(621,766	)		(198,019	)
Consolidated	$	9,011,805		$	5,052,758
Depreciation and Amortization:
Jinong	$	198,258		$	853,743
Gufeng		536,619			547,757
Yuxing		304,818			312,519
Sales VIEs		186,806			186,606
Consolidated	$	1,226,500		$	1,900,626
Interest expense:
Jinong		69,442			70,836
Gufeng		93,122			104,723
Sales VIEs		123			4,016
Consolidated	$	162,686		$	179,575
Capital Expenditure:
Jinong	$	3,036		$	3,341
Gufeng		26,988			13,868
Yuxing		1,249			-
Consolidated	$	31,273		$	17,209

	As of
	September 30,			June 30,
	2018			2018
Identifiable assets:
Jinong	$	224,480,929		$	226,335,489
Gufeng		160,920,365			168,572,947
Yuxing		-			-
Sales VIEs		83,654,118			87,567,782
Reconciling item (1)		582,901			512,622
Reconciling item (2)		(2,879	)		(2,879	)
Consolidated	$	469,635,433		$	482,985,960

(1) Reconciling amounts refer to the unallocated assets or expenses of Green New Jersey.

(2) Reconciling amounts refer to the unallocated assets or expenses of the Parent Company.

XML

Commitments and Contingencies

3 Months Ended

Sep. 30, 2018

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 15 – COMMITMENTS AND CONTINGENCIES

On June 29, 2018, Jinong renewed an office lease with Kingtone Information.  Pursuant to the lease, Jinong rented 612 square meters (approximately 6,588 square feet) of office space from Kingtone Information. The lease provided for a four-year term effective as of July 1, 2018 with monthly rent of $3,564 (approximately RMB 24,480). 

Accordingly, the Company recorded an aggregate of $11,985 and $14,716 as rent expenses from these committed property leases for the three-month periods ended September 30, 2018 and 2017, respectively. The contingent rent expenses herein for the next five twelve-month periods ended September 30, are as follows:

Years ending September 30,
2019	$	47,940
2020		47,940
2021		47,940
2022		47,940
2023		47,940

XML

Variable Interest Entities

3 Months Ended

Sep. 30, 2018

Variable Interest Entities [Abstract]

VARIABLE INTEREST ENTITIES

NOTE 16 – VARIABLE INTEREST ENTITIES

In accordance with accounting standards regarding consolidation of variable interest entities, VIEs are generally entities that lack enough equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs with which a 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.

Green Nevada through one of its subsidiaries, Jinong, entered into a series of agreements (the “VIE Agreements”) with Yuxing for it to qualify as a VIE, effective June 16, 2013.

The Company has concluded, based on the contractual arrangements, that Yuxing is a VIE and that the Company’s wholly-owned subsidiary, Jinong, absorbs majority of the risk of loss from the activities of Yuxing, thereby enabling the Company, through Jinong, to receive a majority of Yuxing expected residual returns.

On June 30, 2016 and January 1, 2017, the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and a series of contractual agreements to qualify as VIEs with the shareholders of the sales VIE Companies.

Jinong, the sales VIE Companies, and the shareholders of the sales VIE Companies also entered into a series of contractual agreements for the sales VIE Companies to qualify as VIEs (the “VIE Agreements”).

On November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, exited the VIE agreements with the shareholders of Zhenbai.

As a result of these contractual arrangements, with Yuxing and the sales VIE Companies the Company is entitled to substantially all the economic benefits of Yuxing and the VIE Companies. The following financial statement amounts and balances of the VIEs were included in the accompanying consolidated financial statements as of September 30, 2018 and June 30, 2018:

	September 30,		June 30,
	2018		2018
ASSETS
Current Assets
Cash and cash equivalents	$	1,347,720	$	982,312
Accounts receivable, net		35,129,065		38,295,505
Inventories		20,889,337		21,133,970
Other current assets		950,471		988,051
Related party receivable		249,087		(359,005	)
Advances to suppliers		814,358		848,458
Total Current Assets		59,380,038		61,889,291
Plant, Property and Equipment, Net		10,548,189		11,206,667
Other assets		218,549		226,654
Intangible Assets, Net		10,724,735		11,348,180
Goodwill		3,181,816		3,319,732
Total Assets	$	84,053,327	$	87,990,524
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Short-term loan	$	-	$	-
Accounts payable		20,951,481		25,584,614
Customer deposits		242,728		841,694
Accrued expenses and other payables		4,109,982		3,896,340
Amount due to related parties		41,903,021		43,339,286
Total Current Liabilities	$	67,207,212	$	73,661,934
Long-term Loan		-		-
Total Liabilities	$	67,207,212	$	73,661,934
Stockholders’ equity		16,846,115		14,328,590
Total Liabilities and Stockholders’ Equity		84,053,327	$	87,990,524

	Three Months Ended September 30,
	2018		2017
Revenue	$	17,985,020	$	17,132,823
Expenses		15,371,814		19,112,207
Net income	$	2,613,206	$	(1,979,384	)

XML

Business Combinations

3 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

BUSINESS COMBINATIONS

NOTE 17 – BUSINESS COMBINATIONS

On June 30, 2016, the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and also into a series of contractual agreements to qualify as VIEs with the shareholders of Shaanxi Lishijie Agrochemical Co., Ltd., Songyuan Jinyangguang Sannong Service Co., Ltd., Shenqiu County Zhenbai Agriculture Co., Ltd., Weinan City Linwei District Wangtian Agricultural Materials Co., Ltd., Aksu Xindeguo Agricultural Materials Co., Ltd., and Xinjiang Xinyulei Eco-agriculture Science and Technology Co., Ltd.

Subsequently, on January 1, 2017, Jinong entered into similar strategic acquisition agreements and a series of contractual agreements to qualify as VIEs with the shareholders of Sunwu County Xiangrong Agricultural Materials Co., Ltd., and Anhui Fengnong Seed Co., Ltd.

On November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Zhenbai.

The VIE Agreements are as follows:

Entrusted Management Agreements

Pursuant to the terms of certain Entrusted Management Agreements dated June 30, 2016 and January 1, 2017, between Jinong and the shareholders of the sales VIE Companies (the “Entrusted Management Agreements”), the sales VIE Companies and their shareholders agreed to entrust the operations and management of its business to Jinong. According to the Entrusted Management Agreement, Jinong possesses the full and exclusive right to manage the sales VIE Companies’ operations, assets and personnel, has the right to control all the sales VIE Companies’ cash flows through an entrusted bank account, is entitled to the sales VIE Companies’ net profits as a management fee, is obligated to pay all the sales VIE Companies’ payables and loan payments, and bears all losses of the sales VIE Companies. The Entrusted Management Agreements will remain in effect until (i) the parties mutually agree to terminate the agreement; (ii) the dissolution of the sales VIE Companies; or (iii) Jinong acquires all the assets or equity of the sales VIE Companies (as more fully described below under “Exclusive Option Agreements”).

Exclusive Technology Supply Agreements

Pursuant to the terms of certain Exclusive Technology Supply Agreements dated June 30, 2016 and January 1, 2017, between Jinong and the sales VIE companies (the “Exclusive Technology Supply Agreements”), Jinong is the exclusive technology provider to the sales VIE companies. The sales VIE companies agreed to pay Jinong all fees payable for technology supply prior to making any payments under the Entrusted Management Agreement. The Exclusive Technology Supply Agreements shall remain in effect until (i) the parties mutually agree to terminate the agreement; (ii) the dissolution of the sales VIE companies; or (iii) Jinong acquires the sales VIE companies (as more fully described below under “Exclusive Option Agreements”).

Shareholder’s Voting Proxy Agreements

Pursuant to the terms of certain Shareholder’s Voting Proxy Agreements dated June 30, 2016 and January 1, 2017, among Jinong and the shareholders of the sales VIE companies (the “Shareholder’s Voting Proxy Agreements”), the shareholders of the sales VIE companies irrevocably appointed Jinong as their proxy to exercise on such shareholders’ behalf all of their voting rights as shareholders pursuant to PRC law and the Articles of Association of the sales VIE companies, including the appointment and election of directors of the sales VIE companies. Jinong agreed that it shall maintain a board of directors, the composition and appointment of which shall be approved by the Board of the Company. The Shareholder’s Voting Proxy Agreements will remain in effect until Jinong acquires all the assets or equity of the sales VIE companies.

Exclusive Option Agreements

Pursuant to the terms of certain Exclusive Option Agreements dated June 30, 2016 and January 1, 2017, among Jinong, the sales VIE companies, and the shareholders of the sales VIE companies (the “Exclusive Option Agreements”), the shareholders of the sales VIE companies granted Jinong an irrevocable and exclusive purchase option (the “Option”) to acquire the sales VIE companies’ equity interests and/or remaining assets, but only to the extent that the acquisition does not violate limitations imposed by PRC law on such transactions. The Option is exercisable at any time at Jinong’s discretion so long as such exercise and subsequent acquisition of the sales VIE companies does not violate PRC law. The consideration for the exercise of the Option is to be determined by the parties and memorialized in the future by definitive agreements setting forth the kind and value of such consideration. Jinong may transfer all rights and obligations under the Exclusive Option Agreements to any third parties without the approval of the shareholders of the sales VIE companies so long as a written notice is provided. The Exclusive Option Agreements may be terminated by mutual agreements or by 30 days written notice by Jinong.

Equity Pledge Agreements

Pursuant to the terms of certain Equity Pledge Agreements dated June 30, 2016 and January 1, 2017, among Jinong and the shareholders of the sales VIE companies (the “Pledge Agreements”), the shareholders of the sales VIE companies pledged all of their equity interests in the sales VIE companies to Jinong, including the proceeds thereof, to guarantee all of Jinong’s rights and benefits under the Entrusted Management Agreements, the Exclusive Technology Supply Agreements, the Shareholder’ Voting Proxy Agreements and the Exclusive Option Agreements. Prior to termination of the Pledge Agreements, the pledged equity interests cannot be transferred without Jinong’s prior written consent. The Pledge Agreements may be terminated only upon the written agreement of the parties.

Non-Compete Agreements

Pursuant to the terms of certain Non-Compete Agreements dated June 30, 2016 and January 1, 2017, among Jinong and the shareholders of the sales VIE companies (the “Non-Compete Agreements”), the shareholders of the sales VIE companies agreed that during the period beginning on the initial date of their services with Jinong, and ending five (5) years after termination of their services with Jinong, without Jinong’s prior written consent, they will not provide services or accept positions including but not limited to partners, directors, shareholders, managers, proxies or consultants, provided by any profit making organizations with businesses that may compete with Jinong. They will not solicit or interfere with any of the Jinong’s customers, or solicit, induce, recruit or encourage any person engaged or employed by Jinong to terminate his or her service or engagement. If the shareholders of the sales VIE companies breach the non-compete obligations contained therein, Jinong is entitled to all loss and damages; if the damages are difficult to determine, remedies bore the shareholders of the sales VIE companies shall be no less than 50% of the salaries and other expenses Jinong provided in the past.

The Company entered into these VIE Agreements as a way for the Company to have more control over the distribution of its products. The transactions are accounted for as business combinations in accordance with ASC 805. A summary of the purchase price allocations at fair value is below:

For acquisitions made on June 30, 2016:

Cash	$	708,737
Accounts receivable		6,422,850
Advances to suppliers		1,803,180
Prepaid expenses and other current assets		807,645
Inventories		7,787,043
Machinery and equipment		140,868
Intangible assets		270,900
Other assets		3,404,741
Goodwill		3,158,179
Accounts payable		(3,962,670	)
Customer deposits		(3,486,150	)
Accrued expenses and other payables		(4,653,324	)
Taxes payable		(16,912	)
Purchase price	$	12,385,087

A summary of the purchase consideration paid is below:

Cash	$	5,568,500
Convertible notes		6,671,769
Derivative liability		144,818
	$	12,385,087

The cash component of the purchase price for these acquisitions made on June 30, 2016 was paid in July and August 2016.

For acquisitions made on January 1, 2017:

Working Capital	$	941,192
Machinery and equipment		222,875
Intangible assets		1440
Goodwill		684,400
Customer Relationship		522,028
Non-compete Agreement		392,852
Purchase price	$	2,764,787

A summary of the purchase consideration paid is below:

Cash	$	1,201,888
Convertible notes		1,559,350
Derivative liability		3,549
	$	2,764,787

The cash component of the purchase price for these acquisitions made on January 1, 2017 was paid during March 2017.

On November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Zhenbai. In return, the shareholders of Zhenbai agreed to tender the whole payment consideration in the SAA back to the Company with early termination penalties. The convertible notes paid to Zhenbai’s shareholders and the accrued interest has been forfeited.

For the discontinuation of Zhenbai made on November 30, 2017, the Company gave up the control of the following assets in Zhenbai:

Working Capital	$	1,179,352
Intangible assets		896,559
Customer  Relationship		684,727
Non-compete Agreement		211,833
Goodwill		538,488
Total Asset	$	2,614,401

In return, the purchase consideration returned to the Company from Zhenbai’s shareholders is summarized below:

Cash	$	461,330
Interest Payable		83,039
Convertible notes		1,724,683
Derivative liability		13,353
Total Payback	$	2,282,406
Net Loss		(331,995	)

XML

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Sep. 30, 2018

Basis of Presentation and Summary of Significant Accounting Policies [Abstract]

Principle of consolidation

Principle of consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Green New Jersey, Jinong, Gufeng, Tianjuyuan, and the VIE Companies. All significant inter-company accounts and transactions have been eliminated in consolidation.

Effective June 16, 2013, Yuxing was converted from being a wholly-owned foreign enterprise 100% owned by Jinong to a domestic enterprise 100% owned one natural person, who is not affiliated to the Company (“Yuxing’s Owner”). Effective the same day, Yuxing’s Owner entered into a series of contractual agreements with Jinong pursuant to which Yuxing became the VIE of Jinong.

VIE assessment

VIE assessment

A VIE is an entity (1) that has total equity at risk that is not sufficient to finance its activities without additional subordinated financial support from other entities, (2) where the group of equity holders does not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance, or the obligation to absorb the entity’s expected losses or the right to receive the entity’s expected residual returns, or both, or (3) where the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. In order to determine if an entity is considered a VIE, the Company first performs a qualitative analysis, which requires certain subjective decisions regarding its assessments, including, but not limited to, the design of the entity, the variability that the entity was designed to create and pass along to its interest holders, the rights of the parties, and the purpose of the arrangement. If the Company cannot conclude after a qualitative analysis whether an entity is a VIE, it performs a quantitative analysis. The qualitative analysis considered the design of the entity, the risks that cause variability, the purpose for which the entity was created, and the variability that the entity was designed to pass along to its variable interest holders. When the primary beneficiary could not be identified through a qualitative analysis, we used internal cash flow models to compute and allocate expected losses or expected residual returns to each variable interest holder based upon the relative contractual rights and preferences of each interest holder in the VIE’s capital structure.

Use of estimates

Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 consolidated financial statements and the amount of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those results.

Cash and cash equivalents and concentration of cash

Cash and cash equivalents and concentration of cash

For statement of cash flows purposes, the Company considers all cash on hand and in banks, certificates of deposit with state owned banks in the Peoples Republic of China (“PRC”) and banks in the United States, and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. The Company maintains large sums of cash in three major banks in China. The aggregate cash in such accounts and on hand as of September 30, 2018 and June 30, 2018 were $153,154,657 and $150,805,639, respectively. The Company had $153,141,535 and $150,785,737 in cash in banks in China, and $13,122 and $19,902 in cash in two banks in the United States as of September 30, 2018 and June 30, 2018, respectively. Cash overdrafts as of a balance sheet date will be reflected as liabilities in the balance sheet. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

Accounts receivable

Accounts receivable

The Company’s policy is to maintain reserves for potential credit losses on accounts receivable. Management regularly reviews the composition of accounts receivable and analyzes customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves at each year-end. Accounts considered uncollectible are written off through a charge to the valuation allowance. As of September 30, 2018, and June 30, 2018, the Company had accounts receivable of $136,794,689 and $174,460,937, net of allowance for doubtful accounts of $24,387,808 and $24,551,796, respectively.

Inventories

Inventories

Inventory is valued at the lower of cost (determined on a weighted average basis) or market. Inventories consist of raw materials, work in process, finished goods and packaging materials. The Company reviews its inventories regularly for possible obsolete goods and establishes reserves when determined necessary. At September 30, 2018 and 2017, the Company had no reserve for obsolete goods.

Intangible Assets

Intangible Assets

The Company records intangible assets acquired individually or as part of a group at fair value. Intangible assets with definitive lives are amortized over the useful life of the intangible asset, which is the period over which the asset is expected to contribute directly or indirectly to the entity’s future cash flows. The Company evaluates intangible assets for impairment at least annually and more often whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. The Company has not recorded impairment of intangible assets as of September 30, 2018 and 2017 respectively.

Customer deposits

Customer deposits

Payments received before all the relevant criteria for revenue recognition are satisfied are recorded as customer deposits. When all revenue recognition criteria are met, the customer deposits are recognized as revenue. As of September 30, 2018, and June 30, 2018, the Company had customer deposits of $5,785,249 and $7,251,967, respectively.

Earnings per share

Earnings per share

Basic earnings per share are computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and stock awards.

The components of basic and diluted earnings per share consist of the following:

	Three Months Ended
	September 30,
	2018		2017
Net Income for Basic Earnings Per Share	$	9,011,805	$	5,094,828
Basic Weighted Average Number of Shares		38,896,945		38,185,277
Net Income Per Share – Basic	$	0.23	$	0.13
Net Income for Diluted Earnings Per Share	$	9,011,805	$	5,094,828
Diluted Weighted Average Number of Shares		38,896,945		38,185,277
Net Income Per Share – Diluted	$	0.23	$	0.13

Recent accounting pronouncements

Recent accounting pronouncements

Revenue Recognition:  In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for us in our first quarter of fiscal 2018 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09 (full retrospective method); or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09 (modified retrospective method). We are currently assessing the impact to our consolidated financial statements and have not yet selected a transition approach.

Disclosure of Going Concern Uncertainties:  In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15), to provide guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for us in our fourth quarter of fiscal 2017 with early adoption permitted. We do not believe the impact of our pending adoption of ASU 2014-15 on the Company’s financial statements will be material.

Financial instrument: In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The standard addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is not permitted. Accordingly, the standard is effective for us on September 1, 2018. We are currently evaluating the impact that the standard will have on our consolidated financial statements.

Leases: In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-2”), which provides guidance on lease amendments to the FASB Accounting Standard Codification. This ASU will be effective for us beginning in May 1, 2019. We are currently in the process of evaluating the impact of the adoption of ASU 2016-2 on our consolidated financial statements.

Stock-based Compensation: In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). ASU 2016-09 changes how companies account for certain aspects of stock-based awards to employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for us in the first quarter of 2018, and earlier adoption is permitted. We are still evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

Financial Instruments - Credit Losses: In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): The amendments in this Update require a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The amendments broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit loss, which will be more decision useful to users of the financial statements. ASU 2016-13 is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is allowed as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is still evaluating the effect that this guidance will have on the Company’s consolidated financial statements and related disclosures.

Statement of Cash Flows: In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): The amendments in this Update apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under Topic 230. The amendments in this Update provide guidance on the following eight specific cash flow issues. The amendments are an improvement to GAAP because they provide guidance for each of the eight issues, thereby reducing the current and potential future diversity in practice described above. ASU 2016-15 is effective for the Company for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is still evaluating the effect that this guidance will have on the Company’s consolidated financial statements and related disclosures.

Statement of Cash Flows: In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): “Restricted Cash” (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. This update is effective in fiscal years, including interim periods, beginning after December 15, 2017 and early adoption is permitted. The adoption of this guidance will result in the inclusion of the restricted cash balances within the overall cash balance and removal of the changes in restricted cash activity, which are currently recognized in other financing activities, on the Statements of Consolidated Cash Flows. Furthermore, an additional reconciliation will be required to reconcile Cash and cash equivalents and restricted cash reported within the Consolidated Balance Sheets to sum to the total shown in the Statements of Consolidated Cash Flows. The Company anticipates adopting this new guidance effective July 1, 2018. The Company is currently evaluating this guidance and the impact it will have on the Consolidated Financial Statements and disclosures. 

Business Combination: In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. This guidance will be effective for us in the first quarter of 2018 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our consolidated financial statements.

Stock-based Compensation: In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock compensation (Topic 718): Scope of modification accounting” (“ASU 2017-09”). The purpose of the amendment is to clarify which changes to the terms or condition of a share-based payment award require an entity to apply modification accounting. For all entities that offer share-based payment awards, ASU 2017-09 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2017-09 on its condensed consolidated financial statements.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

XML

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Sep. 30, 2018

Basis of Presentation and Summary of Significant Accounting Policies [Abstract]

Schedule of components of basic and diluted earnings per share

	Three Months Ended
	September 30,
	2018		2017
Net Income for Basic Earnings Per Share	$	9,011,805	$	5,094,828
Basic Weighted Average Number of Shares		38,896,945		38,185,277
Net Income Per Share – Basic	$	0.23	$	0.13
Net Income for Diluted Earnings Per Share	$	9,011,805	$	5,094,828
Diluted Weighted Average Number of Shares		38,896,945		38,185,277
Net Income Per Share – Diluted	$	0.23	$	0.13

XML

Inventories (Tables)

3 Months Ended

Sep. 30, 2018

Inventories [Abstract]

Schedule of inventories

	September 30,		June 30,
	2018		2018
Raw materials	$	30,149,050	$	13,154,465
Supplies and packing materials	$	523,992	$	566,254
Work in progress	$	386,158	$	417,130
Finished goods	$	54,916,355	$	39,646,965
Total	$	85,975,555	$	53,784,814

XML

Property, Plant and Equipment (Tables)

3 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

Schedule of property, plant and equipment

	September 30,			June 30,
	2018			2018
Building and improvements	$	38,877,508		$	40,319,393
Auto		3,387,289			3,504,028
Machinery and equipment		18,097,309			18,765,192
Agriculture assets		741,044			768,528
Total property, plant and equipment		61,103,149			63,357,141
Less: accumulated depreciation		(32,074,369	)		(32,462,458	)
Total	$	29,028,781		$	30,894,683

XML

Intangible Assets (Tables)

3 Months Ended

Sep. 30, 2018

Finite-Lived Intangible Assets [Line Items]

Schedule of impaired intangible assets

	September 30,		June 30,
	2018		2018
Land use rights, net	$	9,516,800	$	9,930,420
Technology patent, net		3,334		3,570
Customer relationships, net		3,131,697		3,578,724
Non-compete agreement		586,096		659,500
Trademarks		5,925,920		6,145,700
Total	$	19,163,847	$	20,317,914

Schedule of finite-lived intangible assets, future amortization expense

Twelve Months Ended on September 30,	Expense ($)
2019		1,841,368
2020		1,563,540
2021		774,915
2022		583,475
2023		530,802

LAND USE RIGHT [Member]

Finite-Lived Intangible Assets [Line Items]

Schedule of impaired intangible assets

	September 30,			June 30,
	2018			2018
Land use rights	$	11,868,721			12,308,907
Less: accumulated amortization		(2,351,921	)		(2,378,488	)
Total land use rights, net	$	9,516,800			9,930,419

TECHNOLOGY PATENT [Member]

Finite-Lived Intangible Assets [Line Items]

Schedule of impaired intangible assets

	September 30,			June 30,
	2018			2018
Technology know-how	$	2,199,715		$	2,276,335
Less: accumulated amortization		(2,199,715	))		(2,276,335	)
Total technology know-how, net	$	-		$	-

CUSTOMER RELATIONSHIPS [Member]

Finite-Lived Intangible Assets [Line Items]

Schedule of impaired intangible assets

	September 30,			June 30,
	2018			2018
Customer relationships	$	11,608,629		$	12,039,169
Less: accumulated amortization		(8,476,932	))		(8,460,445	))
Total customer relationships, net	$	3,131,697		$	3,578,724

NON-COMPETE AGREEMENT [Member]

Finite-Lived Intangible Assets [Line Items]

Schedule of impaired intangible assets

	September 30,			June 30,
	2018			2018
Non-compete agreement	$	1,188,597		$	1,232,680
Less: accumulated amortization		(602,501	)		(573,180	)
Total non-compete agreement, net	$	586,096		$	659,500

XML

Other Non-Current Assets (Tables)

3 Months Ended

Sep. 30, 2018

Other Non-Current Assets [Abstract]

Schedule of estimated amortization expenses of the lease advance payments

Twelve months ending September 30,
2019	$	1,954,680
2020	$	1,954,680
2021	$	1,954,680
2022	$	1,954,680
2023 and thereafter	$	8,957,891

XML

Accrued Expenses and Other Payables (Tables)

3 Months Ended

Sep. 30, 2018

Accrued Expenses and Other Payables [Abstract]

Schedule of accrued expenses and other payables

	September 30,		June 30,
	2018		2018
Payroll payable	$	12,932	$	13,788
Welfare payable		149,479		155,023
Accrued expenses		6,373,325		5,368,348
Other payables		4,371,728		4,543,261
Other levy payable		122,109		126,638
Total	$	11,029,573	$	10,207,058

XML

Loan Payables (Tables)

3 Months Ended

Sep. 30, 2018

Loan Payables [Abstract]

Summary of loan payables

No.	Payee	Loan period per agreement	Interest Rate			September 30, 2018
1	Bank of Beijing - Pinggu Branch	May 22, 2018-May 21, 2019		5.22	%		1,456,000
2	Postal Saving Bank of China - Pinggu Branch	June 19, 2018-June 18, 2019		6.31	%		2,912,000
	Total					$	4,368,000

XML

Convertible Notes Payable (Tables)

3 Months Ended

Sep. 30, 2018

Convertible Notes Payable [Abstract]

Summary of convertible notes payable

No.	Related Acquisitions of Sales VIEs	Issuance Date	Maturity Date	Notional Interest Rate		Conversion Price		Notional Amount (in RMB)
1	Wangtian, Lishijie, Xindeguo, Xinyulei, Jinyangguang	June 30, 2016	June 30, 2019	3	%	$	5.00		39,000,000
2	Fengnong, Xiangrong	January 1, 2017	December 31, 2019	3	%	$	5.00		12,000,000

XML

Taxes Payable (Tables)

3 Months Ended

Sep. 30, 2018

Taxes Payable [Abstract]

Schedule of income taxes and related payables

	Sept 30,			June 30,
	2018			2018
VAT provision	$	(444,722	)	$	(449,140	)
Income tax payable		77,307			554,065
Other levies		821,723			836,747
Total	$	454,308		$	941,672

Schedule of provision for income taxes

	September 30,		September 30,
	2018		2017
Current tax - foreign	$	1,654,416	$	1,722,655
Deferred tax		-		-
	$	1,654,416	$	1,722,655

Schedule of effective income tax rate reconciliation

September 30, 2018

	China					United States
	15% - 25%					21%					Total
Pretax income (loss)	$	11,287,985					(621,765	)			$	10,666,220
Expected income tax expense (benefit)		2,821,996		25.0	%		(130,571	)	21.0	%		2,691,426
High-tech income benefits on Jinong		(1,041,180	)	(9.5	)%		-		-			(1,041,180	)
Losses from subsidiaries in which no benefit is recognized		(126,400	)	(1.1	)%		-		-			(126,400	)
Change in valuation allowance on deferred tax asset from US tax benefit		-					130,571		(21.0	)%		130,571
Actual tax expense	$	1,654,416		14.7	%	$	-		-	%	$	1,654,416		15.5	%

	China					United States
September 30, 2017	15% - 25%					34%					Total
Pretax income (loss)	$	7,015,501				$	(198,017	)			$	6,817,484
Expected income tax expense (benefit)		1,753,875		0.250			(67,326	)	34	%		1,686,549
High-tech income benefits on Jinong		(675,422	)	-0.096								(675,422	)
Losses from subsidiaries in which no benefit is recognized		644,202		0.092								644,202
Change in valuation allowance on deferred tax asset from US tax benefit		-					67,326		-34	%		67,326
Actual tax expense	$	1,722,655		24.6	%	$	-		0.00	%	$	1,722,655		25.3	%

XML

Segment Reporting (Tables)

3 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Schedule of segment reporting information, by segment

	Three Months Ended September 30,
Revenues from unaffiliated customers:	2018			2017
Jinong	$	22,496,533		$	26,773,760
Gufeng		17,473,251			18,222,066
Yuxing		2,387,546			1,792,643
Sales VIEs		15,597,474			15,340,182
Consolidated	$	57,954,804		$	62,128,651
Operating income:
Jinong	$	6,928,090		$	6,766,075
Gufeng		1,609,052			2,106,213
Yuxing		193,177			175,473
Sales VIEs		2,631,299			(1,808,652	)
Reconciling item (1)		-			2
Reconciling item (2)		(621,764	)		(198,019	)
Consolidated	$	10,739,854		$	6,791,658
Net income:
Jinong	$	5,900,016		$	5,741,090
Gufeng		1,120,344			1,489,067
Yuxing		193,178			175,622
Sales VIEs		2,420,029			(2,070,864
Reconciling item (1)		2			2
Reconciling item (2)		(621,766	)		(198,019	)
Consolidated	$	9,011,805		$	5,052,758
Depreciation and Amortization:
Jinong	$	198,258		$	853,743
Gufeng		536,619			547,757
Yuxing		304,818			312,519
Sales VIEs		186,806			186,606
Consolidated	$	1,226,500		$	1,900,626
Interest expense:
Jinong		69,442			70,836
Gufeng		93,122			104,723
Sales VIEs		123			4,016
Consolidated	$	162,686		$	179,575
Capital Expenditure:
Jinong	$	3,036		$	3,341
Gufeng		26,988			13,868
Yuxing		1,249			-
Consolidated	$	31,273		$	17,209

	As of
	September 30,			June 30,
	2018			2018
Identifiable assets:
Jinong	$	224,480,929		$	226,335,489
Gufeng		160,920,365			168,572,947
Yuxing		-			-
Sales VIEs		83,654,118			87,567,782
Reconciling item (1)		582,901			512,622
Reconciling item (2)		(2,879	)		(2,879	)
Consolidated	$	469,635,433		$	482,985,960

(1) Reconciling amounts refer to the unallocated assets or expenses of Green New Jersey.

(2) Reconciling amounts refer to the unallocated assets or expenses of the Parent Company.

XML

Commitments and Contingencies (Tables)

3 Months Ended

Sep. 30, 2018

Commitments and Contingencies [Abstract]

Schedule of payments for lease expenses

Years ending September 30,
2019	$	47,940
2020		47,940
2021		47,940
2022		47,940
2023		47,940

XML

Variable Interest Entities (Tables)

3 Months Ended

Sep. 30, 2018

Variable Interest Entities [Abstract]

Schedule of VIEs consolidated financial statements

	September 30,		June 30,
	2018		2018
ASSETS
Current Assets
Cash and cash equivalents	$	1,347,720	$	982,312
Accounts receivable, net		35,129,065		38,295,505
Inventories		20,889,337		21,133,970
Other current assets		950,471		988,051
Related party receivable		249,087		(359,005	)
Advances to suppliers		814,358		848,458
Total Current Assets		59,380,038		61,889,291
Plant, Property and Equipment, Net		10,548,189		11,206,667
Other assets		218,549		226,654
Intangible Assets, Net		10,724,735		11,348,180
Goodwill		3,181,816		3,319,732
Total Assets	$	84,053,327	$	87,990,524
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Short-term loan	$	-	$	-
Accounts payable		20,951,481		25,584,614
Customer deposits		242,728		841,694
Accrued expenses and other payables		4,109,982		3,896,340
Amount due to related parties		41,903,021		43,339,286
Total Current Liabilities	$	67,207,212	$	73,661,934
Long-term Loan		-		-
Total Liabilities	$	67,207,212	$	73,661,934
Stockholders’ equity		16,846,115		14,328,590
Total Liabilities and Stockholders’ Equity		84,053,327	$	87,990,524

	Three Months Ended September 30,
	2018		2017
Revenue	$	17,985,020	$	17,132,823
Expenses		15,371,814		19,112,207
Net income	$	2,613,206	$	(1,979,384	)

XML

Business Combinations (Tables)

3 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Summary of purchase price allocations at fair value

For acquisitions made on June 30, 2016:

Cash	$	708,737
Accounts receivable		6,422,850
Advances to suppliers		1,803,180
Prepaid expenses and other current assets		807,645
Inventories		7,787,043
Machinery and equipment		140,868
Intangible assets		270,900
Other assets		3,404,741
Goodwill		3,158,179
Accounts payable		(3,962,670	)
Customer deposits		(3,486,150	)
Accrued expenses and other payables		(4,653,324	)
Taxes payable		(16,912	)
Purchase price	$	12,385,087

For acquisitions made on January 1, 2017:

Working Capital	$	941,192
Machinery and equipment		222,875
Intangible assets		1440
Goodwill		684,400
Customer Relationship		522,028
Non-compete Agreement		392,852
Purchase price	$	2,764,787

Working Capital	$	1,179,352
Intangible assets		896,559
Customer  Relationship		684,727
Non-compete Agreement		211,833
Goodwill		538,488
Total Asset	$	2,614,401

Summary of purchase consideration paid for VIE

Cash	$	5,568,500
Convertible notes		6,671,769
Derivative liability		144,818
	$	12,385,087

Cash	$	1,201,888
Convertible notes		1,559,350
Derivative liability		3,549
	$	2,764,787

Cash	$	461,330
Interest Payable		83,039
Convertible notes		1,724,683
Derivative liability		13,353
Total Payback	$	2,282,406
Net Loss		(331,995	)

XML

Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($)	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Basis of Presentation and Summary of Significant Accounting Policies [Abstract]
Net Income for Basic Earnings Per Share	$ 9,011,805	$ 5,094,828
Basic Weighted Average Number of Shares	38,896,945	38,185,277
Net Income Per Share - Basic	$ 0.23	$ 0.13
Net Income for Diluted Earnings Per Share	$ 9,011,805	$ 5,094,828
Diluted Weighted Average Number of Shares	38,896,945	38,185,277
Net Income Per Share - Diluted	$ 0.23	$ 0.13

XML

Basis of Presentation and Summary of Significant Accounting Policies (Details Textual) - USD ($)	Jun. 16, 2013	Sep. 30, 2018	Jun. 30, 2018
Basis of Presentation and Summary of Significant Accounting Policies (Textual)
Aggregate cash in accounts and on hand		$ 153,154,657	$ 150,805,639
Accounts receivable		136,794,689	174,460,937
Allowance for doubtful accounts		24,387,808	24,551,796
Customer deposits		5,785,249	7,251,967
Ownership percentage, description	Yuxing was converted from being a wholly-owned foreign enterprise 100% owned by Jinong to a domestic enterprise 100% owned one natural person, who is not affiliated to the Company ("Yuxing's Owner"). Effective the same day, Yuxing's Owner entered into a series of contractual agreements with Jinong pursuant to which Yuxing became the VIE of Jinong.
United States Bank [Member]
Basis of Presentation and Summary of Significant Accounting Policies (Textual)
Deposits in banks		13,122	19,902
China Bank [Member]
Basis of Presentation and Summary of Significant Accounting Policies (Textual)
Deposits in banks		$ 153,141,535	$ 150,785,737

XML

Inventories (Details) - USD ($)	Sep. 30, 2018	Jun. 30, 2018
Inventories [Abstract]
Raw materials	$ 30,149,050	$ 13,154,465
Supplies and packing materials	523,992	566,254
Work in progress	386,158	417,130
Finished goods	54,916,355	39,646,965
Total	$ 85,975,555	$ 53,784,814

XML

Property, Plant and Equipment (Details) - USD ($)	Sep. 30, 2018	Jun. 30, 2018
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 61,103,149	$ 63,357,141
Less: accumulated depreciation	(32,074,369)	(32,462,458)
Total	29,028,781	30,894,683
Building and improvements [Member]
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	38,877,508	40,319,393
Auto [Member]
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	3,387,289	3,504,028
Machinery and equipment [Member]
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	18,097,309	18,765,192
Agriculture assets [Member]
Property, Plant and Equipment [Line Items]
Total property, plant and equipment	$ 741,044	$ 768,528

XML

Intangible Assets (Details) - USD ($)	Sep. 30, 2018	Jun. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Intangible assets	$ 19,163,847	$ 20,317,914
Land use right, net [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets	9,516,800	9,930,420
Technology patent, net [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets	3,334	3,570
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets	3,131,697	3,578,724
Non-compete agreement [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets	586,096	659,500
Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets	$ 5,925,920	$ 6,145,700

XML

Intangible Assets (Details 1) - Land Use Rights [Member] - USD ($)	Sep. 30, 2018	Jun. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Land use rights	$ 11,868,721	$ 12,308,907
Less: accumulated amortization	(2,351,921)	(2,378,488)
Total land use rights, net	$ 9,516,800	$ 9,930,419

XML

Intangible Assets (Details 2) - Technology Patent [Member] - USD ($)	Sep. 30, 2018	Jun. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Technology know-how	$ 2,199,715	$ 2,276,335
Less: accumulated amortization	(2,199,715)	(2,276,335)
Total technology know-how, net

XML

Intangible Assets (Details 3) - Customer Relationships [Member] - USD ($)	Sep. 30, 2018	Jun. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Customer relationships	$ 11,608,629	$ 12,039,169
Less: accumulated amortization	(8,476,932)	(8,460,445)
Total customer relationships, net	$ 3,131,697	$ 3,578,724

XML

Intangible Assets (Details 4) - Non-Compete Agreement [Member] - USD ($)	Sep. 30, 2018	Jun. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Non-compete agreement	$ 1,188,597	$ 1,232,680
Less: accumulated amortization	(602,501)	(573,180)
Total non-compete agreement, net	$ 586,096	$ 659,500

XML

Intangible Assets (Details 5) - Other Intangible Assets [Member]	Sep. 30, 2018 USD ($)
Indefinite-lived Intangible Assets [Line Items]
2019	$ 1,841,368
2020	1,563,540
2021	774,915
2022	583,475
2023	$ 530,802

XML

Intangible Assets (Details Textual)			1 Months Ended			12 Months Ended
	Jan. 01, 2017 USD ($)	Jul. 02, 2010 USD ($)	Sep. 25, 2009 USD ($) a	Aug. 13, 2003 USD ($) a	Aug. 16, 2001 USD ($)	Jun. 30, 2016 USD ($)	Jan. 01, 2017 CNY (¥)	Jun. 30, 2016 CNY (¥)	Jul. 02, 2010 CNY (¥)	Sep. 25, 2009 CNY (¥) a	Aug. 13, 2003 CNY (¥) a	Aug. 16, 2001 CNY (¥)
Land use right, net [Member]
Intangible Assets (Textual)
Intangible assets land use right			88	11						88	11
Fair value of intangible assets			$ 10,655,721	$ 152,290	$ 1,060,710					¥ 73,184,895	¥ 1,045,950	¥ 7,285,099
Amortization period of intangible assets			50 years	50 years	50 years
Technology Patent [Member]
Intangible Assets (Textual)
Fair value of intangible assets		$ 1,339,520			$ 855,410				¥ 9,200,000			¥ 5,875,068
Amortization period of intangible assets					10 years
Amortization method, description		Amortized over the remaining useful life of six years using the straight line method.
Customer Relationships [Member]
Intangible Assets (Textual)
Fair value of intangible assets	$ 2,398,349	$ 9,464,000				$ 2,398,349	¥ 16,472,179	¥ 16,472,179	65,000,000
Amortization period of intangible assets		10 years
Amortization period of intangible assets, description						Seven to ten years.
Customer Relationships [Member] | Variable Interest Entity [Member]
Intangible Assets (Textual)
Fair value of intangible assets	$ 2,343,480						14,729,602
Amortization period of intangible assets, description	Seven to ten years
Non-Compete Agreement [Member]
Intangible Assets (Textual)
Fair value of intangible assets	$ 895,539	$ 192,192				$ 895,539	6,150,683	¥ 6,150,683	1,320,000
Amortization period of intangible assets		5 years				5 years
Non-Compete Agreement [Member] | Variable Interest Entity [Member]
Intangible Assets (Textual)
Fair value of intangible assets	$ 1,088,792						6,843,439
Amortization period of intangible assets	5 years
Trademarks [Member]
Intangible Assets (Textual)
Fair value of intangible assets		$ 5,925,920							¥ 40,700,000
Trademarks [Member] | Variable Interest Entity [Member]
Intangible Assets (Textual)
Fair value of intangible assets	$ 4,717						¥ 29,648

XML

Other Non-Current Assets (Details)	Sep. 30, 2018 USD ($)
Other Non-Current Assets [Abstract]
2019	$ 1,954,680
2020	1,954,680
2021	1,954,680
2022	1,954,680
2023 and thereafter	$ 8,957,891

XML

Other Non-Current Assets (Details Textual) ¥ in Millions	1 Months Ended	3 Months Ended
	Mar. 31, 2017 CNY (¥)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)
Other Non-Current Assets (Textual)
Other Non-current Assets		$ 14,821,931	$ 15,885,696
Jinong [Member]
Other Non-Current Assets (Textual)
Lease term	10 years
Description of lease	A lease agreement for approximately 3,400 mu, and 2600 hectare agriculture lands in Shiquan County, Shaanxi Province. The lease was from April 2017 and was renewable for every ten-year period up to 2066.
Leasing fees | ¥	¥ 13
Amortized expenses		$ 500,000

XML

Accrued Expenses and Other Payables (Details) - USD ($)	Sep. 30, 2018	Jun. 30, 2018
Accrued Expenses and Other Payables [Abstract]
Payroll payable	$ 12,932	$ 13,788
Welfare payable	149,479	155,023
Accrued expenses	6,373,325	5,368,348
Other payables	4,371,728	4,543,261
Other levy payable	122,109	126,638
Total	$ 11,029,573	$ 10,207,058

XML

Related Parties Transactions (Details)	1 Months Ended				3 Months Ended
	Jul. 01, 2016 USD ($)	Jul. 01, 2016 CNY (¥)	Dec. 31, 2015 USD ($)	Dec. 31, 2015 CNY (¥)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 29, 2016 m²
Amount Due to Related Parties (Textual)
Amount due to related parties					$ 3,232,715		$ 3,271,619
Amount due from related parties					249,087		235,551
Sales Agreement [Member]
Amount Due to Related Parties (Textual)
Sale of products			$ 3,712,800	¥ 25,500,000
Yuxing [Member]
Amount Due to Related Parties (Textual)
Amount due to related parties					431,907		393,565
Amount due from related parties					249,087		235,551
Sale of products					249,087	$ 235,551
Xi'an Techteam Science & Technology Industry (Group) Co. Ltd. [Member] | Gufeng
Amount Due to Related Parties (Textual)
Amount due to related parties					$ 1,019,200		$ 1,057,000
Kingtone Information Technology Co., Ltd. [Member]
Amount Due to Related Parties (Textual)
Ground lease | m²								612
Monthly rental expenses	$ 3,564	¥ 24,480
Effective lease term	2 years	2 years

XML

Loan Payables (Details)	3 Months Ended
	Sep. 30, 2018 USD ($)
Short-term Debt [Line Items]
Short term loans payables	$ 4,368,000
Bank of Beijing-Pinggu Branch [Member]
Short-term Debt [Line Items]
Loan period per agreement, Start	May 22, 2018
Loan period per agreement, End	May 21, 2019
Loans payable, interest rates	5.22%
Short term loans payables	$ 1,456,000
Postal Saving Bank of China - Pinggu Branch [Member]
Short-term Debt [Line Items]
Loan period per agreement, Start	Jun. 19, 2018
Loan period per agreement, End	Jun. 18, 2019
Loans payable, interest rates	6.31%
Short term loans payables	$ 4,368,000

XML

Loan Payables (Details Textual) - USD ($)	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Loan Payables (Textual)
Interest expense	$ 93,122	$ 179,575
Loan Payables [Member] | Minimum [Member]
Loan Payables (Textual)
Loans payable, interest rates	5.22%
Loans payable, maturity date	May 21, 2019
Loan Payables [Member] | Maximum [Member]
Loan Payables (Textual)
Loans payable, interest rates	6.31%
Loans payable, maturity date	Jun. 18, 2019

XML

Convertible Notes Payable (Details) - 3 months ended Sep. 30, 2018	$ / shares	CNY (¥)
Wangtian, Lishijie, Xindeguo, Xinyulei, Jinyangguang [Member]
Related Party Transaction [Line Items]
Issuance Date	Jun. 30, 2016
Maturity Date	Jun. 30, 2019
Notional Interest Rate	3.00%
Conversion Price | $ / shares	$ 5.00
Notional Amount | ¥		¥ 39,000,000
Fengnong, Xiangrong [Member]
Related Party Transaction [Line Items]
Issuance Date	Jan. 01, 2017
Maturity Date	Dec. 31, 2019
Notional Interest Rate	3.00%
Conversion Price | $ / shares	$ 5.00
Notional Amount | ¥		¥ 12,000,000

XML

Convertible Notes Payable (Details Textual)	3 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2018 CNY (¥)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 CNY (¥)	Jun. 30, 2016 USD ($)	Jun. 30, 2016 CNY (¥)
Convertible Notes Payable (Textual)
Convertible notes payable, term	3 years
Fair value of convertible notes payable	$ 7,210,528	¥ 49,522,859	$ 48,820,525	¥ 7,108,268
Debt conversion, description	The per share conversion price of the notes is the higher of the following: (i) $5.00 per share or (ii) 75% of the closing price of the Company's common stock on the date the noteholder delivers the conversion notice.
Interest expenses	$ 1,025,268
Annual interest rate	3.00%
Jinong [Member]
Convertible Notes Payable (Textual)
Aggregate amount of convertible notes payable	$ 7,425,600	¥ 51,000,000
Zhenbai [Member]
Convertible Notes Payable (Textual)
Aggregate amount of convertible notes payable					$ 1,747,200	¥ 12,000,000

XML

Taxes Payable (Details) - USD ($)	Sep. 30, 2018	Jun. 30, 2018
Taxes Payable [Abstract]
VAT provision	$ (444,722)	$ (449,140)
Income tax payable	77,307	554,065
Other levies	821,723	836,747
Total	$ 29,459,231	$ 29,952,206

XML

Taxes Payable (Details 1) - USD ($)	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Taxes Payable [Abstract]
Current tax - foreign	$ 1,654,416	$ 1,722,655
Deferred tax	0	0
Total	$ 1,654,416	$ 1,722,655

XML

Taxes Payable (Details 2) - USD ($)	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Taxes Payable [Line Items]
Pretax income (loss)	$ 10,666,221	$ 6,775,413
Expected income tax expense (benefit)	2,691,426	1,686,549
High-tech income benefits on Jinong	(1,041,180)	(675,422)
Losses from subsidiaries in which no benefit is recognized	(126,400)	(644,202)
Change in valuation allowance on deferred tax asset from US tax benefit	130,571	67,326
Actual tax expense	$ 1,654,416	$ 1,722,655
Actual tax expense, Percentage	15.50%	25.30%
China 15% - 25% [Member]
Taxes Payable [Line Items]
Pretax income (loss)	$ 11,287,985	$ 7,015,501
Expected income tax expense (benefit)	2,821,996	1,753,875
High-tech income benefits on Jinong	(1,041,180)	(675,422)
Losses from subsidiaries in which no benefit is recognized	(126,400)	644,202
Change in valuation allowance on deferred tax asset from US tax benefit
Actual tax expense	$ 1,654,416	$ 1,722,655
Expected income tax expense (benefit), Percentage	25.00%	0.25%
High-tech income benefits on Jinong, Percentage	(9.50%)	(0.096%)
Losses from subsidiaries in which no benefit is recognized, Percentage	(1.10%)	0.092%
Change in valuation allowance on deferred tax asset from US tax benefit, Percentage
Actual tax expense, Percentage	14.70%	24.60%
United States 21% [Member]
Taxes Payable [Line Items]
Pretax income (loss)	$ (621,765)	$ (198,017)
Expected income tax expense (benefit)	(130,571)	(67,326)
High-tech income benefits on Jinong
Losses from subsidiaries in which no benefit is recognized
Change in valuation allowance on deferred tax asset from US tax benefit	130,571	67,326
Actual tax expense
Expected income tax expense (benefit), Percentage	21.00%	34.00%
High-tech income benefits on Jinong, Percentage
Losses from subsidiaries in which no benefit is recognized, Percentage
Change in valuation allowance on deferred tax asset from US tax benefit, Percentage	(21.00%)	(34.00%)
Actual tax expense, Percentage

XML

Taxes Payable (Details Textual) - USD ($)		3 Months Ended
	Jan. 01, 2008	Sep. 30, 2018	Sep. 30, 2017
Taxes Payable (Textual)
Income tax expense (benefit)		$ 1,654,416	$ 1,722,655
Effective income tax rate reconciliation, percentage		15.50%	25.30%
Effective income tax rate reconciliation, federal		34.00%	34.00%
Value added tax rate		13.00%
September 1, 2015 through June 30, 2016 [Member]
Taxes Payable (Textual)
Value added tax rate		3.00%
Enterprise Income Tax [Member]
Taxes Payable (Textual)
New enterprise income tax rate	25.00%
Existing enterprise income tax rate	33.00%
Income tax rate reconciliation tax holidays	50.00%
High tech income tax rate	15.00%
Enterprise Income Tax [Member] | Jinong [Member]
Taxes Payable (Textual)
Income tax expense (benefit)		$ 1,041,180	$ 1,013,134
Enterprise Income Tax [Member] | Gufeng [Member]
Taxes Payable (Textual)
Income tax expense (benefit)		$ 395,255	$ 511,796
Effective income tax rate reconciliation, federal	25.00%

XML

Stockholders' Equity (Details) - $ / shares	3 Months Ended
	Sep. 30, 2018	Jun. 30, 2018
Stockholders' Equity (Textual)
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Preferred stock, description	Under the Company's Articles of Incorporation, the Board has the authority, without further action by stockholders, to designate up to 20,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges, qualifications and restrictions granted to or imposed upon the preferred stock, including dividend rights, conversion rights, voting rights, rights and terms of redemption, liquidation preference and sinking fund terms, any or all of which may be greater than the rights of the common stock.
Common stock, shares issued	38,896,945	38,896,945
Common stock, shares outstanding	38,896,945	38,896,945

XML

Concentrations (Details) - Supplier Concentration Risk [Member]	3 Months Ended
	Sep. 30, 2018 USD ($) Vendors	Sep. 30, 2017 Vendors
Four Vendor [Member]
Concentrations (Textual)
Concentration risk percentage	47.60%
Vendor concentration, description	The Company purchased more than 10% of its raw materials,
Number of vendor | Vendors	4
Total purchase amount | $	$ 26,676,809
Six Vendor [Member]
Concentrations (Textual)
Concentration risk percentage		64.60%
Vendor concentration, description		The Company purchased more than 10% of its raw materials,
Number of vendor | Vendors		6
Total purchase amount | $	$ 52,430,050

XML

Segment Reporting (Details) - USD ($)		3 Months Ended
		Sep. 30, 2018	Sep. 30, 2017	Jun. 30, 2018
Schedule of segment reporting information, by segment
Revenues from unaffiliated customers:		$ 57,954,806	$ 62,128,651
Operating income:		10,739,854	6,874,285
Net income:		9,011,805	5,094,828
Depreciation and Amortization:		1,226,500	1,900,626
Interest expense		(162,686)	(179,575)
Capital Expenditure:		31,273	17,209
Identifiable assets:		469,635,433		$ 482,985,960
Stock compensation			1,303,645
Sales VIEs [Member]
Schedule of segment reporting information, by segment
Revenues from unaffiliated customers:		15,597,474	15,340,182
Operating income:		2,631,299	1,808,652
Net income:		2,420,029	(2,070,864)
Depreciation and Amortization:		186,806	186,606
Interest expense		123	4,016
Identifiable assets:		83,654,118		87,567,782
Green New Jersey - Reconciling item [Member]
Schedule of segment reporting information, by segment
Operating income:	[1]		2
Net income:	[1]	2	2
Identifiable assets:	[1]	582,901		512,622
Parent Company - Reconciling item [Member]
Schedule of segment reporting information, by segment
Operating income:	[2]	(621,764)	(198,019)
Net income:	[2]	(621,766)	198,019
Identifiable assets:	[2]	(2,879)		(2,879)
Jinong [Member]
Schedule of segment reporting information, by segment
Revenues from unaffiliated customers:		22,496,533	26,773,760
Operating income:		6,928,090	6,766,075
Net income:		5,900,016	5,741,090
Depreciation and Amortization:		198,258	853,743
Interest expense		69,442	70,836
Capital Expenditure:		3,036	3,341
Identifiable assets:		224,480,929		226,335,489
Gufeng [Member]
Schedule of segment reporting information, by segment
Revenues from unaffiliated customers:		17,473,251	18,222,066
Operating income:		1,609,052	2,106,213
Net income:		1,120,344	1,489,067
Depreciation and Amortization:		536,619	547,757
Interest expense		93,122	104,723
Capital Expenditure:		26,988	13,868
Identifiable assets:		160,920,365		168,572,947
Yuxing [Member]
Schedule of segment reporting information, by segment
Revenues from unaffiliated customers:		2,387,546	1,792,643
Operating income:		193,177	175,473
Net income:		193,178	175,622
Depreciation and Amortization:		304,818	312,519
Capital Expenditure:		1,249
Identifiable assets:

[1] Reconciling amounts refer to the unallocated assets or expenses of Green New Jersey.

[2] Reconciling amounts refer to the unallocated assets or expenses of the Parent Company.

XML

Segment Reporting (Details Textual)	3 Months Ended
	Sep. 30, 2018 Segments
Segment Reporting (Textual)
Number of operating segments	4
Number of business segments	4

XML

Commitments and Contingencies (Details)	Sep. 30, 2018 USD ($)
Twelve Months ending March 31,
2019	$ 47,940
2020	47,940
2021	47,940
2022	47,940
2023	$ 47,940

XML

Commitments and Contingencies (Details Textual)	1 Months Ended		3 Months Ended
	Jun. 29, 2016 USD ($) ft²	Jun. 29, 2016 CNY (¥) ft²	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)
Commitments and Contingencies (Textual)
Monthly rent expenses | $			$ 11,985	$ 14,716
Kingtone Information [Member]
Commitments and Contingencies (Textual)
Monthly rent expenses	$ 3,564	¥ 24,480
Lease term	2 years	2 years
Description of lease	Pursuant to the lease, Jinong rented 612 square meters (approximately 6,588 square feet) of office space from Kingtone Information.	Pursuant to the lease, Jinong rented 612 square meters (approximately 6,588 square feet) of office space from Kingtone Information.
Pursuant to lease in square feet | ft²	6,588	6,588

XML

Variable Interest Entities (Details) - USD ($)	3 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Current Assets
Cash and cash equivalents	$ 153,154,657	$ 133,909,463	$ 150,805,639	$ 123,050,548
Accounts receivable, net	136,794,689		174,460,937
Inventories	85,975,555		53,784,814
Related party receivable	249,087		235,551
Advances to suppliers	18,497,101		25,194,463
Total Current Assets	398,462,437		407,426,651
Plant, Property and Equipment, Net	29,028,781		30,894,683
Other assets	14,821,931		15,885,696
Intangible Assets, Net	19,163,847		20,317,914
Goodwill	7,874,421		8,166,467
Total Assets	469,635,433		482,985,960
Current Liabilities
Short-term loan	4,368,000		4,726,300
Accounts payable	22,463,673		27,128,921
Customer deposits	5,785,249		7,251,967
Amount due to related parties	3,232,715		3,271,619
Total Current Liabilities	76,853,106		83,066,274
Long-term Liabilities
Long-term debt			3,549
Total Liabilities	84,063,634		90,438,173
Stockholders' equity	385,571,799		392,547,787
Total Liabilities and Stockholders' Equity	469,635,433		482,985,960
Revenue	57,954,806	62,128,651
Expenses	5,729,786	12,068,999
Net income	9,011,805	5,094,828
Variable Interest Entity [Member]
Current Assets
Cash and cash equivalents	1,174,732		374,587
Accounts receivable, net	35,129,065		38,295,505
Inventories	20,889,337		21,133,970
Other current assets	950,471		988,051
Related party receivable	249,087		(359,005)
Advances to suppliers	814,358		848,458
Total Current Assets	59,380,038		61,889,291
Plant, Property and Equipment, Net	10,548,189		11,206,667
Other assets	218,549		226,654
Intangible Assets, Net	10,724,735		11,348,180
Goodwill	3,181,816		3,319,732
Total Assets	84,053,327		87,990,524
Current Liabilities
Short-term loan
Accounts payable	20,951,481		25,584,614
Customer deposits	242,728		841,694
Accrued expenses and other payables	4,109,982		3,896,340
Amount due to related parties	41,903,021		43,339,286
Total Current Liabilities	67,207,212		73,661,934
Long-term Liabilities
Long-term debt
Total Liabilities	67,207,212		73,661,934
Stockholders' equity	16,846,115		14,328,590
Total Liabilities and Stockholders' Equity	84,053,327		$ 87,990,524
Revenue	17,985,020	17,132,823
Expenses	15,371,814	19,112,207
Net income	$ 2,613,206	$ (1,979,384)

XML

Business Combinations (Details) - USD ($)	Sep. 30, 2018	Jun. 30, 2018	Nov. 30, 2017	Jan. 01, 2017	Jun. 30, 2016
Business Acquisition [Line Items]
Goodwill	$ 7,874,421	$ 8,166,467
Total Assets	$ 469,635,433	$ 482,985,960
Variable Interest Entities [Member]
Business Acquisition [Line Items]
Cash					$ 708,737
Accounts receivable					6,422,850
Advances to suppliers					1,803,180
Prepaid expenses and other current assets					807,645
Inventories					7,787,043
Machinery and equipment					140,868
Intangible assets					270,900
Other assets					3,404,741
Goodwill					3,158,179
Accounts payable					(3,962,670)
Customer deposits					(3,486,150)
Accrued expenses and other payables					(4,653,324)
Taxes payable					(16,912)
Purchase price					$ 12,385,087
Zhenbai [Member]
Business Acquisition [Line Items]
Machinery and equipment				$ 222,875
Intangible assets			$ 896,559	1,440
Goodwill			538,488	684,400
Purchase price				2,764,787
Working Capital			1,179,352	941,192
Customer Relationship			684,727	522,028
Non-compete Agreement			211,833	$ 392,852
Total Assets			$ 614,401

XML

Business Combinations (Details 1) - USD ($)	Nov. 30, 2017	Jan. 01, 2017	Jun. 30, 2016
Business Acquisition [Line Items]
Cash		$ 1,201,888
Convertible notes		1,559,350
Derivative liability		3,549
Total Payback		$ 2,764,787
Variable Interest Entities [Member]
Business Acquisition [Line Items]
Cash			$ 5,568,500
Convertible notes			6,671,769
Derivative liability			144,818
Total Payback			$ 12,385,087
Zhenbai [Member]
Business Acquisition [Line Items]
Cash	$ 461,330
Interest Payable	83,039
Convertible notes	1,724,683
Derivative liability	13,353
Total Payback	282,406
Net Loss	$ 331,995