XML 27 R12.htm IDEA: XBRL DOCUMENT

Intangible Assets

12 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 6 – INTANGIBLE ASSETS

Intangible assets consisted of the following:

	June 30,		June 30,
	2020		2019
Land use rights, net	$	8,850,905	$	9,341,327
Technology patent, net		2,069		3,004
Customer relationships, net		908,933		2,174,564
Non-compete agreement		230,669		436,634
Trademarks		5,759,049		5,925,920
Total	$	15,751,625	$	17,881,449

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 $10,355,663). 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 $148,002). 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 $1,030,842). The intangible asset is being amortized over the grant period of 50 years.

The Land Use Rights consisted of the following:

	June 30, 2019			Foreign Currency Adjustment			Amortization			June 30, 2020
Land use rights	$	11,868,721			(334,215	)				11,534,506
Less: accumulated amortization		(2,527,394	)					(156,207	)	(2,683,601)
Total land use rights, net	$	9,341,327			(334,215	)		(156,207	)	8,850,905

TECHNOLOGY PATENT

On August 16, 2001, Jinong was issued a technology patent related to a proprietary formula used in the production of humid acid. The fair value of the related intangible asset was determined to be the respective cost of RMB 5,875,068 (or $831,322) 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 on the acquired technology patent was estimated to be RMB9,200,000 (or $1,301,800) and is amortized over the remaining useful life of six years using the straight-line method. As of June 30, 2020, this technology patent is fully amortized.

On June 30, 2016, the Company acquired Xingyulei and Xindeguo. The fair value on the acquired technology patent was estimated to be RMB26,648 (or $3,771) and RMB3,000(or $425) respectively.

The technology know-how consisted of the following:

	June 30,			Foreign Currency						June 30,
	2019			Adjustment			Amortization			2020
Technology know-how	$	2,199,247			(61,930	)				$	2,137,317
Less: accumulated amortization		(2,196,243	)		61,098			(103	)		(2,135,248	)
Total technology know-how, net	$	3,004			(832	)		(103	)	$	2,069

CUSTOMER RELATIONSHIP

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The fair value on the acquired customer relationships was estimated to be RMB65,000,000 (or $9,197,500) and is amortized over the remaining useful life of ten years. On June 30, 2016, and January 1, 2017 the Company acquired the VIE Companies. The fair value of the acquired customer relationships was estimated to be RMB14,729,602 (or $2,084,239) and is amortized over the remaining useful life of seven to ten years.

	June 30,			Foreign Currency						June 30,
	2019			Adjustment			Amortization			2020
Customer relationships	$	11,608,629			(326,890	)				$	11,281,739
Less: accumulated amortization		(9,434,065	)					(938,741	)		(10,372,806	)
Total customer relationships, net	$	2,174,564			(326,890	)		(938,741	)	$	908,933

NON-COMPETE AGREEMENT

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The fair value on the acquired non-compete agreement was estimated to be RMB1,320,000 (or $186,780) 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 VIE Companies. The fair value of the acquired non-compete agreements was estimated to be RMB6,843,439 (or $968,347) and is amortized over the remaining useful life of five years using the straight-line method.

	June 30,			Foreign Currency						June 30,
	2019			Adjustment			Amortization			2020
Non-compete agreement	$	1,188,597			(33,470	)				$	1,155,127
Less: accumulated amortization		(751,963	)					(172,495	)		(924,458	)
Total non-compete agreement, net	$	436,634			(33,470	)		(172,495	)	$	230,669

TRADEMARKS

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The preliminary fair value on the acquired trademarks was estimated to be RMB40,700,000 (or $5,759,050) and is subject to an annual impairment test. On June 30, 2016, and January 1, 2017 the Company acquired the VIE Companies. The fair value of the acquired trademarks was estimated to be RMB29,648 (or $4,195) and is subject to an annual impairment test.

AMORTIZATION EXPENSE

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

Years Ending June 30,	Expense ($)
2021		812,591
2022		586,726
2023		548,263
2024		395,530
2025		329,007