0001213900-14-009245.txt : 20141231 0001213900-14-009245.hdr.sgml : 20141231 20141231151205 ACCESSION NUMBER: 0001213900-14-009245 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20140930 FILED AS OF DATE: 20141231 DATE AS OF CHANGE: 20141231 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIANYIN PHARMACEUTICAL CO., INC. CENTRAL INDEX KEY: 0001362718 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 204857782 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-34189 FILM NUMBER: 141318489 BUSINESS ADDRESS: STREET 1: 23RD FLOOR, UNIONSUN YANGKUO PLAZA STREET 2: NO.2, BLOCK 3, RENMIN ROAD SOUTH CITY: CHENGDU, P.R. STATE: F4 ZIP: 610041 BUSINESS PHONE: 0086-028-86154737 MAIL ADDRESS: STREET 1: 23RD FLOOR, UNIONSUN YANGKUO PLAZA STREET 2: NO.2, BLOCK 3, RENMIN ROAD SOUTH CITY: CHENGDU, P.R. STATE: F4 ZIP: 610041 FORMER COMPANY: FORMER CONFORMED NAME: VISCORP, INC. DATE OF NAME CHANGE: 20060515 10-Q 1 f10q0914_tianyinpharma.htm QUARTERLY REPORT

 

 

U.S. 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, 2014

 

              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

 

Tianyin Pharmaceutical Co., Inc.

(Exact name of registrant as specified in its charter)

 

Delaware    

(State or other jurisdiction of

incorporation or organization)

 

(IRS Employer
Identification No.)

 

23rd Floor, Unionsun Yangkuo Plaza

No. 2, Block 3, Renmin Road South

Chengdu, P. R. China, 610041

 

+86 028 8551 6696

(Address, including zip code, and telephone number,

including area code, of Registrant’s principal executive offices)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 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 accelerate filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting 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

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934) Yes ☐    No ☒

 

As of December 31, 2014, we are authorized to issue up to 50,000,000 shares of Common Stock, par value US$.001 per share of which 29,546,276 shares issued and 29,432,791 shares outstanding; and 10,000,000 shares of Series A Preferred Stock, of which -0- shares are currently issued and outstanding.

 

 

 

 
 

 

TABLE OF CONTENTS

 

   Page
PART I - FINANCIAL INFORMATION   
    
Item 1. Financial Statements   
    
Consolidated Balance Sheets at September 30, 2014 (unaudited) and June 30, 2014  3
    
Unaudited Consolidated Statements of Operations for the three months ended September 30, 2014 and 2013  4
    
Unaudited Consolidated Statements of Comprehensive Income for the three months ended September 30, 2014 and 2013  5
    
Unaudited Consolidated Statements of Cash Flows for the three months ended September 30, 2014 and 2013  6
    
Unaudited notes to Consolidated Financial Statements  7
    
Item 2. Management’s Discussion and Analysis or Plan of Operation  11
    
Item 3. Quantitative and Qualitative Disclosure About Market Risk  14
    
Item 4. Controls and Procedures  15
    
PART II – OTHER INFORMATION  15
    
Item 1. Legal Proceedings  15
    
Item 2. Unregistered Sales of Equity Securities And Use Of Proceeds  15
    
Item 3. Defaults Upon Senior Securities  15
    
Item 4. Mine Safety Disclosures  15
    
Item 5. Other Information  15
    
Item 6. Exhibits  16

 

2
 

 

Tianyin Pharmaceutical Co., Inc.
Consolidated Balance Sheets

 

   September 30,   June 30, 
   2014   2014 
   (Unaudited)     
Assets        
Current assets:        
Cash and cash equivalents  $15,599,314   $16,120,041 
Restricted cash   489,841    994,017 
Accounts receivable, net of allowance for doubtful accounts of $102,401 at September 30, 2014 and June 30, 2014   4,138,462    9,074,576 
Inventory   5,616,924    3,841,712 
Loan receivable   -    1,981,280 
Deferred tax assets   996,207    1,180,510 
Prepaid R&D expenses - current portion   3,518,667    - 
Other current assets   376,503    376,504 
Total current assets   30,735,918    33,568,640 
           
Property and equipment, net   46,825,853    45,378,356 
           
Intangibles, net   27,495,028    27,699,733 
           
Prepaid R&D expenses   1,935,267    - 
           
Goodwill   211,120    211,120 
           
Total assets  $107,203,186   $106,857,849 
           
Liabilities and Equity          
Current liabilities:          
Accounts payable and accrued expenses  $1,921,918   $1,592,459 
Accounts payable – construction related   1,507,082    2,238,927 
Short-term bank loans   4,547,200    4,547,200 
Due for acquisition of non-controlling interests   2,436,000    - 
Income tax payable   71,328    35,832 
Other taxes payable   9,072    179,610 
Other current liabilities   427,510    522,995 
Total current liabilities   10,920,110    9,117,023 
           
Total liabilities   10,920,110    9,117,023 
           
Equity          
Stockholders’ equity:          
Preferred stock, $0.001 par value, 25,000,000 shares authorized, no shares issued and outstanding at September 30, 2014 and June 30, 2014   -    - 
Common stock, $0.001 par value, 50,000,000 shares authorized, 29,546,276 shares issued, 29,432,791 shares outstanding at September 30, 2014 and June 30, 2014   29,546    29,546 
Additional paid-in capital   27,809,515    30,189,802 
Treasury stock, 113,485 shares at cost   (135,925)   (135,925)
Statutory reserve   7,114,169    6,976,412 
Retained earnings   51,041,326    50,193,258 
Accumulated other comprehensive income   10,424,445    10,423,712 
Total stockholders’ equity   96,283,076    97,676,805 
           
Noncontrolling interest   -    64,021 
           
Total equity   96,283,076    97,740,826 
           
Total liabilities and equity  $107,203,186   $106,857,849 

 

3
 

  

Tianyin Pharmaceutical Co., Inc.        
Consolidated Statements of Operations        
(Unaudited)        
         
   For the Three Months Ended
September 30,
 
   2014   2013 
         
Sales  $9,733,381   $14,748,548 
           
Cost of sales   4,655,463    8,755,033 
           
Gross profit   5,077,918    5,993,515 
           
Operating expenses          
Selling expenses   1,628,848    2,539,244 
General and administrative expenses   936,056    1,028,766 
Research and development   1,092,643    251,314 
Total operating expenses   3,657,547    3,819,324 
           
Income from operations   1,420,371    2,174,191 
           
Other income (expenses):          
Interest income   817    22,310 
Interest expense   (88,838)   (102,901)
Total other income (expenses)   (88,021)   (80,591)
           
Income before provision for income taxes   1,332,350    2,093,600 
           
Provision for income taxes   354,828    634,108 
           
Net income   977,522    1,459,492 
           
Less: Net income (loss) attributable to noncontrolling interest   (8,303)   (55,631)
           
Net income attributable to Tianyin Pharmaceutical Co., Inc.  $985,825   $1,515,123 
           
Basic and diluted earnings per share  $0.03   $0.05 
           
Weighted average number of common shares outstanding:          
Basic and diluted   29,432,791    29,382,791 

 

4
 

 

Tianyin Pharmaceutical Co., Inc.        
Consolidated Statements of Comprehensive Income        
(Unaudited)        
         
   For the Three Months Ended
September 30,
 
   2014   2013 
         
Net income  $977,522   1,459,492 
           
Other comprehensive income (loss)          
Foreign currency translation adjustment   728    612,662 
           
Total other comprehensive income   728    612,662 
           
Total Comprehensive income   978,250    2,072,154 
           
Less: Comprehensive income (loss) attributable to the noncontrolling interest   (8,308)   (54,474)
           
Comprehensive income attributable to Tianyin Pharmaceutical Co., Inc.  $986,558   $2,126,628 

 

5
 

 

Tianyin Pharmaceutical Co., Inc.

Consolidated Statements of Cash Flows

(Unaudited)  

 

   For the Three Months Ended September 30, 
   2014   2013 
Cash flows from operating activities:        
Net Income  $977,522   $1,459,492 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:                
Depreciation and amortization   643,900    647,294 
Deferred tax assets   184,303    - 
Changes in current assets and current liabilities:          
Accounts receivable   4,933,075    285,687 
Inventory   (1,774,119)   397,873 
Prepaid R&D expenses   (5,450,575)   - 
Other current assets   -    313,900 
Accounts payable and accrued expenses   329,256    41,043 
Accounts payable – construction related   (731,394)   (2,728,333)
Income tax and other taxes payable   (134,958)   (193,381)
Other current liabilities   (95,427)   22,011 
           
Net cash provided by (used in) operating activities   (1,118,417)   245,586 
           
Cash flows from investing activities:          
Addition of Contruction in process   (1,885,926)   - 
Collection of loans receivable   1,980,060    - 
           
Net cash provided by investing activities   94,134    - 
           
Cash flows from financing activities:          
Changes in restricted cash   503,866    - 
Repayment of short-term bank loans   -    (1,623,000)
           
Net cash provided by (used in) financing activities   503,866    (1,623,000)
           
Effect of foreign currency translation on cash   (310)   159,558 
           
Net decrease in cash and cash equivalents   (520,727)   (1,217,856)
           
Cash and cash equivalents – beginning of period   16,120,041    26,827,008 
           
Cash and cash equivalents – ending of period  $15,599,314   $25,609,152 
           
Supplemental disclosures of cash activities          
Cash paid for interest  $83,617   $102,862 
Cash paid for income taxes  $135,052   $702,609 

 

6
 

 

TIANYIN PHARMACEUTICAL CO., INC.

Notes To Consolidated Financial Statements

(Unaudited)

 

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

 

Tianyin Pharmaceutical (the “Company” or “TPI”), was established under the laws of Delaware. The Company’s primary business is to research, manufacture and sell pharmaceutical products in China through its wholly owned subsidiaries.

 

The following chart describes the Company’s current corporate structure:

 

7
 

 

NOTE 2 – BASIS OF PRESENTATION AND CONSOLIDATION

 

The unaudited consolidated financial statements include the accounts of TPI and its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. The accompanying unaudited financial statements have been prepared in accordance with US GAAP applicable to interim financial information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by US GAAP for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included.

 

These interim unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended June 30, 2014, included in the Company’s annual report on Form 10-K filed with the U.S. Securities Exchange Commission on December 9, 2014, as not all disclosures required by US GAAP for annual financial statements are presented. The interim consolidated financial statements follow the same accounting policies and methods of computations as the audited consolidated financial statements for the year ended June 30, 2014.

 

In preparing the accompanying unaudited consolidated financial statements, we evaluated the period from September 30, 2014 through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified for this period.

 

The Company uses the United States dollar (“U.S. Dollar” or “US$” or “$”) for financial reporting purposes. The subsidiaries within the Company maintain their books and records in their respective functional currency, being the primary currency of the economic environment in which their operations are conducted. Assets and liabilities of a subsidiary with functional currency other than U.S. Dollar are translated into U.S. Dollars using the applicable exchange rates prevailing at the balance sheet date. Items on the statements of comprehensive income and cash flows are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Company’s financial statements are recorded as a component of accumulated other comprehensive income.

 

NOTE 3 – ACQUISITION OF NON-CONTROLING INTEREST

 

On September 30, 2014, the Company’s subsidiary, Chengdu Tianyin, acquired the remaining 13% of Sichuan Jiangchuan Pharmaceutical Co. Ltd (“JCM”) for RMB 15 million (approximately $2.4 million) from an unrelated individual. Total payment of RMB 15 million was made on October 8, 2014. JCM became a wholly owned subsidiary of Chengdu Tianyin on September 30, 2014.

 

NOTE 4 – INVENTORY

 

Inventory as of September 30, 2014 and June 30, 2013 consists of the following:

 

   September 30,
2014
   June 30,
2014
 
         
Raw materials  $1,467,933   $690,355 
Packaging supplies   483,334    387,599 
Work in process   1,088,359    1,088,880 
Finished goods   2,577,298    1,674,878 
   $5,616,924   $3,841,712 

  

NOTE 5 – PREPAID R&D EXPENSE

 

In July 2014, the Company’s subsidiary, Chengdu Tianyin, entered into a research and development agreement with a pharmaceutical research company, Kang Lu Biomedical Co. (KL). Pursuing to the agreement, KL will provide research and development expanding formulation varieties from Gingko Mihuan Oral Liquid (GMOL) to Capsule formulation. The total contract price is RMB 65 million (approximately $10.5 million). The first payment of RMB39 million (approximately $6.3 million) was paid in July 2014. The project is expected to be completed before August 2017. The total contract price will be amortized over three year period of the agreement on a straight line basis.

 

8
 

 

NOTE 6 – SHORT-TERM BANK LOANS

 

Short-term bank loans consist of the following:

 

   September 30,   June 30, 
   2014   2014 
         
On October 30, 2013, the Company obtained a loan from China CITIC Bank, which matures on October 30, 2014. The interest is calculated using an annual fixed interest rate of 7.20% and paid monthly. The loan was guaranteed by the Company’s CEO, Dr. Jiang and a third party. The loan was extended in October, 2014 and will be due in January 30, 2015.  $4,547,200   $4,547,200 
           
Total short-term bank loans  $4,547,200   $4,547,200 

 

NOTE 7 – INCOME TAXES

 

The Company's subsidiary, Raygere, is incorporated in the British Virgin Islands. Under the corporate tax laws of British Virgin Islands, it is not subject to tax on income or capital gain.

 

The operating subsidiaries in China are all subject to 25% income tax rate. The tax write- offs and loss profit credit could only be applied to the individual subsidiaries of TPI.

 

In July 2006, the FASB issued ASC 740 that clarifies the accounting for income taxes by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company did not recognize any benefits in the financial statements for the fiscal year ended June 30, 2014 and for the three months ended September 30, 2014.

 

The comparison of income tax expense at the U.S. statutory rate of 35% in 2014 and 2013, to the Company’s effective tax is as follows:

 

   Three months ended
September 30,
 
   2014   2013 
         
U.S. Statutory rate  $466,322   $732,760 
Tax rate difference between China and U.S.   (133,184)   (208,899)
Change in valuation allowance   21,690    110,247 
Effective tax  $354,828   $634,108 

 

The provisions for income taxes are summarized as follows:    
   Three months ended
September 30,
 
   2014   2013 
         
Current  $170,525   $634,108 
Deferred   162,613    - 
Valuation allowance   21,690    - 
Total  $354,828   $634,108 

 

NOTE 8 – RISK FACTORS

 

The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be adversely influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. Specifically, the Company's business may be negatively influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

 

9
 

 

NOTE 9 – RISK OF CONCENTRATIONS AND CREDIT RISK

 

Concentrations

 

For the quarters ended September 30, 2014 and 2013, no single customer accounted for more than 10% of the Company’s sales. In terms of individual product sales, our major product Gingko Mihuan Oral Liquid (GMOL) represented 58% or $5.6 million (23% increase year over year) of total sales for the three months ended September 30, 2014 of compared with 35% or $5.1 million of total sales for the three months ended September 30, 2013.

 

Credit Risk

 

Financial instruments, which potentially subject the Company to credit risk consist principally of cash on deposit with financial institutions. Management believes that the financial institutions that hold the Company’s cash and cash equivalents are financially sound and minimal credit risk exists with respect to these investments.

 

10
 

 

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

 

The following discussion and analysis of financial condition and results of operations relates to the operations and financial condition reported in the financial statements of Tianyin Pharmaceutical Co., Inc. for the periods ended September 30, 2014 and 2013 and should be read in conjunction with such financial statements and related notes included in this report and the Company’s Annual Report on Form 10-K  for the year ended June 30, 2014.

 

The information set forth below includes forward-looking statements. Certain factors that could cause results to differ materially from those projected in the forward-looking statements are set forth below. Readers are cautioned not to put undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise.

 

Overview

 

We are engaged in the development, manufacturing, marketing and sale of patented biopharmaceutical, modernized traditional Chinese medicines (mTCM), branded generics and other pharmaceuticals in China. We currently manufacture and market a portfolio of 58 products, 24 of which are listed in the National Medical Reimbursement program, including the patent protected Ginkgo Mihuan Oral Liquid (GMOL) and a series of drug candidates that target various high incidence healthcare conditions in China. Established in 1994, Chengdu Tianyin Pharmaceutical Co., Ltd (“Chengdu Tianyin”) is a pharmaceutical company that manufactures and sells mTCMs and branded generics. The current management acquired 100% of the equity interest of Chengdu Tianyin in 2003. On October 30, 2007, Grandway Groups Holdings Ltd. (“Grandway”) completed the acquisition of the 100% of the equity interest and now owns 100% of the equity interest of Chengdu Tianyin.

 

In June 2009, Chengdu Tianyin invested approximately $0.7 million (RMB 5 million) to establish a wholly-owned trading subsidiary, Chengdu Tianyin Medicine Trading Co., Ltd (“TMT”) for the sale and distribution of pharmaceutical products to optimize our business model through our distribution channels.

 

On August 21, 2009, Chengdu Tianyin, Sichuan Mingxin Pharmaceutical (“Sichuan Mingxin”) and an individual investor established Sichuan Jiangchuan Pharmaceutical Co., Ltd (“JCM”), whose major business is to produce macrolide antibiotic active pharmaceutical ingredients (API). Total registered capital of JCM is approximately $3.2 million (equivalent of RMB 20 million), of which Chengdu Tianyin accounts for 87%, after increasing its stake in JCM from 77% at the inception of JCM by purchasing another 10% ownership from Sichuan Mingxin in the fiscal year 2012. JCM is designed as a broader strategy to establish the Company’s presence in the API industry in China. By September 30, 2014, Chengdu Tianyin had purchased the remaining 13% of the ownership of JCM from the individual investor for approximately $2.4 million (RMB 15 million). Consequently, JCM became a wholly owned subsidiary of Chengdu Tianyin.

 

On August 29, 2012, Chengdu Tianyin entered into a Share Transfer Agreement with the shareholders of Sichuan Hengshuo Pharmaceutical Co., Ltd (“Sichuan Hengshuo” or “HSP”), a pharmaceutical distribution company, to acquire 100% ownership of HSP for approximately $0.2 million (RMB 1.3 million). The purpose of the acquisition was to facilitate the relocation of Company’s manufacturing facility to Qionglai since HSP was registered at Qionglai. The share transfer was closed on November 30, 2012, pursuant to which Chengdu Tianyin now owns 100% of HSP and Guoqing Jiang, Chairman and CEO of Chengdu Tianyin has become the legal representative of HSP.

 

Competitive Environment

 

The market for pharmaceutical products is highly competitive. Our operations may be affected by technological advances by competitors, industry consolidation, patents granted to competitors, competitive combination products, new products offered by our competitors, as well as new information provided by other marketed products and/or other post-market studies.

 

Development and Growth Strategy

 

Research and Development (R&D)

 

We have a proven cooperative partnership model for the R&D which is cost effective, efficient, and value adding for our organic growth. We focused on innovative products as well as modifications and improvements of existing marketed products with substantial market potential. Our R&D partners include a number of most prestigious academic institutions in China, including China Pharmaceutical University, Sichuan University-affiliated West China Center of Medical Sciences, and Shaanxi University of Chinese Medicines. The partnership-based R&D strategy supports TPI to commercialize, produce, and broaden our product pipeline and to market those products through our sales and marketing infrastructure. In July 2014, the TPI’s subsidiary, Chengdu Tianyin, entered into a research and development agreement with a pharmaceutical research company to expand formulation varieties from Gingko Mihuan Oral Liquid (GMOL) to Capsule formulation. The project is expected to be completed before August 2017.

 

11
 

 

R&D for additional indications of flagship product Gingko Mihuan (GMOL)

 

Our flagship product GMOL (CFDA certification number: H20013079; patent number: 20061007800225) contributes a significant share to our total quarterly revenue. Our R&D partnership research has been recently explored for further development of capsulation and tablets formulations for GMOL. The in-house research group at TPI together with the partnership research institutes will collaborate in developing, testing and filing for the CFDA approval application. Due to the increased stringency by CFDA approval, the time span and costs for the R&D of new products have increased significantly since twenty years ago when Chengdu Tianyin was founded.

 

Jiangchuan Macrolide Facility (JCM)

 

In January 2012, the JCM facility for R&D, manufacturing and sale of macrolide APIs received its Good Manufacturing Practice (“GMP”) certification designated as "CHUAN M0799," which is valid until December 31, 2015. As a result, JCM started the production of the macrolide API for TPI’s Azithromycin Dispersible Tablets (SFDA No: H20074145). The API produced by JCM is to supply for TPI’s own Azithromycin Tablets as well as for both domestic and international third party sales.

 

In April 2014, JCM has developed a new line of Azithromycin API products that support steady monthly export orders to South Asia. Following a series of tests on quality, purity, intermediates contents, stereochemistry, stability in comparison with the international standards of Azithromycin API, JCM has received monthly orders for manufacturing one of the major intermediates of Azithromycin, Azithromycin Amine (AA) at a competitive international price which varies from month to month according to the market demands and the foreign exchange rate. The current monthly orders for Azithromycin APIs were 5-8 tons per month.

 

Tianyin Medicine Trading Distribution Business (TMT)

 

TMT is established to distribute products manufactured by both TPI and other pharmaceutical companies to fuel our expanding sales network as well as to provide synergy to our existing organic product portfolio. TMT has been distributing mainly TPI's own products since its inception in 2009. Since 2010, TPI has signed and later extended distribution contracts with Jiangsu Lianshui Pharmaceutical (“Lianshui”) to distribute Lianshui-branded generic injection products including cough suppressant, antibiotics, anti-inflammatory medicines and other healthcare indications.

  

Pre-extraction and formulation plant development at Qionglai Facility (QLF)

 

In preparation for the new GMP standards stipulated by the PRC government in early 2011, TPI initiated a process to optimize the manufacturing facilities and production lines of the Company in compliance with the new GMP standards. We received our current GMP certificate for both of our pre-extraction plant and formulate facilities until December 2015. In addition, under the guidance by provincial government, our facility is scheduled to be relocated to Qionglai County, south of Chengdu, which is designated for the pharmaceutical industry. The relocation project includes our TCM pre-extraction plant. Both the pre-extraction plant and the formulation plant will subsequently be relocated to form a combined QLF, occupying an area of 80 mu (13 acres). The combined QLF, designed and constructed according to the latest GMP standards, is expected to relieve the current capacity saturation at the current facilities. The re-location cost for Phase I, which includes both the pre-extraction and formulation plant is estimated at $25 million, which is to boost the current capacity by at least 30-50%. The Phase II QLF, an additional $10 million may be invested to double the current capacity. By the first quarter of fiscal year 2015, the QLF construction project has been completed. TPI expects to receive the GMP certification at the end of December 2014.

 

Fiscal 2015 Guidance

 

The following factors, in our opinion, will influence the Company’s growth perspectives for fiscal year 2015:

 

  1) Market expansion and revenue growth of TPI’s core product portfolio led by flagship product Gingko Mihuan Oral Liquid (GMOL) and other major products;

 

  2) JCM revenue at both domestic and international markets in the fiscal year 2015;

 

  3) Generic sale stabilization and recovery along with our strategy to cope with pricing restrictions and market competition under the ongoing healthcare reform; and

  

  4) QLF GMP certification/relocation and smooth transition of production capacity.  

 

We forecast that the organic revenue growth for TPI may range from 5-10% for the fiscal year 2015. Management will continue to evaluate the Company's business outlook and communicate any changes on a quarterly basis or as when appropriate.

 

12
 

 

Discussion on Operating Results

 

The following table shows the results of our business. All references to the results of operations and financial conditions are on a consolidated basis that includes Chengdu Tianyin, TMT, JCM and HSP.

 

Comparison of results for the three months ended September 30, 2014 and 2013:

 

   Three Months Ended 
   September 30,   September 30, 
   2014   2013 
   (In $ millions) 
Sales   9.7    14.7 
Cost of sales   4.7    8.8 
Gross profit   5.1    6.0 
Income from Operation   1.4    2.2 
Provision for income taxes   0.4    0.6 
Net income   1.0    1.5 

 

Sales for the quarter ended September 30, 2014 was $9.7 million as compared to $14.7 million for the quarter ended September 30, 2013. The sales decrease was a result of continuous pricing pressure and restrictive sales policies on generic products compared with the same period last year.

 

Cost of Sales for the quarter ended September 30, 2014 was $4.7 million or 48% of sales, as compared to $8.8 million or 60% of sales for the quarter ended September 30, 2013. Our cost of sales primarily consists of the costs of direct raw materials (85% of the cost of goods sold) and production cost (15% of cost of goods sold). The percentage decrease in our cost of sales from the previous period was mainly attributable to a greater percentage of higher margin products and a decrease of our lower margin generic segment.

 

Gross Margin for the quarter ended September 30, 2014 was 52% as compared to 40% for the quarter ended September 30, 2013. As discussed above, our gross margin improved, predominately as a result of an increased higher margin products being sold during the period. We see the trend to continue for the rest of fiscal 2015.

 

Income from Operations was $1.4 million for the quarter ended September 30, 2014, as compared to $2.2 million for the quarter ended September 30, 2013. The decrease of income from operations was mainly due to the amount of research & development costs towards cardiovascular portfolio centered on GMOL.

 

Net Income was $1.0 million with net margin of 10% for the quarter ended September 30, 2014, as compared to net income of $1.5 million with net margin of 10% for the quarter ended September 30, 2013.

 

Foreign Currency Translation Adjustment. Our reporting currency is the US dollar. We have evaluated the determination of its functional currency based on the guidance in ASC Topic, “Foreign Currency Matters,” which provides that an entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment in which an entity primarily generates and expends cash. We have conducted financings in U.S. dollars, paid operating expenses primarily in U.S. dollars, paid dividends to our shareholders of common stock and expect to receive any dividends that may be declared by our subsidiaries in U.S. dollars. Therefore, we have determined that our functional currency is the U.S. dollar based on the expense and financing indicators, in accordance with the guidance in ASC 830-10-85-5.  However, the functional currency of our indirectly owned operating subsidiary in China is Renminbi (RMB). Results of operations and cash flow are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period.  Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of shareholders’ equity.  Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

 

Currency translation adjustments are included in accumulated other comprehensive income in the consolidated statement of Comprehensive Income and amounted to $728 and $612,662 for the three months ended September 30, 2014 and 2013, respectively. The balance sheet amounts with the exception of equity as of September 30, 2014 were translated at 6.1576 RMB to 1.00 US dollar as compared to 6.1350 RMB to 1.00 US dollar as of September 30, 2013. The equity accounts were stated at their historical rate. The average translation rates applied to income statement accounts for the quarters ended September 30, 2014 and 2013 were the average exchange rates during the years.

 

13
 

 

Liquidity and Capital Resources

 

Discussion of Cash Flow ($ in millions)

 

   For the three months ended
September 30,
 
   2014   2013 
         
Cash provided by (used in) operating activities  $(1.1)  $0.2 
Cash provided by investing activities  $0.1   $- 
Cash provided by (used in) financing activities  $0.5   $(1.6)

 

Operating activities

 

As of September 30, 2014, we had working capital totaling $19.8 million, including cash and cash equivalents of $15.6 million. Net cash used in operating activities was $1.1 million for the three months ended September 30, 2014 as compared with net cash provided by operating activities of $0.2 million for the three months ended September 30, 2013. We believe that TPI is adequately funded to meet all of our working capital and capital expenditure needs for fiscal year 2015.

 

Investing activities

 

We had $0.1 million and zero cash provided by investing activities for the three months ended September 30, 2014 and 2013, respectively. We do not expect further investing activities in construction upon the completion of the QLF.

 

Financing Activities

 

Net cash provided by financing activities for the three months ended September 30, 2014, totaled $0.5 million as compared to net cash used in financing activities for the same period of 2013 of  $1.6 million.

 

Borrowings and Credit Facilities

 

The short-term bank borrowings outstanding as of September 30, 2014 and 2013 were $4.5 million and $4.3 million, respectively. We paid an average interest rate of 7.20% and 6.927% per annum in 2014 and 2013, respectively. These loans were made from CITIC Bank, secured by Chengdu Tianyin's certificate of deposit and guaranteed by Guoqing Jiang, our CEO. The loans do not contain any additional financial covenants or restrictions. The borrowings have one-year terms which do not contain specific renewal terms.

 

Changes in Equity

  

During the three months ended September 30, 2014, there have been no activities related to warrants exercise or option exercises.

 

Critical Accounting Policies and Estimates

 

Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended June 30, 2014, for disclosures regarding TPI’s critical accounting policies and estimates, as well as updates further disclosed in our interim financial statements as described in this Form 10-Q.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

Others

 

While Inflation is not often expected to impact significantly on our operations, we could realize inflationary pressures that could increase our costs which we may not be able to pass onto our customers as a result of costs controls that could be affected by governmental healthcare pricing initiatives and policies.

 

Item 3.   Quantitative and Qualitative Disclosure About Market Risk

 

Not applicable

 

14
 

 

Item 4.   Controls and Procedures

 

(a)           Evaluation of disclosure controls and procedures

 

We maintain disclosure controls and procedures designed to provide reasonable assurance that material information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that the information is accumulated and communicated to our management, as appropriate to allow timely decisions regarding required disclosure. We performed an evaluation, under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, our management has concluded as of June 30, 2014 and as of September 30, 2014, due to the existence of material weaknesses, that our disclosure controls and procedures were not effective in ensuring that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission, and were not effective in providing reasonable assurance that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

(b)           Changes in internal control over financial reporting

  

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter covered by this report that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

ITEM 1. Legal Proceedings

 

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. We are not aware of any pending or threatened legal proceeding that, if determined in a manner adverse to us, could have a material adverse effect on our business and operations.

 

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

(a)        Not applicable.

 

(b)        Not applicable.

 

(c)        Not applicable.

 

ITEM 3.

Defaults upon Senior Securities

 

(a)        Not Applicable.

 

(b)        Not Applicable.

 

ITEM 4. Mine Safety Disclosures

 

Not applicable.

 

ITEM 5.

OTHER INFORMATION

 

(a)        Not applicable.

 

(b)        Not applicable.

 

15
 

 

ITEM 6. EXHIBITS

 

(a) The following exhibits are filed as part of this report.

 

Exhibit No.   Document
     
3.1   Articles of Incorporation, as amended (Incorporated by reference to Exhibit 3.1 to our Annual Report on Form 10-K filed on September 29, 2008).
     
3.2   Bylaws (Incorporated by reference to Exhibit 3.2 to our Annual Report on Form 10-K filed on September 29, 2008).
     
31.1   Certification  of  Chief  Executive  Officer  required  by Rule 13a-14/15d-14(a) under the Exchange Act (Filed herewith)
     
31.2   Certification of  Chief Accounting Officer required by Rule 13a-14/15d-14(a) under the Exchange Act (Filed herewith)
     
32.1   Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith)
     
32.2   Certification of Acting Chief Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Filed herewith)
     
101   Interactive Data Files (Filed herewith)
101.SCH   XBRL Taxonomy Extension Schema Document
101.SCH   XBRL Taxonomy Extension Schema Document
101.CAL    XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB   XBRL Taxonomy Extension Labels Linkbase Document
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document

 

16
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10-Q for the quarter ended September 30, 2014 to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date:    December 31, 2014

 

TIANYIN PHARMACEUTICAL CO., INC.
 
By: /s/ Dr. Guoqing Jiang  
Name: Dr. Guoqing Jiang  
Title :

Chairman, Chief Executive Officer,

Chief Accounting Officer

 

  

By: /s/ Dr. James Jiayuan Tong  
Name: Dr. James Jiayuan Tong  
Title : Chief Financial Officer,  
  Director  

 

 

 

17

 

EX-31.1 2 f10q0914ex31i_tianyinpharma.htm CERTIFICATION

Exhibit 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

 

I, Guoqing Jiang certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2014 of Tianyin Pharmaceutical Co., Inc.

 

2. Based on my knowledge, this quarterly 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 quarterly report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly 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 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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 the registrant’s board of directors (or persons performing the equivalent functions):

 

a. All significant deficiencies and material weaknesses in the design or operation of internal control 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: December 31, 2014

 

/s/ Guoqing Jiang  
Guoqing Jiang  
Chief Executive Officer, Chief Accounting Officer, Chairman
EX-31.2 3 f10q0914ex31ii_tianyinpharma.htm CERTIFICATION

Exhibit 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

 

I, James Jiayuan Tong, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2014 of Tianyin Pharmaceutical Co., Inc.

 

2. Based on my knowledge, this quarterly 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 quarterly report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly 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 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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 the registrant’s board of directors (or persons performing the equivalent functions):

 

a. All significant deficiencies and material weaknesses in the design or operation of internal control 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: December 31, 2014

 

/s/ James Jiayuan Tong  
James Jiayuan Tong  
Chief Financial Officer, Director  
EX-32.1 4 f10q0914ex32i_tianyinpharma.htm CERTIFICATION

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

 

In connection with the Quarterly Report of Tianyin Pharmaceutical Co., Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report’), I, Guoqing Jiang, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

 

Date:  December 31, 2014

 

/s/ Guoqing Jiang  
Guoqing Jiang  

Chief Executive Officer,

Chief Accounting Officer, Chairman

 

 

EX-32.2 5 f10q0914ex32ii_tianyinpharma.htm CERTIFICATION

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

 

In connection with the Quarterly Report of Tianyin Pharmaceutical Co., Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report’), I, James Jiayuan Tong, Chief Financial Officer & Chief Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

 

Date: December 31, 2014

 

/s/ James Jiayuan Tong  
James Jiayuan Tong  
Chief Financial Officer, Director  
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The Company&#8217;s primary business is to research, manufacture and sell pharmaceutical products in China through its wholly owned subsidiaries.</font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font: 10pt/normal 'times new roman', times, serif; font-stretch: normal;">&#160;</font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font: 10pt/normal 'times new roman', times, serif; font-stretch: normal;">The following chart describes the Company&#8217;s current corporate structure:</font></p> <p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font: 10pt/normal 'times new roman', times, serif; font-stretch: normal;"><img src="image_001.jpg" alt="image_001.jpg" /><br /></font></p> <div><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font: 10pt/normal 'times new roman', times, serif; font-stretch: normal;"><b>NOTE 2 &#8211; BASIS OF PRESENTATION AND CONSOLIDATION</b></font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font: 10pt/normal 'times new roman', times, serif; font-stretch: normal;">&#160;</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font: 10pt/normal 'times new roman', times, serif; font-stretch: normal;">The unaudited consolidated financial statements include the accounts of TPI and its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. The accompanying unaudited financial statements have been prepared in accordance with US GAAP applicable to interim financial information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by US GAAP for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included.</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font: 10pt/normal 'times new roman', times, serif; font-stretch: normal;">&#160;</font></p><p style="font: 10pt/normal 'times new roman', times, serif; margin: 0px; text-align: justify; color: #000000; text-transform: none; text-indent: 0px; letter-spacing: normal; word-spacing: 0px; white-space: normal; font-stretch: normal; -webkit-text-stroke-width: 0px;"><font style="font: 10pt/normal 'times new roman', times, serif; font-stretch: normal;">These interim unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended June 30, 2014, included in the Company&#8217;s annual report on Form 10-K filed with the U.S. Securities Exchange Commission on December 9, 2014, as not all disclosures required by US GAAP for annual financial statements are presented. 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Income Taxes (Details) (USD $)
3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Income Taxes [Abstract]    
U.S. Statutory rate $ 466,322us-gaap_IncomeTaxReconciliationRepatriationOfForeignEarningsJobsCreationActOf2004 $ 732,760us-gaap_IncomeTaxReconciliationRepatriationOfForeignEarningsJobsCreationActOf2004
Tax rate difference between China and U.S. (133,184)us-gaap_IncomeTaxReconciliationChangeInEnactedTaxRate (208,899)us-gaap_IncomeTaxReconciliationChangeInEnactedTaxRate
Change in valuation allowance 21,690us-gaap_IncomeTaxReconciliationChangeInDeferredTaxAssetsValuationAllowance 110,247us-gaap_IncomeTaxReconciliationChangeInDeferredTaxAssetsValuationAllowance
Effective tax $ 354,828us-gaap_IncomeTaxExpenseBenefit $ 634,108us-gaap_IncomeTaxExpenseBenefit
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Acquisition Of Non-Controling Interest
3 Months Ended
Sep. 30, 2014
Acquisition of Non-Controling Interest [Abstract]  
ACQUISITION OF NON-CONTROLING INTEREST

NOTE 3 – ACQUISITION OF NON-CONTROLING INTEREST

 

On September 30, 2014, the Company’s subsidiary, Chengdu Tianyin, acquired the remaining 13% of Sichuan Jiangchuan Pharmaceutical Co. Ltd (“JCM”) for RMB 15 million (approximately $2.4 million) from an unrelated individual. Total payment of RMB 15 million was made on October 8, 2014. JCM became a wholly owned subsidiary of Chengdu Tianyin on September 30, 2014.

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Risk of Concentrations and Credit Risk (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Risk of Concentrations and Credit Risk (Textual)    
Concentration risk,description In terms of individual product sales, our major product Gingko Mihuan Oral Liquid (GMOL) represented 58% or $5.6 million (23% increase year over year) of total sales for the three months ended September 30, 2014 of compared with 35% of or $5.1 million of total sales for the three months ended September 30, 2013.  
GMOL [Member]    
Risk of Concentrations and Credit Risk (Textual)    
Concentration risk, percentage 58.00%us-gaap_ConcentrationRiskPercentage1
/ us-gaap_ProductOrServiceAxis
= us-gaap_ProductMember
35.00%us-gaap_ConcentrationRiskPercentage1
/ us-gaap_ProductOrServiceAxis
= us-gaap_ProductMember
Sales revenue, goods, net $ 5.6us-gaap_SalesRevenueGoodsNet
/ us-gaap_ProductOrServiceAxis
= us-gaap_ProductMember
$ 5.1us-gaap_SalesRevenueGoodsNet
/ us-gaap_ProductOrServiceAxis
= us-gaap_ProductMember
Sales [Member] | GMOL [Member]    
Risk of Concentrations and Credit Risk (Textual)    
Concentration risk, percentage 10.00%us-gaap_ConcentrationRiskPercentage1
/ us-gaap_ConcentrationRiskByBenchmarkAxis
= us-gaap_SalesRevenueGoodsNetMember
/ us-gaap_ProductOrServiceAxis
= us-gaap_ProductMember
10.00%us-gaap_ConcentrationRiskPercentage1
/ us-gaap_ConcentrationRiskByBenchmarkAxis
= us-gaap_SalesRevenueGoodsNetMember
/ us-gaap_ProductOrServiceAxis
= us-gaap_ProductMember
XML 20 R8.htm IDEA: XBRL DOCUMENT v2.4.1.9
Basis of Presentation and Consolidation
3 Months Ended
Sep. 30, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BASIS OF PRESENTATION AND CONSOLIDATION

NOTE 2 – BASIS OF PRESENTATION AND CONSOLIDATION

 

The unaudited consolidated financial statements include the accounts of TPI and its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. The accompanying unaudited financial statements have been prepared in accordance with US GAAP applicable to interim financial information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by US GAAP for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included.

 

These interim unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended June 30, 2014, included in the Company’s annual report on Form 10-K filed with the U.S. Securities Exchange Commission on December 9, 2014, as not all disclosures required by US GAAP for annual financial statements are presented. The interim consolidated financial statements follow the same accounting policies and methods of computations as the audited consolidated financial statements for the year ended June 30, 2014.

 

In preparing the accompanying unaudited consolidated financial statements, we evaluated the period from September 30, 2014 through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified for this period.

 

The Company uses the United States dollar (“U.S. Dollar” or “US$” or “$”) for financial reporting purposes. The subsidiaries within the Company maintain their books and records in their respective functional currency, being the primary currency of the economic environment in which their operations are conducted. Assets and liabilities of a subsidiary with functional currency other than U.S. Dollar are translated into U.S. Dollars using the applicable exchange rates prevailing at the balance sheet date. Items on the statements of comprehensive income and cash flows are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Company’s financial statements are recorded as a component of accumulated other comprehensive income.

XML 21 R2.htm IDEA: XBRL DOCUMENT v2.4.1.9
Consolidated Balance Sheets (USD $)
Sep. 30, 2014
Jun. 30, 2014
Current assets:    
Cash and cash equivalents $ 15,599,314us-gaap_CashAndCashEquivalentsAtCarryingValue $ 16,120,041us-gaap_CashAndCashEquivalentsAtCarryingValue
Restricted cash 489,841us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue 994,017us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue
Accounts receivable, net of allowance for doubtful accounts of $102,401 at September 30, 2014 and June 30, 2014 4,138,462us-gaap_AccountsReceivableNetCurrent 9,074,576us-gaap_AccountsReceivableNetCurrent
Inventory 5,616,924us-gaap_InventoryNet 3,841,712us-gaap_InventoryNet
Loan receivable    1,981,280us-gaap_NotesAndLoansReceivableNetCurrent
Deferred tax assets 996,207us-gaap_DeferredTaxAssetsLiabilitiesNetCurrent 1,180,510us-gaap_DeferredTaxAssetsLiabilitiesNetCurrent
Prepaid R&D expenses - current portion 3,518,667us-gaap_PrepaidExpenseCurrent   
Other current assets 376,503us-gaap_OtherAssetsCurrent 376,504us-gaap_OtherAssetsCurrent
Total current assets 30,735,918us-gaap_AssetsCurrent 33,568,640us-gaap_AssetsCurrent
Property and equipment, net 46,825,853us-gaap_PropertyPlantAndEquipmentNet 45,378,356us-gaap_PropertyPlantAndEquipmentNet
Intangibles, net 27,495,028us-gaap_IntangibleAssetsNetExcludingGoodwill 27,699,733us-gaap_IntangibleAssetsNetExcludingGoodwill
Prepaid R&D expenses 1,935,267us-gaap_PrepaidExpenseNoncurrent   
Goodwill 211,120us-gaap_Goodwill 211,120us-gaap_Goodwill
Total assets 107,203,186us-gaap_Assets 106,857,849us-gaap_Assets
Current liabilities:    
Accounts payable and accrued expenses 1,921,918us-gaap_AccountsPayableAndAccruedLiabilitiesCurrent 1,592,459us-gaap_AccountsPayableAndAccruedLiabilitiesCurrent
Accounts payable - construction related 1,507,082us-gaap_ConstructionPayableCurrent 2,238,927us-gaap_ConstructionPayableCurrent
Short-term bank loans 4,547,200us-gaap_ShortTermBankLoansAndNotesPayable 4,547,200us-gaap_ShortTermBankLoansAndNotesPayable
Due for acquisition of non-controlling interests 2,436,000us-gaap_BusinessCombinationContingentConsiderationLiabilityCurrent   
Income tax payable 71,328us-gaap_TaxesPayableCurrent 35,832us-gaap_TaxesPayableCurrent
Other taxes payable 9,072tpi_OtherTaxesPayable 179,610tpi_OtherTaxesPayable
Other current liabilities 427,510us-gaap_OtherLiabilitiesCurrent 522,995us-gaap_OtherLiabilitiesCurrent
Total current liabilities 10,920,110us-gaap_LiabilitiesCurrent 9,117,023us-gaap_LiabilitiesCurrent
Total liabilities 10,920,110us-gaap_Liabilities 9,117,023us-gaap_Liabilities
Stockholders' equity:    
Preferred stock, $0.001 par value, 25,000,000 shares authorized, no shares issued and outstanding at September 30, 2014 and June 30, 2014      
Common stock, $0.001 par value, 50,000,000 shares authorized, 29,546,276 shares issued, 29,432,791 shares outstanding at September 30, 2014 and June 30, 2014 29,546us-gaap_CommonStockValue 29,546us-gaap_CommonStockValue
Additional paid-in capital 27,809,515us-gaap_AdditionalPaidInCapital 30,189,802us-gaap_AdditionalPaidInCapital
Treasury stock, 113,485 shares at cost (135,925)us-gaap_TreasuryStockValue (135,925)us-gaap_TreasuryStockValue
Statutory reserve 7,114,169us-gaap_StatutoryAccountingPracticesStatutoryCapitalAndSurplusRequired 6,976,412us-gaap_StatutoryAccountingPracticesStatutoryCapitalAndSurplusRequired
Retained earnings 51,041,326us-gaap_RetainedEarningsAccumulatedDeficit 50,193,258us-gaap_RetainedEarningsAccumulatedDeficit
Accumulated other comprehensive income 10,424,445us-gaap_AccumulatedOtherComprehensiveIncomeLossNetOfTax 10,423,712us-gaap_AccumulatedOtherComprehensiveIncomeLossNetOfTax
Total stockholders'equity 96,283,076us-gaap_StockholdersEquity 97,676,805us-gaap_StockholdersEquity
Noncontrolling interest    64,021us-gaap_MinorityInterest
Total equity 96,283,076us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest 97,740,826us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest
Total liabilities and equity $ 107,203,186us-gaap_LiabilitiesAndStockholdersEquity $ 106,857,849us-gaap_LiabilitiesAndStockholdersEquity
XML 22 R6.htm IDEA: XBRL DOCUMENT v2.4.1.9
Consolidated Statements of Cash Flows (Unaudited) (USD $)
3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Cash flows from operating activities:    
Net Income $ 977,522us-gaap_ProfitLoss $ 1,459,492us-gaap_ProfitLoss
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 643,900us-gaap_DepreciationDepletionAndAmortization 647,294us-gaap_DepreciationDepletionAndAmortization
Deferred tax assets 184,303us-gaap_IncreaseDecreaseInDeferredLiabilities   
Changes in current assets and current liabilities:    
Accounts receivable 4,933,075us-gaap_IncreaseDecreaseInAccountsReceivable 285,687us-gaap_IncreaseDecreaseInAccountsReceivable
Inventory (1,774,119)us-gaap_IncreaseDecreaseInInventories 397,873us-gaap_IncreaseDecreaseInInventories
Prepaid R&D expenses (5,450,575)us-gaap_IncreaseDecreaseInPrepaidExpense   
Other current assets    313,900us-gaap_IncreaseDecreaseInOtherCurrentAssets
Accounts payable and accrued expenses 329,256us-gaap_IncreaseDecreaseInAccountsPayableAndAccruedLiabilities 41,043us-gaap_IncreaseDecreaseInAccountsPayableAndAccruedLiabilities
Accounts payable - construction related (731,394)us-gaap_IncreaseDecreaseInConstructionPayables (2,728,333)us-gaap_IncreaseDecreaseInConstructionPayables
Income tax and other taxes payable (134,958)us-gaap_IncreaseDecreaseInIncomeTaxes (193,381)us-gaap_IncreaseDecreaseInIncomeTaxes
Other current liabilities (95,427)us-gaap_IncreaseDecreaseInOtherCurrentLiabilities 22,011us-gaap_IncreaseDecreaseInOtherCurrentLiabilities
Net cash provided by (used in) operating activities (1,118,417)us-gaap_NetCashProvidedByUsedInOperatingActivities 245,586us-gaap_NetCashProvidedByUsedInOperatingActivities
Cash flows from investing activities:    
Addition of Contruction in process (1,885,926)tpi_AdditionOfConstructionInprogress   
Collection of loans receivable 1,980,060us-gaap_ProceedsFromCollectionOfLoansReceivable   
Net cash provided by investing activities 94,134us-gaap_NetCashProvidedByUsedInInvestingActivities   
Cash flows from financing activities:    
Changes in restricted cash 503,866us-gaap_IncreaseDecreaseInRestrictedCash   
Repayment of short-term bank loans    (1,623,000)us-gaap_RepaymentsOfBankDebt
Net cash provided by (used in) financing activities 503,866us-gaap_NetCashProvidedByUsedInFinancingActivities (1,623,000)us-gaap_NetCashProvidedByUsedInFinancingActivities
Effect of foreign currency translation on cash (310)us-gaap_EffectOfExchangeRateOnCashAndCashEquivalents 159,558us-gaap_EffectOfExchangeRateOnCashAndCashEquivalents
Net decrease in cash and cash equivalents (520,727)us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease (1,217,856)us-gaap_CashAndCashEquivalentsPeriodIncreaseDecrease
Cash and cash equivalents - beginning of period 16,120,041us-gaap_CashAndCashEquivalentsAtCarryingValue 26,827,008us-gaap_CashAndCashEquivalentsAtCarryingValue
Cash and cash equivalents - end of period 15,599,314us-gaap_CashAndCashEquivalentsAtCarryingValue 25,609,152us-gaap_CashAndCashEquivalentsAtCarryingValue
Supplemental disclosures of cash activities    
Cash paid for interest 83,617us-gaap_InterestPaidNet 102,862us-gaap_InterestPaidNet
Cash paid for income taxes $ 135,052us-gaap_IncomeTaxesPaidNet $ 702,609us-gaap_IncomeTaxesPaidNet
XML 23 R22.htm IDEA: XBRL DOCUMENT v2.4.1.9
Prepaid R&D Expense (Details) (KL [Member])
In Millions, unless otherwise specified
1 Months Ended
Jul. 31, 2014
USD ($)
Jul. 31, 2014
CNY
Research and Development Arrangement, Contract to Perform for Others [Line Items]    
Contract price for research and development $ 10.5us-gaap_ResearchAndDevelopmentArrangementContractToPerformForOthersCostsIncurredGross
/ us-gaap_ResearchAndDevelopmentArrangementContractToPerformForOthersByTypeAxis
= tpi_KangLuBiomedicalCoMember
65.0us-gaap_ResearchAndDevelopmentArrangementContractToPerformForOthersCostsIncurredGross
/ us-gaap_ResearchAndDevelopmentArrangementContractToPerformForOthersByTypeAxis
= tpi_KangLuBiomedicalCoMember
Initial payment for research and development $ 6.3tpi_InitialPaymentForResearchAndDevelopment
/ us-gaap_ResearchAndDevelopmentArrangementContractToPerformForOthersByTypeAxis
= tpi_KangLuBiomedicalCoMember
39.0tpi_InitialPaymentForResearchAndDevelopment
/ us-gaap_ResearchAndDevelopmentArrangementContractToPerformForOthersByTypeAxis
= tpi_KangLuBiomedicalCoMember
Project completion date before August 2017. before August 2017.
XML 24 R24.htm IDEA: XBRL DOCUMENT v2.4.1.9
Short-Term Bank Loans (Details Textual) (Fixed interest rate of 7.2% [Member])
0 Months Ended
Oct. 30, 2013
Fixed interest rate of 7.2% [Member]
 
Short-Term Bank Loans (Textual)  
Annual fixed interest rate of short-term bank loans 7.20%us-gaap_ShortTermDebtPercentageBearingFixedInterestRate
/ us-gaap_DebtInstrumentAxis
= tpi_FixedInterestRateOfSevenPointTwoPercentMember
Maturity date Oct. 30, 2014
XML 25 Show.js IDEA: XBRL DOCUMENT /** * Rivet Software Inc. * * @copyright Copyright (c) 2006-2011 Rivet Software, Inc. All rights reserved. * Version 2.4.0.3 * */ var Show = {}; Show.LastAR = null, Show.hideAR = function(){ Show.LastAR.style.display = 'none'; }; Show.showAR = function ( link, id, win ){ if( Show.LastAR ){ Show.hideAR(); } var ref = link; do { ref = ref.nextSibling; } while (ref && ref.nodeName != 'TABLE'); if (!ref || ref.nodeName != 'TABLE') { var tmp = win ? win.document.getElementById(id) : document.getElementById(id); if( tmp ){ ref = tmp.cloneNode(true); ref.id = ''; link.parentNode.appendChild(ref); } } if( ref ){ ref.style.display = 'block'; Show.LastAR = ref; } }; Show.toggleNext = function( link ){ var ref = link; do{ ref = ref.nextSibling; }while( ref.nodeName != 'DIV' ); if( ref.style && ref.style.display && ref.style.display == 'none' ){ ref.style.display = 'block'; if( link.textContent ){ link.textContent = link.textContent.replace( '+', '-' ); }else{ link.innerText = link.innerText.replace( '+', '-' ); } }else{ ref.style.display = 'none'; if( link.textContent ){ link.textContent = link.textContent.replace( '-', '+' ); }else{ link.innerText = link.innerText.replace( '-', '+' ); } } }; XML 26 R7.htm IDEA: XBRL DOCUMENT v2.4.1.9
Organization and Nature of Business
3 Months Ended
Sep. 30, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND NATURE OF BUSINESS

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

 

Tianyin Pharmaceutical (the “Company” or “TPI”), was established under the laws of Delaware. The Company’s primary business is to research, manufacture and sell pharmaceutical products in China through its wholly owned subsidiaries.

 

The following chart describes the Company’s current corporate structure:

image_001.jpg

XML 27 R3.htm IDEA: XBRL DOCUMENT v2.4.1.9
Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 2014
Jun. 30, 2014
Balance Sheets [Abstract]    
Allowance for doubtful accounts $ 102,401us-gaap_AllowanceForDoubtfulAccountsReceivableCurrent $ 102,401us-gaap_AllowanceForDoubtfulAccountsReceivableCurrent
Treasury stock, shares 113,485us-gaap_TreasuryStockShares 113,485us-gaap_TreasuryStockShares
Preferred stock, par value $ 0.001us-gaap_PreferredStockParOrStatedValuePerShare $ 0.001us-gaap_PreferredStockParOrStatedValuePerShare
Preferred stock, shares authorized 25,000,000us-gaap_PreferredStockSharesAuthorized 25,000,000us-gaap_PreferredStockSharesAuthorized
Preferred stock, shares issued      
Preferred stock, shares outstanding      
Common stock, par value $ 0.001us-gaap_CommonStockParOrStatedValuePerShare $ 0.001us-gaap_CommonStockParOrStatedValuePerShare
Common stock, shares authorized 50,000,000us-gaap_CommonStockSharesAuthorized 50,000,000us-gaap_CommonStockSharesAuthorized
Common stock, shares issued 29,546,276us-gaap_CommonStockSharesIssued 29,546,276us-gaap_CommonStockSharesIssued
Common stock, shares outstanding 29,432,791us-gaap_CommonStockSharesOutstanding 29,432,791us-gaap_CommonStockSharesOutstanding
XML 28 R17.htm IDEA: XBRL DOCUMENT v2.4.1.9
Inventory (Tables)
3 Months Ended
Sep. 30, 2014
Inventory [Abstract]  
Schedule of inventory
    September 30,
2014
    June 30,
2014
 
             
Raw materials   $ 1,467,933     $ 690,355  
Packaging supplies     483,334       387,599  
Work in process     1,088,359       1,088,880  
Finished goods     2,577,298       1,674,878  
    $ 5,616,924     $ 3,841,712  
 
XML 29 R1.htm IDEA: XBRL DOCUMENT v2.4.1.9
Document and Entity Information
3 Months Ended
Sep. 30, 2014
Dec. 31, 2014
Document and Entity Information [Abstract]    
Entity Registrant Name TIANYIN PHARMACEUTICAL CO., INC.  
Entity Central Index Key 0001362718  
Amendment Flag false  
Current Fiscal Year End Date --09-30  
Document Type 10-Q  
Document Period End Date Sep. 30, 2014  
Document Fiscal Year Focus 2015  
Document Fiscal Period Focus Q1  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   29,432,791dei_EntityCommonStockSharesOutstanding
XML 30 R18.htm IDEA: XBRL DOCUMENT v2.4.1.9
Short-Term Bank Loans (Tables)
3 Months Ended
Sep. 30, 2014
Short-Term Bank Loans [Abstract]  
Schedule of short-term bank loans
    September 30,     June 30,  
    2014     2014  
             
On October 30, 2013, the Company obtained a loan from China CITIC Bank, which matures on October 30, 2014. The interest is calculated using an annual fixed interest rate of 7.20% and paid monthly. The loan was guaranteed by the Company’s CEO, Dr. Jiang and a third party. The loan was extended in October, 2014 and will be due in January 30, 2015.   $ 4,547,200     $ 4,547,200  
                 
Total short-term bank loans   $ 4,547,200     $ 4,547,200  

 

XML 31 R4.htm IDEA: XBRL DOCUMENT v2.4.1.9
Consolidated Statements of Operations (Unaudited) (USD $)
3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Statements Of Operations [Abstract]    
Sales $ 9,733,381us-gaap_Revenues $ 14,748,548us-gaap_Revenues
Cost of sales 4,655,463us-gaap_CostOfRevenue 8,755,033us-gaap_CostOfRevenue
Gross profit 5,077,918us-gaap_GrossProfit 5,993,515us-gaap_GrossProfit
Operating expenses    
Selling expenses 1,628,848us-gaap_SellingExpense 2,539,244us-gaap_SellingExpense
General and administrative expenses 936,056us-gaap_GeneralAndAdministrativeExpense 1,028,766us-gaap_GeneralAndAdministrativeExpense
Research and development 1,092,643us-gaap_ResearchAndDevelopmentExpense 251,314us-gaap_ResearchAndDevelopmentExpense
Total operating expenses 3,657,547us-gaap_OperatingExpenses 3,819,324us-gaap_OperatingExpenses
Income from operations 1,420,371us-gaap_OperatingIncomeLoss 2,174,191us-gaap_OperatingIncomeLoss
Other income (expenses):    
Interest income 817us-gaap_InvestmentIncomeInterest 22,310us-gaap_InvestmentIncomeInterest
Interest expense (88,838)us-gaap_InterestExpense (102,901)us-gaap_InterestExpense
Total other income (expenses) (88,021)us-gaap_NonoperatingIncomeExpense (80,591)us-gaap_NonoperatingIncomeExpense
Income before provision for income taxes 1,332,350us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments 2,093,600us-gaap_IncomeLossFromContinuingOperationsBeforeIncomeTaxesMinorityInterestAndIncomeLossFromEquityMethodInvestments
Provision for income taxes 354,828us-gaap_IncomeTaxExpenseBenefit 634,108us-gaap_IncomeTaxExpenseBenefit
Net income 977,522us-gaap_ProfitLoss 1,459,492us-gaap_ProfitLoss
Less: Net income (loss) attributable to noncontrolling interest (8,303)us-gaap_NetIncomeLossAttributableToNoncontrollingInterest (55,631)us-gaap_NetIncomeLossAttributableToNoncontrollingInterest
Net income attributable to Tianyin Pharmaceutical Co., Inc. $ 985,825us-gaap_NetIncomeLoss $ 1,515,123us-gaap_NetIncomeLoss
Basic and diluted earnings per share $ 0.03us-gaap_EarningsPerShareBasic $ 0.05us-gaap_EarningsPerShareBasic
Weighted average number of common shares outstanding:    
Basic and diluted 29,432,791us-gaap_WeightedAverageNumberOfShareOutstandingBasicAndDiluted 29,382,791us-gaap_WeightedAverageNumberOfShareOutstandingBasicAndDiluted
XML 32 R12.htm IDEA: XBRL DOCUMENT v2.4.1.9
Short-Term Bank Loans
3 Months Ended
Sep. 30, 2014
Short-Term Bank Loans [Abstract]  
SHORT-TERM BANK LOANS

NOTE 6 – SHORT-TERM BANK LOANS

 

Short-term bank loans consist of the following:

 

    September 30,     June 30,  
    2014     2014  
             
On October 30, 2013, the Company obtained a loan from China CITIC Bank, which matures on October 30, 2014. The interest is calculated using an annual fixed interest rate of 7.20% and paid monthly. The loan was guaranteed by the Company’s CEO, Dr. Jiang and a third party. The loan was extended in October, 2014 and will be due in January 30, 2015.   $ 4,547,200     $ 4,547,200  
                 
Total short-term bank loans   $ 4,547,200     $ 4,547,200  

 

XML 33 R11.htm IDEA: XBRL DOCUMENT v2.4.1.9
Prepaid R&D Expense
3 Months Ended
Sep. 30, 2014
Prepaid R&D Expense [Abstract]  
PREPAID R&D EXPENSE

NOTE 5 – PREPAID R&D EXPENSE

 

In July 2014, the Company’s subsidiary, Chengdu Tianyin, entered into a research and development agreement with a pharmaceutical research company, Kang Lu Biomedical Co. (KL). Pursuing to the agreement, KL will provide research and development expanding formulation varieties from Gingko Mihuan Oral Liquid (GMOL) to Capsule formulation. The total contract price is RMB 65 million (approximately $10.5 million). The first payment of RMB39 million (approximately $6.3 million) was paid in July 2014. The project is expected to be completed before August 2017. The total contract price will be amortized over three year period of the agreement on a straight line basis.

XML 34 R23.htm IDEA: XBRL DOCUMENT v2.4.1.9
Short-Term Bank Loans (Details) (USD $)
Sep. 30, 2014
Jun. 30, 2014
Schedule of short-term bank loans    
Total short-term bank loans $ 4,547,200us-gaap_ShortTermBankLoansAndNotesPayable $ 4,547,200us-gaap_ShortTermBankLoansAndNotesPayable
Fixed interest rate of 7.2% [Member]    
Schedule of short-term bank loans    
Total short-term bank loans $ 4,547,200us-gaap_ShortTermBankLoansAndNotesPayable
/ us-gaap_DebtInstrumentAxis
= tpi_FixedInterestRateOfSevenPointTwoPercentMember
$ 4,547,200us-gaap_ShortTermBankLoansAndNotesPayable
/ us-gaap_DebtInstrumentAxis
= tpi_FixedInterestRateOfSevenPointTwoPercentMember
XML 35 R19.htm IDEA: XBRL DOCUMENT v2.4.1.9
Income Taxes (Tables)
3 Months Ended
Sep. 30, 2014
Income Taxes [Abstract]  
Summary of comparison of income tax expense

  Three months ended September 30, 
  2014  2013 
       
U.S. Statutory rate $466,322  $732,760 
Tax rate difference between China and U.S.  (133,184)  (208,899)
Change in valuation allowance  21,690   110,247 
Effective tax $354,828  $634,108
Summary of provisions for income taxes
   
 Three months ended September 30, 
  2014  2013 
       
Current $170,525  $634,108 
Deferred  162,613   - 
Valuation allowance  21,690   - 
Total $354,828  $634,108

XML 36 R15.htm IDEA: XBRL DOCUMENT v2.4.1.9
Risk of Concentrations and Credit Risk
3 Months Ended
Sep. 30, 2014
Risk of Concentrations and Credit Risk [Abstract]  
RISK OF CONCENTRATIONS AND CREDIT RISK

NOTE 9 – RISK OF CONCENTRATIONS AND CREDIT RISK

 

Concentrations

 

For the quarters ended September 30, 2014 and 2013, no single customer accounted for more than 10% of the Company’s sales. In terms of individual product sales, our major product Gingko Mihuan Oral Liquid (GMOL) represented 58% or $5.6 million (23% increase year over year) of total sales for the three months ended September 30, 2014 of compared with 35% or $5.1 million of total sales for the three months ended September 30, 2013.

 

Credit Risk

 

Financial instruments, which potentially subject the Company to credit risk consist principally of cash on deposit with financial institutions. Management believes that the financial institutions that hold the Company’s cash and cash equivalents are financially sound and minimal credit risk exists with respect to these investments.

XML 37 R13.htm IDEA: XBRL DOCUMENT v2.4.1.9
Income Taxes
3 Months Ended
Sep. 30, 2014
Income Taxes [Abstract]  
INCOME TAXES

NOTE 7 – INCOME TAXES

 

The Company's subsidiary, Raygere, is incorporated in the British Virgin Islands. Under the corporate tax laws of British Virgin Islands, it is not subject to tax on income or capital gain.

 

The operating subsidiaries in China are all subject to 25% income tax rate. The tax write- offs and loss profit credit could only be applied to the individual subsidiaries of TPI.

 

In July 2006, the FASB issued ASC 740 that clarifies the accounting for income taxes by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company did not recognize any benefits in the financial statements for the fiscal year ended June 30, 2014 and for the three months ended September 30, 2014.

 

The comparison of income tax expense at the U.S. statutory rate of 35% in 2014 and 2013, to the Company’s effective tax is as follows:

 

    Three months ended
September 30,
 
    2014     2013  
             
U.S. Statutory rate   $ 466,322     $ 732,760  
Tax rate difference between China and U.S.     (133,184 )     (208,899 )
Change in valuation allowance     21,690       110,247  
Effective tax   $ 354,828     $ 634,108  

 

The provisions for income taxes are summarized as follows:      
    Three months ended
September 30,
 
    2014     2013  
             
Current   $ 170,525     $ 634,108  
Deferred     162,613       -  
Valuation allowance     21,690       -  
Total   $ 354,828     $ 634,108  

 

XML 38 R14.htm IDEA: XBRL DOCUMENT v2.4.1.9
Risk Factors
3 Months Ended
Sep. 30, 2014
Risk Factors [Abstract]  
RISK FACTORS

NOTE 8 – RISK FACTORS

 

The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be adversely influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. Specifically, the Company's business may be negatively influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

XML 39 R16.htm IDEA: XBRL DOCUMENT v2.4.1.9
Basis of Presentation and Consolidation (Policies)
3 Months Ended
Sep. 30, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BASIS OF PRESENTATION AND CONSOLIDATION

The unaudited consolidated financial statements include the accounts of TPI and its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. The accompanying unaudited financial statements have been prepared in accordance with US GAAP applicable to interim financial information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by US GAAP for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included.

 

These interim unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended June 30, 2014, included in the Company’s annual report on Form 10-K filed with the U.S. Securities Exchange Commission on December 9, 2014, as not all disclosures required by US GAAP for annual financial statements are presented. The interim consolidated financial statements follow the same accounting policies and methods of computations as the audited consolidated financial statements for the year ended June 30, 2014.

 

In preparing the accompanying unaudited consolidated financial statements, we evaluated the period from September 30, 2014 through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified for this period.

 

The Company uses the United States dollar (“U.S. Dollar” or “US$” or “$”) for financial reporting purposes. The subsidiaries within the Company maintain their books and records in their respective functional currency, being the primary currency of the economic environment in which their operations are conducted. Assets and liabilities of a subsidiary with functional currency other than U.S. Dollar are translated into U.S. Dollars using the applicable exchange rates prevailing at the balance sheet date. Items on the statements of comprehensive income and cash flows are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Company’s financial statements are recorded as a component of accumulated other comprehensive income.

 
XML 40 R21.htm IDEA: XBRL DOCUMENT v2.4.1.9
Inventory (Details) (USD $)
Sep. 30, 2014
Jun. 30, 2014
Schedule of inventory    
Raw materials $ 1,467,933us-gaap_InventoryRawMaterials $ 690,355us-gaap_InventoryRawMaterials
Packaging supplies 483,334us-gaap_RetailRelatedInventoryPackagingAndOtherSupplies 387,599us-gaap_RetailRelatedInventoryPackagingAndOtherSupplies
Work in process 1,088,359us-gaap_InventoryWorkInProcess 1,088,880us-gaap_InventoryWorkInProcess
Finished goods 2,577,298us-gaap_InventoryFinishedGoods 1,674,878us-gaap_InventoryFinishedGoods
Total $ 5,616,924us-gaap_InventoryNet $ 3,841,712us-gaap_InventoryNet
XML 41 R26.htm IDEA: XBRL DOCUMENT v2.4.1.9
Income Taxes (Details 1) (USD $)
3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Income Taxes [Abstract]    
Current $ 170,525us-gaap_CurrentIncomeTaxExpenseBenefit $ 634,108us-gaap_CurrentIncomeTaxExpenseBenefit
Deferred 162,613us-gaap_DeferredIncomeTaxExpenseBenefit   
Valuation allowance 21,690us-gaap_IncomeTaxReconciliationChangeInDeferredTaxAssetsValuationAllowance 110,247us-gaap_IncomeTaxReconciliationChangeInDeferredTaxAssetsValuationAllowance
Total $ 354,828us-gaap_IncomeTaxExpenseBenefit $ 634,108us-gaap_IncomeTaxExpenseBenefit
XML 42 R5.htm IDEA: XBRL DOCUMENT v2.4.1.9
Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Statements Of Comprehensive Income [Abstract]    
Net income (loss) $ 977,522us-gaap_ProfitLoss $ 1,459,492us-gaap_ProfitLoss
Other comprehensive income (loss)    
Foreign currency translation adjustment 728us-gaap_OtherComprehensiveIncomeLossForeignCurrencyTransactionAndTranslationAdjustmentNetOfTax 612,662us-gaap_OtherComprehensiveIncomeLossForeignCurrencyTransactionAndTranslationAdjustmentNetOfTax
Total other comprehensive income (loss) 728us-gaap_OtherComprehensiveIncomeLossNetOfTax 612,662us-gaap_OtherComprehensiveIncomeLossNetOfTax
Total Comprehensive income (loss) 978,250us-gaap_ComprehensiveIncomeNetOfTaxIncludingPortionAttributableToNoncontrollingInterest 2,072,154us-gaap_ComprehensiveIncomeNetOfTaxIncludingPortionAttributableToNoncontrollingInterest
Less: comprehensive income (loss) attributable to noncontrolling interest (8,308)us-gaap_ComprehensiveIncomeNetOfTaxAttributableToNoncontrollingInterest (54,474)us-gaap_ComprehensiveIncomeNetOfTaxAttributableToNoncontrollingInterest
Comprehensive income (loss) attributable to Tianyin Pharmaceutical Co., Inc. $ 986,558us-gaap_ComprehensiveIncomeNetOfTax $ 2,126,628us-gaap_ComprehensiveIncomeNetOfTax
XML 43 R10.htm IDEA: XBRL DOCUMENT v2.4.1.9
Inventory
3 Months Ended
Sep. 30, 2014
Inventory [Abstract]  
INVENTORY

NOTE 4 – INVENTORY

 

Inventory as of September 30, 2014 and June 30, 2013 consists of the following:

 

    September 30,
2014
    June 30,
2014
 
             
Raw materials   $ 1,467,933     $ 690,355  
Packaging supplies     483,334       387,599  
Work in process     1,088,359       1,088,880  
Finished goods     2,577,298       1,674,878  
    $ 5,616,924     $ 3,841,712  

  

 
XML 44 R27.htm IDEA: XBRL DOCUMENT v2.4.1.9
Income Taxes (Details Textual)
3 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Income Taxes (Textual)    
Effective tax rates 35.00%us-gaap_EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate 35.00%us-gaap_EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate
Chengdu Tianyin Pharmaceutical Co., Ltd. [Member]    
Income Taxes (Textual)    
Effective tax rates 25.00%us-gaap_EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate
/ us-gaap_BusinessAcquisitionAxis
= tpi_ChengduTianyinPharmaceuticalCoLtdMember
 
Chengdu Tianyin Medicine Trading Co., Ltd. [Member]    
Income Taxes (Textual)    
Effective tax rates 25.00%us-gaap_EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate
/ us-gaap_BusinessAcquisitionAxis
= tpi_ChengduTianyinMedicineTradingCoLtdMember
 
HSP [Member]    
Income Taxes (Textual)    
Effective tax rates 25.00%us-gaap_EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate
/ us-gaap_BusinessAcquisitionAxis
= tpi_SichuanHengshuoPharmaceuticalCoLtdMember
 
JCM [Member]    
Income Taxes (Textual)    
Effective tax rates 25.00%us-gaap_EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate
/ us-gaap_BusinessAcquisitionAxis
= tpi_JcmMember
 
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Acquisition Of Non-Controling Interest (Details) (JCM [Member])
In Millions, unless otherwise specified
3 Months Ended
Sep. 30, 2014
USD ($)
Sep. 30, 2014
CNY
Business Acquisition [Line Items]    
Percentage of Non controling interest in subsidairy company 13.00%us-gaap_MinorityInterestOwnershipPercentageByParent
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13.00%us-gaap_MinorityInterestOwnershipPercentageByParent
/ us-gaap_BusinessAcquisitionAxis
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/ us-gaap_BusinessAcquisitionAxis
= tpi_JcmMember
15.0us-gaap_PaymentsToAcquireAdditionalInterestInSubsidiaries
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