10-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1 to

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.     For the fiscal year ending June 30, 2014

OR

[  ] 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 000-53401

Bohai Pharmaceuticals Group, Inc.

(Exact name of registrant as specified in its charter)

Nevada	98-0697405
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification number)
c/o YantaiBohai Pharmaceuticals Group Co. Ltd. No. 7 Tianzheng Road, Laishan District Yantai, Shandong Province, China	264003
(Address of Principal Executive Offices)	(Zip Code)

 +86(535)-685-7928

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

None

(Title of Class)

None

Name of each exchange on which registered

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.001 par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes [  ]  No [X].

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.   Yes [  ]  No [X].

1

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 Yes [X]  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 [X]   No [  ].

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [  ].

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition 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 [  ]	Smaller reporting company [X]

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

The aggregate market value of the voting and non-voting common stock, other than shares held by persons who may be deemed affiliates of the registrant, computed by reference to the closing sales price for the registrant’s Common Stock on December 31, 2013, as reported on the OTCQB, was approximately $4.6 million.

As of October 14, 2014, there were 19,352,914outstanding shares of common stock of the registrant, par value $.001 per share.

DOCUMENTS INCORPORATED BY REFERENCE

None

2

Explanatory Note

Bohai Pharmaceuticals Group, Inc. is filing this Amendment to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012, filed with the Securities and Exchange Commission on September 28, 2012 (the “Form 10-K”), solely to furnish Exhibit 101 to the Form 10-K in accordance with Rule 405 of Regulation S-T. Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 10-K formatted in eXtensible Business Reporting Language (“XBRL”).

Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

No other changes have been made to the Form 10-K. This Amendment to the Form 10-K speaks as of the original filing date of the Form 10-K, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-K. Accordingly, this Form 10-K/A should be read in conjunction with our filings with the Securities and Exchange Commission subsequent to the filing of the original Form 10-K.

3

Item 15.  Exhibits

Exhibit No.		Description
2.1		Share Exchange Agreement, dated January 5, 2010, by and among the Company, Chance High and Shareholders of Chance High (1)
3.1		Articles of Incorporation of the Company (2)
3.2		Bylaws of the Company (3)
3.3		Certificate of Amendment to Articles of Incorporation (4)
3.4		Articles of Merger and Agreement and Plan of Merger as filed with the Secretary of State of Nevada on January 29, 2010 (5)
4.1		Form of Note issued to the Investors in the Private Placement, dated January 5, 2010 (1)
4.2		Form of Warrant issued to the Investors in the Private Placement, dated January 5, 2010 (1)
4.3		Form of Placement Agent Warrant issued to affiliates of Euro Pacific Capital, Inc. and to Chardan Capital Markets, LLC, dated January 5, 2010 (1)
4.4		Amendment No. 1 to the Note, dated December 31, 2011 (12)
4.5		Amendment No. 2 to the Note, dated May 15, 2012 (13)
4.6		Amendment No. 3 to the Note, dated June 27, 2012 (14)
4.7		Amendment No. 4 to the Note, dated December 6, 2012 (15)
4.8		Amendment No. 5 to the Note, dated April 21, 2014 (16)
10.1		Securities Purchase Agreement, dated January 5, 2010, by and among the Company, the Investors in the Private Placement and Euro Pacific Capital, Inc. as representative of the Investors (1)
10.2		Registration Rights Agreement, dated January 5, 2010, by and among the Company and the Investors in the Private Placement (1)
10.3		Securities Escrow Agreement, dated January 5, 2010, by and among the Company, Euro Pacific Capital, Inc., as representative of the Investors, Glory Period Limited and Escrow, LLC, as escrow agent (1)
10.4		Closing Escrow Agreement, dated December 10, 2009, by and among the Company, Euro Pacific Capital, Inc., as representative of the Investors, and Escrow, LLC, as escrow agent (1)
10.5		Form of Independent Director Agreement and Indemnify Agreement (6)
10.6		Unofficial English Translation of the Intangible Assets Transfer Agreement, dated December 9, 2010, by and between the Company and Shandong Daxin Microbiology Pharmaceutical Industry Co., Ltd. (7)
10.7		Form of Subscription Agreement for the Company’s Regulation S financing (8)
10.8		Termination Agreement dated and entered into effective for all purposes as of March 30, 2011, by and between the Company and Euro Pacific Capital, Inc., as investor representative. (9)
10.9		Unofficial English Translation of Share Purchase Agreement, dated as of August 8, 2011 among WOFE II, Mr. Jiangbo Chi, Ms. Shulian Wang and Mr. Bohai Yu. (10)
21.1	Subsidiaries of the Registrant +
31.1	Certification of Registrant’s Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934. +
31.2	Certification of Registrant’s Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934. +
32.1	Certification of Registrant’s Chief Executive Officer pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350. +
32.2	Certification of Registrant’s Chief Financial Officer pursuant to Rule 13a-14(b)/15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350. +
99.1	Unofficial English translation of Consulting Services Agreement, dated December 7, 2009, between Bohai and the WOFE (1)
99.2	Unofficial English translation of Operating Agreement, dated December 7, 2009, by and among Bohai, its Shareholders and the WOFE (1)
99.3	Unofficial English translation of Voting Rights Proxy Agreement, dated December 7, 2009, by and among Bohai, its Shareholders and the WOFE (1)
99.4	Unofficial English translation of Equity Pledge Agreement, dated December 7, 2009, by and among Bohai, its Shareholders and the WOFE (1)
99.5	Unofficial English translation of Option Agreement, dated December 7, 2009, by and among Bohai, its Shareholders and the WOFE (1)
99.6	Unofficial English translation of Call Option Agreement dated December 7, 2009 (1)

4

Previously filed:

+

Filed herewith:

(1)

Incorporated by reference to the Company’s Current Report of Form 8-K, filed on January 11, 2010.

(2)

Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement of Form S-1 (File Number 333-153102), filed on August 20, 2008.

(3)

Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement of Form S-1 (File Number 333-153102), filed on August 20, 2008.

(4)

Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on December 17, 2009.

(5)

Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 17, 2009.

(6)

Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 13, 2010.

(7)

Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on February 4, 2010.

(8)

Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on January 25, 2011.

(9)

Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on April 1, 2011.

(10)

Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on August 10, 2011.

(11)

Incorporated by reference to Exhibit 99.7 to the Company’s Registration Statement on Form S-1, filed on June 1, 2010.

(12)

Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on January 5, 2012.

(13)

Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on May 15, 2012.

(14)

Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on June 28, 2012.

(15)

Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on December 6, 2012.

(16)

Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on April 22, 2014.

5

SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 21^st day of October, 2014.

Bohai Pharmaceuticals Group, Inc.
By:	/s/ Hongwei Qu
	Name: Hongwei Qu
	Title: President and Chief Executive Officer
	(Principal Executive Officer and Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Hongwei Qu	Chief Executive Officer and Chairman	October 21, 2014
HongweiQu
/s/ Chengde Wang	Director	October 21, 2014
Chengde Wang
/s/ Thomas Tan	Director	October 21, 2014
Thomas Tan

6

EX-21.1

Exhibit 21.1

Subsidiaries of the Registrant

1.

The Company’s wholly owned subsidiary, Chance High International Limited, a British Virgin Islands company (“Chance High”);

2.

Chance High’s wholly owned subsidiary, YantaiNirui Pharmaceutical Co., Ltd., a PRC company (“WOFE”);

3.

the WOFE’s variable interest entity, YantaiBohai Pharmaceuticals Group Co., Ltd., a PRC company (“Bohai”), which is the Company’s  initial operating subsidiary; and

4.

WOFE’s wholly owned subsidiary, YantaiTianzheng Pharmaceutical Co., Ltd., a PRC company (“YantaiTianzheng”), which the Company acquired in August 2011 and is the Company’s second operating subsidiary.

1

EX-31.1

Exhibit 31.1

SECTION 302 CERTIFICATION PURSUANT TO SARBANES-OXLEY ACT OF 2002

I, HongweiQu, President and Chief Executive Officer of Bohai Pharmaceuticals Group, Inc. hereby certify that:

1.

I have reviewed this Annual Report on Form 10-K of Bohai Pharmaceuticals Group, Inc.;

2.

Based on my knowledge, this Annual 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 Annual Report;

3.

Based on my knowledge, the financial statements, and other financial information included in this Annual 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 Annual Report;

4.

The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15(e)) for the Registrant and we 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 Annual Report is being prepared;

(b)

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

(c)

evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Annual 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 Annual Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.

The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation, to the Registrant’s auditors and to the audit committee of Registrant’s board of directors (or persons performing the equivalent function):

(a)

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

(b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal controls.

/s/ Hongwei Qu

Hongwei Qu

President and Chief Executive Officer (principal executive and financial officer)

1

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying Annual Report on Form 10-K of Bohai Pharmaceuticals Group, Inc. for the period ended June 30, 2014, I, HongweiQu, Chief Executive Officer, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.

Such Annual Report on Form 10-K for the year ended June 30, 2014, 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 such Annual Report on Form 10-K for the year ended June 30, 2014, fairly presents, in all material respects, the financial condition and results of operations of Bohai Pharmaceuticals Group, Inc.

/s/ Hongwei Qu

Hongwei Qu

Chief Executive Officer and Chairman

(principal executive and financial officer)

1

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Note 3- Summary of Significant Accounting Policies: Intangible Asset - Pharmaceutical Formulas (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Intangible Asset - Pharmaceutical Formulas

Intangible Asset – Pharmaceutical Formulas

The Company has purchased pharmaceutical formulas that were approved by the State Food and Drug Administration of China (“SFDA”). These formulas can be renewed every 5 years without limitation for a minimum fee and are subject to certain protections under PRC drug regulations for an indefinite period of time. These regulations mitigate competition and the ability of other suppliers to replicate the Company’s products or produce comparable substitutes. These intangible assets are measured initially at cost not subject to amortization and are tested for impairment annually or in interim reporting periods if events or changes in circumstances indicate that the carrying amounts of these intangible assets might not be recoverable.  

During the year ended June 30, 2013, we determined that we would no longer manufacture or seek to develop a market for ten of our products due to a change in our business. As a result of this decision, we recorded an impairment charge in the amount of $1,668,486 during the year ended June 30, 2013. In addition to the above, we reclassified certain other formulas with an aggregate carrying amount of approximately $10,000,000 (RMB 63,855,371) to other intangible assets. The Company has suspended plans to develop and manufacture products to be derived from these formulas but intends to retain them to mitigate competition and maintain the option of using these formulas should they be useful in the future. Accordingly, the Company has determined these formulas, which are approved by the State Food and Drug Administration, should be held as defensive assets. The Company determined that these formulas have an estimated useful life of 8 years as defensive assets. 

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Note 21- Income Taxes: Schedule of Income before Income Tax, Domestic and Foreign (Details) (USD $)	11 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Details
Deferred income taxes			$ 64,210	$ (285,138)
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	357,806	449,012
Provision for income taxes	$ 9,666,128	$ 7,020,291	$ (9,666,129)	$ (7,020,291)

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Note 4- Inventories: Schedule of Inventory, Current (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Inventory, Current

	June 30, 2014	June 30, 2013
Raw materials	$                                       2,231,226	$                                 1,415,071
Work in progress	1,334,451	840,954
Finished goods	935,310	525,709
Total inventories	$                                       4,500,987	$                                 2,781,734

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Note 3- Summary of Significant Accounting Policies: Advertising (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Advertising

Advertising

Advertising and promotion costs are charged to expense as incurred. Advertising expenses included in selling, general and administrative expenses amounted to $737,111 and $95,477 for the years ended June 30, 2014 and 2013, respectively.

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Note 21- Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Effective Income Tax Rate Reconciliation

	For the Years Ended June 30,
	2014		2013
Experted US tax at statutory rate	$	10,728,817	$	8,888,894
Foreign tax differential		(2,871,800)		(1,905,795)
Permanent differences		1,451,305		(411,820)
Change in valuation allowance		357,806		449,012
Provision for Income Taxes	$	9,666,128	$	7,020,291

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Note 5- Property, Plant and Equipment, Net: Property, Plant and Equipment (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Property, Plant and Equipment

	June 30, 2014	June 30, 2013
Buildings	$   13,913,970	$            9,121,541
Plant equipment	11,309,330	8,548,658
Office equipment	438,850	250,339
Motor vehicles	283,648	291,784
Total	25,945,798	18,212,322
Less: accumulated depreciation	(4,823,270)	(2,827,442)
Construction in progress	5,961	2,293,573
Property, plant and equipment, net	$               21,128,489	$  17,678,453

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Note 3- Summary of Significant Accounting Policies: Intangible Asset - Pharmaceutical Formulas (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Indefinite Lived Intangible Asset Intellectual Property Renewal	5 years
Goodwill, Impairment Loss		$ 1,668,486
Defensive Drug Formulas | US ($)
Finite-Lived Intangible Asset, Useful Life		8 years
Defensive Drug Formulas | Other Intangible Assets | US ($)
Other Finite-Lived Intangible Assets, Gross		10,000,000
Defensive Drug Formulas | Other Intangible Assets | CNY
Other Finite-Lived Intangible Assets, Gross		$ 63,855,371

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Note 16- Commitments, Contingencies and Other Matters: Schedule of Cash Balances By Georgraphic Segment Table Text Block (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2012
Cash and cash equivalents at beginning of period	$ 23,308,715	$ 6,947,972	$ 18,386,288
Percentage of Cash and Cash Equivalents By Geographical Segment	100.00%	100.00%
BVI
Cash and cash equivalents at beginning of period	23,940	28,331
Percentage of Cash and Cash Equivalents By Geographical Segment	0.10%	0.41%
China
Cash and cash equivalents at beginning of period	$ 23,284,775	$ 6,919,641
Percentage of Cash and Cash Equivalents By Geographical Segment	99.90%	99.59%

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Note 3- Summary of Significant Accounting Policies: Research and Development Costs (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Research and Development Costs

Research and Development Costs 

Research and development costs are charged to expense as incurred and included in operating expenses. We have only one full-time employee who is engaged in research and development, so the Company is mainly dependent on third-parties to perform the limited amount of research and development that the Company undertakes (see Note16). On March 1, 2013, the Company entered into a series of contracts with Binzhou Medical College to establish an institute named Bohai Pharmaceutical Institute in the following 5 years. On May 31, 2013, these two parties entered into two contracts agreeing on performing researches on two pharmaceutical products, namely Lung Nourishing Cream and Tongbi Capsules, in the following 17 months, respectively. These three contracts amount to $243,380 (RMB 1,500,000), that has been fully paid as of June 30, 2014. Research and development costs amounted to $244,149 and $7,982 for the years ended June 30, 2014 and 2013, respectively.

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Note 3- Summary of Significant Accounting Policies: Use of Estimates (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Use of Estimates

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those results.

Significant estimates and assumptions include allocating purchase consideration issued in business combinations, valuing equity securities and derivative financial instruments issued in financing transactions and in share-based payment arrangements, accounts receivable reserves, inventory reserves, and evaluating the carrying amounts and useful lives of intangible assets. Certain estimates, including accounts receivable and inventory reserves and the carrying amounts of intangible assets (including present value of future cash flow estimates for the Company’s pharmaceutical formulas) could be affected by external conditions including those unique to the Company’s industry and general economic conditions. It is reasonably possible that these external factors could have an effect on management’s estimates that could cause actual results to differ from management’s estimates.

Company management re-evaluates all of the accounting estimates at least quarterly based on these conditions and records adjustments, when necessary.

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Note 3- Summary of Significant Accounting Policies: Fair Value Measurements and Fair Value of Financial Instruments: Schedule of Derivative Liabilities at Fair Value (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2012
Details
Derivative Liability			$ 1,211,236
Change in fair value of warrants	$ 0	$ (1,211,236)

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Note 2- Liquidity and Financial Condition (Details) (USD $)	0 Months Ended	12 Months Ended		49 Months Ended	12 Months Ended	49 Months Ended	12 Months Ended	49 Months Ended		12 Months Ended	0 Months Ended
	Jun. 08, 2010	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2014 US ($)	Jun. 30, 2014 US ($)	Jun. 30, 2014 CNY	Jun. 30, 2014 CNY	Aug. 08, 2011 Yantai Tianzheng US ($)	Jun. 30, 2014 Land Use Rights	Jun. 30, 2014 Land Use Rights US ($) acre	Jun. 30, 2014 Land Use Rights CNY acre	Aug. 15, 2013 Yantai Rural Commercial Bank Ltd. US ($)	Aug. 15, 2013 Yantai Rural Commercial Bank Ltd. CNY
Net income		$ 21,889,215	$ 19,123,517
Net cash provided by operating activities		25,006,067	20,563,149
Working Capital		43,032,676		43,032,676
Equity Method Investment, Ownership Percentage		100.00%		100.00%					100.00%
Business Acquisition Cost Of Acquired Entity Purchase Prices									35,000,000
Construction and Development Costs	3,160,000					3,160,000		19,500,000
Percentage Of Construction Completed				100.00%
Finite-Lived Intangible Asset, Useful Life										50 years
Installment Payments To Acquire Land					19,440,000		120,000,000				19,440,000	120,000,000
Convertible notes, net		0	8,464,500	0	7,435,800	7,435,800
Repayments of Short-term Debt					182,248
Short-term loan, net		$ 4,872,899	$ 0	$ 4,872,899									$ 4,872,899	$ 30,000,000

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Note 7- Intangible Assets - Land Use Rights, Net: Installments Table (Details) (USD $)	Jun. 30, 2014
First Installment | November 30, 2012
Installments	$ 3,235,879
Second Installment | December 31, 2012
Installments	3,235,879
Third Installment | June 30, 2013
Installments	6,471,759
Fourth Installment | December 31, 2013
Installments	6,497,199
Total Installments
Installments	$ 19,440,716

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Note 7- Intangible Assets - Land Use Rights, Net: Schedule of Acquired Finite-Lived Intangible Assets by Major Class (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Acquired Finite-Lived Intangible Assets by Major Class

		June 30, 2014	June 30, 2013
Land use rights, at cost	$	40,251,014	$ 40,093,414
Less: Accumulated amortization		(2,632,674)	(2,229,950)
Intangible assets – land use rights, net	$	37,618,340	$     37,863,464

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Note 19- Stockholders' Equity (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Details
Common Stock, Shares Authorized	150,000,000	150,000,000
Common Stock, Par Value	$ 0.001	$ 0.001
Percentage Of Net Income To Be Allocated To Reserve Fund	10.00%
Restructuring Reserve	$ 562,148

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Note 3- Summary of Significant Accounting Policies: Restricted Cash (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Escrow Deposit	$ 12,623,467	$ 12,574,051
Restricted Cash and Cash Equivalents	7,750,568	7,720,232
Notes payable	9,745,795	9,707,638
Bank Overdrafts | US ($)
Restricted Cash and Cash Equivalents	$ 4,872,899	$ 4,853,819

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Note 5- Property, Plant and Equipment, Net (Details) (USD $)	0 Months Ended	12 Months Ended
	Jun. 08, 2010	Jun. 30, 2014	Jun. 30, 2013
Details
Depreciation and amortization		$ 645,670	$ 582,748
Construction and Development Costs	$ 3,160,000
Construction Completion Percentage		100.00%

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Note 3- Summary of Significant Accounting Policies: Research and Development Costs (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Research and Development Expense	$ 244,149	$ 7,980
US ($)
Repayment Of Contracts	243,380
Research and Development Expense	244,149	7,982
CNY
Repayment Of Contracts	$ 1,500,000

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Note 6- Indefinite Lived Intangible Assets - Pharmaceutical Formulas: Schedule of Indefinite-Lived Intangible Assets (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Details
Intangible assets- pharmaceutical formulas	$ 14,164,630	$ 14,109,169

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Note 3- Summary of Significant Accounting Policies: Property, Plant and Equipment (Details) (Building)	12 Months Ended
	Jun. 30, 2014
Minimum
Property, Plant and Equipment, Useful Life	30 years
Maximum
Property, Plant and Equipment, Useful Life	40 years

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Note 21- Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Deferred Tax Assets and Liabilities

	June 30,
	2014		2013
Deferred tax assets:
NOL carryover	$	4,921,014	$	5,250,749
Stock compensation		-		86,200
Sub-total		4,921,014		5,336,949
Deferred tax liabilities:
Valuation allowance		(4,921,014)		(5,336,949)
Total	$	-	$	-

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Note 19- Stockholders' Equity

12 Months Ended

Jun. 30, 2014

Notes

Note 19- Stockholders' Equity

NOTE 19- STOCKHOLDERS’ EQUITY

Authorized Capital

The Company is authorized to issue 150,000,000 million shares of Common Stock, par value $ 0.001 per share. Holders of its Common Stock are entitled to one vote for each share held of record on each matter submitted to a vote of shareholders.

Shares Issued for Conversion

During the year ended June 30, 2014, the Company issued 103,629 shares for conversion of convertible notes. $182,250 principal and $25,000 accrued interest for convertible notes were converted.

Retained earnings

According to the laws and regulations in the PRC, we are required to provide for certain statutory funds, namely, reserve fund by an appropriation from net profit after taxes but before dividend distribution based on the local statutory financial statements of the PRC company prepared in accordance with the accounting principles and relevant financial regulations. 

In the PRC, we are required to allocate at least 10% of our net profit to the reserve fund until the balance of such fund has reached 50% of its registered capital. Appropriation of enterprise expansion fund are determined at the discretion of it directors. The Company allocated $562,148 to the reserve fund during the year ended June 30, 2014 which recorded in retained earnings. 

The reserve fund can only be used, upon approval by the relevant authority, to offset accumulated losses or increase capital.

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Note 3- Summary of Significant Accounting Policies: Earnings Per Share (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Earnings Per Share

Earnings per Share 

We report earnings per share in accordance with ASC Topic 260, “Earnings Per Share”. Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Common equivalent shares are excluded from the computation of diluted shares in periods for which they have an anti-dilutive effect. Diluted shares underlying stock options and common stock purchase warrants are included in the determination of diluted earnings per share using the treasury stock method. Diluted shares underlying convertible debt obligations are included in the determination of diluted loss per share using the “if converted” method (Note 17).

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Note 3- Summary of Significant Accounting Policies: Foreign Currency Translation (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Foreign Currency Translation

Foreign Currency Translation 

The Company’s reporting currency is the U.S. dollar. The functional currency of the Company’s operating business based in the PRC is the RMB. For the Company’s subsidiaries and affiliates whose functional currencies are the RMB, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the exchange rate in effect as of the end of the period, and equity is translated at historical exchange rates. Translation adjustments resulting from the process of translating the functional currency financial statements into U.S. dollars are included in comprehensive income.

Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods. All of the Company’s revenue transactions are transacted in the functional currency. Transaction gains or losses have not had, and are not expected to have a material effect on the Company’s results of operations. 

Period end exchange rates used to translate assets and liabilities and average exchange rates used to translate results of operations in each of the reporting periods are as follows:

	The year ended June 30, 2014	The year ended June 30, 2013
Period end US$: RMB exchange rate	6.1565	6.1807
Average periodic US$: RMB exchange rate	6.1438	6.2767

The RMB is not freely convertible into any other currencies. In addition, all foreign exchange transactions in the PRC must be conducted through authorized institutions. Accordingly, management cannot provide any assurance that the RMB underlying the consolidated financial statement amounts could have been, or could be, converted into US dollars at the exchange rates used to translate the functional currency into the reporting currency. 

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Note 3- Summary of Significant Accounting Policies: Principles of Consolidation (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Total Current Assets	$ 82,618,690	$ 61,519,011
Total current liabilities	39,586,014	44,186,731
Intersegment Elimination | US ($)
Total Current Assets	37,511,591	26,417,979
Total current liabilities	$ 9,426,786	$ 4,372,634

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Note 12- Notes Payable (Details) (USD $)	6 Months Ended	12 Months Ended
	Oct. 31, 2014	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Apr. 22, 2014	Jun. 30, 2013	Jun. 30, 2014 Guarantees	Jun. 30, 2013 Guarantees	Apr. 25, 2014 Subsequent Event	Jun. 30, 2014 CNY	Apr. 22, 2014 CNY	Jun. 30, 2013 CNY	Jun. 30, 2014 CNY Guarantees	Jun. 30, 2013 CNY Guarantees	Apr. 25, 2014 CNY Subsequent Event
Notes Payable, Related Parties, Current				$ 9,745,797	$ 9,745,797	$ 9,707,638				$ 60,000,000	$ 60,000,000	$ 60,000,000
Bank Charge Fee Percentage	0.05%
Restricted Cash Minimum Percentage on Notes Payable		50.00%
Restricted Cash and Cash Equivalents		$ 7,750,568	$ 7,720,232				$ 4,872,899	$ 4,853,819	$ 4,872,899				$ 30,000,000	$ 30,000,000	$ 30,000,000

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Note 3- Summary of Significant Accounting Policies: Inventories (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Inventories

Inventories

Inventories are valued at the lower of cost, determined using the weighted average method, or market. Finished goods inventories include the costs of raw materials, direct labor and overhead associated with the manufacturing process. In assessing the ultimate realization of inventories, management makes judgments as to future demand requirements compared to current or committed inventory levels. Our reserve requirements generally increase/decrease due to management’s projected demand requirements, market conditions and product life cycle changes. As of June 30, 2014 and June 30, 2013, management does not believe that any inventory reserves are necessary.    

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Note 3- Summary of Significant Accounting Policies: Principles of Consolidation: Condensed Balance Sheet (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Condensed Balance Sheet

	June 30, 2014	June 30, 2013
Total current assets*	$ 83,930,195	$ 58,857,580
Total assets*	154,570,385	130,683,952
Total current liabilities**	28,442,197	24,065,824
Total liabilities**	$      32,438,616	$      27,729,581

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Note 18- Stock Options: Schedule of Share-based Compensation, Activity (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Share-based Compensation, Activity

	Option Shares	Vested Shares	Exercise Price per Common Stock Range
Balance, June 30, 2012	-	-	$                        -
Granted or vested during the year ended June 30, 2013	32,000	32,000	2.00
Exercised during the year ended June 30, 2013	-	-	-
Expired during the year ended June 30, 2013	-	-	-
Balance, June 30, 2013	32,000	32,000	2.00
Granted or vested during the year ended June 30, 2014	-	-	-
Exercised during the year ended June 30, 2014	-	-	-
Expired during the year ended June 30, 2014	-	-	-
Balance, June 30, 2014	32,000	32,000	$                 2.00

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Note 21- Income Taxes (Details) (USD $)	11 Months Ended	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2014	Jun. 30, 2013
Details
OperatingLossCarryForwardsExpiration		2032
Effective Income Tax Rate Reconciliation At Federal Statutory Corporation Income Tax Rate	25.00%
Operating Loss Carry forwards Federal Tax Income Purposes	$ 14,473,570	$ 14,473,570
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent	29.50%		26.70%
Deferred Tax Assets, Net, Noncurrent	8,143,826	8,143,826	8,048,113
Retained Earnings Accumulated Deficit Reinvested	$ 709,451,700	$ 709,451,700

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Note 10- Accrued Expenses: Schedule of Accrued Liabilities (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Accrued Liabilities

	June 30, 2014	June 30, 2013
Sales representatives commission and expenses	$         5,879,162	$         4,731,442
Other payable for PPE	3,889,955	2,279,869
Other accrued expense	741,129	1,596,636
Other taxes payable	2,380,031	2,185,328
Accrued Interest expenses	2,372,625	1,117,527
Compensation and related cost	455,663	274,813
Total	$      15,718,565	$      12,185,615

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Note 3- Summary of Significant Accounting Policies: Shipping Costs (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Shipping Costs

Shipping costs 

Shipping costs are included in selling, general and administrative expense. Shipping costs amounted to $1,033,266 and $1,011,367 for the years ended June 30, 2014 and 2013, respectively. 

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Note 3- Summary of Significant Accounting Policies

12 Months Ended

Jun. 30, 2014

Notes

Note 3- Summary of Significant Accounting Policies

NOTE 3- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of BPGI, its wholly-owned subsidiary Chance High, WOFE II, Yantai Tianzheng and Bohai. All significant intercompany accounts and transactions have been eliminated in consolidation.

The Company, in determining whether it is required to consolidate investee businesses, considers both the voting and variable interest models of consolidation as required under applicable GAAP. The Company adopted FASB Accounting Standards Codification (“ASC”) 810- 10 -15-14 and also ASC 810- 10 -05-8, which requires that a VIE be consolidated if that company is entitled to receive a majority of the VIE’s residual returns and has direct ability to make decisions on all operating activities of the VIE. The Company controls Bohai through the VIE Agreements described in Note 1, under the following series of agreements entered into on December 7, 2009.

Under the Operating Agreement entered into between WOFE and Bohai, the WOFE has the direct ability to make decisions on all the operating activities and exercise all voting rights of Bohai. Under the Consulting Services Agreement entered into between WOFE and Bohai, Bohai agreed to pay all of its net income to WOFE quarterly as a consulting fee. Accordingly, WOFE has the right to receive the expected residual returns of Bohai. As such, the Company is the primary beneficiary of and maintains controlling managerial and financial interest in, Bohai in accordance with ASC 810-10-15-14. Accordingly, Bohai’s financial position and results of operations are consolidated with those of the Company for all periods presented.

We initially measured the assets, liabilities, and non-controlling interests of Bohai at their carrying amounts as of the date of the Share Exchange. We have subsequently accounted for the assets, liabilities, and non-controlling interest of Bohai as if it was consolidated based on voting interests. The usual accounting rules for which the VIE operates are applied as they would to a consolidated subsidiary as follows:

Carrying amounts of the VIE are consolidated into the financial statements of the Company as the primary beneficiary, or Primary Beneficiary (“PB”); and

Inter-company transactions and balances, such as revenues and costs, receivables and payables between or among the PB and the VIE(s) are eliminated in their entirety.

The carrying amount and classification of Bohai’s assets and liabilities included in the consolidated balance sheets are as follows:

	June 30, 2014	June 30, 2013
Total current assets*	$ 83,930,195	$ 58,857,580
Total assets*	154,570,385	130,683,952
Total current liabilities**	28,442,197	24,065,824
Total liabilities**	$      32,438,616	$      27,729,581

*           Includes intercompany accounts in the amounts of $37,511,591 and $26,417,979 in current assets as of June 30, 2014 and June 30, 2013, respectively, which were eliminated in consolidation. 

**         Includes intercompany accounts in the amounts of $9,426,786 and $4,372,634 in current liabilities as of June 30, 2014 and June 30, 2013, respectively, which were eliminated in consolidation.

Business Combinations

The Company uses the acquisition method of accounting for business combinations which requires that the assets acquired and liabilities assumed be recorded at the date of the acquisition at their respective fair values. Assets acquired and liabilities assumed in a business combination that arise from contingencies are recognized at fair value if fair value can reasonably be estimated. If the acquisition date fair value of an asset acquired or liability assumed that arises from a contingency cannot be determined, the asset or liability is recognized if probable and reasonably estimable; if these criteria are not met, no asset or liability is recognized. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are charged to expense as incurred. The operating results of acquired business are reflected in the acquirer’s consolidated financial statements and results of operations after the date of the acquisition.  

Business Segments

The Company’s operates its business through a single reporting segment.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those results.

Significant estimates and assumptions include allocating purchase consideration issued in business combinations, valuing equity securities and derivative financial instruments issued in financing transactions and in share-based payment arrangements, accounts receivable reserves, inventory reserves, and evaluating the carrying amounts and useful lives of intangible assets. Certain estimates, including accounts receivable and inventory reserves and the carrying amounts of intangible assets (including present value of future cash flow estimates for the Company’s pharmaceutical formulas) could be affected by external conditions including those unique to the Company’s industry and general economic conditions. It is reasonably possible that these external factors could have an effect on management’s estimates that could cause actual results to differ from management’s estimates.

Company management re-evaluates all of the accounting estimates at least quarterly based on these conditions and records adjustments, when necessary.

Cash and Cash Equivalents

We consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. We maintain bank accounts in the PRC, Hongkong and a checking account in the United States of America that principally consist of demand deposits. We also have restricted cash accounts in the United States  and the PRC that include funds designated for interest payments due to convertible note holders and for use in investor relations programs pursuant to a securities purchase agreement. 

Restricted Cash

Escrow account balances amounted to $12,623,467 and $12,574,051 as of June 30, 2014 and June 30, 2013, respectively.

The Company is required by its Note holders to maintain deposits in escrow accounts to fund the principal and interest payments under the Convertible Notes obligation. As of June 30, 2014 and June 30, 2013, there was $7,750,568 and $7,720,232 of cash restricted for this purpose.

The Company has certain outstanding notes payable in the amount of $9,745,795 and $9,707,638 as of June 30, 2014 and June 30, 2013, respectively, and it is required to maintain a portion of these outstanding draft amounts in its bank as restricted cash. As of June 30, 2014 and June 30, 2013, there was $4,872,899 and $4,853,819 cash restricted for this purpose. 

Accounts Receivable

Accounts receivable consists of amounts due from customers. The Company’s credit terms generally range from 90 to 180 days. The Company’s policy with respect to accounts receivable reserves is to establish an allowance for doubtful accounts based on management’s assessment of known requirements, aging of receivables, payment history, specific customer’s current credit worthiness, and the economic environment. The Company has a significantly low history of credit losses and no historical pattern of making any price or collection concessions with respect to its accounts receivable balances. Accordingly, an allowance for doubtful accounts is not considered necessary based on management’s assessment.

Inventories

Inventories are valued at the lower of cost, determined using the weighted average method, or market. Finished goods inventories include the costs of raw materials, direct labor and overhead associated with the manufacturing process. In assessing the ultimate realization of inventories, management makes judgments as to future demand requirements compared to current or committed inventory levels. Our reserve requirements generally increase/decrease due to management’s projected demand requirements, market conditions and product life cycle changes. As of June 30, 2014 and June 30, 2013, management does not believe that any inventory reserves are necessary.    

Property, Plant and Equipment

Property, plant and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets that range from 5 to 10 years for office equipment, machinery, and vehicles and 30 to 40 years for buildings. The cost of repairs and maintenance is charged to expense as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. We examine the possibility of impairment in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. 

Intangible Asset – Pharmaceutical Formulas

The Company has purchased pharmaceutical formulas that were approved by the State Food and Drug Administration of China (“SFDA”). These formulas can be renewed every 5 years without limitation for a minimum fee and are subject to certain protections under PRC drug regulations for an indefinite period of time. These regulations mitigate competition and the ability of other suppliers to replicate the Company’s products or produce comparable substitutes. These intangible assets are measured initially at cost not subject to amortization and are tested for impairment annually or in interim reporting periods if events or changes in circumstances indicate that the carrying amounts of these intangible assets might not be recoverable.  

During the year ended June 30, 2013, we determined that we would no longer manufacture or seek to develop a market for ten of our products due to a change in our business. As a result of this decision, we recorded an impairment charge in the amount of $1,668,486 during the year ended June 30, 2013. In addition to the above, we reclassified certain other formulas with an aggregate carrying amount of approximately $10,000,000 (RMB 63,855,371) to other intangible assets. The Company has suspended plans to develop and manufacture products to be derived from these formulas but intends to retain them to mitigate competition and maintain the option of using these formulas should they be useful in the future. Accordingly, the Company has determined these formulas, which are approved by the State Food and Drug Administration, should be held as defensive assets. The Company determined that these formulas have an estimated useful life of 8 years as defensive assets. 

Common Stock Purchase Warrants and Other Derivative Financial Instruments

The Company accounts for the issuance of common stock purchase warrants issued as free standing financial instruments in accordance with the applicable provisions ASC 810 “Derivatives and Hedging Activities.” Based on this guidance, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The common stock purchase warrants have expired as of June 30, 2013 and we did not issue any warrants during the year ended June 30, 2014. 

Fair Value Measurements and Fair Value of Financial Instruments

We adopted the guidance of ASC 820 for fair value measurements, which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:  

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. 

Level 2 - Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other then quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3 - Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. 

The carrying amounts reported in the balance sheets for cash, accounts receivable, other receivables, short-term borrowings, accounts payable and accrued expenses, customer advances, and amounts due from related parties approximate their fair market value based on the short-term maturity of these instruments.

ASC 825-10 “Financial Instruments ” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. We use Level 3 inputs to value the Company’s derivative liabilities. 

The following table reflects gains and losses for the years ended June 30, 2014 and 2013 for all financial assets and liabilities categorized as Level 3.

Liabilities:

Balance of warrant liabilities as of June 30, 2012	$      1,211,236
Change in the fair value of warrant liabilities	(1,211,236)
Balance of warrant liabilities as of June 30, 2013	-
Change in the fair value of warrant liabilities	-
Balance of warrant liabilities as of June 30, 2014	$-

Estimating the fair value of derivative financial instruments require the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. The assumptions used to value the Company’s derivatives, which had a direct effect on the fair values. In addition, valuation techniques are sensitive to changes in the trading market price of the our Common Stock and its estimated volatility interest rate changes and other variables or market conditions not within the Company’s control that can significantly affect management’s estimates of fair value and changes in fair value. Because derivative financial instruments are initially and subsequently carried at fair value, the Company’s net income may include significant charges or credits as these estimates and assumptions change. 

The warrants expired on January 5, 2013. At the expiration time, the portion of this warrant not exercised prior thereto shall be and become void and of no value and this warrant shall be terminated and shall no longer be outstanding.

Foreign Currency Translation 

The Company’s reporting currency is the U.S. dollar. The functional currency of the Company’s operating business based in the PRC is the RMB. For the Company’s subsidiaries and affiliates whose functional currencies are the RMB, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the exchange rate in effect as of the end of the period, and equity is translated at historical exchange rates. Translation adjustments resulting from the process of translating the functional currency financial statements into U.S. dollars are included in comprehensive income.

Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods. All of the Company’s revenue transactions are transacted in the functional currency. Transaction gains or losses have not had, and are not expected to have a material effect on the Company’s results of operations. 

Period end exchange rates used to translate assets and liabilities and average exchange rates used to translate results of operations in each of the reporting periods are as follows:

	The year ended June 30, 2014	The year ended June 30, 2013
Period end US$: RMB exchange rate	6.1565	6.1807
Average periodic US$: RMB exchange rate	6.1438	6.2767

The RMB is not freely convertible into any other currencies. In addition, all foreign exchange transactions in the PRC must be conducted through authorized institutions. Accordingly, management cannot provide any assurance that the RMB underlying the consolidated financial statement amounts could have been, or could be, converted into US dollars at the exchange rates used to translate the functional currency into the reporting currency. 

Revenue Recognition 

Revenue represents the invoiced value of goods sold recognized upon the delivery of goods to distributors. Pursuant to the guidance of ASC Topic 605 and ASC Topic 36, revenue is recognized when all of the following criteria are met:

- Persuasive evidence of an arrangement exists;

- Delivery has occurred or services have been rendered;

- The seller’s price to the buyer is fixed or determinable; and

- Collectability is reasonably assured.

Cost of Revenue

Cost of revenue consists primarily of raw material costs, labor cost, overhead costs associated with the manufacturing process and related expenses which are directly attributable to our revenues.

Stock-based Compensation

Stock based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the employee or director’s requisite service period (presumptively, the vesting period). The FASB Accounting Standards Codification also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated based on the then current fair value, at each subsequent reporting date. 

Research and Development Costs 

Research and development costs are charged to expense as incurred and included in operating expenses. We have only one full-time employee who is engaged in research and development, so the Company is mainly dependent on third-parties to perform the limited amount of research and development that the Company undertakes (see Note16). On March 1, 2013, the Company entered into a series of contracts with Binzhou Medical College to establish an institute named Bohai Pharmaceutical Institute in the following 5 years. On May 31, 2013, these two parties entered into two contracts agreeing on performing researches on two pharmaceutical products, namely Lung Nourishing Cream and Tongbi Capsules, in the following 17 months, respectively. These three contracts amount to $243,380 (RMB 1,500,000), that has been fully paid as of June 30, 2014. Research and development costs amounted to $244,149 and $7,982 for the years ended June 30, 2014 and 2013, respectively.

Shipping costs 

Shipping costs are included in selling, general and administrative expense. Shipping costs amounted to $1,033,266 and $1,011,367 for the years ended June 30, 2014 and 2013, respectively. 

Advertising

Advertising and promotion costs are charged to expense as incurred. Advertising expenses included in selling, general and administrative expenses amounted to $737,111 and $95,477 for the years ended June 30, 2014 and 2013, respectively.

Income Taxes

We are governed by the PRC’s Income Tax Laws and the Internal Revenue Code of the United States. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement and income tax base of assets and liabilities and operating loss and tax credit carry-forwards. Deferred tax assets are reduced by a valuation allowance to the extent that management concludes it is more likely than not that the benefit of such tax assets will not be realized in future periods. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the periods that include the enactment date. 

We account for certain tax positions based upon authoritative guidance that prescribes a recognition threshold and measurement processes for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance also provides direction on recognition, classification, interest and penalties, accounting in interim periods and related disclosure. 

Our policy is to classify assessments, if any, for tax related to interest as interest expense and penalties as general and administrative expense.

Earnings per Share 

We report earnings per share in accordance with ASC Topic 260, “Earnings Per Share”. Basic earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Common equivalent shares are excluded from the computation of diluted shares in periods for which they have an anti-dilutive effect. Diluted shares underlying stock options and common stock purchase warrants are included in the determination of diluted earnings per share using the treasury stock method. Diluted shares underlying convertible debt obligations are included in the determination of diluted loss per share using the “if converted” method (Note 17).

Recent Accounting Pronouncements

In April 2014, the FASB issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance in U.S. GAAP. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. Early adoption is permitted. The Company does not expect the adoption to have a significant impact on its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from contracts with Customers (Topic 606)”. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchanged for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial position or results of operations upon adoption.

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Note 14- Convertible Promissory Notes in Default and Due On Demand: Schedule of Long-term Debt Instruments (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Long-term Debt Instruments

Payment date	Amount
May 14, 2012	$ 314,000
June 28, 2012	100,000
July 3, 2012	631,000
November 29, 2012	940,500
October 9, 2013	100,000
October 29, 2013	300,000
March 6, 2014	446,450

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Note 3- Summary of Significant Accounting Policies: Revenue Recognition (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Revenue Recognition

Revenue Recognition 

Revenue represents the invoiced value of goods sold recognized upon the delivery of goods to distributors. Pursuant to the guidance of ASC Topic 605 and ASC Topic 36, revenue is recognized when all of the following criteria are met:

- Persuasive evidence of an arrangement exists;

- Delivery has occurred or services have been rendered;

- The seller’s price to the buyer is fixed or determinable; and

- Collectability is reasonably assured.

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Note 23- Subsequent Events

12 Months Ended

Jun. 30, 2014

Notes

Note 23- Subsequent Events

NOTE 23- SUBSEQUENT EVENTS

In July 2014, convertible notes with an aggregate face amount of $970,287and accrued interest of $177,913 were converted into 574,100 shares of Common Stock.

Effective September 15, 2014,the Company dismissed its independent registered public accounting firm, Marcum Bernstein & Pinchuk LLP (“Marcum”) effective immediately.  The dismissal was approved by the Board of Directors (the “Board”) of the Company.

As at the date  of this report, there is certain amount of outstanding audit fee being in dispute between the Company  and Marcum that has not yet been resolved.  Marcum therefore has refused to reissue the audit report  for the year ended June 30, 2013 due to disagreement with the Company related to  the outstanding service fees. The Company is now consulting its legal counsel for further actions. As at the date of this report,  no agreements have been reached.

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Note 22- Vie

12 Months Ended

Jun. 30, 2014

Notes

Note 22- Vie

NOTE 22- VIE

To satisfy PRC laws and regulations, the Company conducts certain business in the PRC through the VIE.

As a result of the VIE Agreements signed between WOFE and Bohai, the Company includes the assets, liabilities, revenues and expenses of Bohai (the “VIE”) in its consolidated financial statements. 

Substantially all of the Company’s assets, including those of Bohai which is considered the VIE and Yantai Tianzheng, which is an acquired subsidiary of the Company, are accessible to Bohai through WOFE II creditors irrespective of the VIE arrangement. 

The VIE Agreements include:

Equity Interest Pledge Agreement.  The WOFE and Bohai’s shareholders have entered into Equity Interest Pledge Agreements, pursuant to which each Bohai shareholder has pledged all of his shares of Bohai to the WOFE in order to guarantee cash-flow payments under the applicable Consulting Services Agreement. The Equity Pledge Agreement further entitles the WOFE to collect dividends from Bohai during the term of the pledge. 

Consulting Service Agreement.  Bohai and the WOFE has entered into a Consulting Services Agreement, which provides that the WOFE will be the exclusive provider of technology services to Bohai and Bohai will pay all of its net income based on the quarterly financial statements to the WOFE for such services. Any such payment from the WOFE to the Company would need to comply with applicable Chinese laws affecting payments from Chinese companies to non-Chinese companies. See “Risk Factors – Risks Associated With Doing Business in China.”  

Operating Agreement.  Pursuant to the operating agreement among the WOFE, Bohai and the Bohai shareholders, the WOFE provides guidance and instructions on Bohai’s daily operations and financial affairs. The Bohai shareholders must designate the candidates recommended by the WOFE as their representatives on their respective boards of directors. The WOFE has the right to appoint senior executives of Bohai. In addition, the WOFE agrees to guarantee Bohai’s performance under any agreements or arrangements relating to Bohai’s business arrangements with any third party. Bohai, in return, agrees to pledge its accounts receivable and all of its assets to the WOFE. Moreover, Bohai agrees that without the prior consent of the WOFE, Bohai will not engage in any transactions that could materially affect its assets, liabilities, rights or operations, including, without limitation, incurrence or assumption of any indebtedness, sale or purchase of any assets or rights, incurrence of any encumbrance on any of its assets or intellectual property rights in favor of a third party or transfer of any agreements relating to its business operation to any third party.

These contractual arrangements may not be as effective in providing the Company with control over the VIE as direct ownership. Due to its VIE structure, the Company has to rely on contract right to effect control and management of the VIE, which exposes it to the risk of potential breach of contract by the shareholders of Bohai. The VIE Agreements are subject to significant risks as set forth in the following risk factors.

The PRC government may determine that the VIE Agreements used to control the Company’s operating subsidiary Bohai are not in compliance with applicable PRC laws, rules and regulations and that they are therefore unenforceable.

There are risks involved with the operation of Bohai under the VIE Agreements. The Company has been advised by PRC legal counsel that if the PRC government determines the VIE Agreement used to control the operating company to be unenforceable as they circumvent the PRC restrictions relating to foreign investment restrictions, the relevant regulatory authorities would have broad discretion in dealing with such breach and could have a material adverse impact on our business, financial condition and results of operations.

The Company depends upon the VIE Agreements in conducting its production, manufacturing, and distribution of traditional Chinese herbal medicines in the PRC, which may not be as effective as direct ownership.

The Company conducts its production, manufacturing and distribution of traditional Chinese herbal medicines in the PRC and generate the revenues from the Bohai business through the VIE Agreements. The VIE Agreements may not be as effective in providing us with control over Bohai as direct ownership. The VIE Agreements are governed by PRC laws and provide for the resolution of disputes through arbitration proceedings pursuant to PRC laws. Accordingly, the VIE Agreements will be interpreted in accordance with PRC laws. If Bohai or its shareholders fail to perform the obligations under the VIE Agreements, the Company may have to rely on legal remedies under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, and there is a risk that the Company may be unable to obtain these remedies. The legal environment in China is not as developed as in other jurisdictions. As a result, uncertainties in the PRC legal system could limit the Company’s ability to enforce the VIE Agreements.

The pricing arrangement under the VIE Agreements may be challenged by the PRC tax authorities.

The Company could face adverse tax consequences if the PRC tax authorities determine that the VIE Agreements were not entered into based on arm’s length negotiations. If the PRC tax authorities determine that the VIE Agreements were not entered into on an arm’s length basis, they may adjust the income and expenses of the Company for PRC tax purposes which could result in higher tax liability.

On January 17, 2014, all rights and obligations of WOFE relating to Bohai, including all of WOFE’s rights and obligations under each of the VIE Agreements, were assigned in full to WOFE II.

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Note 14- Convertible Promissory Notes in Default and Due On Demand: Schedule of Long-term Debt Instruments (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Repayment of convertible notes	$ (846,450)	$ (1,571,500)
Repayment Date One
Repayment Date of Convertible Debt	May 14, 2012
Repayment of convertible notes	314,000
Repayment Date Two
Repayment Date of Convertible Debt	Jun. 28, 2012
Repayment of convertible notes	100,000
Repayment Date Three
Repayment Date of Convertible Debt	Jul. 03, 2012
Repayment of convertible notes	631,000
Repayment Date Four
Repayment Date of Convertible Debt	Nov. 29, 2012
Repayment of convertible notes	940,500
Repayment Date Five
Repayment Date of Convertible Debt	Oct. 09, 2013
Repayment of convertible notes	100,000
Repayment Date Six
Repayment Date of Convertible Debt	Oct. 29, 2013
Repayment of convertible notes	300,000
Repayment Date Seven
Repayment Date of Convertible Debt	Mar. 06, 2014
Repayment of convertible notes	$ 446,450

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Note 6- Indefinite Lived Intangible Assets - Pharmaceutical Formulas: Schedule of Indefinite-Lived Intangible Assets (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Indefinite-Lived Intangible Assets

	June 30, 2014	June 30, 2013
Pharmaceutical formulas, without amortization, net of impairment	$14,164,630	$14,109,169

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Note 3- Summary of Significant Accounting Policies: Cost of Revenue (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Cost of Revenue

Cost of Revenue

Cost of revenue consists primarily of raw material costs, labor cost, overhead costs associated with the manufacturing process and related expenses which are directly attributable to our revenues.

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Note 3- Summary of Significant Accounting Policies: Principles of Consolidation (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of BPGI, its wholly-owned subsidiary Chance High, WOFE II, Yantai Tianzheng and Bohai. All significant intercompany accounts and transactions have been eliminated in consolidation.

The Company, in determining whether it is required to consolidate investee businesses, considers both the voting and variable interest models of consolidation as required under applicable GAAP. The Company adopted FASB Accounting Standards Codification (“ASC”) 810- 10 -15-14 and also ASC 810- 10 -05-8, which requires that a VIE be consolidated if that company is entitled to receive a majority of the VIE’s residual returns and has direct ability to make decisions on all operating activities of the VIE. The Company controls Bohai through the VIE Agreements described in Note 1, under the following series of agreements entered into on December 7, 2009.

Under the Operating Agreement entered into between WOFE and Bohai, the WOFE has the direct ability to make decisions on all the operating activities and exercise all voting rights of Bohai. Under the Consulting Services Agreement entered into between WOFE and Bohai, Bohai agreed to pay all of its net income to WOFE quarterly as a consulting fee. Accordingly, WOFE has the right to receive the expected residual returns of Bohai. As such, the Company is the primary beneficiary of and maintains controlling managerial and financial interest in, Bohai in accordance with ASC 810-10-15-14. Accordingly, Bohai’s financial position and results of operations are consolidated with those of the Company for all periods presented.

We initially measured the assets, liabilities, and non-controlling interests of Bohai at their carrying amounts as of the date of the Share Exchange. We have subsequently accounted for the assets, liabilities, and non-controlling interest of Bohai as if it was consolidated based on voting interests. The usual accounting rules for which the VIE operates are applied as they would to a consolidated subsidiary as follows:

Carrying amounts of the VIE are consolidated into the financial statements of the Company as the primary beneficiary, or Primary Beneficiary (“PB”); and

Inter-company transactions and balances, such as revenues and costs, receivables and payables between or among the PB and the VIE(s) are eliminated in their entirety.

The carrying amount and classification of Bohai’s assets and liabilities included in the consolidated balance sheets are as follows:

	June 30, 2014	June 30, 2013
Total current assets*	$ 83,930,195	$ 58,857,580
Total assets*	154,570,385	130,683,952
Total current liabilities**	28,442,197	24,065,824
Total liabilities**	$      32,438,616	$      27,729,581

*           Includes intercompany accounts in the amounts of $37,511,591 and $26,417,979 in current assets as of June 30, 2014 and June 30, 2013, respectively, which were eliminated in consolidation. 

**         Includes intercompany accounts in the amounts of $9,426,786 and $4,372,634 in current liabilities as of June 30, 2014 and June 30, 2013, respectively, which were eliminated in consolidation.

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Note 3- Summary of Significant Accounting Policies: Business Combinations (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Business Combinations

Business Combinations

The Company uses the acquisition method of accounting for business combinations which requires that the assets acquired and liabilities assumed be recorded at the date of the acquisition at their respective fair values. Assets acquired and liabilities assumed in a business combination that arise from contingencies are recognized at fair value if fair value can reasonably be estimated. If the acquisition date fair value of an asset acquired or liability assumed that arises from a contingency cannot be determined, the asset or liability is recognized if probable and reasonably estimable; if these criteria are not met, no asset or liability is recognized. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are charged to expense as incurred. The operating results of acquired business are reflected in the acquirer’s consolidated financial statements and results of operations after the date of the acquisition.  

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Note 2- Liquidity and Financial Condition

12 Months Ended

Jun. 30, 2014

Notes

Note 2- Liquidity and Financial Condition

NOTE 2- LIQUIDITY AND FINANCIAL CONDITION

The Company’s net income amounted to $21,889,215 for the year ended June 30, 2014. The Company’s cash flows provided by operating activities amounted to $25,006,067 for the year ended June 30, 2014. The Company had working capital of $43,032,676  as of June 30, 2014. The Company has historically financed its operations principally from cash flows generated from operating activities and external financing through short-term bank loans, convertible notes, and notes payable.

On August 8, 2011, the Company, through WOFE II, signed a share transfer agreement with the shareholders of Yantai Tianzheng to acquire 100% of Yantai Tianzheng for total purchase consideration of US $35,000,000 and the balance was fully paid as of June 30, 2014.

The Company has gained the benefits of the economies of scale by having combined and streamlined the cost structures of Bohai and Yantai Tianzheng. The Company has streamlined the combined business around a more focused portfolio of products that include non-prescription drug products acquired as part of the Yantai Tianzheng’s product portfolio.

On June 8, 2010, Yantai Tianzheng signed an agreement with Yantai Huanghai Construction Co. to construct certain portions of a factory. The total contract price amounted to approximately $3,160,000 million (RMB $ 19,500,000  million). The construction is 100% completed and transferred into buildings as of June 30, 2014. The final cost is $4.82 million (RMB 29.68 million), as of June 30, 2014, $2.37 million (RMB 14.63 million) was paid and $2.45 million (RMB 15.05 million) is to be paid.

On November 5, 2012, the Company acquired a new land use right of 266,668 square meters located in the high-tech development district of Laishan, Yantai, Shandong Province. The Company was granted the right to use the land for a period of 50 years at a total cost of approximately $19,440,000 million (RMB 120,000,000). The Company paid in full $19,440,000 million (RMB 120,000,000) as of June 30, 2014. (See Note 7).

The Company is also required to repay the remaining $7,435,800 convertible notes balance, which pursuant to five amendments to the original notes, as of June 30, 2014, was due on an extended maturity date of April 5, 2016. The Company made payments toward principal of $846,450 during the year ended June 30, 2014. Also $182,248 of the convertible was converted to common stock for the year ended June 30, 2014.

As described elsewhere herein, the Company has at times, been in temporary default of its obligation to repay the convertible notes at previously extended maturity dates. The Company cannot predict what the implications of the non-payment of the notes would be. The Company will continue to experience difficulty converting sufficient currency and will maintain an escrow account of restricted funds intended to secure the Note’s repayment. The non-payment of the notes could have a material adverse effect on the Company should the note holders pursue further action.

Management believes, based on the Company’s historical ability to fund operations using internally generated cash flow, that the Company’s currently available cash and funds it expects to generate from operations and through potential short term loans financing from banks will enable it to operate the business and satisfy short term obligations through at least June 30, 2015. Notwithstanding, the Company still has substantial obligations as described herein and there is no assurance that unforeseen circumstances would not have a material adverse effect on the Company’s financial condition.

The Company will require significant additional capital in order to fund these obligations and execute its longer term business plan. If the Company is unable to generate sufficient operating cash flows or raise additional capital, or encounters unforeseen circumstances that place constraints on its capital resources, management will be required to take various measures to conserve liquidity. Such measures could include, but not necessarily be limited to, curtailing the Company’s business development activities (as was done recently when the Company determined to streamline its operations to focus on the continued distribution of a smaller number of key products), suspending the pursuit of one or more elements of its business plan, and controlling overhead expenses. There is a material risk, and management cannot provide any assurances, that the Company will be able to raise additional capital if needed.

On August 15, 2013, the Company obtained a short term loan from Yantai Rural Commercial Bank Ltd. (“RCB”) due on August 14, 2014 in the amount of $4,872,899 (RMB 30,000,000), which was guaranteed by a third party, Shandong Guangyuan Group Ltd. (“Guangyuan”) and the principal shareholder of the Company, Hongwei Qu. Guangyuan is an unrelated third party and has no business relationship with the Company (See Note 13).  Except for the loan from RCB, the Company has not received any commitments for new financing, and cannot provide any assurance that new financing will be available to the Company on acceptable terms, if at all. The failure of the Company to fund its obligations when needed would have a material adverse effect on its business and results of operations.

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Note 3- Summary of Significant Accounting Policies: Business Segments (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Business Segments

Business Segments

The Company’s operates its business through a single reporting segment.

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Note 3- Summary of Significant Accounting Policies: Advertising (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Details
Advertising Expense	$ 737,111	$ 95,477

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Note 21- Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Details
Operating Loss Carryforwards	$ 4,921,014	$ 5,250,749
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits, Share-based Compensation Cost		86,200
Deferred Tax Assets, Gross	4,921,014	5,336,949
Deferred Tax Assets, Valuation Allowance	$ (4,921,014)	$ (5,336,949)

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Note 3- Summary of Significant Accounting Policies: Common Stock Purchase Warrants and Other Derivative Financial Instruments (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Common Stock Purchase Warrants and Other Derivative Financial Instruments

Common Stock Purchase Warrants and Other Derivative Financial Instruments

The Company accounts for the issuance of common stock purchase warrants issued as free standing financial instruments in accordance with the applicable provisions ASC 810 “Derivatives and Hedging Activities.” Based on this guidance, the Company classifies as equity any contracts that (i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The common stock purchase warrants have expired as of June 30, 2013 and we did not issue any warrants during the year ended June 30, 2014. 

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Note 3- Summary of Significant Accounting Policies: Fair Value Measurements and Fair Value of Financial Instruments: Schedule of Derivative Liabilities at Fair Value (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Derivative Liabilities at Fair Value

Balance of warrant liabilities as of June 30, 2012	$      1,211,236
Change in the fair value of warrant liabilities	(1,211,236)
Balance of warrant liabilities as of June 30, 2013	-
Change in the fair value of warrant liabilities	-
Balance of warrant liabilities as of June 30, 2014	$-

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Note 1- Organization and Principal Activities (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Equity Method Investment, Ownership Percentage	100.00%
Common Stock, Par Value	$ 0.001	$ 0.001
Chance High International Limited
Equity Method Investment, Ownership Percentage	100.00%
Chairman and Chief Executive Officer
Equity Method Investment, Ownership Percentage	96.70%
Two Other Shareholders
Equity Method Investment, Ownership Percentage	3.30%

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Bohai Pharmaceuticals Group, Inc. - Consolidated Balance Sheets (USD $)	Jun. 30, 2014		Jun. 30, 2013
Current Assets:
Cash	$ 23,308,715		$ 6,947,972
Restricted cash	12,623,467		12,574,051
Accounts receivable	41,647,165		38,716,023
Inventories	4,500,987		2,781,734
Prepaid expenses and other current assets	538,356		449,231
Total Current Assets	82,618,690		61,519,011
Non-current Assets
Property, plant and equipment, net	21,128,489		17,678,453
Prepayment for property, plant and equipment	275,334		1,112,873
Intangible assets- pharmaceutical formulas	14,164,630		14,109,169
Long term prepayments- land use right, net	37,618,340		37,863,464
Other intangible assets, net	23,738,108		28,139,219
Goodwill	5,222,658		5,202,209
Total Non-Current Assets	102,147,559		104,105,387
TOTAL ASSETS	184,766,249		165,624,398
Current liabilities:
Notes payable	9,745,795		9,707,638
Convertible notes, net	0		8,464,500
Short-term loan, net	4,872,899		0
Accounts payable	6,107,200		5,081,913
Accrued expenses	15,718,565		12,185,615
Land use right payable	0		6,471,759
Income taxes payable	3,085,929		2,222,476
Due to a related party	55,626		52,830
Total current liabilities	39,586,014		44,186,731
Non-current liabilities
Acquisition purchase price payable - non-current portion	0		5,000,000
Covertible notes, net	7,435,800		0
Deferred tax liability	8,143,826		8,048,113
Total non-current liabilities	15,579,626		13,048,113
TOTAL LIABILITIES	55,165,640		57,234,844
STOCKHOLDERS' EQUITY
Common Stock	17,965	[1]	17,861	[1]
Additional paid-in capital	24,822,499		24,615,353
Accumulated other comprehensive income	8,114,171		8,999,581
Retained earnings	96,645,974		74,756,759
Total stockholders' equity	129,600,609		108,389,554
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 184,766,249		$ 165,624,398

[1] $0.001 par value, 150,000,000 shares authorized, 17,964,714 and 17,861,085 shares issued and outstanding as of June 30, 2014 and June 30, 2013, respectively

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Note 3- Summary of Significant Accounting Policies: Stock-based Compensation (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Stock-based Compensation

Stock-based Compensation

Stock based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC 718 which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the employee or director’s requisite service period (presumptively, the vesting period). The FASB Accounting Standards Codification also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

Pursuant to ASC Topic 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the “measurement date.” The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. We record compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated based on the then current fair value, at each subsequent reporting date. 

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Note 11- Due To Related Party (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Details
Due to a related party	$ 55,626	$ 52,830

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Note 21- Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) (USD $)	11 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Details
Current Foreign Tax Expense (Benefit)	$ 10,728,817	$ 8,888,894
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Amount	(2,871,800)	(1,905,795)
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount	1,451,305	(411,820)
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	357,806	449,012
Provision for income taxes	$ 9,666,128	$ 7,020,291	$ (9,666,129)	$ (7,020,291)

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Bohai Pharmaceuticals Group, Inc. - Consolidated Statements of Cash Flows (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:
Net income	$ 21,889,215	$ 19,123,517
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,523,567	5,359,502
Impairment of intangible assets- drug formula	0	1,688,486
Loss on disposal of property, plant and equipment	(196,780)	0
Change in fair value of warrants	0	(1,211,236)
Convertible notes conversion	240,984	0
Deferred income taxes	64,210	(285,138)
Changes in operating assets and liabilities:
Accounts receivable, increase decrease	(2,784,702)	(8,275,584)
Prepaid expenses and other current assets, increase decrease	359,833	393,371
Inventories, increase decrease	(1,711,849)	1,079,465
Accounts payable, increase decrease	1,099,540	1,650,110
Accrued expenses, increase decrease	(334,434)	1,205,007
Income taxes payable, increase decrease	856,483	(164,351)
Net cash provided by operating activities	25,006,067	20,563,149
Cash flows used in investing activities:
Purchases of property, plant and equipment	(460,387)	(3,959,698)
Land use rights payments	(6,471,759)	(12,745,551)
Property, plant and equipment deposits	843,654	(497,783)
Cash paid for acquisition of business	(5,000,000)	(20,300,000)
Net cash used in investing activities	(11,088,492)	(37,503,032)
Cash flows from financing activities:
Proceeds from short-term loan	4,882,972	0
Proceeds from notes payable	9,765,943	9,559,163
Repayment of notes payable	(9,765,943)	0
Borrowing from related party	4,378	16,059
Repayment to related party	(1,737)	0
Repayment of convertible notes	(846,450)	(1,571,500)
Deposit of restricted cash-note payable	4,882,971	(4,779,582)
Release of restricted cash-note payable	(4,882,971)	0
Deposit of restricted cash-convertible note escrow deposit	137,773	(2,697,345)
Release of restricted cash-convertible note escrow deposit	(137,773)	4,601,029
Net cash provided by (used in) financing activities	4,039,163	5,127,824
Effect of foreign currency translation on cash and cash equivalents	(1,595,995)	373,743
Net increase (decrease) in cash and cash equivalents	16,360,743	(11,438,316)
Cash and cash equivalents at beginning of period	6,947,972	18,386,288
Cash and cash equivalents at end of period	23,308,715	6,947,972
Cash paid for interest	769,358	1,363,164
Cash paid for income taxes	8,658,958	7,469,786
Non-cash financing and investing activities:
Land use right liability	0	6,471,759
Acquisition liability	0	5,000,000
PPE non-cash assuming liability	$ 3,889,955	$ 2,279,869

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Note 9- Goodwill (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 US ($)	Jun. 30, 2013 US ($)	Jun. 30, 2014 CNY	Jun. 30, 2013 CNY	Aug. 08, 2011 Yantai Tianzheng US ($)
Business Acquisition, Percentage of Voting Interests Acquired							100.00%
Business Acquisition, Cost of Acquired Entity, Purchase Price							$ 35,000,000
Goodwill	$ 5,222,658	$ 5,202,209	$ 5,222,658	$ 5,202,209	$ 32,153,295	$ 32,153,295

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Note 7- Intangible Assets - Land Use Rights, Net: Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

	Amortization
FY 2015	$                                   830,867
2016	830,867
2017	830,867
2018	830,867
2019	830,867
Thereafter	33,464,005,
Total	$   37,618,340

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Note 14- Convertible Promissory Notes in Default and Due On Demand (Details) (USD $)	12 Months Ended		0 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jan. 05, 2010 Securities Purchase Agreement	Jan. 06, 2010 Securities Purchase Agreement	Jun. 30, 2014 Eight Percent Senior Convertible Promissory Note	Jan. 06, 2010 Eight Percent Senior Convertible Promissory Note
Sale of Stock, Number of Shares Issued in Transaction			6,000,000
Proceeds from Issuance or Sale of Equity			$ 12,000,000
Debt Instrument, Interest Rate, Effective Percentage	9.00%			8.00%		8.00%
Common Stock Convertible Conversion Price				$ 2.00		$ 2.00
Class of Warrant or Right, Exercise Price of Warrants or Rights				$ 2.40
Debt Instrument, Maturity Date	Aug. 14, 2014				Jan. 05, 2012
Accretion of Note Discount	0	0
Interest Expense, Debt	777,007	1,069,261
Description On Event Of Default	upon an Event of Default, and provided no more than 50% of the aggregate face amount of the Notes have been converted, the Investors holding Notes have the right to
Convertible Notes Payable	$ 7,435,800	$ 8,464,500
Debt Instrument, Debt Default, Description of Violation or Event of Default	the Company’s principal shareholder, Mr. Qu, is obligated to deliver 1,000,000 shares of Common Stock to the Investors if a default occurs.

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Note 3- Summary of Significant Accounting Policies: Restricted Cash (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Restricted Cash

Restricted Cash

Escrow account balances amounted to $12,623,467 and $12,574,051 as of June 30, 2014 and June 30, 2013, respectively.

The Company is required by its Note holders to maintain deposits in escrow accounts to fund the principal and interest payments under the Convertible Notes obligation. As of June 30, 2014 and June 30, 2013, there was $7,750,568 and $7,720,232 of cash restricted for this purpose.

The Company has certain outstanding notes payable in the amount of $9,745,795 and $9,707,638 as of June 30, 2014 and June 30, 2013, respectively, and it is required to maintain a portion of these outstanding draft amounts in its bank as restricted cash. As of June 30, 2014 and June 30, 2013, there was $4,872,899 and $4,853,819 cash restricted for this purpose. 

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Note 17- Net Income Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Earnings Per Share, Basic and Diluted

	The year ended June 30, 2014	The year ended June 30, 2013
Net Income available to common stockholders - basic	$                  21,889,215	$                  19,123,517
Interest on convertible notes	582,756	801,946
Net Income available for common shareholders - diluted	$                  22,471,971	$                  19,925,463
Weighted average number of common shares outstanding - basic	17,964,714	17,861,085
Common shares if converted from Convertible Debt	4,018,827	4,232,250
Weighted average number of common shares outstanding - diluted	21,983,541	22,093,335
Earnings per share:
Basic	$                               1.22	$                               1.07
Diluted	$                               1.02	$                               0.91

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Note 16- Commitments, Contingencies and Other Matters

12 Months Ended

Jun. 30, 2014

Notes

Note 16- Commitments, Contingencies and Other Matters

NOTE 16- COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

(a)Contract Research and Development Arrangement

On May 2009, the Company entered into a contract with Yantai Tianzheng Medicine Research and Development Co. to perform research and development on two new pharmaceutical products, namely Fern Injection and Forsythia Capsule. The total contract price is approximately$2,436,449 (RMB 15,000,000). Yantai Tianzheng Medicine Research and Development Co. committed to complete all research work required for the clinical trial within 3 years. As of June 30, 2014, the Company has paid $2,127,027 (RMB 13,095,044) and the remaining contract amount will be paid as the research services are performed. All payments of $2,127,027 (RMB 13,095,044) have been charged to expense. The Company extended the term of the contract to May 10, 2017 due to certain changes in government regulations that affected this research project.

(b)Supplier Concentrations

We have the following concentrations of business with each supplier constituting greater than 10 % of the Company’s purchases of raw materials or other supplies:

	The year ended June 30, 2014	The year ended June 30, 2013
Shandong Yantai Medicine Procurement and Supply Station	23.87%	29.00%
Shandong Shuntianyi Chinese Herbal Medicine Co., Ltd	23.27%	*%

* Constitutes less than 10% of the Company’s purchases.

(c)Sales Concentrations

 Sales Product Concentrations

Five of the Company’s products, namely Tongbi Capsules, Tongbi Tablets, Lung Nourishing Syrup, Zhengxintai Capsules and Fangfengtongsheng Granule represented approximately 28.8 %, 16.7 %, 17.2 %, 11.8 % and 23.0 %, respectively, of total sales for the year ended June 30, 2014.

Five of the Company’s products, namely Tongbi Capsules, Tongbi Tablets, Lung Nourishing Syrup, Zhengxintai Capsules and Fangfengtongsheng Granule represented approximately 30.5%, 12.6%, 18.4%, 12.5% and 18.6%, respectively, of total sales for the year ended June 30, 2013.

Sales Customer Concentrations  

The Company does not have concentrations of business with each customer constituting greater than 10 % of the Company’s gross sales for the years ended June 30, 2014 and 2013. 

(d)Economic and Political Risks

The Company’s operations are conducted solely in the PRC. There are significant risks associated with doing business in the PRC, which include, among others, political, economic, legal and foreign currency exchange risks. The Company’s results may be adversely affected by changes in political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.  

(e)Concentrations of Credit Risk

Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and trade accounts receivable. Substantially all of the Company’s cash is deposited in state-owned banks within the PRC, and no deposits are covered by insurance. We have not experienced any losses in such accounts and believe that the Company’s loss exposure is insignificant due to the fact that banks in the PRC are state owned and are generally high credit quality financial institutions. A significant portion of the Company’s sales are credit sales which are made primarily to customers whose ability to pay are dependent upon the industry economics prevailing in these areas. We continually monitor the credit worthiness of the Company’s customers in an effort to reduce credit risk. 

At June 30, 2014 and June 30, 2013, the Company’s cash balances by geographic area were as follows:

	June 30, 2014			June 30, 2013
Country:
BVI (Chance High)	$       23,940	0.10%	$      28,331		0.41%
China	23,284,775	99.90%	6,919,641		99.59%
Total cash and cash equivalents	$   23,308,715	100%	$   6,947,972		100%

(f)Certificate of land use right

The Company’s corporate headquarters is located at No. 7 Tianzheng Road, Laishan District, Yantai, Shandong Province in China. Under the current PRC laws, land is owned by the state, and parcels of land in rural areas which are known as collective land are owned by the rural collective economic organization. “Land use rights” are granted to an individual or entity after payment of a land use right fee is made to the applicable state or rural collective economic organization. Land use rights allow the holder of the right to use the land for a specified long-term period.

We have 5 land use rights, for a total of approximately 675,364 square meters of land on which the Company maintains its manufacturing facility.

The Company has not obtained a land use right certificate for one parcel of land of 280,235 square meters that is located in the high-tech development district of Laishan and that was purchased on February 22, 2010. Registration of this land use right certification is still in process. On November 12, 2013, the Company obtained the land use right certificate for one parcel land of 266,668square meters that is located in the high-tech development district of Laishan and that was purchased on November 5, 2012.

We currently have not obtained the land use right certificate for another parcel of land located in Xingfu Twelve Village of Zhifu District. The land is about 11,222 square meters. Bohai used to have its manufacturing facility on this land. In the process of the planning of Yantai City, the usage of the aforesaid land use right has been changed from “industrial use” to “commercial use” and therefore, the approval process for the land use right certificates on five relevant parcels of land including the land occupied by Bohai has been suspended until the completion of the planning process.

We cannot provide any assurance that the Company will eventually obtain the land use right certificates for these lands. If the Company is asked by the local government to relocate the Company’s facility, management believes that estimated relocation and other costs will be reimbursed by the local government.

On May 5, 2014, Bohai has relocated its manufacturing facilities to Yantai Tianzheng in Laishan. As of June 30, 2014, the Company’s headquarter, Bohai’s manufacturing facility and Yantai Tianzheng’s manufacturing facilities are all located in Laishan. The Company does not believe that relocation of operations would have a material adverse effect on the Company’s financial position or results of operations. 

(g)Business insurance

Business insurance is not readily available in the PRC. To the extent that the Company suffers a loss of a type that would normally be covered by insurance in the United States, such as product liability and general liability insurance, the Company would incur significant expenses in both defending any action and in paying any claims that could result from a settlement or judgment.

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Note 3- Summary of Significant Accounting Policies: Accounts Receivable (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Accounts Receivable

Accounts Receivable

Accounts receivable consists of amounts due from customers. The Company’s credit terms generally range from 90 to 180 days. The Company’s policy with respect to accounts receivable reserves is to establish an allowance for doubtful accounts based on management’s assessment of known requirements, aging of receivables, payment history, specific customer’s current credit worthiness, and the economic environment. The Company has a significantly low history of credit losses and no historical pattern of making any price or collection concessions with respect to its accounts receivable balances. Accordingly, an allowance for doubtful accounts is not considered necessary based on management’s assessment.

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Note 13- Short-term Loan (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Short-term loan, net	$ 4,872,899	$ 0
Debt Instrument, Interest Rate, Effective Percentage	9.00%
Debt Instrument, Maturity Date	Aug. 14, 2014
USD ($)
Short-term loan, net	4,872,899
CNY
Short-term loan, net	$ 30,000,000

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Note 18- Stock Options

12 Months Ended

Jun. 30, 2014

Notes

Note 18- Stock Options

NOTE 18- STOCK OPTIONS

On October 13, 2010, we granted stock options to two directors for the purchase of 26,000   shares of our Common Stock at an exercise price of $2.00   per share. The options vested immediately and expire five years from the date of issuance. These options have been valued at $23,844. We use a binomial option pricing model to calculate the grant date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 70 %, risk free interest rate of 0.3%, expected term of 2.5 years. 

On May 2, 2011, we granted stock options to a director for the purchase of 6,000 shares of our Common Stock at an exercise price of $2.00 per share. The options vested immediately and expire five years from the date of issuance. These options have been valued at $3,184. We use a binomial option pricing model to calculate the grant date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 55%, risk free interest rate of 0.3%, expected term of 5 years.

The following table summarizes the weighted average remaining contractual life and exercise price of our outstanding options as of June 30, 2014:

Options Outstanding
Exercise Price	Number Outstanding at June 30, 2013	Number Outstanding Currently Exercisable at June 30, 2013	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price of Options currently exercisable
$2.00	32,000	32,000	1.39	$2.00

The Company accounts for share-based payments in accordance with ASC 718. Accordingly, it expenses the fair value of awards granted to the directors. Total compensation expense related to the stock options for the years ended June 30, 2014and 2013 were $0 and $0, respectively.

A summary of our stock option activity as of June 30, 2014, and changes during the years ended June 30, 2014 and 2013 is presented in the following table:

	Option Shares	Vested Shares	Exercise Price per Common Stock Range
Balance, June 30, 2012	-	-	$                        -
Granted or vested during the year ended June 30, 2013	32,000	32,000	2.00
Exercised during the year ended June 30, 2013	-	-	-
Expired during the year ended June 30, 2013	-	-	-
Balance, June 30, 2013	32,000	32,000	2.00
Granted or vested during the year ended June 30, 2014	-	-	-
Exercised during the year ended June 30, 2014	-	-	-
Expired during the year ended June 30, 2014	-	-	-
Balance, June 30, 2014	32,000	32,000	$                 2.00

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Note 20- Operating Expenses and Other Income (expenses): Schedule of Operating Costs and Expenses Table Text Block (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Operating Costs and Expenses Table Text Block

	The year ended June 30, 2014	The year ended June 30, 2013
Sales Commissions	$                                    89,021,050	$                                    75,414,664
Advertising expense	737,111	95,477
Audit fees and other professional expenses	323,660	230,150
Depreciation and amortization	2,541,351	2,613,040
Staff costs (salary &welfare)	2,705293	2,652,288
Research and development cost	244,149	7,980
Other operating expenses	4,726,109	5,016,081
Impairment of drug formula	-	1,688,486
Total Operating expenses	$                               100,298,723	$                                  87,718,166

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Note 18- Stock Options: Schedule of Share-based Compensation, Activity (Details) (USD $)	0 Months Ended		12 Months Ended
	May 02, 2011	Oct. 13, 2010	Jun. 30, 2013	Jun. 30, 2014
Details
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number			32,000	32,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number			32,000	32,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price			$ 2.00	$ 2.00
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	6,000	26,000	32,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares			32,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 2.00	$ 2.00	$ 2.00

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Note 1- Organization and Principal Activities

12 Months Ended

Jun. 30, 2014

Notes

Note 1- Organization and Principal Activities

NOTE 1- ORGANIZATION AND PRINCIPAL ACTIVITIES

The Company’s Operations

Bohai Pharmaceuticals Group, Inc. (“BPGI”) was incorporated under the laws of the State of Nevada on January 9, 2008 under the name of Link Resources, Inc. Prior to January 5, 2010; BPGI was a public “shell” company. BPGI became a public operating company on January 5, 2010 pursuant to a Share Exchange Transaction completed on January 5, 2010. 

BPGI is engaged in the production, manufacturing and distribution of herbal pharmaceuticals based on traditional Chinese medicine (“TCM”) in the People’s Republic of China (“China” or the “PRC”) through the following two operating subsidiaries:

(i)Yantai Bohai Pharmaceuticals Group Co., Ltd., (“Bohai”) a PRC company and the Company’s original operating subsidiary. BPGI controls Bohai through a variable interest entity arrangement (“VIE”) described below; and

(ii)Yantai Tianzheng Pharmaceuticals Company, Ltd., a PRC company (“Yantai Tianzheng”), which BPGI acquired effective July 1, 2011 through a newly formed PRC wholly-foreign owned enterprise subsidiary, Yantai Nirui Pharmaceuticals, Ltd. (“WOFE II”).

BPGI owns100% of Chance High International Limited, a British Virgin Islands company(“Chance High”). Chance Highowns100 % of the issued and outstanding shares of capital stock of a Chinese wholly-foreign owned enterprise known as Yantai Shencaojishi Pharmaceuticals Co., Ltd. (the “WOFE”). On December 7, 2009 (prior to the date of the Share Exchange Transaction), the WOFE entered into a series of variable interest entity contractual agreements (the “VIE Agreements”) with Bohai and its three shareholders, including Mr. Hongwei Qu, the Company’s current Chairman and Chief Executive Officer (“Mr.Qu”). Mr. Qu currently owns96.7% of the outstanding equity interests of Bohai andtwo other shareholders who collectively own the remaining 3.3% of Bohai.

The VIE Agreements include (i) a Consulting Services Agreement, (ii) an Operating Agreement, and (iii) a Proxy Agreement, through which the WOFE has the right to advise, consult, manage and operate Bohai for an annual fee equal to all of Bohai’s yearly net profits after tax. Pursuant to these agreements, the WOFE indirectly owns but has100 % managerial and economic control of the business activities of Bohai including the right to appoint all executives and senior management and members of the board of directors of Bohai. Additionally, Bohai’s shareholders pledged their rights, titles and equity interest in Bohai as security for the WOFE to collect consulting and services fees provided to Bohai pursuant to an equity pledge agreement. In order to further reinforce the WOFE’s rights to control and operate Bohai, Bohai’s shareholders granted the WOFE an exclusive right and option to acquire all of their equity interests in Bohai through an option agreement. The VIE Agreements have perpetual terms unless otherwise determined by PRC law, and can (particularly in the case of the Consulting Services Agreement (which is the principal VIE Agreement) be terminated by the parties under certain circumstances, including material breach, the termination of Bohai’s business or a liquidation of Bohai. The WOFE (which is controlled indirectly by BPGI through Chance High) can also terminate the Consulting Services Agreement at will.

BPGI, its wholly owned subsidiary Chance High, WOFE, WOFE II, Bohai and Yantai Tianzheng are referred to herein collectively and as a consolidated basis as the “Company” or “we”, “us” or “our” or similar terminology. Mr. Qu currently serves the Company’s Chairman, Chief Executive Officer and President. As used herein, the term “Common Stock” means the common stock of BPGI, $0.001 par value per share.

BPGI is headquartered and maintains its principal operations in the city of Yantai, Shandong Province, China, and conducts business operations exclusively in the PRC.

On January 17, 2014, the Company merged WOFE with and into WOFE II. In connection with the merger, and in accordance with relevant PRC laws and regulations, all of WOFE’s rights relating to Bohai transferred to WOFE II.

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Statement of Financial Position - Parenthetical (USD $)	Jun. 30, 2014	Jun. 30, 2013
Statement of Financial Position
Common Stock, Par Value	$ 0.001	$ 0.001
Common Stock, Shares Authorized	150,000,000	150,000,000
Common Stock, Shares Issued	17,964,714	17,861,085
Common Stock, Shares Outstanding	17,964,714	17,861,085

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Note 11- Due To Related Party

12 Months Ended

Jun. 30, 2014

Notes

Note 11- Due To Related Party

NOTE 11- DUE TO RELATED PARTY

Due to related party amounted to $55,626 and $52,830 as of June 30, 2014 and June 30, 2013, respectively. It represents accrued out of pocket expenses of Mr. Hongwei Qu, Chief executive officer of the Company.

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Note 16- Commitments, Contingencies and Other Matters: Schedules of Concentration of Risk, by Risk Factor (Details)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Shandong Yantai Medicine Procurement and Supply Station
Concentration Risk, Percentage	23.87%	29.00%
Shandong Shuntianyi Chinese Herbal Medicine Co., Ltd
Concentration Risk, Percentage	23.27%	0.00%

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Note 8- Other Intangible Assets, Net (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Other intangible assets, net	$ 23,738,108	$ 28,139,219
Other Intangible Assets
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months	4,503,005
Finite-Lived Intangible Assets, Amortization Expense, Year Two	4,503,005
Finite-Lived Intangible Assets, Amortization Expense, Year Three	4,506,005
Finite-Lived Intangible Assets, Amortization Expense, Year Four	4,506,005
Finite-Lived Intangible Assets, Amortization Expense, Year Five	4,105,457
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	1,620,631
Other intangible assets, net	23,738,108
Customer Relationships | USD ($)
Amortization of Other Deferred Charges	1,895,244	1,855,115
Drug Formulas | USD ($)
Amortization of Other Deferred Charges	1,317,887	1,282,359
Defensive Drug Formulas | USD ($)
Amortization of Other Deferred Charges	$ 1,299,183	$ 953,756

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Note 7- Intangible Assets - Land Use Rights, Net: Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Long term prepayments- land use right, net	$ 37,618,340	$ 37,863,464
Use Rights
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months	830,867
Finite-Lived Intangible Assets, Amortization Expense, Year Two	830,867
Finite-Lived Intangible Assets, Amortization Expense, Year Three	830,867
Finite-Lived Intangible Assets, Amortization Expense, Year Four	830,867
Finite-Lived Intangible Assets, Amortization Expense, Year Five	830,867
Finite-Lived Intangible Assets, Amortization Expense, after Year Five	33,464,005
Long term prepayments- land use right, net	$ 37,618,340	$ 37,863,464

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Document and Entity Information (USD $)	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Document and Entity Information:
Entity Registrant Name	Bohai Pharmaceuticals Group, Inc.
Document Type	10-K
Document Period End Date	Jun. 30, 2014
Amendment Flag	true
Entity Central Index Key	0001443242
Current Fiscal Year End Date	--06-30
Entity Common Stock, Shares Outstanding		17,964,714
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Entity Public Float		$ 19,352,914
Amendment Description	Bohai Pharmaceuticals Group, Inc. is filing this Amendment to the Registrant’s Annual Report on Form 10-K for the fiscal year ended June 30, 2012, filed with the Securities and Exchange Commission on September 28, 2012 (the “Form 10-K”), solely to furnish Exhibit 101 to the Form 10-K in accordance with Rule 405 of Regulation S-T. Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 10-K formatted in eXtensible Business Reporting Language (“XBRL”).

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Note 12- Notes Payable

12 Months Ended

Jun. 30, 2014

Notes

Note 12- Notes Payable

NOTE 12- NOTES PAYABLE

The Company borrowed from Weihai City Commercial Bank (“City Bank”) under the facility was obtained by Yantai Tianzheng. The latest outstanding amount of $9,745,797 (RMB 60,000,000) was borrowed on April 22, 2014 and has a term of a period of six months and has a bank charge fee of 0.05%. As of June 30, 2014 and June 30, 2013, the outstanding aggregate amount was $9,745,797 (RMB 60,000,000) and $9,707,638 (RMB 60,000,000), respectively. The Company was required to maintain 50% of the notes amounts, or $4,872,899 (RMB 30,000,000) and $4,853,819 (RMB 30,000,000) as guaranteed funds, which was classified as restricted cash as of June 30, 2014 and June 30, 2013, respectively.

Yantai Tianzheng entered into this credit facility following its execution of third party guaranty arrangements between Yantai Tianzheng, City Bank and Laishan Public Assets Management LLP (“Laishan”) and between Yantai Tianzheng, City Bank, and Bohai in April 2013. Under the terms of the Guaranty, Laishan and Bohai each has agreed to act as guarantor of up to$4,872,899 (RMB 30,000,000) of any credit extended by City Bank to Yantai Tianzheng at any time during the period from April 25, 2013 through April 25, 2015. Laishan is an unrelated third party and has no business relationship with the Company. As a state-owned enterprise, Laishan provides the guarantee to support the development of Bohai, which is a prominent emerging company in the area.

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Note 3- Summary of Significant Accounting Policies: Foreign Currency Translation (Details)	9 Months Ended	12 Months Ended
	Mar. 31, 2014	Jun. 30, 2013	Jun. 30, 2014
Details
Foreign Currency Exchange Rate, Translation		6.1807	6.1565
Foreign Currency Transactions Average Exchange Rates	6.1438	6.2767

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Note 7- Intangible Assets - Land Use Rights, Net (Details) (Land Use Rights, US ($), USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Land Use Rights | US ($)
Amortization of Intangible Assets	$ 857,924	$ 685,524

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Bohai Pharmaceuticals Group, Inc. - Consolidated Condensed Statements of Operations (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Income Statement
Net Revenues	$ 175,086,238	$ 151,792,917
Cost of revenues	42,376,170	37,196,569
Gross profit	132,710,068	114,596,348
Operating expenses:
Selling, general and administrative expenses	97,757,372	83,416,640
Impairment charge- drug formula	0	1,688,486
Depreciation and amortization	2,541,351	2,613,040
TOTAL OPERATING EXPENSES	100,298,723	87,718,166
Income from operations	32,411,345	26,878,182
Other income (expenses):
Interest income	183,974	38,712
Interest expenses	(2,286,707)	(1,967,527)
Other (expenses) income, net	1,246,732	(16,796)
Change in fair value of derivative liabilities	0	1,211,236
Total other (expenses) income	(856,001)	(734,374)
Income before provision for income taxes	31,555,344	26,143,808
Provision for income taxes	(9,666,129)	(7,020,291)
Net income	21,889,215	19,123,517
Comprehensive income:
Net income	21,889,215	19,123,517
Unrealized foreign currency translation loss	(885,410)	2,763,505
Comprehensive income	$ 21,003,805	$ 21,887,022
Net income per common share, basic	$ 1.22	$ 1.07
Net income per common share, diluted	$ 1.02	$ 0.91
Weighted average common shares outstanding, basic	17,964,714	17,861,085
Weighted average common shares outstanding, diluted	21,983,541	22,093,335

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Note 6- Indefinite Lived Intangible Assets - Pharmaceutical Formulas

12 Months Ended

Jun. 30, 2014

Notes

Note 6- Indefinite Lived Intangible Assets - Pharmaceutical Formulas

NOTE 6- INDEFINITE LIVED INTANGIBLE ASSETS – PHARMACEUTICAL FORMULAS

 The Company purchased, and currently owns exclusive rights to, a series of pharmaceutical formulas that were approved by the SFDA. This asset includes 12 formulas that are included in the Chinese government’s Essential Drug List (“EDL”) and 25 medicines included in the National Drug Reimbursement List (“NDRL”). The intellectual property underlying these formulas can be renewed every 5 years without limitation for a minimum fee and are subject to certain protections under PRC drug regulations for an indefinite period of time. These regulations mitigate competition and the ability of other suppliers to replicate the Company’s products or produce comparable substitutes. These intangible assets are measured initially at cost not subject to amortization and are tested for impairment annually or in interim reporting periods if events or changes in circumstances indicate that the carrying amounts of these intangible assets might not be recoverable.

Pharmaceutical formulas with indefinite lives consist of the following: 

	June 30, 2014	June 30, 2013
Pharmaceutical formulas, without amortization, net of impairment	$14,164,630	$14,109,169

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Note 5- Property, Plant and Equipment, Net

12 Months Ended

Jun. 30, 2014

Notes

Note 5- Property, Plant and Equipment, Net

NOTE 5- PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment consist of the following:

	June 30, 2014	June 30, 2013
Buildings	$   13,913,970	$            9,121,541
Plant equipment	11,309,330	8,548,658
Office equipment	438,850	250,339
Motor vehicles	283,648	291,784
Total	25,945,798	18,212,322
Less: accumulated depreciation	(4,823,270)	(2,827,442)
Construction in progress	5,961	2,293,573
Property, plant and equipment, net	$               21,128,489	$  17,678,453

Depreciation expense for property, plant and equipment for the years ended June 30, 2014 and 2013 amounted to $645,670 and $582,748, respectively.

On June 8, 2010, Yantai Tianzheng signed an agreement with Yantai Huanghai Construction Co. to construct certain portions of a factory. The total contract price amounted to approximately $3,160,000 (RMB 19,500,000). The construction is 100% completed and transferred into buildings as of June 30, 2014. The final cost is $4,820,000 (RMB 29,680,000), as of June 30, 2014, $2,370,000 (RMB 14,630,000 ) was paid and $2,450,000 (RMB 15,050,000) is to be paid.

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Note 17- Net Income Per Share

12 Months Ended

Jun. 30, 2014

Notes

Note 17- Net Income Per Share

NOTE 17- NET INCOME PER SHARE

Basic earnings per share are computed on the basis of the weighted average number of shares of Common Stock outstanding during the period. Diluted earnings per share is computed on the basis of the weighted average number of shares of Common Stock plus the effect of potentially dilutive common shares outstanding during the period using the if-converted method for the convertible debt and equity securities and the treasury stock method for stock options and common stock purchase warrants. The following table sets forth the computation of basic and diluted net income per common share:

	The year ended June 30, 2014	The year ended June 30, 2013
Net Income available to common stockholders - basic	$                  21,889,215	$                  19,123,517
Interest on convertible notes	582,756	801,946
Net Income available for common shareholders - diluted	$                  22,471,971	$                  19,925,463
Weighted average number of common shares outstanding - basic	17,964,714	17,861,085
Common shares if converted from Convertible Debt	4,018,827	4,232,250
Weighted average number of common shares outstanding - diluted	21,983,541	22,093,335
Earnings per share:
Basic	$                               1.22	$                               1.07
Diluted	$                               1.02	$                               0.91

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Note 13- Short-term Loan

12 Months Ended

Jun. 30, 2014

Notes

Note 13- Short-term Loan

NOTE 13- SHORT-TERM LOAN  

 On August 15, 2013, the Company entered into a short term bank loan agreement with RCB. As of June 30, 2014, the loan amounted to $4,872,899 (RMB 30,000,000) with an interest rate of 9% per annum, which is due on August 14, 2014. The Company entered into this credit facility following its execution of third party guaranty arrangements among the Company, RCB, Guangyuan, and the principal shareholder of the Company, HongweiQu, on August 15, 2013. Guangyuan is an unrelated third party and has no business relationship with the Company. Guangyuan is a construction company and expected to be a potential constructor for Bohai’s construction on the land purchased in November 2012. As of report date, the loan was fully paid.

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Note 4- Inventories: Schedule of Inventory, Current (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Details
Inventory, Raw Materials, Gross	$ 2,231,226	$ 1,415,071
Inventory, Work in Process, Gross	1,334,451	840,954
Inventory, Finished Goods, Gross	935,310	525,709
Inventory, Gas in Storage Underground, Noncurrent	$ 4,500,987	$ 2,781,734

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Note 9- Goodwill

12 Months Ended

Jun. 30, 2014

Notes

Note 9- Goodwill

NOTE 9- GOODWILL

On August 8, 2011, the Company acquired 100% of Yantai Tianzheng’s equity interests for total purchase consideration of US$35,000,000 (paid in its RMB equivalent). The Company accounted for its acquisition of Yantai Tianzheng using the acquisition method of accounting. The fair value of the purchase consideration issued to the sellers of Yantai Tianzheng was allocated to fair value of the net tangible assets acquired, with the resulting excess allocated to separately identifiable intangibles including customer relationships that have a finite life, pharmaceutical formulas that have an indefinite life and the remainder recorded as goodwill. Goodwill recognized from the transactions mainly represented the expected operational synergies upon acquisition of the subsidiary and intangibles not qualifying for separate recognition. Goodwill is nondeductible for income tax purpose in the tax jurisdiction of the acquisition transactions incurred. Goodwill amounted $5,222,658 (RMB 32,153,295) and $5,202,209 (RMB 32,153,295) as of June 30, 2014 and June 30, 2013, respectively. Goodwill is measured initially at cost not subject to amortization and are tested for impairment annually or in interim reporting periods if events or changes in circumstances indicate that the carrying amounts of these intangible assets might not be recoverable. The Company has decided there is no impairment for the years ended June 30, 2014 and 2013.

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Note 8- Other Intangible Assets, Net: Other Intangible Assets At June 30, 2014 Consist of The Following (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Other Intangible Assets At June 30, 2014 Consist of The Following:

Other intangible assets at June 30, 2014 consist of the following:

	Customer Relationships	Yantai Tianzheng Drug Formulas	Defensive Drug Formulas	Total
Cost	$      14,856,818	$                10,381,061	$         10,372,025	$     35,609,904
Accumulated Amortization	(5,674,003)	(3,928,913)	(2,268,880)	(11,871,796)
Net carrying amount	$9,182,815	$6,452,148	$8,103,145	$23,738,108

Other intangible assets at June 30, 2013 consist of the following:

	Customer Relationships	Yantai Tianzheng Drug Formulas	Defensive Drug formulas	Total
Cost	$  14,798,647	$                                10,340,415	$                10,331,414	$ 35,470,476
Accumulated Amortization	(3,767,858)	(2,594,829)	(968,570)	(7,331,257)
Net carrying amount	$  11,030,789	$                                  7,745,586	$                  9,362,844	$ 28,139,219

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Note 20- Operating Expenses and Other Income (expenses): Schedule of Operating Costs and Expenses Table Text Block (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Details
Commission	$ 89,021,050	$ 75,414,664
Marketing and Advertising Expense	737,111	95,477
Professional Fees	323,660	230,150
Depreciation and amortization	2,541,351	2,613,040
Staff Costs	2,705,293	2,652,288
Research and Development Expense	244,149	7,980
Other Cost and Expense, Operating	4,726,109	5,016,081
Impairment of intangible assets- drug formula	0	1,688,486
TOTAL OPERATING EXPENSES	$ 100,298,723	$ 87,718,166

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Note 7- Intangible Assets - Land Use Rights, Net

12 Months Ended

Jun. 30, 2014

Notes

Note 7- Intangible Assets - Land Use Rights, Net

NOTE 7- INTANGIBLE ASSETS - LAND USE RIGHTS, NET

		June 30, 2014	June 30, 2013
Land use rights, at cost	$	40,251,014	$ 40,093,414
Less: Accumulated amortization		(2,632,674)	(2,229,950)
Intangible assets – land use rights, net	$	37,618,340	$     37,863,464

The Company acquired a new land use right for 266,668 square meters on November 5, 2012. The Company was granted the right to use the land for a period of 50 years at a cost of approximately $19.44 million (RMB 120,000,000). As of June 30, 2014, the Company had made full payments of $19.44 million (RMB 120,000,000) through four installments:

Installment	Payment date	Amount in USD
First	11/30/2012	$    3,235,879
Second	12/31/2012	3,235,879
Third	6/30/2013	6,471,759
Fourth	12/31/2013	6,497,199
Total		$    19,440,716

There is no private ownership of land in the PRC. All land is owned by the government, which grants land use rights for specified periods of time. Amortization expense for land use rights amounted to $857,924 and $685,524 for the years ended June 30, 2014 and 2013, respectively.

Amortization is calculated over a period of 30 - 50  years.

Amortization of land use rights for fiscal years ending subsequent to June 30, 2014 is as follows:

	Amortization
FY 2015	$                                   830,867
2016	830,867
2017	830,867
2018	830,867
2019	830,867
Thereafter	33,464,005,
Total	$   37,618,340

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Note 8- Other Intangible Assets, Net

12 Months Ended

Jun. 30, 2014

Notes

Note 8- Other Intangible Assets, Net

NOTE 8- OTHER INTANGIBLE ASSETS, NET

Other Intangible assets, net include customer relationships and certain prescription drug product formulas. The Company acquired these assets in its business combination with Yantai Tianzheng. Customer relationships are amortized on a straight line basis over periods of 5 and 8 years. Pharmaceutical formulas including those retained as defensive assets are amortized on a straight t line basis over a period of 8 years.

Approximately, $10.37 million for the carrying amount of certain other product formulas that the Company will hold as defensive assets have been reclassified from indefinite life drug formulas. According to the Company’s years of industrial experience and R&D knowledge, to get a new drug formula approved from scratch usually take at least 8 years, so the Company is amortizing the pharmaceutical formulas as defensive assets over 8 years.

Other intangible assets at June 30, 2014 consist of the following:

	Customer Relationships	Yantai Tianzheng Drug Formulas	Defensive Drug Formulas	Total
Cost	$      14,856,818	$                10,381,061	$         10,372,025	$     35,609,904
Accumulated Amortization	(5,674,003)	(3,928,913)	(2,268,880)	(11,871,796)
Net carrying amount	$9,182,815	$6,452,148	$8,103,145	$23,738,108

Other intangible assets at June 30, 2013 consist of the following:

	Customer Relationships	Yantai Tianzheng Drug Formulas	Defensive Drug formulas	Total
Cost	$  14,798,647	$                                10,340,415	$                10,331,414	$ 35,470,476
Accumulated Amortization	(3,767,858)	(2,594,829)	(968,570)	(7,331,257)
Net carrying amount	$  11,030,789	$                                  7,745,586	$                  9,362,844	$ 28,139,219

Amortization expense for customer relationships amounted to $1,895,244 and $1,855,115 for the years ended June 30, 2014 and 2013, respectively.

Amortization expense for YTP drug formulas amounted to $1,317,887 and $1,282,359 for the years ended June 30, 2014 and 2013, respectively.

Amortization expense for defensive drug formulas amounted to $1,299,183 and $953,756 for the years ended June 30, 2014 and 2013, respectively. Amortization expenses are recorded in general and administrative expenses.

Amortization expense for fiscal years ending subsequent to June 30, 2014 is as follows:   

	Amortization
2015	$                                                          4,503,005
2016	4,503,005
2017	4,506,005
2018	4,506,005
2019	4,105,457
Thereafter	1,620,631
Total	$                                                       23,738,108

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Note 10- Accrued Expenses

12 Months Ended

Jun. 30, 2014

Notes

Note 10- Accrued Expenses

NOTE 10- ACCRUED EXPENSES

Accrued expense consists of the following:

	June 30, 2014	June 30, 2013
Sales representatives commission and expenses	$         5,879,162	$         4,731,442
Other payable for PPE	3,889,955	2,279,869
Other accrued expense	741,129	1,596,636
Other taxes payable	2,380,031	2,185,328
Accrued Interest expenses	2,372,625	1,117,527
Compensation and related cost	455,663	274,813
Total	$      15,718,565	$      12,185,615

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Note 16- Commitments, Contingencies and Other Matters: Schedule of Cash Balances By Georgraphic Segment Table Text Block (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Cash Balances By Georgraphic Segment Table Text Block

	June 30, 2014			June 30, 2013
Country:
BVI (Chance High)	$       23,940	0.10%	$      28,331		0.41%
China	23,284,775	99.90%	6,919,641		99.59%
Total cash and cash equivalents	$   23,308,715	100%	$   6,947,972		100%

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Note 5- Property, Plant and Equipment, Net: Property, Plant and Equipment (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Property, Plant and Equipment, Gross	$ 25,945,798
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	(4,823,270)	(2,827,442)
Construction in Progress, Gross	5,961	2,293,573
Property, plant and equipment, net	21,128,489	17,678,453
Buildings
Property, Plant and Equipment, Gross	13,913,970	9,121,541
Plant Equipment
Property, Plant and Equipment, Gross	11,309,330	8,548,658
Office Equipment
Property, Plant and Equipment, Gross	438,850	250,339
Vehicles
Property, Plant and Equipment, Gross	$ 283,648	$ 291,784

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Note 18- Stock Options: Schedule of Other Share-based Compensation, Activity (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Other Share-based Compensation, Activity

Options Outstanding
Exercise Price	Number Outstanding at June 30, 2013	Number Outstanding Currently Exercisable at June 30, 2013	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price of Options currently exercisable
$2.00	32,000	32,000	1.39	$2.00

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Note 16- Commitments, Contingencies and Other Matters (Details) (USD $)				12 Months Ended
	May 31, 2009 Contract Research and Development Arrangement	May 31, 2009 Contract Research and Development Arrangement CNY	Jun. 30, 2014 Contract Research and Development Arrangement Yantai Tianzheng	Jun. 30, 2014 Tongbi Capsules	Jun. 30, 2013 Tongbi Capsules	Jun. 30, 2014 Tongbi Tablet	Jun. 30, 2013 Tongbi Tablet	Jun. 30, 2014 Lung Nourishing Syrup	Jun. 30, 2013 Lung Nourishing Syrup	Jun. 30, 2014 Zhengxintai Capsules	Jun. 30, 2013 Zhengxintai Capsules	Jun. 30, 2014 Fang Fengtongsheng Tablets	Jun. 30, 2013 Fang Fengtongsheng Tablets
Total Contract Amount Paid	$ 2,436,449	$ 15,000,000	$ 2,127,027
Percentage of Total Sales				28.80%	30.50%	16.70%	12.60%	17.20%	18.40%	11.80%	12.50%	23.00%	18.60%

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Note 16- Commitments, Contingencies and Other Matters: Schedules of Concentration of Risk, by Risk Factor (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedules of Concentration of Risk, by Risk Factor

	The year ended June 30, 2014	The year ended June 30, 2013
Shandong Yantai Medicine Procurement and Supply Station	23.87%	29.00%
Shandong Shuntianyi Chinese Herbal Medicine Co., Ltd	23.27%	*%

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Note 8- Other Intangible Assets, Net: Other Intangible Assets At June 30, 2014 Consist of The Following (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Other intangible assets, net	$ 23,738,108	$ 28,139,219
USD ($)
Other Finite-Lived Intangible Assets, Gross	35,609,904	35,470,476
Finite-Lived Intangible Assets, Accumulated Amortization	(11,871,796)	(7,331,257)
Other intangible assets, net	23,738,108	28,139,219
Customer Relationships | USD ($)
Other Finite-Lived Intangible Assets, Gross	14,856,818	14,798,647
Finite-Lived Intangible Assets, Accumulated Amortization	(5,674,003)	(3,767,858)
Other intangible assets, net	9,182,815	11,030,789
Yantai Tianzheng Drug Formulas | USD ($)
Other Finite-Lived Intangible Assets, Gross	10,381,061	10,340,415
Finite-Lived Intangible Assets, Accumulated Amortization	(3,928,913)	(2,594,829)
Other intangible assets, net	6,452,148	7,745,586
Defensive Drug Formulas | USD ($)
Other Finite-Lived Intangible Assets, Gross	10,372,025	10,331,414
Finite-Lived Intangible Assets, Accumulated Amortization	(2,268,880)	(968,570)
Other intangible assets, net	$ 8,103,145	$ 9,362,844

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Note 3- Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Cash and Cash Equivalents

Cash and Cash Equivalents

We consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. We maintain bank accounts in the PRC, Hongkong and a checking account in the United States of America that principally consist of demand deposits. We also have restricted cash accounts in the United States  and the PRC that include funds designated for interest payments due to convertible note holders and for use in investor relations programs pursuant to a securities purchase agreement. 

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Note 3- Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In April 2014, the FASB issued ASU 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance in U.S. GAAP. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. Early adoption is permitted. The Company does not expect the adoption to have a significant impact on its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from contracts with Customers (Topic 606)”. This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchanged for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial position or results of operations upon adoption.

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Note 15- Acquisition Purchase Price Payable

12 Months Ended

Jun. 30, 2014

Notes

Note 15- Acquisition Purchase Price Payable

NOTE 15- ACQUISITION PURCHASE PRICE PAYABLE

On August 8, 2011, the Company, through WOFE II, acquired 100% of Yantai Tianzheng’s equity interests for total purchase consideration of US$35,000,000 that was fully paid as of June 30, 2014. $5,000,000 was paid on September 24, 2013, and the balance was fully paid as of June 30, 2014. 

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Note 20- Operating Expenses and Other Income (expenses)

12 Months Ended

Jun. 30, 2014

Notes

Note 20- Operating Expenses and Other Income (expenses)

NOTE 20- OPERATING EXPENSES AND OTHER INCOME (EXPENSES)

 For the years ended June 30, 2014 and 2013, operating expenses consisted of the following:

	The year ended June 30, 2014	The year ended June 30, 2013
Sales Commissions	$                                    89,021,050	$                                    75,414,664
Advertising expense	737,111	95,477
Audit fees and other professional expenses	323,660	230,150
Depreciation and amortization	2,541,351	2,613,040
Staff costs (salary &welfare)	2,705293	2,652,288
Research and development cost	244,149	7,980
Other operating expenses	4,726,109	5,016,081
Impairment of drug formula	-	1,688,486
Total Operating expenses	$                               100,298,723	$                                  87,718,166

Other income mainly includes exchange gain of $1,215,902 that is caused by the difference of acquisition payable using different exchange rate as of agreement date and as of June 30, 2014.

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Note 10- Accrued Expenses: Schedule of Accrued Liabilities (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Details
Accrued Sales Commission, Current	$ 5,879,162	$ 4,731,442
Other Payable For PPE	3,889,955	2,279,869
Other Accrued Liabilities, Current	741,129	1,596,636
Accrual for Taxes Other than Income Taxes, Current	2,380,031	2,185,328
Interest Payable, Current	2,372,625	1,117,527
Accrued Employee Benefits, Current	455,663	274,813
Accrued expenses	$ 15,718,565	$ 12,185,615

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Note 3- Summary of Significant Accounting Policies: Income Taxes (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Income Taxes

Income Taxes

We are governed by the PRC’s Income Tax Laws and the Internal Revenue Code of the United States. Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement and income tax base of assets and liabilities and operating loss and tax credit carry-forwards. Deferred tax assets are reduced by a valuation allowance to the extent that management concludes it is more likely than not that the benefit of such tax assets will not be realized in future periods. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the periods that include the enactment date. 

We account for certain tax positions based upon authoritative guidance that prescribes a recognition threshold and measurement processes for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance also provides direction on recognition, classification, interest and penalties, accounting in interim periods and related disclosure. 

Our policy is to classify assessments, if any, for tax related to interest as interest expense and penalties as general and administrative expense.

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Note 17- Net Income Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Details
Net Income (Loss) Available to Common Stockholders, Basic	$ 21,889,215	$ 19,123,517
Effective Interest On Convertible Notes And Amortization Of Debt Issued Costs	582,756	801,946
Net Income (Loss) Available to Common Stockholders, Diluted	$ 22,471,971	$ 19,925,463
Weighted average common shares outstanding, basic	17,964,714	17,861,085
Common Shares Issuable Upon Conversion Of Convertible Debt	4,018,827	4,232,250
Weighted average common shares outstanding, diluted	21,983,541	22,093,335
Net income per common share, basic	$ 1.22	$ 1.07
Net income per common share, diluted	$ 1.02	$ 0.91

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Note 3- Summary of Significant Accounting Policies: Fair Value Measurements and Fair Value of Financial Instruments (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Fair Value Measurements and Fair Value of Financial Instruments

Fair Value Measurements and Fair Value of Financial Instruments

We adopted the guidance of ASC 820 for fair value measurements, which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:  

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. 

Level 2 - Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other then quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3 - Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. 

The carrying amounts reported in the balance sheets for cash, accounts receivable, other receivables, short-term borrowings, accounts payable and accrued expenses, customer advances, and amounts due from related parties approximate their fair market value based on the short-term maturity of these instruments.

ASC 825-10 “Financial Instruments ” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. We use Level 3 inputs to value the Company’s derivative liabilities. 

The following table reflects gains and losses for the years ended June 30, 2014 and 2013 for all financial assets and liabilities categorized as Level 3.

Liabilities:

Balance of warrant liabilities as of June 30, 2012	$      1,211,236
Change in the fair value of warrant liabilities	(1,211,236)
Balance of warrant liabilities as of June 30, 2013	-
Change in the fair value of warrant liabilities	-
Balance of warrant liabilities as of June 30, 2014	$-

Estimating the fair value of derivative financial instruments require the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. The assumptions used to value the Company’s derivatives, which had a direct effect on the fair values. In addition, valuation techniques are sensitive to changes in the trading market price of the our Common Stock and its estimated volatility interest rate changes and other variables or market conditions not within the Company’s control that can significantly affect management’s estimates of fair value and changes in fair value. Because derivative financial instruments are initially and subsequently carried at fair value, the Company’s net income may include significant charges or credits as these estimates and assumptions change. 

The warrants expired on January 5, 2013. At the expiration time, the portion of this warrant not exercised prior thereto shall be and become void and of no value and this warrant shall be terminated and shall no longer be outstanding.

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Note 18- Stock Options: Schedule of Other Share-based Compensation, Activity (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Details
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 2.00	$ 2.00
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	32,000	32,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	32,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	1.39
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 2.00

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Bohai Pharmaceuticals Group Inc. - Statement of Stockholders' Deficit (USD $)	Common Stock	Additional Paid-in Capital	Accumulated other comprehensive income	Retained earnings	Total
Balance, Value at Jun. 30, 2012	$ 17,861	$ 24,615,353	$ 6,236,076	$ 55,633,242	$ 86,502,532
Balance, Shares at Jun. 30, 2012	17,861,085
Foreign currency translation adjustment			2,763,505		2,763,505
Net income				19,123,517	19,123,517
Balance, Value at Jun. 30, 2013	17,861	24,615,353	8,999,581	74,756,759	108,389,554
Balance, Shares at Jun. 30, 2013	17,861,085
Stock conversion, Value	104	207,146			207,250
Stock conversion, Shares	103,629
Foreign currency translation adjustment			(885,410)		(885,410)
Net income				21,889,215	21,889,215
Balance, Value at Jun. 30, 2014	$ 17,965	$ 24,822,499	$ 8,114,171	$ 96,645,974	$ 129,600,609
Balance, Shares at Jun. 30, 2014	17,964,714

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Note 7- Intangible Assets - Land Use Rights, Net: Schedule of Acquired Finite-Lived Intangible Assets by Major Class (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Long term prepayments- land use right, net	$ 37,618,340	$ 37,863,464
Use Rights
Finite-Lived Intangible Assets, Gross	40,251,014	40,093,414
Finite-Lived Intangible Assets, Accumulated Amortization	(2,632,674)	(2,229,950)
Long term prepayments- land use right, net	$ 37,618,340	$ 37,863,464

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Note 4- Inventories

12 Months Ended

Jun. 30, 2014

Notes

Note 4- Inventories

NOTE 4- INVENTORIES

Inventories consist of the following:

	June 30, 2014	June 30, 2013
Raw materials	$                                       2,231,226	$                                 1,415,071
Work in progress	1,334,451	840,954
Finished goods	935,310	525,709
Total inventories	$                                       4,500,987	$                                 2,781,734

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Note 7- Intangible Assets - Land Use Rights, Net: Installments Table (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Installments Table

Installment	Payment date	Amount in USD
First	11/30/2012	$    3,235,879
Second	12/31/2012	3,235,879
Third	6/30/2013	6,471,759
Fourth	12/31/2013	6,497,199
Total		$    19,440,716

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Note 3- Summary of Significant Accounting Policies: Shipping Costs (Details) (US ($), USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
US ($)
Shipping, Handling and Transportation Costs	$ 1,033,266	$ 1,011,367

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Note 18- Stock Options (Details) (USD $)	0 Months Ended		12 Months Ended
	May 02, 2011	Oct. 13, 2010	Jun. 30, 2014	Jun. 30, 2013
Details
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	6,000	26,000		32,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 2.00	$ 2.00		$ 2.00
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value	$ 3,184	$ 23,844
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	55.00%	70.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	0.30%	0.30%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	5 years	2 years 6 months
Stock or Unit Option Plan Expense			$ 0	$ 0

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Note 21- Income Taxes: Schedule of Income before Income Tax, Domestic and Foreign (Tables)

12 Months Ended

Jun. 30, 2014

Tables/Schedules

Schedule of Income before Income Tax, Domestic and Foreign

	Years Ended June 30,
	2014		2013
Current taxes
United States	$	-	$	-
PRC		9,238,608		7,305,429
Deferred taxes (benefit)
United States		(357,806)		(449,012)
PRC		427,520		(285,138)
Change in valuation allowance		357,806		449,012
Provision for Income Taxes	$	9,666,128	$	7,020,291

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Note 21- Income Taxes

12 Months Ended

Jun. 30, 2014

Notes

Note 21- Income Taxes

NOTE 21- INCOME TAXES

The Company is incorporated under the laws of State of Nevada in the United States of America and has legal subsidiaries in the British Virgin Islands (“BVI”) and the PRC. The Company does not have any employees or assets nor or is it engaged in any income producing activities in the Unites States and in the BVI. The Company is currently filing Federal income tax returns in the United States and applicable franchise tax returns in the state of Nevada. The Company’s net operating losses that may be available to offset future taxable income in the United States, if any, amount to approximately $10,000,000 and expire through 2032. The Company has fully reserved for these and all other deferred tax assets generated in the Company’s US operations since it currently more likely than not that those assets will not be realized in future periods.

The Company’s only income producing activities are in the PRC. The statutory corporation income tax rate in the PRC is 25 %, which is approximately equal to the effective income tax rate that the Company expects to use when recording income tax expense for financial reporting purposes for the year ending June 30, 2014. Accordingly, the Company is recording a tax provision at interim reporting dates for taxable income earned in the PRC using the effective rate expected to be in effect for the year ending June 30, 2014.

For the years ended June 30, 2014 and 2013, the provision for income taxes consisted of the following:

	Years Ended June 30,
	2014		2013
Current taxes
United States	$	-	$	-
PRC		9,238,608		7,305,429
Deferred taxes (benefit)
United States		(357,806)		(449,012)
PRC		427,520		(285,138)
Change in valuation allowance		357,806		449,012
Provision for Income Taxes	$	9,666,128	$	7,020,291

As of June 30, 2014, we had $14,473,570 of net operating loss carry forwards available for federal income tax purposes that may be used to offset future taxable income and will begin to expire in 2030. We provided for a full valuation allowance against the net deferred tax assets of $4,921,014 on the expected future tax benefits from the net operating loss carry forwards for the year ended June 30, 2014 as management believes it is more likely than not that these assets will not be realized in the future. During the years ended June 30, 2014 and 2013, the valuation allowance increased by $357,806 and $449,012, respectively.

We are subject to income tax in the United States and the PRC. There was a benefit for income tax in the United States because we had a taxable loss in the United States for the years ended June 30, 2014 and 2013. The statutory federal income tax rate is 34%. The company recorded an US tax valuation allowance of $357,806 and $449,012 in fiscal year 2014 and 2013, respectively. Absent this valuation allowance, the effective tax rate would have been 29.5% and 26.7 % in 2014 and 2013, respectively.

The table below summarizes the differences between the U.S. statutory federal rate and our effective tax rate as follows for the years ended June 30, 2014 and 2013:

	For the Years Ended June 30,
	2014		2013
Experted US tax at statutory rate	$	10,728,817	$	8,888,894
Foreign tax differential		(2,871,800)		(1,905,795)
Permanent differences		1,451,305		(411,820)
Change in valuation allowance		357,806		449,012
Provision for Income Taxes	$	9,666,128	$	7,020,291

Our deferred tax assets as of June 30, 2014 and 2013 are as follows:

	June 30,
	2014		2013
Deferred tax assets:
NOL carryover	$	4,921,014	$	5,250,749
Stock compensation		-		86,200
Sub-total		4,921,014		5,336,949
Deferred tax liabilities:
Valuation allowance		(4,921,014)		(5,336,949)
Total	$	-	$	-

The Company also has a deferred tax liability related to definite and indefinite lived intangibles in the PRC jurisdiction of $8,143,826 and $8,048,113 for the years ended June 30, 2014 and 2013, respectively.

The Company has permanently reinvested earnings in its foreign subsidiaries. At June 30, 2014, approximately $709,451,700 of accumulated earnings was permanently reinvested. If such earnings were repatriated, there could be additional federal income taxes (net of available tax credits). It is not practicable to determine the amount of additional tax that might be payable on the undistributed foreign earnings.

Management has evaluated and concluded that there was no material uncertain tax positions requiring recognition in the Company’s consolidated financial statements for the years ended June 30, 2014 and 2013. Further, it is not anticipated that the unrecognized benefits will significantly change over the next twelve months.

We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and in the PRC. For federal tax purposes, years beginning after June 30, 2009 are still open to examination. Currently, no income tax returns are under examination.

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Note 3- Summary of Significant Accounting Policies: Principles of Consolidation: Condensed Balance Sheet (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Total Current Assets	$ 82,618,690	$ 61,519,011
TOTAL ASSETS	184,766,249	165,624,398
Total current liabilities	39,586,014	44,186,731
TOTAL LIABILITIES	55,165,640	57,234,844
Condensed balance sheet
Total Current Assets	83,930,195	58,857,580
TOTAL ASSETS	154,570,385	130,683,952
Total current liabilities	28,442,197	24,065,824
TOTAL LIABILITIES	$ 32,438,616	$ 27,729,581

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Note 3- Summary of Significant Accounting Policies: Property, Plant and Equipment (Policies)

12 Months Ended

Jun. 30, 2014

Policies

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets that range from 5 to 10 years for office equipment, machinery, and vehicles and 30 to 40 years for buildings. The cost of repairs and maintenance is charged to expense as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. We examine the possibility of impairment in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. 

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Note 14- Convertible Promissory Notes in Default and Due On Demand

12 Months Ended

Jun. 30, 2014

Notes

Note 14- Convertible Promissory Notes in Default and Due On Demand

NOTE 14- CONVERTIBLE PROMISSORY NOTES IN DEFAULT AND DUE ON DEMAND

Convertible Notes 

On January 5, 2010, pursuant to a Securities Purchase Agreement (the “Securities Purchase Agreement”) with 128 accredited investors (the “Investors”), BPGI sold 6,000,000 units for aggregate gross proceeds of $12,000,000, each unit consisting of an 8% senior convertible promissory note in the principal amount of $2.00 and one Common Stock purchase warrant (collectively, the “Investor Warrants”). By agreement with the Investors, each investor received: (i) a single Note representing the aggregate number of Notes purchased by them as part of the units (each, a “Note” and collectively, the “Notes”) and (ii) a single Investor Warrant exercisable at $2.40 per share subject to certain anti-dilution provisions. The majority of this debt is guaranteed by third-parties and our CEO, Mr. Qu, and a portion is secured by our inventories and fixed assets.

The Notes originally bore interest at 8% per annum, payable quarterly in arrears on the last day of each fiscal quarter of the Company. Principal was originally due on January 5, 2012. Each Note, plus all accrued but unpaid interest thereon, is convertible, in whole but not in part, at any time at the option of the holder, into shares of Common Stock at a conversion price of $2.00 per share, subject to adjustments for certain anti-dilution provisions. 

The Convertible Notes were initially recorded at a discounted carrying amount of zero as a result of having allocated a portion of the proceeds to (i) the fair value of the warrants, which were recorded as liabilities stated at fair value, and (ii) a beneficial conversion feature that was not bifurcated as a free standing derivative at the time of issuance or at subsequent reporting dates based on periodic classification assessments. Accretion of the note discount amounted to $0 and $0 for the years ended June 30, 2014 and 2013, respectively. Accretion of the discount was recorded as a component of interest expense in the accompanying statements of income and comprehensive income. Contractual interest expense amounted to $777,007 and $1,069,261 for the years ended June 30, 2014 and 2013, respectively. 

The Notes contain certain events of default, including non-payment of interest or principal when due, bankruptcy, failure to maintain a listing of the Common Stock or to make required filings on a timely basis. No premium is payable by us if an event of default occurs. However, upon an Event of Default, and provided no more than 50% of the aggregate face amount of the Notes have been converted, the Investors holding Notes have the right to receive a portion, based on their pro-rata participation in the transaction, of 1,000,000 shares of our Common Stock that have been placed in escrow by our principal shareholder. The shares in escrow will be returned to our principal shareholder when 50% of the aggregate face amount of the Notes has been converted or, if later, when the Notes are repaid.  

On December 31, 2011, the Company’s Chinese operating subsidiary determined it was unable to convert a sufficient amount of RMB needed to repay the notes on their original maturity date of January 5, 2012. As a result, the Company entered into a series of amendments to the Notes with Euro Pacific as representative of the Investors to extend to the maturity date and increase the interest rate on the Notes.

On April 21, 2014, the Company and Euro Pacific, acting as representative of the holders of certain 8% convertible notes, entered into a fifth amendment to the convertible notes (the “Fifth Amendment”) to extend the maturity date of the convertible notes to April 5, 2016.The Fifth Amendment provides, among other things, that (i) the interest of the convertible notes will cease to accrue as of the date of the Fifth Amendment (the “Effective Date”), (ii) any accrued and unpaid interest as of the Effective Date in an aggregate amount of up to $1,000,000 (unless otherwise converted to the Company’s common stock pursuant to Section 5 of the Notes) will be paid by cash as soon as practicable after the date of consummation of a financing by the Company conducted in the U.S. with net proceeds to the Company of at least $5 million, and (iii) in the event that the volume weighted average public trading price (as reported by Bloomberg Financial Markets) of the Company’s common stock exceeds $2.50 for 20 consecutive trading days (the “Trading Period”) with a daily average volume of 30,000 shares over such Trading Period, the Company will have the right, upon notice to the Investor Representative, to require mandatory conversion of the entire outstanding principal amount (including any accrued but unpaid interest) due thereunder into shares of common stock at a conversion price of $2.00 per share.

In October 2013, the Company paid $400,000 towards the principal. In March 2014, the Company paid $446,450 towards the principal. In May and June 2014, the Company issued 103,629 shares common stock and reduced $182,250 towards the principal and $25,000 toward the accrued interest. The outstanding balance of the Notes amounted to $7,435,800 and $8,464,500 as of June 30, 2014 and June 30, 2013, respectively.

The Company has been in temporary default of this obligation at the previously extended maturity dates. Should the Company be unable to repay the notes in time and in the absence of a further extension of the maturity date, this circumstance would constitute an event of default under the terms of loan agreement. The Company cannot predict what the implications of the non-payment of the loan would be other than it would continue to experience difficulty converting sufficiency currency and will maintain an escrow account of restricted funds intended to secure their repayment. The non-payment of the notes could have a material adverse effect on the Company should the note holders pursue further action.

On June 27, 2012, Euro Pacific also agreed to release us from certain restrictions on our ability to incur debt, to incur liens or to make capital expenditures as stipulated in the note agreement. The purpose of the Third Amendment is to provide us with enhanced flexibility to seek potential sources of financing.

The Company has paid $2,831,950 principle in total and converted into common stock $182,248 in total. The payment dates and amounts are as follows:

Payment date	Amount
May 14, 2012	$ 314,000
June 28, 2012	100,000
July 3, 2012	631,000
November 29, 2012	940,500
October 9, 2013	100,000
October 29, 2013	300,000
March 6, 2014	446,450

As of June 30, 2014 and June 30, 2013, the Company’s principal shareholder, Mr. Qu, is obligated to deliver 1,000,000 shares of Common Stock to the Investors if a default occurs.

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Note 15- Acquisition Purchase Price Payable (Details) (USD $)	12 Months Ended		1 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Sep. 24, 2013 Yantai Tianzheng	Jun. 30, 2014 Yantai Tianzheng	Aug. 08, 2011 Yantai Tianzheng
Equity Method Investment, Ownership Percentage	100.00%				100.00%
Business Acquisition, Cost of Acquired Entity, Purchase Price				$ 35,000,000
Cash paid for acquisition of business	$ (5,000,000)	$ (20,300,000)	$ 5,000,000