10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.

20549

FORM 10-Q

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

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

For the transition period fromto

Commission file number: 0-53600

CHINA YCT INTERNATIONAL GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	65-2954561
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

c/o Shandong Spring Pharmaceutical Co., Ltd Economic Development Zone.
Gucheng Road Sishui County Shandong Province PR China 273200
(Address of principal executive offices)	(Zip Code)

Issuer's telephone number: 406-282-3188

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      ☒   No      ☐

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

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act.  ☐

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

The number of shares outstanding of the issuer's common stock on August 11, 2017 was 29,789,168.

CHINA YCT INTERNATIONAL GROUP, INC.

Table of Contents

	Page
Consolidated Balance Sheets as of June 30, 2017 and March 31, 2017 (Unaudited)	F1
Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended June 30, 2017 and 2016 (Unaudited)	F2
Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2017 and 2016 (Unaudited)	F3
Notes to Consolidated Financial Statements (Unaudited)	F4-F9

CHINA YCT INTERNATIONAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	JUNE 30, 2017			MARCH 31, 2017
Assets
Current assets:
Cash and cash equivalents	$	14,892,871		$	10,308,622
Accounts receivable		63,254			1,134,967
Inventories		3,241,402			5,483,040
Purchase deposit to related party		1,318,791			-
Purchase deposit to vendors		-			650,790
Prepaid leases – current portion		869,914			900,547
Total current assets		20,386,232			18,477,966
Prepaid leases		1,066,180			1,265,252
Development cost of acer truncatum bunge planting		42,531,408			42,055,972
Plant, property, and equipment, net		16,568,367			14,487,135
Intangible assets, net		11,951,219			12,042,758
Deferred tax assets		348,585			508,521
Security deposit to related party		1,476,145			1,449,422
Total assets	$	94,328,136		$	90,287,026
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable to related party	$	-		$	706,048
Accounts payable and other accrued expenses		297,206			251,307
Taxes payable		1,146,320			2,028,190
Total current liabilities		1,443,526			2,985,545
Stockholders' Equity
Preferred stock, par value $500 per share; 45 shares authorized, issued and outstanding at June 30, 2017 and March 31, 2017		22,500			22,500
Common stock, par value $0.001 per share; 100,000,000 shares authorized;  29,789,168 shares issued and outstanding at June 30, 2017 and March 31, 2017		29,789			29,789
Additional paid-in capital		4,322,838			4,322,838
Statutory reserve		1,828,504			1,828,504
Retained earnings		86,871,403			83,061,604
Accumulated other comprehensive loss		(2,779,830	)		(4,386,845	)
Total stockholders' equity attributable to the Company		90,295,204			84,878,390
Noncontrolling interest		2,589,406			2,423,091
Total stockholders' equity		92,884,610			87,301,481
Total liabilities and stockholders' equity	$	94,328,136		$	90,287,026

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

F - 1

CHINA YCT INTERNATIONAL GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	THREE MONTHS ENDED JUNE 30,
	2017		2016
Sales	$	17,134,865	$	9,712,495
Cost of Goods Sold (including $4,288,935 and $1,743,479 from a related party for the three months ended June 30, 2017 and 2016, respectively)		10,287,148		5,912,261
Gross profit		6,847,717		3,800,234
Operating expenses
Selling expenses		1,236,292		747,880
General and administrative expenses		908,405		850,357
Research and development expenses		64,378		69,160
Total operating expenses		2,209,075		1,667,397
Income from operations		4,638,642		2,132,837
Gain on disposal of acer truncatum bunge plants		573,092		-
Interest income		25,103		15,422
Income before income tax provision		5,236,837		2,148,259
Income tax provision		1,309,209		572,724
Net income		3,927,628		1,575,535
Less: Net income attributable to noncontrolling interest		117,829		-
Net income attributable to the Company		3,809,799		1,575,535
Other comprehensive income (loss):
Foreign currency translation adjustment		1,655,501		(2,085,188	)
Comprehensive income (loss)		5,583,129		(509,653	)
Less: Comprehensive income attributable to noncontrolling interest		166,315		-
Comprehensive income (loss) attributable to the Company	$	5,416,814	$	(509,653	)
Earnings per common share
Basic and Diluted	$	0.13	$	0.05
Weighted average number of common shares outstanding
Basic and Diluted		29,789,168		29,755,568

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

F - 2

CHINA YCT INTERNATIONAL GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	THREE MONTHS ENDED JUNE 30,
	2017			2016
Cash Flows From Operating Activities:
Net income	$	3,927,628		$	1,575,535
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of plant, property and equipment		287,248			176,525
Amortization of intangible assets		309,948			282,974
Amortization of prepaid leases		210,588			237,807
Issuance of common shares for services		-			10,609
Stock-based compensation expenses		-			101,026
Deferred taxes		167,355			(18,630	)
Gain on disposal of acer truncatum bunge plants		(573,092	)		-
Changes in operating assets and liabilities:
Advance payment to vendors		655,130			-
Inventory		2,315,657			(12,762	)
Accounts receivable		1,080,011			88,876
Cancellation of lease		55,932			-
Taxes payable		(908,641	)		195,296
Purchase deposit and accounts payable to related party, net		(2,014,308	)		109,922
Accounts payable and other accrued expenses		40,790			(45,457	)
Net cash provided by operating activities		5,554,246			2,701,721
Cash Flows From Investing Activities:
Acquisition of property, plant and equipment		(2,080,416	)		(639,877	)
Proceeds from disposal of acer truncatum bunge plants		2,084,706			-
Development cost of acer truncatum bunge planting		(1,215,128	)		(474,608	)
Net cash used in investing activities		(1,210,838	)		(1,114,485	)
Effect of exchange rate changes on cash and cash equivalents		240,841			(219,655	)
Net increase in cash and cash equivalents		4,584,249			1,367,581
Cash and cash equivalents at beginning of period		10,308,622			7,639,084
Cash and cash equivalents at end of period	$	14,892,871		$	9,006,665
Supplemental disclosures of cash flow information:
Cash paid during the periods for:
Interest	$	-		$	-
Income taxes	$	1,389,829		$	531,488

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

F - 3

CHINA YCT INTERNATIONAL GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES

China YCT International Group, Inc. ("China YCT") was incorporated in the State of Florida, in the United States of America (the "USA") in January 1989, and reincorporated in the State of Delaware on April 4, 2007.  China YCT, through its 100% owned subsidiary Landway Nano Bio-Tech, Inc. ("Landway Nano"), incorporated in Delaware, owns 97% of Shandong Spring Pharmaceutical Co., Ltd. ("Shandong Spring"), incorporated in the People's Republic of China ("PRC"). China YCT International Group, Inc. and its subsidiaries are collectively referred to as the "Company". The Company, through its 97% owned subsidiary, Shandong Spring, engages in the business of research, developing, manufacturing, and selling traditional Chinese medicine and other healthcare products in China.

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

Basis of presentation

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of June 30, 2017 and the results of operations and cash flows for the periods ended June 30, 2017 and 2016. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three months ended June 30, 2017 are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year ending March 31, 2018. The balance sheet on March 31, 2017 has been derived from the audited financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended March 31, 2017 as included in our Annual Report on Form 10-K.

Certain amounts have been reclassified to conform to current year presentation.

Principles of consolidation

The consolidated financial statements include the financial statements of China YCT, Landway Nano and its 97% owned subsidiary, Shandong Spring.  All inter-company transactions and balances are eliminated in consolidation.

F - 4

Foreign currency translation

The accounts of the Company's Chinese subsidiary are maintained in RMB and the accounts of the U.S. companies are maintained in USD. The accounts of the Chinese subsidiary were translated into USD in accordance with Accounting Standards Codification ("ASC") Topic 830 "Foreign Currency Matters". According to Topic 830, all assets and liabilities were translated at the exchange rate on the balance sheet date; stockholders' equity is translated at historical rates and statement of comprehensive income items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with ASC Topic 220, "Comprehensive Income." Gains and losses resulting from the foreign currency transactions are reflected in the statements of comprehensive income.

The following exchange rates were used to translate the amounts from RMB into United States dollars ("USD$") for the respective periods:

	June 30		June 30
	2017		2016
Period End Exchange Rate (RMB/USD)		6.7744		6.6312
Average Period Exchange Rate (RMB/USD)		6.8536		6.5317

 Recent accounting pronouncements

The Company's management has evaluated all the recently issued accounting pronouncements during the quarter ended June 30, 2017 and does not believe that they will have a material effect on the Company's consolidated financial position and results of operations.

NOTE 3 - INVENTORIES

The components of inventories were as follows: 

	June 30,		March 31,
	2017		2017
Raw materials	$	1,196,558	$	1,276,254
Packaging materials		418,148		476,803
Work-in-process		683,124		1,373,919
Finished goods		943,572		2,356,064
Total inventories	$	3,241,402	$	5,483,040

F - 5

NOTE 4 – PLANT, PROPERTY, AND EQUIPMENT, NET

The components of property and equipment were as follows:

	June 30,			March 31,
	2017			2017
Machinery and equipment	$	3,336,425		$	2,254,813
Office equipment		713,754			717,259
Building		12,629,964			12,401,320
Leasehold improvements		3,936,159			2,803,052
Subtotal		20,616,302			18,176,444
Less: Accumulated Depreciation & Amortization		(4,047,935	)		(3,689,309	)
Total plant, property and equipment, net	$	16,568,367		$	14,487,135

The depreciation and amortization expense for the three months ended June 30, 2017 and 2016 was $287,248 and $176,525, respectively.

NOTE 5 – DEVELOPMENT OF ACER TRUNCATUM BUNGE

Development costs primarily include land development cost incurred for land leveling, irrigation, and fertilization, the purchase costs of acer truncatum bunge trees, and acer truncatum bunge planting fee.

Since July 2013, the Company has developed the acer truncatum bunge planting bases. As of March 31, 2017, the Company had completed planting of 6,080 Mu (1Mu is equal to approximately 666.67 square meters) at four leased farmlands. On April 1, 2017, the Company entered an agreement with Zhongce No.4 Village to terminate the lease for the 200 Mu farmland because the parcel of farmland was recalled by local government for building a new urban district. Base on the agreement, the Company received the refund of all the remaining prepaid lease payment of approximately $56,000 (RMB383,333) and a compensation of approximately $350,000 (RMB2,400,000) from the government for the early termination of the lease.  On May 1, 2017, the Company signed two contracts with the third parties to sell all of the plants from the farmland for approximately $1,974,000 (RMB13,527,000). The total capitalized cost of the acer truncatum bunge planting in Zhongce No.4 Village farmland was approximately $1,512,000 (RMB10,360,000). In addition, the Company incurred approximately $239,000 (RMB1,639,260) expense to pack the plants for sale. The gain from disposal of acer truncatum bunge plants was approximately $573,000. As a result of the lease termination, the Company's acer truncatum bunge planting acreage has reduced to 5,880 Mu at June 30, 2017 from 6,080 Mu at March 31, 2017.

F - 6

NOTE 6 - TAXES PAYABLE

Taxes payable at June 30, 2017 and March 31, 2017 were as follows:

	As of
	June 30,				March 31,
	2017				2017
Corporate income tax		$	1,156,996			$	1,382,382
Value-added tax			(10,676	)			576,086
Other tax and fees			-				69,722
Total tax payable		$	1,146,320			$	2,028,190

NOTE 7 - INCOME TAXES

China YCT and Landway Nano were incorporated in the United States of America and are subject to United States federal taxation. No provisions for income taxes have been made, as there was no taxable income from U.S. operations for the three months ended June 30, 2017 and 2016. The Company has net loss carryforward of approximately $22,000 which will be expired in 2047. The Company has set up 100% valuation allowance on deferred tax assets resulting from net operation loss incurred in the U.S.

The Company's Chinese subsidiaries are governed by the Income Tax Law of the PRC concerning the privately run and foreign invested enterprises, which are generally subject to tax at a statutory rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments.

The Company has not provided deferred taxes on undistributed earnings attributable to its PRC subsidiaries as they are to be permanently reinvested. On February 22, 2008, MOF, and SAT, jointly issued Cai Shui 2008 Circular 1, "Circular 1." According to Article 4 of Circular 1, distributions of accumulated profits earned by foreign investment enterprises, ("FIE") prior to January 1, 2008 to their foreign investors will be exempt from withholding tax, ("WHT") while distribution of the profits earned by a FIE after January 1, 2008 to its foreign investors shall be subject to WHT.

Dividend payments by PRC subsidiaries are limited by certain statutory regulations in the PRC. No dividends may be paid by PRC subsidiaries without first receiving prior approval from SAFE. Dividend payments are restricted to 90% of after tax profits.

Should the Company's PRC subsidiaries distribute all their profits generated after December 31, 2007, the aggregate withholding tax amount will be $8,687,140 and $8,306,160 as of June 30, 2017 and March 31, 2017, respectively.

The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of ASC Topic 740, Income Taxes. Since Shandong Spring intends to reinvest its earnings to further expand its businesses in mainland China, it does not intend to declare dividends to their immediate foreign holding companies in the foreseeable future. Accordingly, the Company has not recorded any deferred taxes in relation to US tax on the cumulative amount of undistributed retained earnings since January 1, 2008.

F - 7

The reconciliation of income tax expense at the U.S. statutory rate of 35% to the Company's effective tax rate is as follows:

	Three Months Ended
	June 30,
	2017				2016
U.S. Statutory rate		$	1,832,893			$	751,891
Tax rate difference between China and U.S.			(523,684	)			(214,826	)
Permanent difference			-				35,659
Effective tax rate		$	1,309,209			$	572,724

The provisions for income taxes are summarized as follows: 

	Three Months Ended
	June 30,
	2017			2016
Current		$	1,141,854		$	591,354
Deferred			167,355			(18,630	)
Total		$	1,309,209		$	572,724

NOTE 8 - RELATED PARTY TRANSACTIONS AND BALANCES

Balances:

(i) Security deposit to related party:

The security deposit - related party of $1,476,145 represents the deposit paid to Shandong Yongchuntang Bioengineering Co. Ltd. ("Shandong Yongchuntang") on January 4, 2017 for using the direct-sales license issued to Shandong Yongchuntang. The amount is non-interest bearing and not secured. Shandong Yongchuntang owns 3% equity of Shandong Spring.

(ii) Trade related balance with related party:

On June 30, 2017, purchase deposit to related party of $1,318,791 pertains to purchase deposit paid in respect of purchase of healthcare products from Shandong Yongchuntang.

On March 31, 2017, accounts payable balance of $706,048 pertains to payable in respect of purchase of healthcare products from Shandong Yongchuntang.

Contingency:

The Company is authorized by Shandong Yongchuntang to sell Shandong Yongchuntang's products using the direct-sales license issued to Shandong Yongchuntang.  As a condition for using the direct-sales license, the Company needs to make 20% sales increase each year based on the 95% of sales of the year 2014.  If the Company cannot meet this sales target in any year from April 1, 2017 to June 30, 2020, the Company needs to pay approximately $1.4 million as an annual fee for using the direct-sales license.  There is risk that the Company may fail to meet the sales target and may need to pay approximate $1.4 million in the subsequent years.

F - 8

NOTE 9 - MAJOR CUSTOMERS AND VENDORS

The Company sold products through tendistributors during the three months ended June 30, 2017 and 2016. Sales to four distributors represented 19%, 16%, 11% and 11% of total sales for the three months ended June 30, 2017. Sales to three distributors represented 23%, 16%, and 14% of total sales for the three months ended June 30, 2016.

The Company sold 10 and 6 products during the three months ended June 30, 2017 and 2016, respectively. Sales of four products represented37%, 17%, 11%, and 11% of total sales for the three months ended June 30, 2017.  Sales of three products represented 53%, 15%, and 14% of total sales for the three months ended June 30, 2016. 

The Company purchases its products from Shandong Yongchuntang according to the purchase contract signed between the Company and Shandong Yongchuntang. Pursuant to the renewed one year contract dated February 20, 2017, the Company agreed to purchase 9 products from Shandong Yongchuntang at fixed prices. Total purchases from Shandong YCT represented 54% and 33% of our total purchases during the three months ended June 30, 2017 and 2016, respectively. The purchases from two other vendors represented 19% and 14% of the Company's total purchases for the three months ended June 30, 2017. The purchases from three other vendors represented 23%, 18%, and 14% of the Company's total purchases for the three months ended June 30, 2016.

NOTE 10 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events that have occurred after the date of the balance sheet through the date of issuance of these consolidated financial statements and determined that no subsequent event requires recognition or disclosure to the consolidated financial statements.

F - 9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation

 You should read the following discussion together with our consolidated financial statements and the related notes included elsewhere in this Form 10-Q and our audited financial statements included in our Annual Report on Form 10-K. This discussion contains forward-looking statements. These forward-looking statements are based on information available at the time the statements are made and/or management's belief as of that time with respect to future events and involve risks and uncertainties that could cause actual results and outcomes to be materially different. Important factors that could cause such differences include but are not limited to: competitive factors, general economic conditions, customer relations, relationships with vendors, the interest rate environment, governmental regulation and supervision, seasonality, distribution networks, product introductions and acceptance, technological change, changes in industry practices, onetime events and other factors described herein and in other filings made by the company with the Securities and Exchange Commission. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, and therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to the date this Form 10-Q is filed with the Securities and Exchange Commission.

Overview

China YCT International Group, Inc. ("China YCT") was incorporated in the State of Florida in January 1989, and reincorporated in the State of Delaware on April 4, 2007. China YCT principally operates through its wholly-owned subsidiary, Landway Nano Bio-Tech, Inc. ("Landway Nano"), incorporated in Delaware, which, in turn, owns 97% of  Shandong Spring Pharmaceutical Co., Ltd. ("Shandong Spring"), incorporated in the People's Republic of China (the "PRC"). China YCT International Group, Inc. and its subsidiaries are collectively referred to as the "Company". China YCT, through Shandong Spring, is engaged in the business of developing, manufacturing, and selling medicine, developing the acer truncatum bunge planting bases, selling acer truncatum seed oil, and distributing health care supplement products manufactured by Shandong Yongchuntang in the PRC.

Since July 2015, the Company has produced acer truncatum bunge seed oil and sold the product to customers through its internet direct sales system.  The acer truncatum bunge seed oil was extracted from the acer truncatum pods that were purchased from third party vendors.  The Company's self-grown acer truncatum pods will not be ready to be used for production until approximately the fall of 2018.

1

Results of Operations

The following table sets forth information from our statements of comprehensive income (loss) for the three months ended June 30, 2017 and 2016, in dollars:

	Three Months Ended
	June 30,						$			%
	2017			2016			Change			Change
Sales		17,134,865			9,712,495			7,422,370			76.4	%
Cost of Goods sold		(10,287,148	)		(5,912,261	)		(4,374,887	)		74.0	%
Gross Profit		6,847,717			3,800,234			3,047,483			80.2	%
Operating Expenses		(2,209,075	)		(1,667,397	)		(541,678	)		32.5	%
Operating Income		4,638,642			2,132,837			2,505,805			117.5	%
Interest Income		25,103			15,422			9,681			62.8	%
Gain on Disposal of Acer Truncatum Bunge Plants		573,092			-			573,092			100.0	%
Income Tax Provision		(1,309,209	)		(572,724	)		(736,485	)		128.6	%
Net Income		3,927,628			1,575,535			2,352,093			149.3	%
Comprehensive Income (Loss)		5,583,129			(509,653	)		6,092,782			(1,195.5	)%

Revenue

During the three months ended June 30, 2017, we realized $17,134,865 in revenue, representing an increase of 76.4% or $7,422,370 as compared to $9,712,495 for the same period in 2016.  The increase in revenue in RMB was 85.1% as compared to the three months ended June 30, 2016, but 8.7% of the increase was offset by fewer USD converted from RMB due to a significant RMB depreciation occurred in the three months ended June 30, 2017, compared with the same period in 2016. The total 85.1% revenue increase in RMB was due to the increased sales of health care products, acer truncatum bunge seed oil, and Huoliyuan Capsule.

Part of our revenues was generated by us as the distributor for the health care products manufactured by Shandong Yongchuntang. We purchase products from Shandong Yongchuntang according to the purchase contract signed between the Company and Shandong Yongchuntang. On February 20, 2017, the Company renewed the purchase contract with Shandong Yongchuntang for a term of one year ending on February 25, 2018.  Pursuant to the renewed one year contract, the Company agreed to purchase 9 new products from Shandong Yongchuntang at fixed prices. During the three months ended June 30, 2017, 45.8% of our total revenue was generated as the distributor of Shandong Yongchuntang, compared to 32.8% during the three months ended June 30, 2016.  For the three months ended June 30, 2017, our revenue from sales of the health care products was $7,845,001, representing an increase of 146.4% or $4,660,662 as compared to $3,184,339 for the same period in 2016.  The revenue from sales of health care products measured in RMB was increased by 158.5% but was offset by 12.1% decrease due to fewer USD converted from RMB because a significant RMB depreciation occurred during the three months ended June 30, 2017 compared with the same period in 2016. The significant increase in sales of the health care products in RMB was primarily due to the growth of our customer basis and the internet direct-sales.

2

The sales of Huoliyuan Capsule accounted for 37.3% of our revenue during the three months ended June 30, 2017, compared to 52.7% during the three months ended June 30, 2016. The decrease in the sales of Huoliyuan Capsule over our total revenue is primarily due to the sales growth of Huoliyuan Capsule being slower than the sales growth of health care products and acer truncatum bunge seed oil. The sales of the Huoliyuan Capsule during the three months ended June 30, 2017 were $6,395,042, an increase of 24.9% or $1,276,023 as compared to the three months ended June 30, 2016. The revenue from sales of  Huoliyuan Capsule denominated in RMB was increased by 31.1%, but was offset by 6.2% decrease due to fewer USD converted from RMB because a significant RMB depreciation occurred during the three months ended June 30, 2017 compared with the same period in 2016. The increase in sales of Huoliyuan Capsule in RMB was primarily due to the stabilization of the market competition.

Since July 2015, the Company has produced Acer truncatum Bunge Seed Oil and sold the product to customers through its distributors.  The Acer truncatum Bunge Seed Oil was extracted from the acer truncatum pods that were purchased from third party vendors.  Our self-grown acer truncatum pods will not be ready to be used for production until approximately the fall of 2018. During the three months ended June 30, 2017, 16.9% of our total revenue was generated from the sales of acer truncatum oil products, compared to 14.5% during the same period in 2016. During the three months ended June 30, 2017, the sales of acer truncatum bunge seed oil was $2,894,822, representing an increase of 105.4% or $1,485,685 compared to $1,409,137 for the same period in 2016. The significant increase in sales of acer truncatum oil products in RMB was primarily due to the increased promotion of our acer truncatum bunge seed oil by organizing conferences to introduce the features and benefits of the product to our distributors and customers.

The following is the sales breakdown by products during the three months ended June 30, 2017 and 2016:

	For the Three Months Ended June 30,
	2017				2016
Health care supplements		7,845,001	45.8	%		3,184,339	32.8	%
Drugs (Huoliyuan Capsule)		6,395,042	37.3	%		5,119,019	52.7	%
Acer truncatum oil		2,894,822	16.9	%		1,409,137	14.5	%
Total		17,134,865	100	%		9,712,495	100	%

Cost of Goods Sold

Our costs of revenue were comprised primarily of the cost of finished goods we purchased from Shandong Yongchuntang, the raw materials we purchased from third party vendors, and the manufacturing costs of acer truncatum bunge seed oil, and Huoliyuan Capsule. The cost of manufacturing Huoliyuan Capsule was approximately 42.2% and 57.5% of the total cost of goods sold during the three months ended June 30, 2017 and 2016, respectively. The cost of manufacturing acer truncatum bunge seed oil was approximately 15.6% and 12.6% of the total cost of goods sold during the three months ended June 30, 2017 and 2016, respectively.

During the three months ended June 30, 2017, our cost of goods sold totaled $10,287,148, representing an increase of $4,374,887 or 74.0% as compared to $5,912,261 during the three months ended June 30, 2016. The cost of goods sold, in RMB, increased by 82.6%, in which 8.6% was offset by fewer USD converted from RMB due to a significant RMB depreciation during the three months ended June 30, 2017 compared with the same period in 2016. The percentages of the costs of goods sold to total revenues decreased slightly from 60.9% for the three months ended June 30, 2016 to 60.0% for the three months ended June 30, 2017.   

3

Gross Profit

Gross profit for the three months ended June 30, 2017 was $6,847,717, an increase of 80.2% or $3,047,483 as compared to the same period for the prior year. The overall gross profit as a percentage of net revenues was approximately 40.0% for the three months ended June 30, 2017, a slight increase from 39.1% for the same period of 2016. The gross profit as percentage of net revenues for the health care products was approximately 44.7% for the three months ended June 30, 2017, a slight increase from 44.4% for the same period of 2016.  The gross profit as percentage of net revenues for Huoliyuan was approximately 32.1% for thethree months ended June 30, 2017, decreased from 33.6% for the same period of 2016. The gross profit as percentage of net revenues for acer truncatum bunge seed oil was approximately 44.5% for the three months ended June 30, 2017, decreased from 47.2% for the same period of 2016. The lower gross profit as percentage of net revenue for Huoliyuan during the three months ended June 30, 2017 was due to the increased raw material and manufacturing costs. The lower gross profit as percentage of net revenue for the acer truncatum bunge seed oil during the three months ended June 30, 2017 was primarily due to the increased raw material cost.

The comparison of the gross profits for the three months ended June 30, 2017 and 2016 as follows:

	June 30, 2017		Gross Profit Margin			June 30, 2016		Gross Profit Margin			Change in $		Variance
Health care supplements		3,508,114		44.7	%		1,414,571		44.4	%		2,093,543		148.0	%
Drugs (Huoliyuan Capsule)		2,051,767		32.1	%		1,720,074		33.6	%		331,693		19.3	%
Acer truncatum oil		1,287,836		44.5	%		665,589		47.2	%		622,247		93.5	%
Total		6,847,717		40.0	%		3,800,234		39.1	%		3,047,483		80.2	%

Research and Development Expenses

Our R&D expenses for the three months ended June 30, 2017 were $64,378 or approximate 0.4% of total corresponding revenue, a decrease of $4,782 or 6.9%, as compared to $69,160 or approximately 0.7% of total corresponding revenue for the three months ended June 30, 2016.  

Our long-term goal is to utilize advanced biological technology to refine and extract the beneficial compounds in plants that have traditionally been known to have medicinal benefits, primarily gingko and acer trunkatum bunge plants. As of June 30, 2017, we had 27 staff in R&D department.

Operating expenses

Our selling expenses consist primarily of sales commissions, advertising and promotion expenses, freight charges and related compensation. Our selling expenses for the three months ended June 30, 2017 were $1,236,292 or 7.2% of our total revenue for the period, representing slight decrease on the percentage of total revenue from 7.7% for the prior year's quarter ended June 30, 2016. Our selling expenses for the three months ended June 30, 2017 increased by 65.3% or $488,412 as compared to the same period in the prior year. There was 73.5% increase in selling expenses in RMB but was offset by 8.2% due to depreciation in RMB occurred during the three months ended June 30, 2017, compared with the prior year's quarter ended June 30, 2016. The increase in selling expenses was primarily due to the increase in shipping cost and sales commission as a result of increased sales.

4

Our G&A expenses for the three months ended June 30, 2017 were $908,405 or 5.3% of our total revenue for the period, representing a decrease on the percentage of total revenue from 8.8% for the prior year's quarter ended June 30, 2016.  Our G&A expenses for the three months ended June 30, 2017 increased by 6.8% or $58,048 as compared to the same period in the prior year.  There was 12.1% increase in G&A expenses in RMB but was offset by 5.3% due to depreciation in RMB occurred during the three months ended June 30, 2017, compared with the prior year's quarter ended June 30, 2016. The increase in G&A expenses was primarily due to the increase in depreciation and amortization expenses.

Net Income

As a result of above, during the three months ended June 30, 2017, we realized net income of $3,927,628, representing a 149.3% or $2,352,093 increase, compared to $1,575,535 during the three months ended June 30, 2016. The increase was mainly due to the higher revenue from sales of all of our products and the gain from disposal of acer truncatum bunge plants.

Income Taxes

Income tax expense increased by $736,485 during the three months ended June 30, 2017, as compared to the prior quarter ended June 30, 2016, as a result of the increase in income from operation and the gain from disposal of acer truncatum bunge plants.

Comprehensive Income (Loss)

Our business operates entirely in Chinese RMB, but we report our results in our SEC filings in U.S. Dollars. The conversion of our accounts from RMB to Dollars results in translation adjustments, which are reported as a middle step between net income and comprehensive income. The net income is added to the retained earnings on our balance sheet while the translation adjustment is added to a line item on our balance sheet labeled "Accumulated other comprehensive income (loss)," since it is more reflective of changes in the relative values of U.S. and Chinese currencies than of the success of our business. During the three months ended June 30, 2017, the effect of converting our financial results to Dollars was income of $1,655,501 to our other comprehensive income, as compared to a loss of $2,085,188 during the three months ended June 30, 2016 as a result of the currency exchange rate fluctuation.

Noncontrolling interest

Since March 18, 2017, Shandong Yongchuntang has become a 3% shareholder of Shandong Spring.  During the three months ended June 30, 2017, $166,315 of comprehensive income was attributable to Shandong Yongchuntang.

Liquidity and Capital Resources

Our principal sources of liquidity were generated from our operations. As of June 30, 2017, we had $18,942,706 in working capital, an increase of $3,450,285 or 22.3% as compared to $15,492,421 in working capital as of March 31, 2017. Based on our current operating plan, we believe that existing cash and cash equivalents balances, and the funds to be generated by operations will be sufficient to meet our working capital and capital requirements for our current operations for at least the next 12 months. Our operations produced positive cash flow of $5,554,246 during the three months ended June 30, 2017. We had accounts receivable of $63,254 outstanding as of June 30, 2017. We expect our marketing activities to continue to help generate positive cash flow.  The operations of our own manufacturing since fiscal year 2010 and the development of our own acer truncatum bunge planting bases have put some pressure on our cash flow. We may be required to seek additional capital and reduce certain spending as needed on an on-going basis. There can be no assurance that any additional financing will be available on acceptable terms.

5

In order to fully implement our business plan, however, we will require capital contributions far in excess of our current asset value. Our budget for bringing our manufacturing facility to an operating level that assures profitability is $5 million. Our expectation, therefore, is that we will seek to access the capital markets in both the U.S. and China to obtain the funds we need. At present, we have no commitment from any source for additional funds and there can be no assurance that the funds will be available on terms acceptable to us.

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

	For the Three Months Ended June 30,
	2017			2016			Change in $			Change in %
Net cash provided by operating activities	$	5,554,246		$	2,701,721			2,852,525			105.6	%
Net cash used in investing activities	$	(1,210,838	)	$	(1,114,485	)		(96,353	)		8.6	%
Effect of exchange rate change on cash and cash equivalents	$	240,841		$	(219,655	)		460,496			(209.6	)%
Net increase (decrease) in cash and cash equivalents	$	4,584,249		$	1,367,581			3,216,668			235.2	%
Cash and cash equivalents, beginning balance	$	10,308,622		$	7,639,084			2,669,538			34.9	%
Cash and cash equivalents, ending balance	$	14,892,871		$	9,006,665			5,886,206			65.4	%

Operating Activities

Net cash provided by operating activities was $5,554,246 for the three months ended June 30, 2017, which was an increase of 105.6% or $2,852,525 from the $2,701,721 net cash provided by operating activities for the same period of the prior year. The increase was primarily due to the increase from cash inflow from sales revenue and accounts receivable, and the decrease from cash out flow from inventory.

Investing Activities

During the three months ended June 30, 2017, our net cash used in investing activities was $1,210,838, as compared to $1,114,485 of net cash used for the three months ended June 30, 2016. The cash used in investing activities for the three months ended June 30, 2017 of $1,210,838 was primarily attributable to the acquisition of property, plant and equipment of $2,080,416, and capital expenditures of $1,215,128 in acer truncatum bunge planting, and offsetting by cash receipt of $2,084,706from disposal of acer truncatum bunge plants.

Financing Activities

No net cash was generated or used by financing activities over the three months ended June 30, 2017 and 2016.

6

Item 3. Quantitative and Qualitative Disclosures about Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The term "disclosure controls and procedures" (defined in SEC Rule 13a-15(e)) refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within required time periods. The Company's management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q (the "Evaluation Date"). Based on that evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, such controls and procedures were not effective.

Changes in Internal Controls

The term "internal control over financial reporting" (defined in SEC Rule 13a-15(f)) refers to the process of a company that is designed 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. The Company's management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated any changes in the Company's internal control over financial reporting that occurred during the quarter ended June 30, 2017, and they have concluded that there was no change to the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II.

OTHER INFORMATION

Item 1. Legal Proceedings

There are no material pending legal proceedings to which the Company is a party.

Item 1A. Risk Factors

A smaller reporting company is not required to provide the information required by this Item.

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

Not Applicable

Item 3. Defaults Upon Senior Securities.

None

7

Item 4. Removed and Reserved

Item 5. Other Information

None

Item 6. Exhibits

31.1	Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer
31.2	Rule 13a-14(a)/ 15d-14(a) Certification of Chief Financial Officer
32	Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

8

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CHINA YCT INTERNATIONAL GROUP, LTD.

Date: August 14, 2017

/s/ Yan Tinghe

Yan Tinghe Chief Executive Officer (Principal Executive Officer)

/s/ Li Chuanmin

Li Chuanmin Chief Financial Officer (Principal Financial Officer)

9

EX-31.1

EXHIBIT 31.1

I, Yan Tinghe, certify that:

1.      I have reviewed this quarterly report on Form10-Q of China YCT International Group, Inc.;

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

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

4.      The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules13a-15(f) and15d-15(f)) for the registrant and have:

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

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

c.      evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.      disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

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

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

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

Date:   August 14, 2017

By:     /s/Yan Tinghe

            Yan Tinghe, Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

Rule13a-14(a) Certification

I, Li Chuanmin, certify that:

1.      I have reviewed this quarterly report on Form10-Q of China YCT International Group, Inc.;

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

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

4.      The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules13a-15(f) and15d-15(f)) for the registrant and have:

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

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

c.      evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.      disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

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

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

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

Date:    August 14, 2017

By:       /s/ Li Chuanmin

              Li Chuanmin Chief Financial Officer (Principal Financial Officer)

EX-32

EXHIBIT 32

Rule13a-14(b) Certification

In connection with the Quarterly Report of China YCT International Group, Inc. (the "Company") on Form 10-Q for the period ending June 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies, pursuant to 18U.S.C. Section1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1) The Report fully complies with the requirements of Section13(a) or15(d)of the Securities Exchange Act of 1934; and

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

August 14, 2017                                                 By: /s/Yan Tinghe

Yan Tinghe, Chief Executive Officer (Principal Executive Officer)

August 14, 2017                                                  By: /s/Li Chuanmin

Li Chuanmin, Chief Financial Officer (Principal Financial Officer)

Assigned original of this written statement required by Section 906 has been provided to China YCT International Group, Inc. and will be retained by China YCT International Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Jun. 30, 2017	Aug. 11, 2017
Document and Entity Information:
Entity Registrant Name	China YCT International Group, Inc.
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Trading Symbol	cyig
Amendment Flag	false
Entity Central Index Key	0000847464
Current Fiscal Year End Date	--03-31
Entity Common Stock, Shares Outstanding		29,789,168
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	2018
Document Fiscal Period Focus	Q1

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2017	Mar. 31, 2017
Current assets:
Cash and cash equivalents	$ 14,892,871	$ 10,308,622
Accounts receivable	63,254	1,134,967
Inventories	3,241,402	5,483,040
Purchase deposit to related party	1,318,791
Purchase deposit to vendors		650,790
Prepaid leases - current portion	869,914	900,547
Total current assets	20,386,232	18,477,966
Prepaid leases	1,066,180	1,265,252
Development cost of acer truncatum bunge planting	42,531,408	42,055,972
Plant, property, and equipment, net	16,568,367	14,487,135
Intangible assets, net	11,951,219	12,042,758
Deferred tax assets	348,585	508,521
Security deposit to related party	1,476,145	1,449,422
Total assets	94,328,136	90,287,026
Current liabilities:
Accounts payable to related party		706,048
Accounts payable and other accrued expenses	297,206	251,307
Taxes payable	1,146,320	2,028,190
Total current liabilities	1,443,526	2,985,545
Stockholders' Equity
Preferred stock, par value $500 per share; 45 shares authorized, issued and outstanding at June 30, 2017 and March 31, 2017	22,500	22,500
Common stock, par value $0.001 per share; 100,000,000 shares authorized; 29,789,168 shares issued and outstanding at June 30, 2017 and March 31, 2017	29,789	29,789
Additional paid-in capital	4,322,838	4,322,838
Statutory reserve	1,828,504	1,828,504
Retained earnings	86,871,403	83,061,604
Accumulated other comprehensive income (loss)	(2,779,830)	(4,386,845)
Total stockholders' equity attributable to the Company	90,295,204	84,878,390
Noncontrolling interest	2,589,406	2,423,091
Total stockholders' equity	92,884,610	87,301,481
Total liabilities and stockholders' equity	$ 94,328,136	$ 90,287,026

XML

CONSOLIDATED BALANCE SHEETS PARENTHETICAL - $ / shares	Jun. 30, 2017	Mar. 31, 2017
CONSOLIDATED BALANCE SHEETS PARENTHETICAL
Preferred stock par value	$ 500.00	$ 500.00
Preferred stock shares authorized	45	45
Preferred stock shares issued	45	45
Preferred stock shares outstanding	45	45
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	100,000,000	100,000,000
Common stock shares issued	29,789,168	29,789,168
Common stock shares outstanding	29,789,168	29,789,168

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)	3 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Sales	$ 17,134,865	$ 9,712,495
Cost of Goods Sold (including $4,288,935 and $1,743,479 from a related party for the three months ended June 30, 2017 and 2016, respectively)	10,287,148	5,912,261
Gross profit	6,847,717	3,800,234
Operating Expenses
Selling Expenses	1,236,292	747,880
General and administrative expenses	908,405	850,357
Research and development expenses	64,378	69,160
Total operating expenses	2,209,075	1,667,397
Income from operations	4,638,642	2,132,837
Gain on disposal of acer truncatum bunge plants	573,092
Interest income	25,103	15,422
Income before income tax provision	5,236,837	2,148,259
Income tax provision	1,309,209	572,724
Net income	3,927,628	1,575,535
Less: Net income attributable to noncontrolling interest	117,829
Net income attributable to the Company	3,809,799	1,575,535
Other comprehensive income (loss):
Foreign currency translation adjustment	1,655,501	(2,085,188)
Comprehensive income (loss)	5,583,129	(509,653)
Less: Comprehensive income attributable to noncontrolling interest	166,315
Comprehensive income (loss) attributable to the Company	$ 5,416,814	$ (509,653)
Earnings per common share: Basic and Diluted	$ 0.13	$ 0.05
Weighted average number of common shares outstanding: Basic and Diluted	29,789,168	29,755,568

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME PARENTHETICAL - USD ($)	3 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME PARENTHETICAL
Cost of goods sold - related party	$ 4,288,935	$ 1,743,479

XML

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($)	3 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash Flows From Operating Activities:
Net income	$ 3,927,628	$ 1,575,535
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of plant, property and equipment	287,248	176,525
Amortization of intangible assets	309,948	282,974
Amortization of prepaid leases	210,588	237,807
Issuance of common shares for services		10,609
Stock-based compensation expenses		101,026
Deferred taxes	167,355	(18,630)
Gain on disposal of acer truncatum bunge plants	(573,092)
Changes in operating assets and liabilities:
Change in advance payment to vendors	655,130
Change in inventory	2,315,657	(12,762)
Change in accounts receivable	1,080,011	88,876
Change in cancellation of lease	55,932
Change in taxes payable	(908,641)	195,296
Change in purchase deposit and accounts payable to related party, net	(2,014,308)	109,922
Change in accounts payable and accrued expenses	40,790	(45,457)
Net cash provided by operating activities	5,554,246	2,701,721
Cash Flows From Investing Activities:
Acquisition of property, plant and equipment	(2,080,416)	(639,877)
Proceeds from disposal of acer truncatum bunge plants	2,084,706
Development cost of acer truncatum bunge planting	(1,215,128)	(474,608)
Net cash used in investing activities	(1,210,838)	(1,114,485)
Effect of exchange rate changes on cash and cash equivalents	240,841	(219,655)
Net increase in cash and cash equivalents	4,584,249	1,367,581
Cash and cash equivalents at beginning of period	10,308,622	7,639,084
Cash and cash equivalents at end of period	14,892,871	9,006,665
Cash paid during the periods for:
Interest
Income taxes	$ 1,389,829	$ 531,488

XML

Note 1 - Organization and Principal Activities

3 Months Ended

Jun. 30, 2017

Notes

Note 1 - Organization and Principal Activities

NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES

China YCT International Group, Inc. ("China YCT") was incorporated in the State of Florida, in the United States of America (the "USA") in January 1989, and reincorporated in the State of Delaware on April 4, 2007.  China YCT, through its 100% owned subsidiary Landway Nano Bio-Tech, Inc. ("Landway Nano"), incorporated in Delaware, owns 97% of Shandong Spring Pharmaceutical Co., Ltd. ("Shandong Spring"), incorporated in the People's Republic of China ("PRC"). China YCT International Group, Inc. and its subsidiaries are collectively referred to as the "Company". The Company, through its 97% owned subsidiary, Shandong Spring, engages in the business of research, developing, manufacturing, and selling traditional Chinese medicine and other healthcare products in China.

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Note 2 - Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Jun. 30, 2017

Notes

Note 2 - Basis of Presentation and Summary of Significant Accounting Policies

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

Basis of presentation

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of June 30, 2017 and the results of operations and cash flows for the periods ended June 30, 2017 and 2016. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three months ended June 30, 2017 are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year ending March 31, 2018. The balance sheet on March 31, 2017 has been derived from the audited financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended March 31, 2017 as included in our Annual Report on Form 10-K. 

Certain amounts have been reclassified to conform to current year presentation.

Principles of consolidation

The consolidated financial statements include the financial statements of China YCT, Landway Nano and its 97% owned subsidiary, Shandong Spring.  All inter-company transactions and balances are eliminated in consolidation.

Foreign currency translation

The accounts of the Company's Chinese subsidiary are maintained in RMB and the accounts of the U.S. companies are maintained in USD. The accounts of the Chinese subsidiary were translated into USD in accordance with Accounting Standards Codification ("ASC") Topic 830 "Foreign Currency Matters". According to Topic 830, all assets and liabilities were translated at the exchange rate on the balance sheet date; stockholders' equity is translated at historical rates and statement of comprehensive income items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with ASC Topic 220, "Comprehensive Income." Gains and losses resulting from the foreign currency transactions are reflected in the statements of comprehensive income.

The following exchange rates were used to translate the amounts from RMB into United States dollars ("USD$") for the respective periods:

	June 30		June 30
	2017		2016
Period End Exchange Rate (RMB/USD)		6.7744		6.6312
Average Period Exchange Rate (RMB/USD)		6.8536		6.5317

Recent accounting pronouncements

The Company's management has evaluated all the recently issued accounting pronouncements during the quarter ended June 30, 2017 and does not believe that they will have a material effect on the Company's consolidated financial position and results of operations.

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Note 3 - Inventories

3 Months Ended

Jun. 30, 2017

Notes

Note 3 - Inventories

NOTE 3 - INVENTORIES

The components of inventories were as follows: 

	June 30,		March 31,
	2017		2017
Raw materials	$	1,196,558	$	1,276,254
Packaging materials		418,148		476,803
Work-in-process		683,124		1,373,919
Finished goods		943,572		2,356,064
Total inventories	$	3,241,402	$	5,483,040

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Note 4 - Plant, Property, and Equipment, Net

3 Months Ended

Jun. 30, 2017

Notes

Note 4 - Plant, Property, and Equipment, Net

NOTE 4 – PLANT, PROPERTY, AND EQUIPMENT, NET

The components of property and equipment were as follows:

	June 30,		March 31,
	2017		2017
Machinery and equipment	$	3,336,425	$	2,254,813
Office equipment		713,754		717,259
Building		12,629,964		12,401,320
Leasehold improvements		3,936,159		2,803,052
Subtotal		20,616,302		18,176,444
Less: Accumulated Depreciation & Amortization		(4,047,935)		(3,689,309)
Total plant, property and equipment, net	$	16,568,367	$	14,487,135

The depreciation and amortization expense for the three months ended June 30, 2017 and 2016 was $287,248 and $176,525, respectively.

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Note 5 - Development of Acer Truncatum Bunge

3 Months Ended

Jun. 30, 2017

Notes

Note 5 - Development of Acer Truncatum Bunge

NOTE 5 – DEVELOPMENT OF ACER TRUNCATUM BUNGE

Development costs primarily include land development cost incurred for land leveling, irrigation, and fertilization, the purchase costs of acer truncatum bunge trees, and acer truncatum bunge planting fee.

Since July 2013, the Company has developed the acer truncatum bunge planting bases. As of March 31, 2017, the Company had completed planting of 6,080 Mu (1Mu is equal to approximately 666.67 square meters) at four leased farmlands. On April 1, 2017, the Company entered an agreement with Zhongce No.4 Village to terminate the lease for the 200 Mu farmland because the parcel of farmland was recalled by local government for building a new urban district. Base on the agreement, the Company received the refund of all the remaining prepaid lease payment of approximately $56,000 (RMB383,333) and a compensation of approximately $350,000 (RMB2,400,000) from the government for the early termination of the lease.  On May 1, 2017, the Company signed two contracts with the third parties to sell all of the plants from the farmland for approximately $1,974,000 (RMB13,527,000). The total capitalized cost of the acer truncatum bunge planting in Zhongce No.4 Village farmland was approximately $1,512,000 (RMB10,360,000). In addition, the Company incurred approximately $239,000 (RMB1,639,260) expense to pack the plants for sale. The gain from disposal of acer truncatum bunge plants was approximately $573,000. As a result of the lease termination, the Company’s acer truncatum bunge planting acreage has reduced to 5,880 Mu at June 30, 2017 from 6,080 Mu at March 31, 2017.  

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Note 6 - Taxes Payable

3 Months Ended

Jun. 30, 2017

Notes

Note 6 - Taxes Payable

NOTE 6 - TAXES PAYABLE

Taxes payable at June 30, 2017 and March 31, 2017 were as follows:

	As of
	June 30,		March 31,
	2017		2017
Corporate income tax	$	1,156,996	$	1,382,382
Value-added tax		(10,676)		576,086
Other tax and fees		-		69,722
Total tax payable	$	1,146,320	$	2,028,190

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Note 7 - Income Taxes

3 Months Ended

Jun. 30, 2017

Notes

Note 7 - Income Taxes

NOTE 7 - INCOME TAXES

China YCT and Landway Nano were incorporated in the United States of America and are subject to United States federal taxation. No provisions for income taxes have been made, as there was no taxable income from U.S. operations for the three months ended June 30, 2017 and 2016. The Company has net loss carryforward of approximately $22,000 which will be expired in 2047. The Company has set up 100% valuation allowance on deferred tax assets resulting from net operation loss incurred in the U.S.

The Company's Chinese subsidiaries are governed by the Income Tax Law of the PRC concerning the privately run and foreign invested enterprises, which are generally subject to tax at a statutory rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments.

The Company has not provided deferred taxes on undistributed earnings attributable to its PRC subsidiaries as they are to be permanently reinvested. On February 22, 2008, MOF, and SAT, jointly issued Cai Shui 2008 Circular 1, "Circular 1." According to Article 4 of Circular 1, distributions of accumulated profits earned by foreign investment enterprises, ("FIE") prior to January 1, 2008 to their foreign investors will be exempt from withholding tax, ("WHT") while distribution of the profits earned by a FIE after January 1, 2008 to its foreign investors shall be subject to WHT.

Dividend payments by PRC subsidiaries are limited by certain statutory regulations in the PRC. No dividends may be paid by PRC subsidiaries without first receiving prior approval from SAFE. Dividend payments are restricted to 90% of after tax profits.

Should the Company's PRC subsidiaries distribute all their profits generated after December 31, 2007, the aggregate withholding tax amount will be $8,687,140 and $8,306,160 as of June 30, 2017 and March 31, 2017, respectively.

The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of ASC Topic 740, Income Taxes. Since Shandong Spring intends to reinvest its earnings to further expand its businesses in mainland China, it does not intend to declare dividends to their immediate foreign holding companies in the foreseeable future. Accordingly, the Company has not recorded any deferred taxes in relation to US tax on the cumulative amount of undistributed retained earnings since January 1, 2008.

The reconciliation of income tax expense at the U.S. statutory rate of 35% to the Company's effective tax rate is as follows:

	Three Months Ended
	June 30,
	2017		2016
U.S. Statutory rate	$	1,832,893	$	751,891
Tax rate difference between China and U.S.		(523,684)		(214,826)
Permanent difference		-		35,659
Effective tax rate	$	1,309,209	$	572,724

The provisions for income taxes are summarized as follows: 

	Three Months Ended
	June 30,
	2017		2016
Current	$	1,141,854	$	591,354
Deferred		167,355		(18,630)
Total	$	1,309,209	$	572,724

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Note 8 - Related Party Transactions and Balances

3 Months Ended

Jun. 30, 2017

Notes

Note 8 - Related Party Transactions and Balances

NOTE 8 - RELATED PARTY TRANSACTIONS AND BALANCES

Balances:

(i)                  Security deposit to related party:

The security deposit - related party of $1,476,145 represents the deposit paid to Shandong Yongchuntang Bioengineering Co. Ltd. ("Shandong Yongchuntang") on January 4, 2017 for using the direct-sales license issued to Shandong Yongchuntang. The amount is non-interest bearing and not secured. Shandong Yongchuntang owns 3% equity of Shandong Spring.

(ii)                Trade related balance with related party:

On June 30, 2017, purchase deposit to related party of $1,318,791 pertains to purchase deposit paid in respect of purchase of healthcare products from Shandong Yongchuntang.

On March 31, 2017, accounts payable balance of $706,048 pertains to payable in respect of purchase of healthcare products from Shandong Yongchuntang.

Contingency:

The Company is authorized by Shandong Yongchuntang to sell Shandong Yongchuntang's products using the direct-sales license issued to Shandong Yongchuntang.  As a condition for using the direct-sales license, the Company needs to make 20% sales increase each year based on the 95% of sales of the year 2014.  If the Company cannot meet this sales target in any year from April 1, 2017 to June 30, 2020, the Company needs to pay approximately $1.4 million as an annual fee for using the direct-sales license.  There is risk that the Company may fail to meet the sales target and may need to pay approximate $1.4 million in the subsequent years.

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Note 9 - Major Customer and Vendor

3 Months Ended

Jun. 30, 2017

Notes

Note 9 - Major Customer and Vendor

NOTE 9 - MAJOR CUSTOMERS AND VENDORS

The Company sold products through ten distributors during the three months ended June 30, 2017 and 2016. Sales to four distributors represented 19%, 16%, 11% and 11% of total sales for the three months ended June 30, 2017. Sales to three distributors represented 23%, 16%, and 14% of total sales for the three months ended June 30, 2016.

The Company sold 10 and 6 products during the three months ended June 30, 2017 and 2016, respectively. Sales of four products represented 37%, 17%, 11%, and 11% of total sales for the three months ended June 30, 2017.  Sales of three products represented 53%, 15%, and 14% of total sales for the three months ended June 30, 2016. 

The Company purchases its products from Shandong Yongchuntang according to the purchase contract signed between the Company and Shandong Yongchuntang. Pursuant to the renewed one year contract dated February 20, 2017, the Company agreed to purchase 9 products from Shandong Yongchuntang at fixed prices. Total purchases from Shandong YCT represented 54% and 33% of our total purchases during the three months ended June 30, 2017 and 2016, respectively. The purchases from two other vendors represented 19% and 14% of the Company's total purchases for the three months ended June 30, 2017. The purchases from three other vendors represented 23%, 18%, and 14% of the Company's total purchases for the three months ended June 30, 2016.

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Note 10 - Subsequent Events

3 Months Ended

Jun. 30, 2017

Notes

Note 10 - Subsequent Events

NOTE 10 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events that have occurred after the date of the balance sheet through the date of issuance of these consolidated financial statements and determined that no subsequent event requires recognition or disclosure to the consolidated financial statements.

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Note 2 - Basis of Presentation and Summary of Significant Accounting Policies: Basis of Presentation (Policies)

3 Months Ended

Jun. 30, 2017

Policies

Basis of Presentation

Basis of presentation

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of June 30, 2017 and the results of operations and cash flows for the periods ended June 30, 2017 and 2016. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three months ended June 30, 2017 are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year ending March 31, 2018. The balance sheet on March 31, 2017 has been derived from the audited financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended March 31, 2017 as included in our Annual Report on Form 10-K. 

Certain amounts have been reclassified to conform to current year presentation.

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Note 2 - Basis of Presentation and Summary of Significant Accounting Policies: Principles of Consolidation (Policies)

3 Months Ended

Jun. 30, 2017

Policies

Principles of Consolidation

Principles of consolidation

The consolidated financial statements include the financial statements of China YCT, Landway Nano and its 97% owned subsidiary, Shandong Spring.  All inter-company transactions and balances are eliminated in consolidation.

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Note 2 - Basis of Presentation and Summary of Significant Accounting Policies: Foreign Currency Translation (Policies)

3 Months Ended

Jun. 30, 2017

Policies

Foreign Currency Translation

Foreign currency translation

The accounts of the Company's Chinese subsidiary are maintained in RMB and the accounts of the U.S. companies are maintained in USD. The accounts of the Chinese subsidiary were translated into USD in accordance with Accounting Standards Codification ("ASC") Topic 830 "Foreign Currency Matters". According to Topic 830, all assets and liabilities were translated at the exchange rate on the balance sheet date; stockholders' equity is translated at historical rates and statement of comprehensive income items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with ASC Topic 220, "Comprehensive Income." Gains and losses resulting from the foreign currency transactions are reflected in the statements of comprehensive income.

The following exchange rates were used to translate the amounts from RMB into United States dollars ("USD$") for the respective periods:

	June 30		June 30
	2017		2016
Period End Exchange Rate (RMB/USD)		6.7744		6.6312
Average Period Exchange Rate (RMB/USD)		6.8536		6.5317

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Note 2 - Basis of Presentation and Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies)

3 Months Ended

Jun. 30, 2017

Policies

Recent Accounting Pronouncements

Recent accounting pronouncements

The Company's management has evaluated all the recently issued accounting pronouncements during the quarter ended June 30, 2017 and does not believe that they will have a material effect on the Company's consolidated financial position and results of operations.

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Note 2 - Basis of Presentation and Summary of Significant Accounting Policies: Foreign Currency Translation: Schedule of Intercompany Foreign Currency Balances (Tables)

3 Months Ended

Jun. 30, 2017

Tables/Schedules

Schedule of Intercompany Foreign Currency Balances

	June 30		June 30
	2017		2016
Period End Exchange Rate (RMB/USD)		6.7744		6.6312
Average Period Exchange Rate (RMB/USD)		6.8536		6.5317

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Note 3 - Inventories: Schedule of Inventory (Tables)

3 Months Ended

Jun. 30, 2017

Tables/Schedules

Schedule of Inventory

	June 30,		March 31,
	2017		2017
Raw materials	$	1,196,558	$	1,276,254
Packaging materials		418,148		476,803
Work-in-process		683,124		1,373,919
Finished goods		943,572		2,356,064
Total inventories	$	3,241,402	$	5,483,040

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Note 4 - Plant, Property, and Equipment, Net: Property, Plant and Equipment (Tables)

3 Months Ended

Jun. 30, 2017

Tables/Schedules

Property, Plant and Equipment

	June 30,		March 31,
	2017		2017
Machinery and equipment	$	3,336,425	$	2,254,813
Office equipment		713,754		717,259
Building		12,629,964		12,401,320
Leasehold improvements		3,936,159		2,803,052
Subtotal		20,616,302		18,176,444
Less: Accumulated Depreciation & Amortization		(4,047,935)		(3,689,309)
Total plant, property and equipment, net	$	16,568,367	$	14,487,135

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Note 6 - Taxes Payable: Schedule of Taxes Payable (Tables)

3 Months Ended

Jun. 30, 2017

Tables/Schedules

Schedule of Taxes Payable

	As of
	June 30,		March 31,
	2017		2017
Corporate income tax	$	1,156,996	$	1,382,382
Value-added tax		(10,676)		576,086
Other tax and fees		-		69,722
Total tax payable	$	1,146,320	$	2,028,190

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Note 7 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables)

3 Months Ended

Jun. 30, 2017

Tables/Schedules

Schedule of Effective Income Tax Rate Reconciliation

	Three Months Ended
	June 30,
	2017		2016
U.S. Statutory rate	$	1,832,893	$	751,891
Tax rate difference between China and U.S.		(523,684)		(214,826)
Permanent difference		-		35,659
Effective tax rate	$	1,309,209	$	572,724

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Note 7 - Income Taxes: Schedule of Provision for Income Tax Expense (Benefit) (Tables)

3 Months Ended

Jun. 30, 2017

Tables/Schedules

Schedule of Provision for Income Tax Expense (Benefit)

	Three Months Ended
	June 30,
	2017		2016
Current	$	1,141,854	$	591,354
Deferred		167,355		(18,630)
Total	$	1,309,209	$	572,724

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Note 1 - Organization and Principal Activities (Details)	3 Months Ended
	Jun. 30, 2017
Landway Nano Bio-Tech, Inc.
Subsidiary or Equity Method Investee, Cumulative Percentage Ownership after All Transactions	100.00%
Shandong Spring Pharmaceutical Co., Ltd.
Subsidiary or Equity Method Investee, Cumulative Percentage Ownership after All Transactions	97.00%

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Note 2 - Basis of Presentation and Summary of Significant Accounting Policies: Foreign Currency Translation: Schedule of Intercompany Foreign Currency Balances (Details)	Jun. 30, 2017	Jun. 30, 2016
Details
Foreign Currency Exchange Rate, Translation	6.7744	6.6312
Foreign Currency Exchange Rate Translation Average Rate	6.8536	6.5317

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Note 3 - Inventories: Schedule of Inventory (Details) - USD ($)	Jun. 30, 2017	Mar. 31, 2017
Details
Raw Materials	$ 1,196,558	$ 1,276,254
Packaging materials	418,148	476,803
Work-in-process	683,124	1,373,919
Finished goods	943,572	2,356,064
Inventories	$ 3,241,402	$ 5,483,040

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Note 4 - Plant, Property, and Equipment, Net: Property, Plant and Equipment (Details) - USD ($)	Jun. 30, 2017	Mar. 31, 2017
Details
Machinery and Equipment, Gross	$ 3,336,425	$ 2,254,813
Office Equipment	713,754	717,259
Buildings and Improvements, Gross	12,629,964	12,401,320
Leasehold Improvements, Gross	3,936,159	2,803,052
Property, Plant and Equipment, Gross	20,616,302	18,176,444
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	(4,047,935)	(3,689,309)
Plant, property, and equipment, net	$ 16,568,367	$ 14,487,135

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Note 4 - Plant, Property, and Equipment, Net (Details) - USD ($)	3 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Details
Depreciation	$ 287,248	$ 176,525

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Note 6 - Taxes Payable: Schedule of Taxes Payable (Details) - USD ($)	Jun. 30, 2017	Mar. 31, 2017
Details
Corporate Income Tax	$ 1,156,996	$ 1,382,382
Value-Added Tax	(10,676)	576,086
Other Tax and Fees		69,722
Taxes payable	$ 1,146,320	$ 2,028,190

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Note 7 - Income Taxes (Details) - USD ($)	3 Months Ended
	Jun. 30, 2017	Mar. 31, 2017
Details
Operating Loss Carryforwards	$ 22,000
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	25.00%
Withholding Tax	$ 8,687,140	$ 8,306,160

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Note 7 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($)	3 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Details
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount	$ 1,832,893	$ 751,891
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Amount	(523,684)	(214,826)
Permanent difference		35,659
Income tax provision	$ 1,309,209	$ 572,724

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Note 7 - Income Taxes: Schedule of Provision for Income Tax Expense (Benefit) (Details) - USD ($)	3 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Details
Current Federal Tax Expense (Benefit)	$ 1,141,854	$ 591,354
Deferred Income Tax Expense (Benefit)	167,355	(18,630)
Income tax provision	$ 1,309,209	$ 572,724

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Note 8 - Related Party Transactions and Balances (Details) - USD ($)	Jun. 30, 2017	Mar. 31, 2017
Details
Security deposit to related party	$ 1,476,145	$ 1,449,422
Purchase deposit to related party	$ 1,318,791
Accounts payable to related party		$ 706,048

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Note 9 - Major Customer and Vendor (Details)	3 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Number Of Major Distributors	The Company sold products through ten distributors	The Company sold products through ten distributors
Concentration Risk, Other Risk	Sales to four distributors represented 19%, 16%, 11% and 11% of total sales
Concentration Risk, Product	Sales of four products represented 37%, 17%, 11%, and 11% of total sales	Sales of three products represented 53%, 15%, and 14% of total sales
ShandongYctMember
Concentration Risk, Supplier	54%	33%
OtherVendor1Member
Concentration Risk, Supplier	19%	23%
OtherVendor2Member
Concentration Risk, Supplier	14%	18%
OtherVendor3Member
Concentration Risk, Supplier		14%