CONCENTRATIONS AND LITIGIATION

12 Months Ended

Jun. 30, 2014

Risks and Uncertainties [Abstract]

Concentration and Litigation [Text Block]

NOTE 12–CONCENTRATIONS AND LITIGIATION

Market Concentration

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

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

Vendor and Customer Concentration

There were two vendors, Beijing Dongqi Trade Center Co., Ltd. and Beijing Baofengnian Agricultural Material Co. Ltd., from which the Company purchased 11.6% and 10.7% of its raw materials for the year ended June 30, 2014. Total purchase from these two venders amounted to $31,597,539 as June 30, 2014. The total amount payable to these two venders as of June 30, 2014 was $8,803,074.

There were two vendors, Sinoagri Holding Co., Ltd. and Beijing Baohenongxiang Agricultural Materials Co. Ltd., from which the Company purchased 14.6% and 13.6% of its raw materials for the year ended June 30, 2013. Total purchase from these two venders amounted to $33,832,070 as June 30, 2013. The total amount payable to these two venders as of June 30, 2013 was $9,426,904.

There were two vendors from which the Company purchased 11.9% and 10.1% of its raw materials for the year ended June 30, 2012. Account payable to Beijing Baofengnian Agricultural Material Co. Ltd. was $216,842 and advance payment to Inner Mongolia Shuangying Chemical Products Co. Ltd. was $1,389,368.

One customer, Sinoagri Holding Co., Ltd., accounted for $15,910,503, or 6.9% of the Company’s sales for the year ended June 30, 2014. One customer, Beijing Baohenongxiang Agricultural Materials Co. Ltd., accounted for $39,735,292, or 18.3% of the Company’s sales for the year ended June 30, 2013. One customer, Sinoagri Holding Company Limited, accounted for $31,509,757, or 14.5% of the Company’s sales for the year ended June 30, 2012.

Litigation

On October 15, 2010, a class action lawsuit was filed against the Company and certain of its current and former officers in the United States District Court for the District of Nevada (the "Nevada Federal Court") on behalf of purchasers of the Company’s common stock between November 12, 2009 and September 1, 2010. The last version of the complaint alleges that the Company and certain current and former officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, as amended, by making material misstatements and omissions in the Company’s financial statements, securities offering documents, and related disclosures during the class period. On October 7, 2011, the defendants moved to dismiss the amended complaint and to strike portions of it. On November 2, 2012, the Court issued an order dismissing the claims for violation of sections 11, 12(a)(2) and 15 of the Securities Act of 1933 as to all defendants and dismissing two individual defendants from the complaint but allowing the claims for violations of section 10(b) and 20(a) of the Securities Exchange Act of 1934 to continue with respect to the Company and the remaining of the individual defendants. The Nevada Federal Court also denied the defendants’ motion to strike. The parties to the securities class action held mediation on March 7, 2013, which led to an agreement in principle to settle the case for a payment of $ 2.5 million by the Company’s insurers in exchange for a release of all claims against all defendants. On August 12, 2014, the Nevada Federal Court entered an order and final judgment granting final approval to the settlement and dismissing all claims in accordance with the settlement agreement. The Company’s insurers funded the full amount of the settlement of $2.5 million.