Intangible Assets

12 Months Ended

Jun. 30, 2017

Intangible Assets [Abstract]

INTANGIBLE ASSETS

NOTE 5 – INTANGIBLE ASSETS

Intangible assets consisted of the following:

	June 30,		June 30,
	2017		2016
Land use rights, net	$	10,121,591	$	10,381,215
Technology patent, net		-		-
Customer relationships, net		5,578,641		6,403,343
Non-compete agreement		1,092,584		925,678
Trademarks		6,119,875		6,129,812
Total	$	22,911,876	$	23,840,048

LAND USE RIGHT

On September 25, 2009, Yuxing was granted a land use right for approximately 88 acres (353,000 square meters or 3.8 million square feet) by the People’s Government and Land & Resources Bureau of Hu County, Xi’an, Shaanxi Province. The fair value of the related intangible asset was determined to be the respective cost of RMB73,184,895 (or $10,995,299). The intangible asset is being amortized over the grant period of 50 years using the straight-line method.

On August 13, 2003, Tianjuyuan was granted a certificate of Land Use Right for a parcel of land of approximately 11 acres (42,726 square meters or 459,898 square feet) at Ping Gu District, Beijing. The purchase cost was recorded at RMB1,045,950 (or $157,144). The intangible asset is being amortized over the grant period of 50 years.

On August 16, 2001, Jinong received a land use right as a contribution from a shareholder, which was granted by the People’s Government and Land& Resources Bureau of Yangling District, Shaanxi Province. The fair value of the related intangible asset at the time of the contribution was determined to be RMB7,285,099 (or $1,094,513). The intangible asset is being amortized over the grant period of 50 years.

The Land Use Rights consisted of the following:

	June 30,								June 30,
	2016			Additions		Amortization			2017
Land use rights	$	12,268,150			-				$12,246,630
Less: accumulated amortization		(1,886,935	)				(238,104	)	(2,125,039)
Total land use rights, net	$	10,381,215							$10,121,591

TECHNOLOGY PATENT

On August 16, 2001, Jinong was issued a technology patent related to a proprietary formula used in the production of humid acid. The fair value of the related intangible asset was determined to be the respective cost of RMB 5,875,068 (or $884,198) and is being amortized over the patent period of 10 years using the straight-line method. This technology patent has been fully amortized.

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The fair value on the acquired technology patent was estimated to be RMB9,200,000 (or $1,384,600) and is amortized over the remaining useful life of six years using the straight-line method. As of June 30, 2016, this technology patent is fully amortized.

The technology know-how consisted of the following:

	June 30,						June 30,
	2016			Additions		Amortization	2017
Technology know-how	$	2,268,798			-		$	2,264,818
Less: accumulated amortization		(2,268,798	)					(2,264,818	)
Total technology know-how, net	$	-					$	-

CUSTOMER RELATIONSHIP

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The fair value on the acquired customer relationships was estimated to be RMB65,000,000 (or $9,765,600) and is amortized over the remaining useful life of ten years. On June 30, 2016, and January 1, 2017 the Company acquired the eight sales VIEs. The fair value of the acquired customer relationships was estimated to be RMB19,917,253 (or $2,992,368) and is amortized over the remaining useful life of from three years up to ten years.

	June 30,								June 30,
	2016			Additions		Amortization			2017
Customer relationships	$	12,257,101			522,028				$12,757,628
Less: accumulated amortization		(5,853,758	)				(1,325,229	)	(7,178,987)
Total customer relationships, net	$	6,403,343							$5,578,641

NON-COMPETE AGREEMENT

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The fair value on the acquired non-compete agreement was estimated to be RMB1,320,000 (or $198,264) and is amortized over the remaining useful life of five years using the straight-line method.  On June 30, 2016, the Company acquired the sales VIEs. The fair value on the acquired non-compete agreements were estimated to be RMB8,765,582 (or $1,316,906) and is amortized over the remaining useful life of five years using the straight-line method.

	June 30,						June 30,
	2016			Additions		Amortization	2017
Non-compete agreement	$	1,124,338			390,080		$	1,124,338
Less: accumulated amortization		(198,660	)					(422,634	)
Total non-compete agreement, net	$	925,678					$	1,092,584

TRADEMARKS

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The preliminary fair value on the acquired trademarks was estimated to be RMB40,700,000 (or $6,119,059) and is subject to an annual impairment test.

AMORTIZATION EXPENSE

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

Years Ending June 30,	Expense ($)
2018		1,894,275
2019		1,894,275
2020		1,855,439
2021		747,663
2022		576,687