Convertible Notes Payable

12 Months Ended

Jun. 30, 2017

Loan Payables & Convertible Notes Payable [Abstract]

CONVERTIBLE NOTES PAYABLE

NOTE 10 – CONVERTIBLE NOTES PAYABLE

Relating to the acquisition of the VIE Companies, the Company subsidiary, Jinong, issued to the VIE Companies shareholders convertible notes payable twice, in the aggregate notional amount of RMB 63,000,000 ($9,462,600) with a term of three years and an annual interest rate of 3%.

No.		Related Acquisitions of Sales VIEs	Issuance Date	Maturity Date	Notional Interest Rate			Conversion Price		Notional Amount (in RMB)
	1	Wangtian, Lishijie, Shenqiu, Xindeguo, Xinyulei, Jinyangguang	June 30, 2016	June 30, 2019		3	%	$	5.00		51,000,000
	2	Fengnong, Xiangrong	January 1, 2017	December 31, 2019		3	%	$	5.00		12,000,000

The convertible notes take priority over the preferred stock and common stock of Jinong, and any other class or series of capital stocks Jinong issues in the future in terms of interests and payments in the event of any liquidation, dissolution or winding up of Jinong. On or after the third anniversary of the issuance date of the note, noteholders may request Jinong to process the note conversion to convert the note into shares of the Company’s common stock. The notes cannot be converted prior to the mature date. The per share conversion price of the notes is the higher of the following: (i) $5.00 per share or (ii) 75% of the closing price of the Company’s common stock on the date the noteholder delivers the conversion notice.

The Company determined that the fair value of the convertible notes payable was RMB 56,124,446 ($8,431,912) and RMB 44,330,692 ($6,671,769) as of June 30, 2017 and June 30, 2016, respectively, which was mainly due to the additional issuance of RMB 12,000,000 in the Xiangrong and Fengnong acquisition on Jan 1, 2017. The difference between the fair value of the notes and the face amount of the notes will be amortized to accretion interest expense over the three-year life of the notes. As of June 30, 2017, the amortization of this discount into accretion interest expenses was $369,401. As these notes were issued on and after June 30, 2016, there was no amortization of this discount into interest expense in fiscal year 2016.