Variable Interest Entities

6 Months Ended

Dec. 31, 2018

Variable Interest Entities [Abstract]

VARIABLE INTEREST ENTITIES

NOTE 16 – VARIABLE INTEREST ENTITIES

In accordance with accounting standards regarding consolidation of variable interest entities, VIEs are generally entities that lack enough equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs with which a company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

Green Nevada through one of its subsidiaries, Jinong, entered into a series of agreements (the “VIE Agreements”) with Yuxing for it to qualify as a VIE, effective June 16, 2013.

The Company has concluded, based on the contractual arrangements, that Yuxing is a VIE and that the Company’s wholly-owned subsidiary, Jinong, absorbs most of the risk of loss from the activities of Yuxing, thereby enabling the Company, through Jinong, to receive a majority of Yuxing expected residual returns.

On June 30, 2016 and January 1, 2017, the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and into a series of contractual agreements to qualify as VIEs with the shareholders of the sales VIE Companies.

Jinong, the sales VIE Companies, and the shareholders of the sales VIE Companies also entered into a series of contractual agreements for the sales VIE Companies to qualify as VIEs (the “VIE Agreements”).

On November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, exited the VIE agreements with the shareholders of Zhenbai.

As a result of these contractual arrangements with Yuxing and the sales VIE companies, the Company is entitled to substantially all the economic benefits of Yuxing and the VIE Companies. The following financial statement amounts and balances of the VIEs were included in the accompanying consolidated financial statements as of December 31 and June 30, 2018:

	December 31,		June 30,
	2018		2018
ASSETS
Current Assets
Cash and cash equivalents	$	2,216,592	$	982,312
Accounts receivable, net		19,385,523		38,295,505
Inventories		25,072,690		21,133,970
Other current assets		703,112		988,051
Related party receivable		0		(359,005
Advances to suppliers		4,182,891		848,458
Total Current Assets		51,560,808		61,889,291
Plant, Property and Equipment, Net		10,281,928		11,206,667
Other assets		218,249		226,654
Intangible Assets, Net		10,569,436		11,348,180
Goodwill		3,204,371		3,319,732
Total Assets	$	75,834,792	$	87,990,524
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Short-term loan	$	0	$	0
Accounts payable		11,903,980		25,584,614
Customer deposits		618,762		841,694
Accrued expenses and other payables		5,151,624		3,896,340
Amount due to related parties		41,805,103		43,339,286
Total Current Liabilities	$	59,479,469	$	73,661,934
Long-term Loan		0		0
Total Liabilities	$	59,479,469	$	73,661,934
Stockholders’ equity		16,355,323		14,328,590
Total Liabilities and Stockholders’ Equity		75,834,792	$	87,990,524

	Three Months Ended December 31,
	2018			2017
Revenue	$	12,911,414		$	13,304,643
Expenses		13,571,628			10,989,225
Net income	$	(660,214	)	$	2,136,994

	Six Months Ended December 31,
	2018		2017
Revenue	$	30,896,434	$	31,077,318
Expenses		28,943,442		25,590,542
Net income	$	1,952,992	$	199,680