Intangible Assets

3 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 6 – INTANGIBLE ASSETS

Intangible assets consisted of the following:

	September 30,		June 30,
	2020		2020
Land use rights, net	$	9,148,309	$	8,850,905
Technology patent, net		2,042		2,069
Customer relationships, net		865,518		908,933
Non-compete agreement		189,592		230,669
Trademarks		5,991,040		5,759,049
Total	$	16,196,501	$	15,751,625

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 $10,772,817). 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 $153,964). 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 $1,072,367). The intangible asset is being amortized over the grant period of 50 years.

The Land Use Rights consisted of the following:

	September 30,			June 30,
	2020			2020
Land use rights	$	11,999,147			11,534,506
Less: accumulated amortization		(2,850,838	)		(2,683,601	)
Total land use rights, net	$	9,148,309			8,850,905

TECHNOLOGY PATENT

On August 16, 2001, Jinong was issued a technology patent related to a proprietary formula used in the production of humic acid. The fair value of the related intangible asset was determined to be the respective cost of RMB 5,875,068 (or $864,810) 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 of the acquired technology patent was estimated to be RMB9,200,000 (or $1,354,240) and is amortized over the remaining useful life of six years using the straight-line method. As of June 30, 2020, this technology patent is fully amortized.

The technology know-how consisted of the following:

	September 30,			June 30,
	2020			2020
Technology know-how	$	2,223,414		$	2,137,317
Less: accumulated amortization		(2,221,373	)		(2,135,248	)
Total technology know-how, net	$	2,042		$	2,069

CUSTOMER RELATIONSHIPS

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The fair value of the acquired customer relationships was estimated to be RMB65,000,000 (or $9,568,000) and is amortized over the remaining useful life of ten years. On June 30, 2016 and January 1, 2017, the Company acquired the sales VIE Companies. The fair value of the acquired customer relationships was estimated to be RMB16,472,179 (or $2,424,705) and is amortized over the remaining useful life of seven to ten years.

	September 30,			June 30,
	2020			2020
Customer relationships	$	11,736,197		$	11,281,739
Less: accumulated amortization		(10,870,679	)		(10,372,806	)
Total customer relationships, net	$	865,518		$	908,933

NON-COMPETE AGREEMENT

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The fair value of the acquired non-compete agreement was estimated to be RMB1,320,000 (or $194,304) and is amortized over the remaining useful life of five years using the straight-line method. On June 30, 2016 and January 1, 2017, the Company acquired the sales VIE Companies. The fair value of the acquired non-compete agreements was estimated to be RMB6,150,683 (or $905,381) and is amortized over the remaining useful life of five years using the straight-line method.

	September 30,			June 30,
	2020			2020
Non-compete agreement	$	1,201,657		$	1,155,127
Less: accumulated amortization		(1,012,065	)		(924,458	)
Total non-compete agreement, net	$	189,592		$	230,669

TRADEMARKS

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The preliminary fair value of the acquired trademarks was estimated to be RMB40,700,000 (or $5,991,040) and is subject to an annual impairment test.

AMORTIZATION EXPENSE

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

Twelve Months Ended on September 30,	Expense ($)
2021		784,659
2022		591,115
2023		535,304
2024		389,121
2025		342,150