Intangible Assets

12 Months Ended

Jun. 30, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

NOTE 6 – INTANGIBLE ASSETS

Intangible assets consisted of the following:

	June 30,		June 30,
	2021		2020
Land use rights, net	$	9,330,109	$	8,755,869
Technology patent, net		-		-
Customer relationships, net		656,625		875,904
Non-compete agreement		16,589		153,190
Trademarks		6,404,328		5,854,087
Total	$	16,407,651	$	15,639,051

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 $11,329,022). 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 $161,913). 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 $1,127,733). The intangible asset is being amortized over the grant period of 50 years.

The Land Use Rights consisted of the following:

	June 30, 2020			Foreign Currency Adjustment		Amortization/ Subtraction			June 30, 2021
Land use rights	$	11,386,504			1,070,249					12,456,753
Less: accumulated amortization		(2,630,635	)				(496,009	)		(3,126,644	)
Total land use rights, net	$	8,755,869			1,070,249		(496,009	)		9,330,109

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 $909,461) 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 $1,424,160) and is amortized over the remaining useful life of six years using the straight-line method. As of June 30, 2021, this technology patent is fully amortized.

The technology know-how consisted of the following:

	June 30,			Foreign Currency			June 30,
	2020			Adjustment			2021
Technology know-how	$	2,133,122			200,498		$	2,333,621
Less: accumulated amortization		(2,133,122	)		(200,498	)		(2,333,621	)
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 $10,062,000) and is amortized over the remaining useful life of ten years. On June 30, 2016, and January 1, 2017 the Company acquired the VIE Companies. The fair value of the acquired customer relationships was estimated to be RMB12,701,403 (or $1,966,177) and is amortized over the remaining useful life of seven to ten years.

	June 30,			Foreign Currency		Amortization/			June 30,
	2020			Adjustment		Subtraction			2021
Customer relationships	$	10,994,749			1,033,429		-		$	12,028,177
Less: accumulated amortization		(10,118,844	)				(1,252,708	)		(11,371,552	)
Total customer relationships, net	$	875,904			1,033,429		(1,252,708	)	$	656,625

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 $204,336) 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 VIE Companies. The fair value of the acquired non-compete agreements was estimated to be RMB4,877,316 (or $755,009) and is amortized over the remaining useful life of five years using the straight-line method.

	June 30,			Foreign Currency		Amortization/			June 30,
	2020			Adjustment		Subtraction			2021
Non-compete agreement	$	876,920			82,425				$	959,345
Less: accumulated amortization		(723,730	)				(219,026	)		(942,756	)
Total non-compete agreement, net	$	153,190			82,425		(219,026	)	$	16,589

TRADEMARKS

On July 2, 2010, the Company acquired Gufeng and its wholly-owned subsidiary Tianjuyuan. The preliminary fair value on the acquired trademarks and brand names was estimated to be RMB41,371,630 (or $6,404,328) 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 ($)
2022		526,688
2023		510,099
2024		345,780
2025		279,227
2026		279,227