Nevada
|
36-3526027
|
(State or other jurisdiction of
incorporation or organization)
|
(IRS Employer Identification No.)
|
Title of each class
|
Name of each exchange on which registered
|
|
Common Stock, $0.001 Par Value Per Share
|
NYSE
|
Large accelerated filer
¨
|
Accelerated filer
x
|
Non-accelerated filer
¨
Do not check if a smaller reporting
company
|
Smaller reporting company
¨
|
PAGE
|
||||
|
||||
PART I
|
|
|||
Item 1.
|
Business
|
4
|
||
Item 1A.
|
Risk Factors
|
22
|
||
Item 1B.
|
Unresolved Staff Comments
|
38 | ||
Item 2.
|
Properties
|
38
|
||
Item 3.
|
Legal Proceedings
|
40
|
||
Item 4.
|
(Removed and Reserved)
|
41
|
||
PART II
|
|
|||
Item 5.
|
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
41
|
||
Item 6.
|
Selected Financial Data
|
43
|
||
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
45
|
||
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
57
|
||
Item 8.
|
Financial Statements and Supplementary Data
|
58
|
||
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
58
|
||
Item 9A.
|
Controls and Procedures
|
58
|
||
Item 9B.
|
Other Information
|
58
|
||
PART III
|
|
|||
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
62
|
||
Item 11.
|
Executive Compensation
|
62
|
||
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
62
|
||
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
62
|
||
Item 14.
|
Principal Accountant Fees and Services
|
62
|
||
PART IV
|
|
|||
Item 15.
|
Exhibits and Financial Statement Schedules
|
62
|
||
SIGNATURES
|
S-1
|
|||
EXHIBIT INDEX
|
E-1
|
|||
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
F-1
|
|
·
|
at least $150 million for fiscal year 2011;
|
|
·
|
at least $750 million for fiscal year 2015; and
|
|
·
|
at least $3 billion for fiscal year 2020.
|
|
·
|
Establish the Engineering Center;
|
|
·
|
Participate in the design of the Protocol;
|
|
·
|
Expand market share by broadening our geographic distribution network and increasing brand awareness;
|
|
·
|
Reduce future manufacturing costs by securing raw material supplies; and
|
|
·
|
Further utilize our research and development platform.
|
|
·
|
Enhance Production Utilization.
The current utilization rate of the production facilities of Jinong and Gufeng are at 87% and 58%, respectively. Jinong and Gufeng have a total annual production capacity of 55,000 metric tons and 500,000 metric tons, respectively. To meet the increasing customer demand, we plan to hire additional sale persons, upgrade certain existing facilities and construct new facilities.
|
|
·
|
Expand Capacity and Diversify Product Offerings.
Through our acquisition of Gufeng, we increased our annual fertilizer production capacity to 555,000 metric tons and our portfolio of fertilizers to 454 products. To meet the needs of farmers in the PRC, we will expand our existing line of fertilizer products, develop new fertilizers and execute other strategic acquisitions of PRC fertilizer manufacturers that complement our strategies and product lines.
|
|
·
|
Capitalize on Synergies Created by Research and Development Efforts.
In connection with the pending construction of Yuxing’s research and development center, we have completed the construction of 100 sunlight greenhouses and 6 “intelligent” greenhouses. We expect the Yuxing facility to help us shorten the fertilizer market cycle by providing an advanced testing field for new fertilizer products manufactured by Jinong. In addition, through our research and development efforts on fertilizers, we expect to simultaneously facilitate the production of superior agricultural products, such as flower bulbs, flowers, fruits and vegetables, resulting in increased revenues.
|
|
·
|
Compound fertilizer- composed of various elements such as urea, ammonium chloride, ammonium sulfate, potassium chloride, potassium sulfate and etc. It is for common crops.
|
|
·
|
Organic/inorganic compound fertilizer- composed of such elements as urea, ammonium phosphate, potassium chloride, potassium sulfate, humic acid and etc. It applies to vegetable and economic crops.
|
|
·
|
Blended fertilizer-with the ingredients of urea, potassium chloride and etc. It suits to maize in the northeast region.
|
|
·
|
Slow-release fertilizer with the main ingredients of urea and resin. It applies to maize and other crops.
|
|
·
|
Water-soluble fertilizers with humic acid- composed of such elements as urea, potassium chloride, potassium sulfate, humic acid and etc. It suits to fruit trees and vegetable.
|
|
·
|
Top-grade flowers, including principally, faber cymbidium and phalaenopsis. These two types of flowers are mainly distributed to the middle and high-end consumers in Shaanxi Province and its adjacent areas. Their seedlings are distributed across the country, primarily to the southern regions of China.
|
|
·
|
Green vegetables and fruits, including, principally, Holland cucumbers, sweet and colored pimientos, eggplant and Japanese watermelons, which are distributed to middle and high-end consumers in Shaanxi Province, primarily in Xi’an.
|
|
·
|
Multicolored seedlings, including, principally, photinia serrulata (Chinese Photinia), which is distributed to customers across China.
|
Volume
|
Revenues
|
Percent of
|
||||||||||||
Ranking
|
Product Names
|
(Tons)
|
(USD)
|
Fertilizer Sales
|
||||||||||
1
|
Organic/Inorganic Compound Fertilizer(sulfur-based) NPK≥40%
|
59,995
|
$ |
24,062,396
|
13.9
|
% | ||||||||
2
|
Organic/Inorganic Compound Fertilizer(sulfur-based) NPK≥45%
|
53,527
|
$ |
22,772,570
|
13.2
|
% | ||||||||
3
|
Compound Fertilizer NPK≥40%
|
49,402
|
$ |
15,015,039
|
8.7
|
% | ||||||||
4
|
Organic/Inorganic Compound Fertilizer(sulfur-based) NPK≥48%
|
20,888
|
$ |
8,888,475
|
5.1
|
% | ||||||||
5
|
Organic/Inorganic Compound Fertilizer(sulfur-based) NPK≥46%
|
16,951
|
$ |
7,451,679
|
4.3
|
% |
Ranking
|
Customer Name
|
|
Amount (USD)
|
|
|
Percentage
of
Jintai's sales
|
|
|||
1
|
Tianxi Yuanyi Co.
|
$
|
996,291
|
14.6
|
%
|
|||||
2
|
Baoji Qinfeng Flower Co., Ltd.
|
$
|
660,266
|
9.7
|
%
|
|||||
3
|
Dafeng Potted Flower Co., Ltd
|
$
|
636,556
|
9.3
|
%
|
|||||
4
|
Xi’an Qingmei Flower Co., Ltd
|
$
|
605,696
|
8.9
|
%
|
|||||
5
|
Chengdu Huadu Gardening Company
|
$
|
552,102
|
8.1
|
%
|
Trademark
|
Registration Number
|
Valid Term
|
||
Jinong
|
No.3906984
|
May 7, 2007 to May 6, 2017
|
||
Mei Er An
|
No. 1508004
|
January 20, 2011 to January 20, 2021
|
||
SPR HOP
|
No. 3320282
|
May 28, 2004 to May 27, 2014
|
||
科霸
KEBA
|
No. 760379
|
August 14, 2005 to August 13, 2015
|
||
天聚
缘
T.J.Y
|
No. 3320283
|
May 28, 2004 to May 27, 2014
|
||
Huang Cheng Gen
|
No. 5219720
|
June 28, 2009 to June 27, 2019
|
Patent/Pending
Patent
Application
|
|
Type of Patent
|
|
Patent No.
/Application No.
|
|
Inventor’s
Name and
Patent Holder
|
|
Date of
Application
|
|
Date of
Publication and
Term
|
Patent:
Production facility of Humic Acid Products
|
Utility Model
Patent
|
Patent No.: ZL
2007 2
0031884.2
|
Inventor: Tao Li
Patent Holder:
Jinong
|
May 29, 2007
|
May 14, 2008;
10 years
|
|||||
Patent
Application:
Method and recipe of the water soluble humic acid fertilizers
|
Utility Model
Patent
|
Application No.:
200710017334.x
|
Applicant:
Jinong
|
February 1,
2007
|
November 24, 2010;
|
|
1)
|
Drying fan for urea-based compound fertilizer. The drying fan for urea-based compound fertilizer is specially designed by our technical personnel through numerous tests on different fertilizer products.
|
|
2)
|
Heat balance control system for flexible compound fertilizer.
|
|
3)
|
Automatic control system for the anti-block of compound fertilize
|
|
4)
|
Water control technology for low nitrogen, low potassium and high phosphorus compound fertilizer
|
|
5)
|
Manufacturing technology for salt-alkaline resistance and soil improvement of compound fertilizer. The company had won the third prize for progress in science and technology in Pinggu District Beijing with this technology.
|
|
6)
|
Manufacturing technology for compound HA fertilizer with high density (NPK≥51%).
|
|
7)
|
Manufacturing technology for the sustained release of blending and compound fertilizer. This technology has passed the inspection and approval of expert panel of Beijing municipal committee.
|
|
·
|
“Green” Certification
. Except for those manufactured by Gufeng and Tianjuyuan, all of our fertilizer products are certified by the CGFDC as green food production material. Our Green Food Production Material Certificate was issued to Jinong on March 30, 2009 and will expire in March 2012. The certificate is renewable with an application within 90 days prior to its expiration. Currently, the CGFDC provides two different certifications within the green food industry: namely, "Green Food Certification" which is granted to edible foods and "Green Food Production Material Certification" which is granted to production materials such as our fertilizer products that meet criteria such as standards that increase human safety and ecological protection of the environmental, in addition to promoting non-polluting product growth and the use of non-genetically modified raw materials. Prior to July 2007, the two categories mentioned above were combined into one category under which companies were issued a "Green Food Certificate." In an effort to improve social sustainable development and optimize the regulation of policy for the PRC green food industry, the CGFDC separated the certification system into two categories.
|
|
·
|
Operating license
.
Our operating license enables us to undertake research and development, production, sales and services of humic acid liquid fertilizer, sales of pesticides, and export and import of products, technology and equipment. The license (registration no. 610000100003655) is valid through August 8, 2057. Once the term has expired, the license is renewable. Gufeng and Tianjuyuan maintain valid operating licenses, which expire on August 1, 2013 and August 7, 2021, respectively.
|
|
·
|
Fertilizer Registration
.
Fertilizer registration is required for the production of fertilizer and issued by the Ministry of Agriculture of the PRC. The registration numbers held by Jinong are: Agriculture Fertilizer Numbers. 1085, 1083, 1084, 0467, 0865, 0896, 4081, 4082, 0992, 5471 and 5511. There are two kinds of registrations: interim registration and formal registration. The interim registration is valid for one year and applies to fertilizers in the stages of in-the-field testing and test selling. Our certificates No. 0865, No. 0896, No. 4081, No.4082, No.0992, No. 5471 and No. 5511 are interim fertilizer registration certificates. Fertilizers that have completed in-the-field testing and test selling must obtain formal registration, which, if granted, is valid for five years, and thereafter must be renewed every five years. Our formal fertilizer registration certificates are certificates No. 1083, No. 1084, No. 1085 and No. 0467. Gufeng and Tianjuyuan have 39 interim fertilizer certificates and 313 formal certificates that are current and valid for the production of their fertilizer products.
|
|
|
Registration
No.
|
|
Trademark
|
|
Product
Name
|
|
Main Technique Index
|
|
Certificate
Issuance Date
|
|
Expiration
Date
|
1
|
No. 1085
|
Ji Nong
|
Humic Acid Liquid Fertilizer
|
Fe+Mn+Zn+B+Mo≥20 g/l;
Amino Acid
≥100 g/l
|
April 23, 2008
|
April, 2013
|
||||||
2
|
No. 1083
|
Ji Nong
|
Humic Acid Liquid Fertilizer
|
N+P2O5+K2O≥200g/l;
Humic Acid≥40 g/l
|
April 23,2008
|
April, 2013
|
||||||
3
|
No. 1084
|
Ji Nong
|
Humic Acid Liquid Fertilizer
|
N+P2O5+K2O≥350g/l;
Humic Acid≥30 g/l
|
April 23,2008
|
April , 2013
|
||||||
4
|
No.0 467
|
Ji Nong
|
Humic Acid Liquid Fertilizer
|
N+P2O5+K2O≥23g/l;
Organic Matter≥80g/l
Cu+Fe+Mn+Zn+B+Mo≥60 g/l
|
July 11, 2011
|
October, 2015
|
||||||
5
|
No.0865
|
Ji Nong
|
Organic Fertilizer
|
N+P2O5+ K2O≥10%;
Organic Matter≥30%
|
April 6, 2011
|
April , 2012*
|
||||||
6
|
No.0896
|
Ji Nong
|
Refined Organic Fertilizer
|
N+P2O5+ K2O≥8%;
Organic Matter≥30%
|
April 6, 2011
|
April, 2012*
|
||||||
7.
|
No. 4081
|
Ji Nong
|
Humic Acid
|
N+P
2
O
5
+K
2
O≥35.0%
|
October 11,
|
November, 2011*
|
||||||
Liquid
|
Humic Acid≥3.0%
|
2010
|
||||||||||
Fertilizer
|
||||||||||||
8.
|
No. 4082
|
Ji Nong
|
Humic Acid
|
Fe+Mn+Zn+B≥6.0%
|
October 11,
|
November, 2011*
|
||||||
Liquid
|
Humic Acid≥3.0%
|
2010
|
||||||||||
Fertilizer
|
||||||||||||
9.
|
No. 0992
|
Ji Nong
|
Organic
|
N+P
2
O
5
+K
2
O≥4.0%
|
January 20,
|
January, 2012*
|
||||||
Fertilizer
|
Organic Matter≥30%
|
2011
|
||||||||||
10.
|
No. 5471
|
Ji Nong
|
Humic Acid
|
N+K2O≥20.0%
|
July 11,
|
July, 2012*
|
||||||
Liquid
|
Humic Acid≥4.0%
|
2011
|
||||||||||
Fertilizer
|
||||||||||||
11.
|
No. 5511
|
Ji Nong
|
Liquid
|
N+P2O5+K2O≥50.0%
|
July 11,
|
July, 2012*
|
||||||
Fertilizer
|
Zn+B 0.5%-3.0%
|
2011
|
|
·
|
loss of key employees or customers;
|
|
·
|
possible inconsistencies in standards, controls, procedures and policies among the combined companies and the need to implement company-wide financial, accounting, information, production and other systems;
|
|
·
|
failure to maintain the quality of products that the companies have historically provided;
|
|
·
|
failure to upgrade existing production lines of Gufeng or effectively implement humic acid production technology into existing manufacturing process of Gufeng;
|
|
·
|
effectively coordinating sales, marketing and distribution functions, including the cross-selling of products;
|
|
·
|
the need to coordinate geographically diverse organizations, and
|
|
·
|
the diversion of management's attention from our day-to-day business as a result of the need to deal with any disruptions and difficulties and the need to add management resources to do so.
|
|
·
|
changes in laws, regulations or their interpretation;
|
|
·
|
confiscatory taxation;
|
|
·
|
restrictions on currency conversion, imports or sources of supplies;
|
|
·
|
expropriation or nationalization of private enterprises.
|
|
·
|
food, feed, and energy demand including liquid fuels and crude oil;
|
|
·
|
agricultural, financial, energy and renewable energy and trade policies;
|
|
·
|
input and output pricing due to market factors and regulatory policies;
|
|
·
|
production and crop progress due to adverse weather conditions, equipment deliveries, and water and irrigation conditions; and
|
|
·
|
infrastructure conditions and policies.
|
|
·
|
actual or anticipated fluctuations in our quarterly operations results;
|
|
·
|
filing of a class action lawsuit against us and certain of our current and former officers;
|
|
·
|
changes in financial estimates by securities research analysts;
|
|
·
|
conditions in foreign or domestic fertilizer and agricultural markets;
|
|
·
|
changes in the economic performance or market valuations of other companies in the same industry;
|
|
·
|
announcements by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital commitments;
|
|
·
|
addition or departure of key personnel;
|
|
·
|
fluctuations of exchange rates between the RMB and the U.S. dollar;
|
|
·
|
intellectual property litigation;
|
|
·
|
general economic or political conditions in the PRC; and
|
|
·
|
Other events or factors, many of which are beyond our control.
|
|
·
|
limit our ability to pay dividends or require us to seek consent for the payment of dividends;
|
|
·
|
increase our vulnerability to general adverse economic and industry conditions;
|
|
·
|
require us to dedicate a portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow to fund capital expenditures, working capital and other general corporate purposes; and
|
|
·
|
limit our flexibility in planning for, or reacting to, changes in our business and our industry.
|
Facility Location
and Production
Segment
|
|
Address
|
|
Area (square meters
/ square feet)
|
|
Ownership Status and
Term
|
Xi’an – Fertilizers (Jinong)
|
Yang Ling Agriculture High-tech Demonstration Zone, No. 6 Guhua 5 Road, Yangling, Xi’an, Shaanxi province
|
30,947 sq. m.
(333,111 sq. ft.)
|
Land use right (Certificate #006012633) expires in January 2051
|
|||
Xi’an – Fertilizers (Jinong)
|
Yang Ling Agriculture High-tech Demonstration Zone, No. 6 Guhua 5 Road, Yangling, Xi’an, Shaanxi province
|
6,495 sq. m.
(69,911 sq. ft.)
|
Building Ownership Certificate (Certificate # 20050722)
|
|||
Xi’an – Agricultural Products (Jintai)
|
Caotan Modern Agriculture Development Zone, Middle Section of Shangji Road, Caotan, Xi’an, Shaanxi Province
|
137,000 sq. m.
(1,474,656 sq. ft.)
|
Lease from January 2008 to January 2018
|
|||
Xi’an – research and development center (Yuxing)
|
North Xin’anVillage, Weifeng, Hu County, Shaanxi Province
|
353,000 sq. m.
(3,799,660 sq. ft.)
|
Land use right (Certificate #006001700) expires in August 2059
|
|||
Beijing – fertilizers (Tianjuyuan & Gufeng)
|
South of Nanzhangdai Village, Donggaocun Town, Ping Gu District, Beijing
|
42,726 sq. m.
(459,898 sq. ft.)
|
Land use right (Certificate #2003189) expires in August 2053
*
|
|||
Beijing – fertilizers (Tianjuyuan & Gufeng)
|
South of Nanzhangdai Village, Donggaocun Town, Ping Gu District, Beijing
|
17,930 sq. m.
(192,997 sq. ft.)
|
Building Ownership Certificate# 33142
*
|
|||
Beijing – fertilizers (Tianjuyuan & Gufeng)
|
|
South of Nanzhangdai Village, Donggaocun Town, Ping Gu District, Beijing
|
|
47,333 sq. m.
(509,488 sq. ft.)
|
|
Lease from February 2004 to January 2054
|
No.
|
|
Loan
Amount
|
|
Lending Institution
|
|
Contract
Period
|
|
Type of
Guarantee
|
|
Interest
Rate
|
|
Property under
Mortgage
|
1
|
RMB10.1 million ($1,562,470)
|
China Agriculture Bank - Beijing Ping Gu District Branch
|
May 23, 2011 to April 19, 2012
|
Mortgage
|
7.2565% (year)
|
Tianjuyuan’s land (Certificate #2003189) and building (Certificate #33142)
|
||||||
2
|
RMB8.4 million ($1,299,480)
|
China Agriculture Bank - Beijing Ping Gu District Branch
|
February 8, 2011 to February 1, 2012
|
Mortgage
|
7.2565% (year)
|
Tianjuyuan’s land (Certificate #2003189) and building (Certificate #33142)
|
||||||
3
|
|
RMB8 million ($1,237,600)
|
|
China Agriculture Bank - Beijing Ping Gu District Branch
|
|
April 12, 2011 to April 11, 2012
|
|
Mortgage
|
|
7.2565% (year)
|
|
Tianjuyuan’s land (Certificate # 2003189) and building (Certificate #33142)
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|
Quarter Ended
|
High Bid
|
Low Bid
|
||||||
09/30/2008
|
$
|
25.01
|
$
|
0.00
|
||||
12/31/2008
|
$
|
3.40
|
$
|
1.84
|
Quarter Ended
|
High
|
Low
|
||||||
03/31/2009
|
$
|
3.90
|
$
|
2.60
|
||||
06/30/2009
|
$
|
9.00
|
$
|
3.28
|
||||
09/30/2009
|
$
|
15.00
|
$
|
6.81
|
||||
12/31/2009
|
$
|
18.70
|
$
|
10.02
|
||||
03/31/2010
|
$
|
17.89
|
$
|
12.31
|
||||
06/30/2010
|
$
|
14.49
|
$
|
8.91
|
||||
09/30/2010
|
$
|
12.50
|
$
|
8.15
|
||||
12/31/2010
|
$
|
10.49
|
$
|
6.81
|
||||
03/31/2011
|
$
|
9.49
|
$
|
6.45
|
||||
06/30/2011
|
$
|
7.87
|
$
|
3.43
|
Plan category
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(a)
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
(c)
|
|||||||||
Equity compensation plans approved by security holders
|
115,099 | $ | 14.67 | 1,797,406 | ||||||||
Equity compensation plans not approved by security holders
|
— | — | — | |||||||||
Total
|
115,099 | $ | 14.67 | 1,797,406 |
For the year ended June 30,
|
||||||||||||||||||||
2011
|
2010
|
2009
|
2008
|
2007
|
||||||||||||||||
Revenue
|
$ | 179,717,966 | $ | 52,090,752 | $ | 35,207,997 | $ | 22,604,719 | $ | 15,184,343 | ||||||||||
Cost of goods sold
|
116,097,931 | 21,138,552 | 14,712,066 | 9,792,856 | 6,598,606 | |||||||||||||||
Gross profit
|
63,620,035 | 30,952,200 | 20,495,931 | 12,811,863 | 8,585,737 | |||||||||||||||
Operating expenses
|
21,508,604 | 6,025,579 | 3,405,918 | 3,494,946 | 1,011,686 | |||||||||||||||
Income from operations
|
42,111,431 | 24,926,621 | 17,090,013 | 9,316,917 | 7,574,051 | |||||||||||||||
Non-operating income (expense)
|
(160,186 | ) | 157,653 | (294,043 | ) | (845,916 | ) | (360,297 | ) | |||||||||||
Provision for income taxes
|
9,037,144 | 3,794,516 | 2,331,548 | 692,474 | 295,012 | |||||||||||||||
Net income
|
$ | 32,914,101 | $ | 21,289,758 | $ | 14,464,422 | $ | 7,778,527 | $ | 6,918,742 | ||||||||||
Weighted average shares outstanding:
|
||||||||||||||||||||
Basic
|
25,929,517 | 23,468,246 | 18,478,474 | 14,688,250 | 10,770,669 | |||||||||||||||
Diluted
|
25,929,517 | 23,468,246 | 18,532,591 | 14,695,626 | 10,770,669 | |||||||||||||||
Earnings (loss) per share:
|
||||||||||||||||||||
Basic
|
$ | 1.27 | $ | 0.91 | $ | 0.78 | $ | 0.53 | $ | 0.64 | ||||||||||
Diluted
|
$ | 1.27 | $ | 0.91 | $ | 0.78 | $ | 0.53 | $ | 0.64 | ||||||||||
As of June 30,
|
||||||||||||||||||||
2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||
Total current assets
|
$ | 118,881,464 | $ | 89,478,076 | $ | 33,593,958 | $ | 25,026,275 | $ | 4,136,059 | ||||||||||
Total assets
|
223,370,987 | 131,787,942 | 61,618,426 | 49,521,382 | 17,099,775 | |||||||||||||||
Total current liabilities
|
31,497,746 | 3,250,020 | 8,458,299 | 11,738,686 | 8,334,420 | |||||||||||||||
Total liabilites
|
31,497,746 | 3,250,020 | 8,458,299 | 11,738,686 | 8,334,420 | |||||||||||||||
Total shareholders' equity
|
$ | 191,873,241 | $ | 128,537,922 | $ | 32,640,872 | $ | 17,263,441 | $ | 8,765,355 |
As of June 30,
|
||||
2011
|
||||
Revenue
|
$ | 107,081,018 | ||
Cost of goods sold
|
85,670,990 | |||
Gross profit
|
21,410,028 | |||
Operating expenses
|
6,121,157 | |||
Income (loss) from operations
|
15,288,871 | |||
Non-operating income (expense)
|
(412,927 | ) | ||
Income tax expense
|
3,879,959 | |||
Net income (loss)
|
$ | 10,995,985 | ||
As of June 30,
|
||||
2011 | ||||
Total current assets
|
$ | 30,037,818 | ||
Total assets
|
75,919,198 | |||
Total current liabilities
|
35,118,933 | |||
Total liabilites
|
35,118,933 | |||
Total shareholders' equity
|
$ | 40,800,265 |
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
|
·
|
at least $150 million for fiscal year 2011;
|
|
·
|
at least $750 million for fiscal year 2015; and
|
|
·
|
at least $3 billion for fiscal year 2020.
|
|
·
|
Establish the Engineering Center;
|
|
·
|
Participate in the design of the Protocol;
|
|
·
|
Expand market share by broadening our geographic distribution network and increasing brand awareness;
|
|
·
|
Reduce future manufacturing costs by securing raw material supplies; and
|
|
·
|
Further utilize our research and development platform.
|
For the Years Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Net sales
|
$ | 179,717,966 | $ | 52,090,752 | ||||
Jinong
|
65,629,265 | 45,816,377 | ||||||
Gufeng
|
107,081,018 | - | ||||||
Jintai
|
6,826,933 | 6,274,375 | ||||||
Yuxing
|
180,750 | - | ||||||
Cost of goods sold
|
116,097,931 | 21,138,552 | ||||||
Jinong
|
26,449,117 | 17,700,532 | ||||||
Gufeng
|
85,670,990 | - | ||||||
Jintai
|
3,841,391 | 3,438,020 | ||||||
Yuxing
|
136,433 | - | ||||||
Gross profit
|
63,620,035 | 30,952,200 | ||||||
Selling expenses
|
7,121,905 | 2,203,345 | ||||||
General and administrative expenses
|
14,386,699 | 3,822,234 | ||||||
Income from operations
|
42,111,431 | 24,926,621 | ||||||
Total other income (expense)
|
(160,186 | ) | 157,653 | |||||
Income before income taxes
|
41,951,245 | 25,084,274 | ||||||
Provision for income taxes
|
9,037,144 | 3,794,516 | ||||||
Net income
|
32,941,101 | 21,289,758 | ||||||
Jinong
|
29,139,457 | 21,502,252 | ||||||
Gufeng
|
10,995,985 | - | ||||||
Jintai
|
(96,244 | ) | 2,640,233 | |||||
Yuxing
|
(293,914 | ) | (181,304 | ) | ||||
Parent
|
(6,831,182 | ) | (2,671,423 | ) | ||||
Basic net earnings per share
|
$ | 1.27 | $ | 0.91 | ||||
Basic weighted average shares outstanding
|
25,929,517 | 23,468,246 | ||||||
Diluted weighted average shares outstanding
|
25,929,517 | 23,468,246 |
For the Years Ended June 30,
|
||||||||
2010
|
2009
|
|||||||
Net sales
|
$ | 52,090,752 | $ | 35,207,997 | ||||
Jinong
|
45,816,377 | 28,889,131 | ||||||
Gufeng
|
- | - | ||||||
Jintai
|
6,274,375 | 6,318,866 | ||||||
Yuxing
|
- | - | ||||||
Cost of goods sold
|
21,138,552 | 14,712,066 | ||||||
Jinong
|
17,700,532 | 11,173,236 | ||||||
Gufeng
|
- | - | ||||||
Jintai
|
3,438,020 | 3,538,830 | ||||||
Yuxing
|
- | - | ||||||
Gross profit
|
30,952,200 | 20,495,931 | ||||||
Selling expenses
|
2,203,345 | 1,412,101 | ||||||
General and administrative expenses
|
3,822,234 | 1,993,817 | ||||||
Income from operations
|
24,926,621 | 17,090,013 | ||||||
Total other income (expense)
|
157,653 | (294,043 | ) | |||||
Income before income taxes
|
25,084,274 | 16,795,970 | ||||||
Provision for income taxes
|
3,794,516 | 2,331,548 | ||||||
Net income
|
21,289,758 | 14,464,422 | ||||||
Jinong
|
21,502,252 | 13,411,090 | ||||||
Gufeng
|
- | - | ||||||
Jintai
|
2,640,233 | 2,446,238 | ||||||
Yuxing
|
(181,304 | ) | - | |||||
Parent
|
(2,671,423 | ) | (1,392,885 | ) | ||||
Basic net earnings per share
|
$ | 0.91 | $ | 0.78 | ||||
Basic weighted average shares outstanding
|
23,468,246 | 18,478,474 | ||||||
Diluted weighted average shares outstanding
|
23,468,246 | 18,532,591 |
Fiscal Year Ended June 30,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Net cash provided by operating activities
|
$ | 33,647,469 | $ | 12,232,035 | $ | 7,184,086 | ||||||
Net cash used in investing activities
|
(32,966,702 | ) | (16,524,693 | ) | (5,097,721 | ) | ||||||
Net cash provided by financing activities
|
- | 48,451,548 | (926,957 | ) | ||||||||
Effect of exchange rate change on cash and cash equivalents
|
2,590,209 | 381,100 | 23,623 | |||||||||
Net increase in cash and cash equivalents
|
3,270,976 | 44,539,990 | 1,183,031 | |||||||||
Cash and cash equivalents, beginning balance
|
62,335,437 | 17,795,447 | 16,612,416 | |||||||||
Cash and cash equivalents, ending balance
|
$ | 65,606,413 | $ | 62,335,437 | $ | 17,795,447 |
30-Jun-11
|
June 30, 2010* |
June 30, 2009*
|
||||||||||
Short term loans payable:
|
$ | 4,099,550 | $ | - | $ | 3,170,290 | ||||||
Total
|
$ | 4,099,550 | $ | - | $ | 3,170,290 |
Payments Due by Period
|
||||||||||||||||||||
Less Than
|
One to
|
Three to
|
More Than
|
|||||||||||||||||
One Year
|
Three Years
|
Five Years
|
Five Years
|
Total
|
||||||||||||||||
Short term loans
|
$ | 4,099,550 | $ | - | $ | - | $ | - | $ | 4,099,550 | ||||||||||
Operating lease obligations
|
34,375 | 34,481 | 29,586 | 210,911 | 309,353 | |||||||||||||||
Total
|
$ | 4,133,925 | $ | 34,481 | $ | 29,586 | $ | 210,911 | $ | 4,408,903 |
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
·
|
We have improved our internal control environment by establishing policies and procedures of transaction level and entity.
|
·
|
We have implemented a financial closing process check list including major book closure steps to perform consolidation and reviews.
|
·
|
We plan to strengthen our financial team by employing more qualified accountants to enhance the quality of our financial reporting preparation.
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Report of Independent Registered Public Accounting Firm
|
F- 1
|
|
Consolidated Balance Sheets - as of June 30, 2011 and 2010
|
F- 2
|
|
Consolidated Statements of Income and Other Comprehensive Income - for the Years ended June 30, 2011 and 2010
|
F- 3
|
|
Consolidated Statements of Shareholders’ Equity - for the Years ended June 30, 2011 and 2010
|
F- 4
|
|
Consolidated Statements of Cash Flows - for the Years ended June 30, 2011 and 2010
|
F- 5
|
|
Notes to Consolidated Financial Statements
|
F-6 - F- 27
|
Balance at
|
Charged to
|
Deduction
|
Balance at
|
|||||||||||||
Beginning
|
Costs and
|
From
|
End
|
|||||||||||||
For the Years Ended June 30,
|
of Year
|
Expenses
|
Reserves
|
of Year
|
||||||||||||
2009
|
$ | - | $ | 119,178 | $ | - | $ | 119,178 | ||||||||
2010
|
$ | 119,178 | $ | 74,224. | $ | - | $ | 193,402 | ||||||||
2011
|
$ | 193,402 | $ | 144,398 | $ | - | $ | 337,801 |
Balance at
|
Charged to
|
Deduction
|
Balance at
|
|||||||||||||
Beginning
|
Costs and
|
From
|
End
|
|||||||||||||
For the Years Ended June 30,
|
of Year
|
Expenses
|
Reserves
|
of Year
|
||||||||||||
2009
|
$ | - | $ | - | $ | - | $ | - | ||||||||
2010
|
$ | - | $ | - | $ | - | $ | - | ||||||||
2011
|
$ | - | $ | 549,570 | $ | - | $ | 549,570 |
China Green Agriculture, Inc.
|
||
Date: September 12, 2011
|
By:
|
/s/ Tao Li
|
Tao Li, President and CEO
|
||
(principal executive officer)
|
September 12, 2011
|
/s/ Tao Li
|
|
Tao Li, Chairman of the Board of Directors, President and CEO (principal executive officer)
|
||
|
||
September 12, 2011
|
/s/ Ken Ren
|
|
Ken Ren, Chief Financial Officer
|
||
(principal financial officer and principal
|
||
accounting officer)
|
||
September 12, 2011
|
/s/ Yu Hao
|
|
Yu Hao, Director
|
||
|
||
September 12, 2011
|
/s/ Lianfu Liu
|
|
Lianfu Liu, Director
|
||
September 12, 2011
|
/s/ Yizhao Zhang
|
|
Yizhao Zhang, Director
|
||
September 12, 2011
|
/s/ Robert B. Fields
|
|
Robert B. Fields, Director
|
3.1
|
Articles of Incorporation (incorporated herein by reference to the Company’s Quarterly Report on Form 10-QSB, for the quarter ended September 30, 2007, filed with the SEC on November 9, 2007, Exhibit 3.1).
|
3.2
|
Certificate of Change filed with the Secretary of State of the State of Nevada on December 18, 2007 (incorporated herein by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 2, 2008, Exhibit 4.2).
|
3.3
|
Certificate of Correction (incorporated herein by reference to the Company’s Registration Statement on Form S-1 filed with the SEC on February 8, 2008, Exhibit 4.1).
|
3.4
|
Articles of Merger (incorporated herein by reference to the Company’s Current Report on Form 8-K, filed February 5, 2008, Exhibit 3.1).
|
3.5
|
Bylaws (incorporated herein by reference to the Company’s Quarterly Report on Form 10-QSB, for the quarter ended September 30, 2007, filed with the SEC on November 9, 2007, Exhibit 3.2).
|
4.1
|
Specimen Common Stock Certificate (incorporated herein by reference to the Company’s Registration Statement on Form S-3 filed with the SEC on June 8, 2009, Exhibit 4.1).
|
10.1
|
Employment Agreement, dated January 16, 2008, by and between Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. and Mr. Tao Li (incorporated herein by reference to the Company’s Annual Report on Form 10-K filed with the SEC on September 7, 2010).
|
10.2
|
Employment Agreement, dated June 21, 2010, by and between the Company and Mr. Ken Ren (Incorporated herein by reference to our Current Report on Form 8-K filed with the SEC on June 25, 2010)
|
10.3
|
Share Transfer Agreement, dated July 1, 2010, by and between Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., Qing Xin Jiang and Qiong Jia (Incorporated herein by reference to the Current Report on Form 8-K filed with the SEC on July 7, 2010).
|
10.4
|
Supplementary Agreement, dated July 1, 2010, by and between Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd., Qing Xin Jiang and Qiong Jia (Incorporated herein by reference to the Current Report on Form 8-K filed with the SEC on July 7, 2010).
|
10.5
|
Employment Agreement, dated July 1, 2010, by and between Beijing Gufeng Chemical Products Co., Ltd. and Qing Xin Jiang.
|
10.6
|
Non-Competition Agreement, dated July 1, 2010 by and between Beijing Gufeng Chemical Products Co., Ltd. and Mr. Qing Xin Jiang.
|
10.7
|
Non-Competition Agreement, dated July 1, 2010 by and between Beijing Gufeng Chemical Products Co., Ltd. and Ms Qiong Jia.
|
10.8
|
Form of Restricted Stock Grant Agreement (Incorporated herein by reference to the Current Report on Form 8-K filed with the SEC on January 11, 2010).
|
10.9
|
Form of Non-Qualified Stock Option Grant Agreement (Incorporated herein by reference to the Current Report on Form 8-K filed with the SEC on January 11, 2010).
|
10.10
|
Offer Letter dated March 28, 2011 between China Green Agriculture, Inc. and Yizhao Zhang. (Incorporated herein by reference to the Quarterly Report on Form 10-Q filed with the SEC on May 10, 2011)
|
Page
|
||
Report of Independent Registered Public Accounting Firms
|
||
Report of Kabani & Company, Inc.
|
F-1
|
|
Financial Statements:
|
||
Consolidated Balance Sheets as of June 30, 2011 and 2010
|
F-2
|
|
Consolidated Statements of Income and Other Comprehensive Income for the years ended June 30, 2011, 2010 and 2009
|
F-3
|
|
Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2011, 2010 and 2009
|
F-4
|
|
Consolidated Statements of Cash Flows for the years ended June 30, 2011, 2010 and 2009
|
F-5
|
|
Notes to Consolidated Financial Statements
|
|
F-6
|
As of June 30,
|
||||||||
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 65,606,413 | $ | 62,335,437 | ||||
Accounts receivable, net
|
17,517,625 | 15,571,888 | ||||||
Inventories
|
23,732,404 | 11,262,647 | ||||||
Other current assets
|
537,126 | 86,824 | ||||||
Advances to suppliers
|
11,487,896 | 221,280 | ||||||
Total Current Assets
|
118,881,464 | 89,478,076 | ||||||
Plant, Property and Equipment, Net
|
66,211,441 | 29,368,515 | ||||||
Construction In Progress
|
4,662,039 | 257,077 | ||||||
Other Assets - Non Current
|
150,169 | 1,098,704 | ||||||
Intangible Assets, Net
|
28,508,629 | 11,585,570 | ||||||
Goodwill
|
4,957,245 | - | ||||||
Total Assets
|
$ | 223,370,987 | $ | 131,787,942 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$ | 5,981,703 | $ | 328,124 | ||||
Unearned revenue
|
11,059,313 | 41,645 | ||||||
Accrued expenses and other payables
|
3,282,353 | 507,705 | ||||||
Amount due to related parties
|
69,962 | 68,164 | ||||||
Taxes payable
|
7,004,865 | 2,304,382 | ||||||
Short term loans
|
4,099,550 | - | ||||||
Total Current Liabilities
|
31,497,746 | 3,250,020 | ||||||
Commitment and Contingencies
|
||||||||
Stockholders' Equity
|
||||||||
Preferred Stock, $.001 par value, 20,000,000 shares authorized, Zero shares issued and outstanding
|
- | - | ||||||
Common stock, $.001 par value, 115,197,165 shares authorized, 26,845,860 and 24,572,329, shares issued and outstanding as of June 30, 2011 and 2010, respectively
|
26,846 | 24,573 | ||||||
Additional paid-in capital
|
98,627,482 | 75,755,682 | ||||||
Statutory reserve
|
10,027,721 | 5,864,648 | ||||||
Retained earnings
|
72,287,436 | 43,536,408 | ||||||
Accumulated other comprehensive income
|
10,903,756 | 3,356,611 | ||||||
Total Stockholders' Equity
|
191,873,241 | 128,537,922 | ||||||
Total Liabilities and Stockholders' Equity
|
$ | 223,370,987 | $ | 131,787,942 |
For the Years Ended June 30,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Sales
|
||||||||||||
Jinong
|
$ | 65,629,265 | $ | 45,816,377 | $ | 28,889,131 | ||||||
Gufeng
|
107,081,018 | - | - | |||||||||
Jintai
|
6,826,933 | 6,274,375 | 6,318,866 | |||||||||
Yuxing
|
180,750 | - | - | |||||||||
Net sales
|
179,717,966 | 52,090,752 | 35,207,997 | |||||||||
Cost of goods sold
|
||||||||||||
Jinong
|
26,449,117 | 17,700,532 | 11,173,236 | |||||||||
Gufeng
|
85,670,990 | - | - | |||||||||
Jintai
|
3,841,391 | 3,438,020 | 3,538,830 | |||||||||
Yuxing
|
136,433 | - | - | |||||||||
Cost of goods sold
|
116,097,931 | 21,138,552 | 14,712,066 | |||||||||
Gross profit
|
63,620,035 | 30,952,200 | 20,495,931 | |||||||||
Operating expenses
|
||||||||||||
Selling expenses
|
7,121,905 | 2,203,345 | 1,412,101 | |||||||||
General and administrative expenses
|
14,386,699 | 3,822,234 | 1,993,817 | |||||||||
Total operating expenses
|
21,508,604 | 6,025,579 | 3,405,918 | |||||||||
Income from operations
|
42,111,431 | 24,926,621 | 17,090,013 | |||||||||
Other income (expense)
|
||||||||||||
Other income (expense)
|
23,999 | (5,321 | ) | 3,455 | ||||||||
Interest income
|
282,727 | 275,449 | 334,948 | |||||||||
Interest expense
|
(466,912 | ) | (112,475 | ) | (632,446 | ) | ||||||
Total other income (expense)
|
(160,186 | ) | 157,653 | (294,043 | ) | |||||||
Income before income taxes
|
41,951,245 | 25,084,274 | 16,795,970 | |||||||||
Provision for income taxes
|
9,037,144 | 3,794,516 | 2,331,548 | |||||||||
Net income
|
32,914,101 | 21,289,758 | 14,464,422 | |||||||||
Other comprehensive income
|
||||||||||||
Foreign currency translation gain
|
7,547,145 | 899,481 | 52,711 | |||||||||
Comprehensive income
|
$ | 40,461,246 | $ | 22,189,239 | $ | 14,517,133 | ||||||
Basic weighted average shares outstanding
|
25,929,517 | 23,468,246 | 18,478,474 | |||||||||
Basic net earnings per share
|
$ | 1.27 | $ | 0.91 | $ | 0.78 | ||||||
Diluted weighted average shares outstanding
|
25,929,517 | 23,468,246 | 18,532,591 | |||||||||
Diluted net earnings per share
|
1.27 | 0.91 | 0.78 |
Additional
|
Accumulated Other
|
Total
|
||||||||||||||||||||||||||
Number
|
Common
|
Paid In
|
Statutory
|
Retained
|
Comprehensive
|
Stockholders'
|
||||||||||||||||||||||
Of Shares
|
Stock
|
Capital
|
Reserve
|
Earnings
|
Income
|
Equity
|
||||||||||||||||||||||
BALANCE, JUNE 30, 2008
|
12,068,086 | 12,069 | 1,200,077 | 1,882,797 | 11,764,079 | 2,404,419 | 17,263,441 | |||||||||||||||||||||
Net income for the year ended June 30, 2009
|
- | - | - | - | 14,464,422 | - | 14,464,422 | |||||||||||||||||||||
Stock options compensation
|
- | - | 155,804 | - | - | - | 155,804 | |||||||||||||||||||||
Issuance of stock for liquidated damages
|
213,483 | 213 | 704,281 | - | - | - | 704,494 | |||||||||||||||||||||
Transfer to statutory reserve
|
- | - | - | 1,585,733 | (1,585,733 | ) | - | - | ||||||||||||||||||||
Accumulative other comprehensive loss
|
- | - | - | - | - | 52,711 | 52,711 | |||||||||||||||||||||
BALANCE, JUNE 30, 2009
|
12,281,569 | 12,282 | 2,060,162 | 3,468,530 | 24,642,768 | 2,457,130 | 32,640,872 | |||||||||||||||||||||
Net income for the year ended June 30, 2010
|
- | - | - | - | 21,289,758 | - | 21,289,758 | |||||||||||||||||||||
Reclass PIPE shares subject to redemption
|
6,313,617 | 6,314 | 20,512,941 | - | - | - | 20,519,255 | |||||||||||||||||||||
Stock issued in relation to fund raising
|
5,627,564 | 5,628 | 51,487,207 | - | - | - | 51,492,835 | |||||||||||||||||||||
Issuance of stock options for compensation
|
272,161 | 272 | 1,695,449 | - | - | - | 1,695,721 | |||||||||||||||||||||
Exercised of stock options-cashless
|
77,418 | 77 | (77 | ) | - | - | - | - | ||||||||||||||||||||
Transfer to statutory reserve
|
- | - | - | 2,396,118 | (2,396,118 | ) | - | - | ||||||||||||||||||||
Accumulative other comprehensive loss
|
- | - | - | - | - | 899,481 | 899,481 | |||||||||||||||||||||
BALANCE, JUNE 30, 2010
|
24,572,329 | 24,573 | 75,755,682 | 5,864,648 | 43,536,408 | 3,356,611 | 128,537,922 | |||||||||||||||||||||
Net income for the year ended ended June 30, 2011
|
- | - | - | - | 32,914,101 | - | 32,914,101 | |||||||||||||||||||||
Stock issued in relation to Acquisition
|
2,275,931 | 2,275 | 19,297,619 | - | - | - | 19,299,894 | |||||||||||||||||||||
Stock-based compensation
|
- | - | 3,605,235 | - | - | - | 3,605,235 | |||||||||||||||||||||
Forefeiture of shares issued for services
|
(2,400 | ) | (2 | ) | (31,054 | ) | - | - | - | (31,056 | ) | |||||||||||||||||
Transfer to statutory reserve
|
- | - | - | 4,163,073 | (4,163,073 | ) | - | - | ||||||||||||||||||||
Accumulative other comprehensive loss
|
- | - | - | - | - | 7,547,145 | 7,547,145 | |||||||||||||||||||||
BALANCE, JUNE 30, 2011
|
26,845,860 | $ | 26,846 | $ | 98,627,482 | $ | 10,027,721 | $ | 72,287,436 | $ | 10,903,756 | $ | 191,873,241 |
For the Years Ended June 30,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Cash flows from operating activities
|
||||||||||||
Net income
|
$ | 32,914,101 | $ | 21,289,758 | $ | 14,464,422 | ||||||
Adjustments to reconcile net income to net cash
provided by operating activities
|
||||||||||||
Issuance of equity for compensation
|
3,605,235 | 1,695,449 | 155,804 | |||||||||
Cancelation of previously issued shares for services
|
(31,056 | ) | - | - | ||||||||
Depreciation
|
4,161,068 | 2,310,596 | 1,494,489 | |||||||||
Amortization
|
1,587,190 | 287,521 | 108,525 | |||||||||
Decrease / (Increase) in current assets, net of effects from acquisitions:
|
||||||||||||
Accounts receivable
|
(838,962 | ) | (7,278,914 | ) | (4,570,071 | ) | ||||||
Other receivables
|
(414,302 | ) | 50,286 | (13,234 | ) | |||||||
Inventories
|
6,765,750 | (4,006,562 | ) | (3,166,338 | ) | |||||||
Advances to suppliers
|
(9,390,123 | ) | (124,298 | ) | 418,072 | |||||||
Other assets
|
(146,674 | ) | (44,648 | ) | 10,875 | |||||||
(Decrease) / Increase in current liabilities, net of effects from acquisitions:
|
||||||||||||
Accounts payable
|
(494,063 | ) | (602,750 | ) | 693,897 | |||||||
Unearned revenue
|
(8,875,835 | ) | 17,304 | (65,037 | ) | |||||||
Tax payables
|
4,467,368 | (606,318 | ) | (2,996,862 | ) | |||||||
Other payables and accrued expenses
|
337,772 | (755,389 | ) | 649,544 | ||||||||
Net cash provided by operating activities
|
33,647,469 | 12,232,035 | 7,184,086 | |||||||||
Cash flows from investing activities
|
||||||||||||
Purchase of plant, property, and equipment
|
(22,740,118 | ) | (14,092,793 | ) | (612,662 | ) | ||||||
Purchase of intangible assets
|
- | (10,719,653 | ) | - | ||||||||
Acquisition of Gufeng, net of cash acquired
|
(6,720,539 | ) | - | - | ||||||||
Amounts (increase) decrease in construction in progress
|
(3,506,045 | ) | 8,287,753 | (4,485,059 | ) | |||||||
Net cash used in investing activities
|
(32,966,702 | ) | (16,524,693 | ) | (5,097,721 | ) | ||||||
Cash flows from financing activities
|
||||||||||||
Repayment of loan
|
(2,253,000 | ) | (3,178,477 | ) | (1,036,770 | ) | ||||||
Proceeds from loans
|
2,253,000 | - | - | |||||||||
Shares issuance cost
|
- | (2,232,302 | ) | - | ||||||||
Proceeds from issuance of shares
|
- | 53,778,748 | - | |||||||||
Restricted cash
|
- | 83,579 | 109,813 | |||||||||
Net cash provided by (used in) financing activities
|
- | 48,451,548 | (926,957 | ) | ||||||||
Effect of exchange rate change on cash and cash equivalents
|
2,590,209 | 381,100 | 23,623 | |||||||||
Net increase in cash and cash equivalents
|
3,270,976 | 44,539,990 | 1,183,031 | |||||||||
Cash and cash equivalents, beginning balance
|
62,335,437 | 17,795,447 | 16,612,416 | |||||||||
Cash and cash equivalents, ending balance
|
$ | 65,606,413 | $ | 62,335,437 | $ | 17,795,447 | ||||||
Supplement disclosure of cash flow information
|
||||||||||||
Interest expense paid
|
$ | 562,778 | $ | 112,475 | $ | 188,798 | ||||||
Income taxes paid
|
$ | 4,623,700 | $ | 3,081,886 | $ | 2,112,985 | ||||||
Issuance of 2,275,931 shares for acquisition of Gufeng
|
$ | 19,299,894 | $ | - | $ | - |
Estimated Useful Life
|
|
Building
|
10-25 years
|
Agricultural assets
|
8 years
|
Machinery and equipment
|
5-15 years
|
Vehicles
|
3-5 years
|
Foreign
|
||||||||||||||||
Balance at
|
currency
|
Balance at
|
||||||||||||||
Entity
|
June 30, 2010
|
Acquisitions
|
adjustment
|
June 30, 2011
|
||||||||||||
Gufeng
|
$ | - | $ | 4,723,322 | $ | 233,923 | $ | 4,957,245 |
For the Years Ended June 30,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Net Income for Basic Earnings Per Share
|
$ | 32,914,101 | $ | 21,289,758 | $ | 14,464,422 | ||||||
Basic Weighted Average Number of Shares
|
25,929,517 | 23,468,246 | 18,478,474 | |||||||||
Net Income per Share – Basic
|
1.27 | 0.91 | 0.78 | |||||||||
Net Income for Diluted Earnings Per Share
|
32,914,101 | 21,289,758 | 14,464,422 | |||||||||
Diluted Weighted Average Number of Shares
|
25,929,517 | 23,468,246 | 18,532,591 | |||||||||
Net Income per Share – Diluted
|
$ | 1.27 | $ | 0.91 | $ | 0.78 |
($ in millions)
|
||||
Purchase Price
|
$ | 28.1 | ||
Fair Value of Assets Acquired:
|
||||
Cash and cash equivalents
|
2.3 | |||
Inventories
|
18.0 | |||
Other current assets
|
4.5 | |||
Fixed assets
|
16.3 | |||
Intangible assets
|
17.1 | |||
Total Assets Acquired
|
$ | 58.2 | ||
Fair Value of Liabilities Assumed:
|
||||
Trade payables
|
$ | 9.6 | ||
Short-term loans
|
4.0 | |||
Deferred revenue
|
19.1 | |||
Other current liabilities
|
2.1 | |||
Total Liabilities Assumed
|
$ | 34.8 | ||
Goodwill (1)
|
$ | 4.7 |
Gufeng at July 2, 2010
|
||||||||
Estimated useful life
|
||||||||
($ in millions)
|
Fair Value
|
(in years)
|
||||||
Amortizable intangible assets:
|
||||||||
Customer relationships
|
$ | 9.6 | 10 | |||||
Proprietary technologies
|
1.3 | 6 | ||||||
Non-compete agreement
|
0.2 | 5 | ||||||
Indefinite-lived intangibles:
|
||||||||
Trademarks
|
6 | |||||||
Total intangible assets acquired
|
$ | 17.1 |
For the Years ended June 30,
|
||||||||
($ in millions, except per share data)
|
2011
|
2010
|
||||||
Net Sales
|
$ | 179.7 | $ | 112.0 | ||||
Net Income
|
$ | 32.9 | $ | 24.8 | ||||
Basic earnings per share
|
$ | 1.27 | $ | 0.96 | ||||
Diluted earnings per share
|
$ | 1.27 | $ | 0.96 |
As of June 30,
|
||||||||
2011
|
2010
|
|||||||
Raw materials
|
$ | 5,990,640 | $ | 314,268 | ||||
Supplies and packing materials
|
530,644 | 113,146 | ||||||
Work in progress
|
105,702 | 10,686,324 | ||||||
Finished goods
|
17,105,418 | 148,909 | ||||||
Total
|
$ | 23,732,404 | $ | 11,262,647 |
As of June 30,
|
||||||||
2011
|
2010
|
|||||||
Building and improvements
|
$ | 44,032,549 | $ | 11,719,363 | ||||
Auto
|
1,491,849 | 117,295 | ||||||
Machinery and equipment
|
32,862,361 | 21,628,525 | ||||||
Agriculture assets
|
1,607,333 | 1,528,898 | ||||||
Total property, plant and equipment
|
79,994,092 | 34,994,081 | ||||||
Less: accumulated depreciation
|
(13,782,651 | ) | (5,625,566 | ) | ||||
Total
|
$ | 66,211,441 | $ | 29,368,515 |
June 30,
|
June 30,
|
|||||||
2011
|
2010
|
|||||||
Land use rights, net
|
$ | 11,814,149 | $ | 11,495,058 | ||||
Technology patent, net
|
1,188,969 | 90,512 | ||||||
Customer relationships, net
|
9,045,858 | - | ||||||
Non-compete agreement
|
163,363 | - | ||||||
Trademarks
|
6,296,290 | - | ||||||
Total
|
$ | 28,508,629 | $ | 11,585,570 |
As of June 30,
|
||||||||
2011
|
2010
|
|||||||
Land use rights
|
$ | 12,452,801 | $ | 11,866,105 | ||||
Less: accumulated amortization
|
(638,652 | ) | (371,047 | ) | ||||
Total land use rights, net
|
$ | 11,814,149 | $ | 11,495,058 |
As of June 30,
|
||||||||
2011
|
2010
|
|||||||
Technology know-how
|
$ | 2,332,113 | $ | 866,338 | ||||
Less: accumulated amortization
|
(1,143,144 | ) | (775,826 | ) | ||||
Total technology know-how, net
|
$ | 1,188,969 | $ | 90,512 |
As of June 30,
|
||||||||
2011
|
2010
|
|||||||
Customer relationships
|
$ | 10,096,418 | $ | - | ||||
Less: accumulated amortization
|
(1,050,560 | ) | - | |||||
Total customer relationships, net
|
$ | 9,045,858 | $ | - |
June 30,
|
June 30,
|
|||||||
2011
|
2010
|
|||||||
Non-compete agreement
|
$ | 204,204 | $ | - | ||||
Less: accumulated amortization
|
(40,841 | ) | - | |||||
Total non-compete agreement, net
|
$ | 163,363 | $ | - |
Year Ends
|
Expense ($)
|
|||
June 30, 2012
|
1,313,165 | |||
June 30, 2013
|
1,310,229 | |||
June 30, 2014
|
1,310,229 | |||
June 30, 2015
|
1,310,229 | |||
June 30, 2016
|
1,269,389 |
As of June 30,
|
||||||||
2011
|
2010
|
|||||||
Payroll payable
|
$ | 248,686 | $ | 8,848 | ||||
Welfare payable
|
164,223 | 164,051 | ||||||
Accrued expenses
|
1,666,753 | 334,806 | ||||||
Other payable
|
1,202,691 | - | ||||||
Total
|
$ | 3,282,353 | $ | 507,705 |
As of June 30,
|
||||||||
2011
|
2010
|
|||||||
VAT provision (credit)
|
$ | 40,495 | $ | (24,655 | ) | |||
Income tax payable
|
6,593,876 | 2,020,253 | ||||||
Other levies
|
370,494 | 308,784 | ||||||
Total
|
$ | 7,004,865 | $ | 2,304,382 |
For the Years Ended June 30,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Current tax -foreign
|
$ | 9,037,144 | $ | 3,794,515 | $ | 2,331,548 | ||||||
Deferred tax
|
- | - | - | |||||||||
Total
|
$ | 9,037,144 | $ | 3,794,515 | $ | 2,331,548 |
FY 2011
|
||||||||||||||||||||||||
China
|
United States
|
|||||||||||||||||||||||
15% - 25%
|
34%
|
Total
|
||||||||||||||||||||||
Pretax income (loss)
|
$ | 48,782,427 | $ | (6,831,182 | ) | $ | 41,951,245 | |||||||||||||||||
Expected income tax expense (benefit)
|
12,195,607 | 25.0 | % | (2,322,602 | ) | 34.0 | % | 9,873,005 | ||||||||||||||||
High-tech income benefits on Jinong
|
(3,416,976 | ) | (7.0 | )% | - | - | (3,416,976 | ) | ||||||||||||||||
Losses from subsidiaries in which no benefit is recognized
|
258,513 | 0.5 | % | - | - | 258,513 | ||||||||||||||||||
Change in valuation allowance on deferred tax asset from US tax benefit
|
- | 2,322,602 | (34.0 | )% | 2,322,602 | |||||||||||||||||||
Actual tax expense
|
$ | 9,037,144 | 18.5 | % | $ | - | - | % | $ | 9,037,144 | 21.5 | % | ||||||||||||
FY 2010
|
||||||||||||||||||||||||
China
|
United States
|
|||||||||||||||||||||||
15% - 25%
|
34%
|
Total
|
||||||||||||||||||||||
Pretax income (loss)
|
$ | 27,755,696 | $ | (2,671,463 | ) | $ | 25,084,233 | |||||||||||||||||
Expected income tax expense (benefit)
|
4,163,354 | 15.0 | % | (908,297 | ) | 34.0 | % | 3,255,057 | ||||||||||||||||
Income tax benefit of nontaxable income on Jintai
|
(396,035 | ) | (1.4 | )% | - | - | (396,035 | ) | ||||||||||||||||
Income tax benefit of nontaxable income on Yuxing
|
27,196 | 0.1 | % | - | - | 27,196 | ||||||||||||||||||
Change in valuation allowance on deferred tax asset from US tax benefit
|
- | 908,297 | (34.0 | )% | 908,297 | |||||||||||||||||||
Actual tax expense
|
$ | 3,794,515 | 13.7 | % | $ | - | - | % | 3,794,515 | 15.1 | % | |||||||||||||
FY 2009
|
||||||||||||||||||||||||
China
|
United States
|
|||||||||||||||||||||||
15% - 25%
|
34%
|
Total
|
||||||||||||||||||||||
Pretax income (loss)
|
$ | 18,188,877 | $ | (1,392,907 | ) | $ | 16,795,970 | |||||||||||||||||
Expected income tax expense (benefit)
|
2,728,332 | 15.0 | % | (473,588 | ) | 34.0 | % | 2,254,744 | ||||||||||||||||
High-tech income benefits on Jinong
|
(29,848 | ) | (0.2 | )% | (29,848 | ) | ||||||||||||||||||
Income tax benefit of nontaxable income on Jintai
|
(366,936 | ) | (2.0 | )% | (366,936 | ) | ||||||||||||||||||
Change in valuation allowance on deferred tax asset from US tax benefit
|
473,588 | (34.0 | )% | 473,588 | ||||||||||||||||||||
Actual tax expense
|
$ | 2,331,548 | 12.8 | % | $ | - | - | % | 2,331,548 | 13.9 | % |
Weighted
|
||||||||||||
Average
|
||||||||||||
Number
|
Exercise
|
Aggregate
|
||||||||||
of Shares
|
Price
|
Intrinsic Value
|
||||||||||
Outstanding, June 30, 2009
|
121,500 | $ | 4.49 | $ | 437,810 | |||||||
Granted
|
205,291 | $ | 14.67 | |||||||||
Forfeited/Canceled
|
(22,000 | ) | $ | 9.95 | ||||||||
Exercised
|
(109,500 | ) | $ | 4.32 | ||||||||
Outstanding, June 30, 2010
|
195,291 | $ | 14.67 | $ | - | |||||||
Granted
|
- | - | ||||||||||
Forfeited/Canceled
|
(80,192 | ) | $ | 14.67 | ||||||||
Exercised
|
- | - | ||||||||||
Outstanding, June 30, 2011
|
115,099 | $ | 14.66 | $ | - | |||||||
Exercisable, June 30, 2011
|
115,099 | $ | 14.66 | $ | - |
Options Outstanding and Exercisable
|
||||||||||||
Weighted
|
||||||||||||
Number |
Weighted
|
Average
|
||||||||||
Outstanding and
|
Average
|
Remaining
|
||||||||||
Range of
|
exercisable as of
|
Exercise
|
Contractual Life
|
|||||||||
Exercise Price
|
June 30, 2011
|
Price
|
(Years)
|
|||||||||
14.02-14.70
|
115,099
|
14.67
|
0.75
|
For the Year Ended June 30,
|
||||||||||||
|
2011
|
2010
|
2009
|
|||||||||
Revenues from unaffiliated customers:
|
||||||||||||
Jinong
|
$ | 65,629,264 | $ | 45,816,377 | $ | 28,889,131 | ||||||
Gufeng
|
107,081,018 | - | - | |||||||||
Jintai
|
6,826,933 | 6,274,375 | 6,318,866 | |||||||||
Yuxing
|
180,750 | - | - | |||||||||
Consolidated
|
$ | 179,717,965 | $ | 52,090,752 | $ | 35,207,997 | ||||||
Operating income :
|
||||||||||||
Jinong
|
$ | 34,051,094 | $ | 25,160,683 | $ | 15,846,248 | ||||||
Gufeng
|
15,288,871 | - | - | |||||||||
Jintai
|
(96,343 | ) | 2,640,016 | 2,445,913 | ||||||||
Yuxing
|
(296,832 | ) | (181,313 | ) | - | |||||||
Reconciling item (1)
|
- | - | - | |||||||||
Reconciling item (2)
|
(3,230,124 | ) | (997,316 | ) | (1,046,344 | ) | ||||||
Reconciling item (2)--stock compensation
|
(3,605,235 | ) | (1,695,449 | ) | (155,804 | ) | ||||||
Consolidated
|
$ | 42,111,431 | $ | 24,926,621 | $ | 17,090,013 | ||||||
Net income:
|
||||||||||||
Jinong
|
$ | 29,139,457 | $ | 21,502,252 | $ | 13,411,090 | ||||||
Gufeng
|
10,995,984 | - | - | |||||||||
Jintai
|
(96,244 | ) | 2,640,233 | 2,446,238 | ||||||||
Yuxing
|
(293,914 | ) | (181,304 | ) | - | |||||||
Reconciling item (1)
|
4,178 | 21,342 | 7,867 | |||||||||
Reconciling item (2)
|
(6,835,360 | ) | (2,692,765 | ) | (1,400,733 | ) | ||||||
Consolidated
|
$ | 32,914,101 | $ | 21,289,758 | $ | 14,464,462 | ||||||
Depreciation and Amortization:
|
||||||||||||
Jinong
|
$ | 2,686,524 | $ | 2,299,483 | $ | 1,512,212 | ||||||
Gufeng
|
2,711,483 | - | - | |||||||||
Jintai
|
124,139 | 119,973 | 90,803 | |||||||||
Yuxing
|
226,112 | 178,661 | - | |||||||||
Consolidated
|
$ | 5,748,258 | $ | 2,598,117 | $ | 1,603,015 | ||||||
Interest expense:
|
||||||||||||
Jinong
|
$ | - | $ | 112,475 | $ | 433,822 | ||||||
Gufeng
|
466,912 | - | - | |||||||||
Reconciling item (2)
|
- | 198,624 | ||||||||||
Consolidated
|
$ | 466,912 | $ | 112,475 | $ | 632,446 | ||||||
Capital Expenditure:
|
||||||||||||
Jinong
|
$ | 6,492,775 | $ | 4,243,089 | $ | 5,097,721 | ||||||
Gufeng
|
8,229,092 | - | - | |||||||||
Jintai
|
3,291 | 180,686 | - | |||||||||
Yuxing
|
11,521,005 | 12,100,919 | - | |||||||||
Consolidated
|
$ | 26,246,163 | $ | 16,524,694 | $ | 5,097,721 | ||||||
Identifiable assets:
|
||||||||||||
Jinong
|
$ | 111,956,641 | $ | 103,519,520 | $ | 53,096,423 | ||||||
Gufeng
|
67,260,447 | - | - | |||||||||
Jintai
|
14,001,793 | 12,198,845 | 8,250,834 | |||||||||
Yuxing
|
24,354,406 | 12,748,003 | - | |||||||||
Reconciling item (1)
|
969,963 | 3,311,943 | 30,995 | |||||||||
Reconciling item (2)
|
4,827,737 | 9,631 | 240,174 | |||||||||
Consolidated
|
$ | 223,370,987 | $ | 131,787,942 | $ | 61,618,426 |
Years ending:
|
||||
June 30, 2012
|
$
|
34,375
|
||
June 30, 2013
|
19,688
|
|||
June 30, 2014
|
14,793
|
|||
June 30, 2015
|
14,793
|
|||
June 30, 2016
|
14,793
|
Quarterly Periods Ended
|
||||||||||||||||
September 30,
|
December 31,
|
March 31,
|
June 30,
|
|||||||||||||
2010
|
2010
|
2011
|
2011
|
|||||||||||||
Net Revenue
|
$ | 39,482,921 | $ | 35,311,738 | $ | 44,653,284 | $ | 60,270,023 | ||||||||
Gross Profit
|
$ | 13,139,327 | $ | 12,332,826 | $ | 17,039,509 | $ | 21,108,373 | ||||||||
Income (loss) from operation
|
$ | 9,625,155 | $ | 7,872,756 | $ | 12,124,854 | $ | 12,488,666 | ||||||||
Other income (expense)
|
$ | (123,627 | ) | $ | (27,843 | ) | $ | (140,650 | ) | $ | 131,934 | |||||
Net income (loss)
|
$ | 7,787,785 | $ | 6,229,492 | $ | 9,472,745 | $ | 9,424,079 | ||||||||
Earnings (loss) per shares - basic
|
$ | 0.30 | $ | 0.24 | $ | 0.37 | $ | 0.36 | ||||||||
Earnings (loss) per shares - diluted
|
$ | 0.30 | $ | 0.24 | $ | 0.35 | $ | 0.38 | ||||||||
Quarterly Periods Ended
|
||||||||||||||||
September 30,
|
December 31,
|
March 31,
|
June 30,
|
|||||||||||||
2009 | 2009 | 2010 | 2010 | |||||||||||||
Net Revenue
|
$ | 11,276,820 | $ | 11,172,116 | $ | 13,442,277 | $ | 16,199,539 | ||||||||
Gross Profit
|
$ | 6,958,958 | $ | 6,769,773 | $ | 8,110,561 | $ | 9,112,908 | ||||||||
Income from operation
|
$ | 6,209,108 | $ | 5,435,126 | $ | 6,208,366 | $ | 7,074,021 | ||||||||
Other income (expense)
|
$ | (31,077 | ) | $ | 7,908 | $ | 112,218 | $ | 68,604 | |||||||
Net income
|
$ | 5,247,274 | $ | 4,720,993 | $ | 5,332,798 | $ | 5,988,693 | ||||||||
Earnings per shares - basic
|
$ | 0.24 | $ | 0.20 | $ | 0.22 | $ | 0.25 | ||||||||
Earnings (loss) per shares - diluted
|
$ | 0.24 | $ | 0.20 | $ | 0.22 | $ | 0.25 |
Condensed Balance Sheets
|
As of June 30,
|
|||||||
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 964,149 | $ | 3,309,036 | ||||
Restricted cash
|
- | (2,907 | ) | |||||
Other current assets
|
8,575 | 15,445 | ||||||
Total Current Assets
|
972,724 | 3,321,574 | ||||||
Long-term equity investment
|
192,634,559 | 125,484,815 | ||||||
Total long term assets
|
192,634,559 | 125,484,815 | ||||||
Total Assets
|
$ | 193,607,283 | $ | 128,806,389 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$ | 64,520 | $ | 64,520 | ||||
Amount due to related parties
|
38,343 | 38,343 | ||||||
Other payables and accrued expenses
|
1,631,179 | 165,604 | ||||||
Total Current Liabilities
|
1,734,042 | 268,467 | ||||||
Stockholders' Equities
|
||||||||
Common stock, $.001 par value, 115,197,165 shares authorized, 26,845,860 and 24,572,329, shares issued and outstanding as of June 30, 2011 and 2010, respectively
|
26,846 | 24,573 | ||||||
Additional paid in capital
|
98,627,482 | 75,755,682 | ||||||
Accumulated other comprehensive income
|
10,903,756 | 3,356,611 | ||||||
Retained earnings
|
82,315,157 | 49,401,056 | ||||||
Total Stockholders' Equity
|
191,873,241 | 128,537,922 | ||||||
Total Liabilities and Stockholders' Equity
|
$ | 193,607,283 | $ | 128,806,389 |
Condensed Statements of Operations
|
Year ended June 30,
|
|||||||||||
2011
|
2010
|
2009
|
||||||||||
Revenue
|
$ | - | $ | - | $ | - | ||||||
General and administrative expenses
|
6,835,360 | 2,646,338 | 1,202,149 | |||||||||
Interest income (expense)
|
4,178 | 21,342 | (190,757 | ) | ||||||||
Equity investment in subsidiaries
|
39,745,283 | 23,914,754 | 15,857,328 | |||||||||
Net income
|
$ | 32,914,101 | $ | 21,289,758 | $ | 14,464,422 |
Condensed Statements of Cash Flows
|
Year ended June 30,
|
|||||||||||
2011
|
2010
|
2009
|
||||||||||
Net cash provided by (used in) operating activities
|
$ | (2,341,980 | ) | $ | (1,156,400 | ) | (1,577,100 | ) | ||||
Net cash provided by (used in) investing activities
|
(6,720,539 | ) | 86,457 | 109,813 | ||||||||
Net cash provided by financing activities
|
6,717,632 | 4,350,480 | 699,798 | |||||||||
Cash and cash equivalents, beginning balance
|
3,309,036 | 28,499 | 795,988 | |||||||||
Cash and cash equivalents, ending balance
|
$ | 964,149 | $ | 3,309,036 | 28,499 |
1.
|
Employment Period
|
2.
|
Capacity and Responsibility
|
(a)
|
During the employment period, Mr. Qingxin Jiang will be appointed as the CEO of the Company. He will enjoy the general authorization and responsibility. The CEO shall offer the Company with appropriate administrative, financial, other managerial service and work designated by the Board from time to time.
|
(b)
|
CEO should do the utmost to faithfully, honestly and diligently perform its responsibility under this Agreement and comply with the policies and procedures in material aspect. During fulfilling the responsibility, CEO shall perform the business and strategic plan approved by the Board.
|
(c)
|
CEO will be located to work in the current business address in Beijing.
|
3.
|
Contribution Compensation and Welfare
|
4.
|
Work Schedule
|
(a)
|
The working environment provided by the Company to the CEO shall comply with the national occupational health and safety requirements;
|
(b)
|
The Company shall offer the necessary working environment to the CEO in accordance with the national and local requirements, and establish necessary employee protection system.
|
5.
|
The Termination of the Agreement
|
|
I.
|
Severe violation against the Company’s policy or regulations by the CEO;
|
|
II.
|
Material negative influences or damages to the Company due to the CEO’s gross negligence or malpractice;
|
|
III.
|
Criminal accusation or criminal liability charged against the CEO;
|
|
IV.
|
Under any circumstances, the termination of this Agreement shall have no relationship with the execution of the Share Transfer Agreement entered into by and between the CEO and Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. on July 1, 2010 (the “Share Transfer Agreement”), which means, the termination of the Agreement is irrelevant to the CEO’s 40% restricted shares deposited in the escrow account pursuant to the terms in the Share Transfer Agreement.
|
6.
|
Confidentiality
|
(a)
|
Confidential Obligations
|
(b)
|
Owner Rights of Intellectual Property Rights
|
(c)
|
The Third Party Information
|
7.
|
CEO’s Statement
|
8.
|
Notification
|
9.
|
Fragmentation
|
10.
|
Integrality
|
11.
|
Jurisdiction
|
12.
|
Arbitration
|
(1)
|
If the parties cannot reach an agreement or solution in 30 days after the negotiation, any party can bring the dispute to the court for arbitration in 60 days after the occurrence of the claim;
|
(2)
|
Any party can appeal to the court in its jurisdiction 15 days after the outcome of the arbitration.
|
13.
|
Modification and Abstention
|
Bejing Gufeng Chemical Products Co., Ltd.
|
||
Corporate Seal
|
||
Authorized representative :
|
/s/ Qingxin Jiang
|
|
Qingxin Jiang
|
||
Signature
:
/s/ Qingxin Jiang
|
(2)
|
Party B:
Qing Xin Jiang
|
Party A:
Beijing Gufeng Chemical Products Co., Ltd
|
(Seal)
|
Authorized Representative
|
(Signature): /s/ Qing Xin Jiang
|
Party B
: Qing Xin Jiang
|
Signature: /s/ Qing Xin Jiang
|
(2)
|
Party B:
Qiong Jia
|
Party A:
Beijing Gufeng Chemical Products Co., Ltd
|
(Seal)
|
Authorized Representative
|
(Signature): /s/ Qing Xin Jiang
|
Party B
: Qiong Jia
|
Signature: /s/ Qiong Jia
|
Name
|
Place of Incorporation
|
Ownership
|
||
Green Agriculture Holding Corporation (“Green New Jersey”)
|
New Jersey
|
100% owned by China Green Agriculture, Inc.
|
||
Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (“Jinong”)
|
People's Republic of China
|
100% owned by Green New Jersey
|
||
Xi’an Jintai Agriculture Technology Development Company
|
People's Republic of China
|
100% owned by Jinong
|
||
Xi’an Hu County Yuxing Agriculture Technology Development Co., Ltd.
|
People’s Republic of China
|
100% owned by Jinong
|
||
Beijing Gufeng Chemical Products Co., Ltd. (“Gufeng”)
|
People's Republic of China
|
100% owned by Jinong
|
||
Beijing Tianjuyuan Fertilizer Co., Ltd.
|
People's Republic of China
|
100% owned by Gufeng
|
Date: September 12, 2011
|
|
/s/ Tao Li
|
|
Tao Li
|
|
President and Chief Executive Officer
|
|
(principal executive officer)
|
Date: September 12, 2011
|
|
/s/ Ken Ren
|
|
Ken Ren
|
|
Chief Financial Officer
|
|
(principal financial officer and principle accounting officer)
|
Dated: September 12, 2011
|
|
/s/ Tao Li
|
|
Tao Li
|
|
President and Chief Executive Officer
|
|
(principal executive officer)
|
|
/s/ Ken Ren
|
|
Ken Ren
|
|
Chief Financial Officer
|
|
(principal financial officer and principle accounting officer)
|