NOTE 16 - VARIABLE INTEREST ENTITIES

In accordance with accounting standards regarding consolidation of variable interest entities, VIEs are generally entities that lack sufficient 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 a majority 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 also 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 of 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, 2017 and June 30, 2016:

	December 31,		June 30,
	2017		2017

ASSETS
Current Assets
Cash and cash equivalents	$	1,347,719	$	374,587
Accounts receivable, net		31,545,752		30,687,859
Inventories		22,272,408		21,314,940
Other current assets		1,101,385		2,195,156
Advances to suppliers		1,624,932		2,380,812
Total Current Assets		57,892,196		56,953,354

Plant, Property and Equipment, Net		12,122,345		12,418,906
Other assets		230,107		225,508
Intangible Assets, Net		11,925,590		13,002,818
Goodwill		3,378,474		3,837,038
Total Assets	$	85,548,712	$	86,437,624

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Short-term loan	$	-	$	166,311
Accounts payable		20,454,287		18,355,921
Customer deposits		694,119		1,375,785
Accrued expenses and other payables		3,328,483		3,833,868
Amount due to related parties		43,107,165		42,741,043
Total Current Liabilities	$	67,584,054	$	66,472,928
Long-term Loan		0		3,549
Total Liabilities	$	67,584,054	$	66,476,477

Stockholders’ equity		17,964,658		19,961,147

Total Liabilities and Stockholders’ Equity		85,548,712	$	86,437,624

	Three months ended				Six months ended
	December 31,				December 31,
	2017		2016		2017		2016
Revenue	$	13,304,643	$	10,852,779	$	31,077,318	$	25,500,167
Expenses		10,989,225		9,954,543		25,590,542		22,967,005
Net income (loss)	$	2,136,994	$	898,236	$	199,680	$	2,533,162