XML 36 R23.htm IDEA: XBRL DOCUMENT

Variable Interest Entities

6 Months Ended

Dec. 31, 2020

NOTE 17 – 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 much 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 unaudited condensed consolidated financial statements as of December 31, 2020 and June 30, 2020:

	December 31,		June 30,
	2020		2020

ASSETS
Current Assets
Cash and cash equivalents	$	1,301,431	$	712,301
Accounts receivable, net		26,634,008		33,727,918
Inventories		31,402,330		22,995,075
Other current assets		1,082,989		593,942
Related party receivable		178,678		66
Advances to suppliers		2,143,448		520,901
Total Current Assets		62,742,884		58,550,203

Plant, Property and Equipment, Net		8,661,703		8,513,395
Other assets		96,383		59,575
Intangible Assets, Net		9,803,637		9,391,626
Goodwill		2,714,799		2,510,745
Total Assets	$	84,019,406	$	79,025,544

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable		15,588,427		16,416,828
Customer deposits		1,104,555		86,430
Accrued expenses and other payables		7,934,163		6,996,544
Amount due to related parties		45,104,164		41,549,931
Total Current Liabilities	$	69,731,309	$	65,049,733
Total Liabilities	$	69,731,309	$	65,049,733

Stockholders’ equity		14,288,097		13,975,811

Total Liabilities and Stockholders’ Equity	$	84,019,406	$	79,025,544

	Three Months Ended December 31,
	2020			2019
Revenue	$	11,003,073		$	12,776,975
Expenses		12,538,159			12,280,810
Net income (loss)	$	(1,535,086	)	$	496,165

	Six Months Ended December 31,
	2020			2019
Revenue	$	24,803,790		$	28,220,513
Expenses		26,233,239			23,701,306
Net income	$	(1,429,449	)	$	4,519,207