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Variable Interest Entities

9 Months Ended

Mar. 31, 2021

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 March 31, 2021 and June 30, 2020:

	March 31,		June 30,
	2021		2020

ASSETS
Current Assets
Cash and cash equivalents	$	617,851	$	712,301
Accounts receivable, net		35,557,185		33,727,918
Inventories		30,612,244		22,995,075
Other current assets		1,393,000		593,942
Related party receivable		165,972		66
Advances to suppliers		963,077		520,901
Total Current Assets		69,309,329		58,550,203

Plant, Property and Equipment, Net		8,501,436		8,513,395
Other assets		96,131		59,575
Intangible Assets, Net		9,603,151		9,391,626
Goodwill		2,707,701		2,510,745
Total Assets	$	90,217,749	$	79,025,544

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable		20,163,566		16,416,828
Customer deposits		836,465		86,430
Accrued expenses and other payables		8,661,699		6,996,544
Amount due to related parties		45,064,229		41,549,931
Total Current Liabilities	$	74,725,959	$	65,049,733
Total Liabilities	$	74,725,959	$	65,049,733

Stockholders’ equity		15,491,790		13,975,811

Total Liabilities and Stockholders’ Equity	$	90,217,749	$	79,025,544

	Three Months Ended March 31,
	2021		2020
Revenue	$	21,811,360	$	17,465,942
Expenses		20,613,304		17,372,472
Net income (loss)	$	1,198,056	$	93,470

	Nine Months Ended March 31,
	2021			2020
Revenue	$	46,615,150		$	45,686,455
Expenses		46,846,543			41,073,778
Net income (loss)	$	(231,393	)	$	4,612,677