Attached files
| file | filename |
|---|---|
| EX-32.1 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 - China Modern Agricultural Information, Inc. | f10k2011a1ex32i_chinamodern.htm |
| EX-31.1 - CERTIFICATIONS OF THE CHIEF EXECUTIVE OFFICER - China Modern Agricultural Information, Inc. | f10k2011a1ex31i_chinamodern.htm |
| EX-31.2 - CERTIFICATIONS OF THE CHIEF FINANCIAL OFFICER - China Modern Agricultural Information, Inc. | f10k2011a1ex31ii_chinamodern.htm |
| EX-32.2 - CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 - China Modern Agricultural Information, Inc. | f10k2011a1ex32ii_chinamodern.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K /A
(Amendment No. 1)
(Mark One)
| x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended June 30, 2011
or
| o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____________________ to ___________________________
Commission file number 333-164488
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CHINA MODERN AGRICULTURAL INFORMATION, INC.
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( Exact name of registrant as specified in its charter)
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Nevada
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27-2776002
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State or other jurisdiction of
Incorporation or organization
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(I.R.S. Employer Identification No.)
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No.A09, Wuzhou Sun Town
Limin Avenue, Limin Development District
Harbin, Heilongjiang, China
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N/A
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code (86) 0451-84800733
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Securities registered under Section 12(b) of the Exchange Act:
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Title of each class
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Name of each exchange on
which registered
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Common Stock
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Over the Counter
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$0.001 par value
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Bulletin Board
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Securities registered pursuant to Section 12(b) of the Exchange Act: None.
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Securities registered pursuant to Section 12(g) of the Exchange Act: None.
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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ¨ No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
(Do not check if a smaller reporting company)
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o
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Smaller reporting company
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x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The aggregate market value of the Company’s common stocks held by non-affiliates computed by reference to the price at which the common stock was last sold, $0.008 per share, as of the last business day of the registrant’s most recently completed fiscal quarter: $190,827.
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: 41,100,000 shares of common stock, par value $0.001 per share, issued and outstanding as of September 26, 2011.
DOCUMENTS INCORPORATED BY REFERENCE
None.
EXPLANATORY NOTE
China Modern Agriculture Information, Inc. (the “Company”) is filing this Amendment No. 1 (this “Amendment”) to its Annual Report on Form 10-K for the fiscal year ended June 30, 2011, which was originally filed on September 28, 2011 (the “Annual Report”), for the sole purpose of filing a report of independent registered public accounting firm presented in accordance with Article 2 of Regulation S-X, with respect to the accompanying consolidated balance sheet as of June 30, 2011 and 2010, and the related consolidated statements of income and other comprehensive income, changes in stockholders’ equity and cash flows for each of the two years in the period ended June 30, 2011, in response to comments of the Securities and Exchange Commission (the “SEC”) dated June 4, 2012 on the Annual Report.
No attempt has been made in this Amendment to modify or update the other disclosure presented in the Annual Report. This Amendment does not reflect events occurring after the filing of the Annual Report or modify or update the disclosure in the Annual Report, except as set forth in this Amendment, and should be read in conjunction with the Annual Report and our other filings with the SEC.
Forward-Looking Statements
Certain statements in this Annual Report on Form 10-K constitute “forward-looking statements” made under the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 that are based on current expectations, estimates, forecasts and assumptions and are subject to risks and uncertainties. Words such as “anticipate,” “assume,” “believe,” “estimate,” “expect,” “goal,” “intend,” “plan,” “project,” “seek,” “target,” and variations of such words and similar expressions are intended to identify such forward-looking statements. All forward-looking statements speak only as of the date on which they are made. Such forward-looking statements are subject to certain risks, uncertainties and assumptions relating to certain factors that could cause actual results to differ materially from those anticipated in such statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Annual Report on Form 10-K and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Annual Report on Form 10-K. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report on Form 10-K and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report on Form 10-K.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
PART II
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CHINA MODERN AGRICULTURAL
INFORMATION, INC. AND
SUBSIDIARIES
Consolidated Financial Statements for the
Years Ended June 30, 2011 and 2010 and
Report of Independent Registered Public Accounting Firm
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
| CONTENTS | PAGE |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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F-1 |
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CONSOLIDATED FINANCIAL STATEMENTS:
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Consolidated Balance Sheets
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F-2 |
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Consolidated Statements of Income and Other Comprehensive Income
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F-4 |
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Consolidated Statements of Changes in Stockholders’ Equity
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F-6 |
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Consolidated Statements of Cash Flows
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F-7 |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-9 |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
China Modern Agricultural Information, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheets of China Modern Agricultural Information, Inc. and Subsidiaries as of June 30, 2011 and 2010, and the related consolidated statements of income and other comprehensive income, changes in stockholders’ equity and cash flows for each of the two years in the period ended June 30, 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of China Modern Agricultural Information, Inc. and Subsidiaries as of June 30, 2011 and 2010, and the consolidated results of their operations and their cash flows for the years ended June 30, 2011 and 2010 in conformity with accounting principles generally accepted in the United States of America.
/s/ Wei, Wei & Co., LLP
New York, New York
September 28, 2011
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F-1
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2011 AND 2010
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ASSETS
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2011
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2010
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||||||
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Current assets
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||||||||
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Cash
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$ | 5,525,180 | $ | 2,959,661 | ||||
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Accounts receivable
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2,506,548 | 1,358,448 | ||||||
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Inventories
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90,017 | 112,220 | ||||||
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Prepaid expenses
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238,238 | 618,660 | ||||||
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Notes receivable, current portion
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210,674 | - | ||||||
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Total current assets
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8,570,657 | 5,048,989 | ||||||
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Property, plant and equipment
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1,884,944 | 1,769,295 | ||||||
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Less: accumulated depreciation
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(430,096 | ) | (308,261 | ) | ||||
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Total property, plant and equipment, net
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1,454,848 | 1,461,034 | ||||||
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Other assets
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Notes receivable
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1,127,707 | - | ||||||
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Loan receivable
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2,165,800 | - | ||||||
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Biological assets, net
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17,204,616 | 11,733,205 | ||||||
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Total other assets
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20,498,123 | 11,733,205 | ||||||
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TOTAL ASSETS
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$ | 30,523,628 | $ | 18,243,228 | ||||
See accompanying notes to the consolidated financial statements.
F-2
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2011 AND 2010
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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2011
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2010
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Current liabilities
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Accounts payable
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$ | - | $ | 2,235 | ||||
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Accrued expenses and other payables
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123,876 | 165,476 | ||||||
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Stockholder loans
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230,356 | 1,344,129 | ||||||
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Total current liabilities
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354,232 | 1,511,840 | ||||||
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Deferred income taxes
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7,080,292 | 3,939,662 | ||||||
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Total liabilities
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7,434,524 | 5,451,502 | ||||||
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Stockholders’ equity
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Common stock, $0.001 par value; 75,000,000 shares
authorized; 41,100,000 shares and 35,998,000 shares
issued and outstanding at June 30, 2011 and
2010, respectively
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41,100 | 35,998 | ||||||
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Additional paid-in capital
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1,603,170 | 1,170,802 | ||||||
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Retained earnings
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19,477,303 | 10,624,119 | ||||||
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Statutory reserve fund
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190,011 | 190,011 | ||||||
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Other comprehensive income
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1,498,692 | 606,341 | ||||||
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Sub-total
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22,810,276 | 12,627,271 | ||||||
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Noncontrolling interests
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278,828 | 164,455 | ||||||
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Total stockholders’ equity
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23,089,104 | 12,791,726 | ||||||
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$ | 30,523,628 | $ | 18,243,228 | ||||
See accompanying notes to the consolidated financial statements.
F-3
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
AND OTHER COMPREHENSIVE INCOME
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
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2011
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2010
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Revenues
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$ | 25,021,612 | $ | 14,357,334 | ||||
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Cost of goods sold
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(11,931,849 | ) | (7,694,202 | ) | ||||
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Gross profit
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13,089,763 | 6,663,132 | ||||||
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Operating expenses
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Selling and marketing
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(48,892 | ) | (156,589 | ) | ||||
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General and administrative
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(1,348,669 | ) | (445,301 | ) | ||||
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Total operating expenses
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(1,397,561 | ) | (601,890 | ) | ||||
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Operating income
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11,692,202 | 6,061,242 | ||||||
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Other income and (expenses)
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||||||||
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Non-operating income
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158,201 | 7,642 | ||||||
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Non-operating expenses
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- | (5,678 | ) | |||||
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Total other income
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158,201 | 1,964 | ||||||
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Income before income taxes
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11,850,403 | 6,063,206 | ||||||
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Provision for income taxes
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2,866,622 | 1,500,371 | ||||||
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Net income before noncontrolling interests
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8,983,781 | 4,562,835 | ||||||
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Noncontrolling interests
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(130,597 | ) | (61,721 | ) | ||||
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Net income attributable to controlling interests
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8,853,184 | 4,501,114 | ||||||
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Other comprehensive income
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||||||||
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Foreign currency translation adjustment
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892,351 | 64,184 | ||||||
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Total comprehensive income
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$ | 9,745,535 | $ | 4,565,298 | ||||
See accompanying notes to the consolidated financial statements.
F-4
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
AND OTHER COMPREHENSIVE INCOME (continued)
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
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2011
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2010
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|||||||
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Earnings per common share, basic and diluted
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$ | 0.23 | $ | 0.13 | ||||
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Weighted average shares outstanding, basic and diluted
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38,038,022 | 35,998,000 | ||||||
See accompanying notes to the consolidated financial statements.
F-5
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
| Common Stock | Additional Paid-in Capital | Retained Earnings | Statutory Reserve Fund | Noncontrolling Interests | Other Comprehensive Income | Total | ||||||||||||||||||||||
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Balance, June 30, 2009
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$ |
35,998
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$ |
1,170,802
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$ |
6,123,005
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$ |
190,011
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$ |
102,734
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$ |
542,157
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$ |
8,164,707
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||||||||||||||
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Net income
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- | - |
4,501,114
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- |
61,721
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- |
4,562,835
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|||||||||||||||||||||
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Other comprehensive
income
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- | - | - | - | - |
64,184
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64,184
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|||||||||||||||||||||
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Balance, June 30, 2010
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35,998
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1,170,802
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10,624,119
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190,011
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164,455
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606,341
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12,791,726
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|||||||||||||||||||||
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Reorganization for
reverse merger
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4,035
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(4,035
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) | - | - | - | - | - | ||||||||||||||||||||
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Value of stock issued for
professional services
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1,067
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436,403
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- | - | - | - |
437,470
|
|||||||||||||||||||||
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Net income
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- | - |
8,853,184
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- |
130,597
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- |
8,983,781
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|||||||||||||||||||||
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VIE distribution
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- | - |
(16,224
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) | - |
(16,224
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) | |||||||||||||||||||||
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Other comprehensive
income
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- | - | - | - | - |
892,351
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892,351
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|||||||||||||||||||||
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Balance, June 30, 2011
|
$ |
41,100
|
$ |
1,603,170
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$ |
19,477,303
|
$ |
190,011
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$ |
278,828
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$ |
1,498,692
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$ |
23,089,104
|
||||||||||||||
See accompanying notes to the consolidated financial statements.
F-6
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
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2011
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2010
|
|||||||
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Cash flows from operating activities
|
||||||||
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Net income before noncontrolling interests
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$ | 8,983,781 | $ | 4,562,835 | ||||
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Adjustment to reconcile net income to net cash
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||||||||
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provided by (used in) operating activities:
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||||||||
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Depreciation
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1,479,677 | 1,049,109 | ||||||
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Deferred income taxes
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2,866,622 | 1,500,371 | ||||||
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Gain from sale of biological assets
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(142,562 | ) | - | |||||
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Value of stock issued for professional services
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437,470 | - | ||||||
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Change in operating assets and liabilities
|
||||||||
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(Increase) in accounts receivable
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(1,148,100 | ) | (210,419 | ) | ||||
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Decrease in inventories
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22,203 | 105,134 | ||||||
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Decrease (increase) in prepaid expenses
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380,422 | (604,010 | ) | |||||
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(Decrease) in accounts payable
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(2,235 | ) | (1,098 | ) | ||||
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(Decrease) increase in accrued expenses and other payables
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(41,600 | ) | 26,750 | |||||
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Net cash provided by operating activities
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12,835,678 | 6,428,672 | ||||||
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Cash flows from investing activities
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||||||||
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Loan receivable
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(2,165,800 | ) | - | |||||
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Purchase of property, plant and equipment
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(26,071 | ) | (2,209 | ) | ||||
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(Increase) in biological assets
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(8,039,525 | ) | (3,397,554 | ) | ||||
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Net cash (used in) investing activities
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(10,231,396 | ) | (3,399,763 | ) | ||||
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Cash flows from financing activities
|
||||||||
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VIE distribution
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(16,224 | ) | - | |||||
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Proceeds from stockholder loans
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1,112,002 | 1,375,738 | ||||||
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Repayment of stockholder loans
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(2,252,358 | ) | (2,130,274 | ) | ||||
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Net cash (used in) financing activities
|
$ | (1,156,580 | ) | $ | (754,536 | ) | ||
See accompanying notes to the consolidated financial statements.
F-7
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
FOR THE YEARS ENDED JUNE 30, 2011 AND 2010
|
2011
|
2010
|
|||||||
|
Effect of exchange rate changes on cash
|
$ | 1,117,817 | $ | 99,596 | ||||
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Net increase in cash
|
2,565,519 | 2,373,969 | ||||||
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Cash, beginning of year
|
2,959,661 | 585,692 | ||||||
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Cash, end of year
|
$ | 5,525,180 | $ | 2,959,661 | ||||
|
Supplemental disclosure of cash flow information
|
||||||||
|
Cash paid for income taxes
|
$ | - | $ | - | ||||
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Cash paid for interest
|
$ | - | $ | - | ||||
|
Supplemental disclosure of non-cash investing and
financing activities
|
||||||||
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Notes receivable from sale of biological assets
|
$ | 1,338,381 | $ | - | ||||
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Fair value of stock issued for professional services
|
$ | 437,470 | $ | - | ||||
See accompanying notes to the consolidated financial statements.
F-8
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
1. ORGANIZATION
China Modern Agricultural Information, Inc. (the “Company”), formerly known as Trade Link Wholesalers, Inc. (“Trade Link”), was incorporated on December 22, 2008 under the laws of the State of Nevada. On April 4, 2011, the Board of Directors of Trade Link filed an amendment to the Certificate of Incorporation with the State of Nevada to effect the name change from Trade Link to China Modern Agricultural Information, Inc.
On January 28, 2011, Trade Link entered into a Share Exchange Agreement (the “Exchange Agreement”) by and among (i) Value Development Holdings, Ltd., a British Virgin Islands company, (“Value Development”) (ii) Value Development’s stockholders, (iii) Trade Link, and (iv) Trade Link’s principal stockholders. Pursuant to the terms of the Exchange Agreement, Value Development and the Value Development stockholders transferred to Trade Link all of the shares of Value Development in exchange for the issuance of 35,998,000 shares of Trade Link’s common stock as set forth in the Exchange Agreement, so that the Value Development stockholders own 87.80% of Trade Link’s outstanding shares (the “Share Exchange”).
On January 28, 2011, Value Development completed the acquisition of Harbin Jiasheng Consulting Managerial Co. Ltd. (“Jiasheng Consulting” or “WFOE”), a holding company. Jiasheng Consulting has entered into Variable Interest Entity (“VIE”) agreements with Mr. Liu Zhengxin, the Company’s Chief HR Officer, and Mr. Wang Youliang, the Company’s Chief Executive Officer, as well as with Heilongjiang Zhongxian Information Co., Ltd. (“Zhongxian Information”). Mr. Liu Zhengxin holds a 62% equity interest in Zhongxian Information and Mr. Wang Youliang holds a 38% equity interest in Zhongxian Information. Pursuant to a VIE agreement signed by Mr. Liu Zhengxin and Mr. Wang Youliang, Jiasheng Consulting now controls all management responsibilities of Zhongxian Information. The contractual arrangements are comprised of a series of agreements, including a shareholder voting rights proxy agreement, exclusive consulting and service agreement, exclusive call option agreement and equity pledge agreement, through which Jiasheng Consulting has the right to provide exclusive and complete business support and technical and consulting service to Zhongxian Information for an annual fee in the amount of Zhongxian Information’s yearly net profits after tax. Additionally, Zhongxian Information’s stockholders have pledged their rights, titles and equity interest in Zhongxian Information as security for the collection of consulting and services fees provided through an Equity Pledge Agreement.
F-9
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
1. ORGANIZATION (continued)
In order to further reinforce Jiasheng Consulting’s rights to control and operate Zhongxian Information, the stockholders of Zhongxian Information have granted Jiasheng Consulting the exclusive right and option to acquire all of their equity interests in Zhongxian Information through an Exclusive Option Agreement. As a result of the entry into the foregoing agreements, the Company has a corporate structure which is set forth below:
F-10
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
1. ORGANIZATION (continued)
At the closing of the Share Exchange, Trade Link cancelled 5,500,000 shares of its common stock held by its principal stockholders.
The share exchange transaction constituted a reverse takeover transaction. Accordingly, the purchase method under reverse takeover accounting has been adopted for the preparation of the consolidated financial statements. As a result, the consolidated financial statements are issued under the name of China Modern Agricultural Information, Inc. (the legal acquirer), but are a continuation of the consolidated financial statements of Value Development and its subsidiaries (the accounting acquirers). Before and after the Share Exchange, Value Development, Value Development Group Limited (a wholly-owned subsidiary of Value Development), Jiasheng Consulting, and Zhongxian Information and Zhongxian Information’s 99% owned subsidiary, Heilongjiang Xinhua Cattle Industry Co., Ltd. (“Xinhua Cattle”) are under common control. Therefore, the reorganization was effectively a legal recapitalization accounted for as transactions between entities under common control at the carry over basis, in a manner similar to pooling-of-interests accounting. The effect of the reorganization was applied retroactively to the prior year’s consolidated financial statements as if the current structure existed since inception of the periods presented.
In connection with the Exchange Agreement on January 28, 2011, the Company issued 100,000 shares of its common stock to attorneys for legal services rendered. The fair value of the stock was $41,000, which has been included in general and administrative expenses in the accompanying consolidated statements of income and other comprehensive income for the year ended June 30, 2011.
Zhongxian Information and Xinhua Cattle are engaged in acquisition, breeding and rearing of dairy cows, and production and sale of fresh milk to manufacturing and distribution companies. Zhongxian Information was established in China in January 2005 with registered capital of 10 million Renminbi (“RMB”). In February 2006, it acquired 99% of the registered capital of Xinhua Cattle, which was established in China in December 2005 with a registered capital of three million RMB. Xinhua Cattle had no significant activities and its cost approximated the fair value at the date of acquisition.
F-11
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
2. CHANGE OF FINANCIAL YEAR END DATE
On January 28, 2011, in connection with the Share Exchange, the Company changed its fiscal year end date from October 31 to June 30.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Change of Reporting Entity and Basis of Accounting and Presentation
The reverse acquisition described in Note 1 was treated as recapitalization of the Company. As such, China Modern Agricultural Information, Inc. is the continuing entity for financial reporting purposes. Securities and Exchange Commission (“SEC”) Manual Item 2.6.5.4 “Reverse Acquisitions” requires that “in a reverse acquisition, the historical shareholder’s equity of the accounting acquirer prior to the merger is retroactively reclassified (a recapitalization) for the equivalent number of shares received in the merger after giving effect to any difference in par value of the registrant’s and the accounting acquirer’s stock by an offset in paid-in capital.” Therefore, the consolidated financial statements have been prepared as if Value Development and its subsidiaries had always been the reporting company and then on the reverse acquisition date, had changed its name and reorganized its capital stock.
Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, “Consolidation,” the Company is required to include in its consolidated financial statements the financial statements of VIEs. ASC 810 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns. VIEs are those entities in which a company, through contractual arrangements, bears the risk of, and enjoy the rewards normally associated with ownership of the entities, and therefore the company is the primary beneficiary of the entities.
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the financial statements of China Modern Agricultural Information, Inc. and its subsidiaries, Value Development, Value Development Group Limited, Jiasheng Consulting, and its VIE, Zhongxian Information and Zhongxian Information’s 99% owned subsidiary, Xinhua Cattle. The Company is the primary beneficiary of the VIE and its subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.
F-12
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Foreign Currency Translations
All Company assets are located in People’s Republic of China (“PRC”). The functional currency for the majority of the Company’s operations is the RMB. The Company uses the United States dollar (“US Dollar” or “US$” or “$”) for financial reporting purposes. The consolidated financial statements of the Company have been translated into US dollars in accordance with ASC 830, “Foreign Currency Matters.” All asset and liability accounts have been translated using the exchange rate in effect at the balance sheet date. Equity accounts have been translated at their historical exchange rates when the capital transactions occurred. Statements of income and other comprehensive income amounts have been translated using the average exchange rate for the years presented. Adjustments resulting from the translation of the Company’s consolidated financial statements are recorded as other comprehensive income (loss).
The exchange rates used to translate amounts in RMB into US dollars for the purposes of preparing the consolidated financial statements are as follows:
|
June 30, 2011
|
June 30, 2010
|
|||||||
|
Balance sheet items, except for stockholders’
equity, as of year end
|
0.1547 | 0.1473 | ||||||
|
Amounts included in the statements of income,
statements of changes in stockholders’ equity and
statements of cash flows for the year
|
0.1507 | 0.1467 | ||||||
For the years ended June 30, 2011 and 2010, foreign currency translation adjustments of $892,351 and $64,184 have been reported as other comprehensive income in the consolidated statements of income and other comprehensive income.
F-13
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Foreign Currency Translations (continued)
Although government regulations now allow convertibility of RMB for current account transactions, significant restrictions still remain. Hence, such translations should not be construed as representations that the RMB could be converted into US dollars at that rate or any other rate.
The value of RMB against the US dollar and other currencies may fluctuate and is affected by, among other things, changes in China’s political and economic conditions. Any significant revaluation of the RMB may materially affect the Company’s consolidated financial condition in terms of US dollar reporting.
Revenue Recognition
The Company’s primary source of revenues are derived from sale of fresh milk principally to two major Chinese manufacturing and distribution companies of dairy products. The Company’s revenue recognition policies comply with SEC Staff Accounting Bulletin (“SAB”) 104. Revenues from sales of goods are recognized when the goods are delivered and the title is transferred, the risks and rewards of ownership have been transferred to the customer, the price is fixed and determinable and collection of the related receivable is reasonably assured.
Revenue is recognized when the title to the goods has been passed to customers, which is the date when the goods are delivered to designated locations and accepted by the customers and the previously discussed requirements are met. Fresh milk is delivered to its customers on a daily basis. The customers’ acceptance occurs upon inspection of quality and measurement of quantity at the time of delivery. The Company does not provide the customer with the right of return.
F-14
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Vulnerability Due to Operations in PRC
The Company’s operations may be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than twenty years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRC’s political, economic and social conditions. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective.
Fair Value of Financial Instruments
Financial instruments include accounts receivable, notes receivable, loan receivable, accounts payable, accrued expenses and other payables and stockholder loans. As of June 30, 2011 and 2010, the carrying values of accounts receivable, accounts payable, accrued expenses and other payables and stockholders loans approximated their fair values due to the short maturity of these financial instruments. The carrying values of notes receivable and loan receivable are valued at their net realizable value which approximates the fair value.
Cash and Cash Equivalents
The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents.
F-15
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Accounts Receivable
Accounts receivable is stated at cost, net of an allowance for doubtful accounts. Receivables outstanding longer than the payment terms are considered past due. The Company maintains an allowance for doubtful accounts for estimated losses when necessary resulting from the failure of customers to make required payments. The Company reviews the accounts receivable on a periodic basis and makes allowances where there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, the customer’s payment history, its current credit-worthiness and current economic trends. The Company considers all accounts receivable at June 30, 2011 and 2010, to be fully collectible and, therefore, did not provide for an allowance for doubtful accounts. For the years presented, the Company did not write off any accounts receivable as bad debts.
Advertising Cost
Advertising costs are charged to operations when incurred. Advertising cost totaled $24,323 and $91,009 for the years ended June 30, 2011 and 2010, respectively.
Inventories
Inventories, comprised principally of livestock feed, are valued at the lower of cost or market value. The value of inventories is determined using the weighted average cost method.
The Company estimates an inventory allowance for excessive or unusable inventories. Inventory amounts are reported net of such allowances, if any. There was no allowance for excessive or unusable inventories as of June 30, 2011 and 2010.
Loan Receivable
Loan receivable at June 30, 2011 represents a non-interest bearing loan to a company with which the Company has signed a letter of intent to acquire, subsequent to the year end. The loan was converted to a non-interest bearing security deposit upon the execution of the letter of intent (see Note 14).
F-16
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Prepaid Expenses
Prepaid expenses of $238,238 as of June 30, 2011 are prepayments for consulting services. Prepaid expenses of $456,600 as of June 30, 2010 represent funds advanced to an advisory firm to assist the Company in locating a public shell for the reverse merger and related financial matters and were expensed during the year ended June 30, 2011.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost, less accumulated depreciation. Cost includes the price paid to acquire or construct the asset, including capitalized interest during the construction period, and any expenditures that substantially increase the assets value or extend the useful life of an existing asset. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Major repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the periods benefited. Maintenance and repairs are generally expensed as incurred.
The estimated useful lives for property, plant and equipment categories are as follows:
|
Machinery and equipment
|
3 years
|
|
Automobile
|
10 years
|
|
Building and building improvements
|
20 and 10 years
|
Impairment of Long-lived Assets
The Company utilizes FASB ASC 360, “Property, Plant and Equipment,” which addresses the financial accounting and reporting for the recognition and measurement of impairment losses for long-lived assets. In accordance with ASC 360, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company may recognize an impairment of a long-lived asset in the event the net book value of such asset exceeds the future undiscounted cash flows attributable to the asset. No impairment of long-lived assets was recognized for the years ended June 30, 2011 and 2010.
F-17
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Biological Assets
Biological assets consist of dairy cows for milking purposes.
Immature Biological Assets
Immature biological assets are recorded at cost, including acquisition costs, transportation costs, insurance expenses, and feeding costs, incurred in raising the cows. Once the cow is able to produce milk, the cost of the immature biological asset is transferred to mature biological assets using the weighted average cost method.
Mature Biological Assets
Mature biological assets are recorded at their original or weighted average transfer cost. Depreciation is provided over the estimated useful life of eight years using the straight-line method. The estimated residual value is 10%. Feeding and management costs incurred on mature biological assets are included as cost of goods sold. When biological assets, including male cows, are retired or otherwise disposed of in the normal course of business, the cost and accumulated depreciation will be removed from the accounts and any resulting gain or loss will be included in the results of operations for the respective period. For the years ended June 30, 2011 and 2010, gains (losses) of $(54,202) and $0, respectively, are included in the cost of goods sold in the accompanying consolidated statements of income and other comprehensive income.
The Company reviews the carrying value of its biological assets for impairment at least annually or whenever events and circumstances indicate that their carrying value may not be recoverable from the estimated future cash flows expected to result from their use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss will be recognized equal to an amount by which the carrying value exceeds the fair value of the asset. The factors considered by management in performing this assessment include current health status and production capacity. There were no impairment losses recorded during the years ended June 30, 2011 and 2010.
F-18
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Taxes
The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes” (“ASC 740”), which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences relate principally to the undistributed earnings of the Company’s subsidiary under PRC law. Deferred tax assets and liabilities represent the future tax consequence for those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions. As of June 30, 2011 and 2010, the Company does not have a liability for any unrecognized tax benefits.
The income tax laws of various jurisdictions in which the Company and its subsidiaries operate are summarized as follows:
United States
The Company is subject to United States tax at graduated rates from 15% to 35%. No provision for income tax in the United States has been made as the Company had no U.S. taxable income for years ended June 30, 2011 and 2010.
F-19
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Taxes (continued)
BVI
Value Development is incorporated in BVI and is governed by the income tax laws of BVI. According to current BVI income tax law, the applicable income tax rate for the Company is 0%.
Hong Kong
Value Development Group Limited is incorporated in Hong Kong. Pursuant to the income tax laws of Hong Kong, the Company is not subject to tax on non Hong Kong source income.
PRC
Xinhua Cattle is entitled to a tax exemption for the full Enterprise Income Tax in China due to a government tax preferential policy for the dairy farming industry. Zhongxian Information is subject to an Enterprise Income Tax at 25% and files its own tax returns. Consolidated tax returns are not permitted in China.
Net Income (Loss) Per Share
The Company computes net income (loss) per common share in accordance with FASB ASC 260, “Earnings Per Share” (“ASC 260”) and SEC SAB 98. Under the provisions of ASC 260 and SAB 98, basic net income (loss) per common share is computed by dividing the amount available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted income per common share is computed by dividing the amount available to common shareholders by the weighted average number of shares of common stock outstanding plus the effect of any dilutive shares outstanding during the period. Accordingly, the number of weighted average shares outstanding as well as the amount of net income per share are presented for basic and diluted per share calculations for all periods reflected in the accompanying consolidated statements of income and other comprehensive income.
F-20
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Statutory Reserve Fund
Pursuant to corporate law of the PRC, the Company’s Chinese subsidiary is required to transfer 10% of its net income, as determined under PRC accounting rules and regulations, to a statutory reserve fund until such reserve balance reaches 50% of the its registered capital. The statutory reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or used to increase registered capital, provided that the remaining reserve balance after such use is not less than 25% of the registered capital. The Company has fully funded the statutory reserve fund.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation. As one of the Company’s related parties in the prior year became a stockholder during the current year, the loans from that related party have been reclassified to stockholder loans.
4. RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2011, FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”) that improves the comparability, consistency, and transparency of financial reporting and increases the prominence of items reported in other comprehensive income by eliminating the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. ASU 2011-05 requires that all changes in other comprehensive income items be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both methods, the entity is required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income to net income in the statement(s) where the component of net income and the components of other comprehensive income are presented. ASU No. 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and is to be applied retrospectively, with early adoption permitted. The adoption of this standard will not have a material effect on the Company’s consolidated financial statements.
F-21
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
4. RECENTLY ISSUED ACCOUNTING STANDARDS (continued)
In May 2011, FASB issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S.GAAP and IFRSs” (“ASU 2011-04”) that provides clarification about the application of existing fair value measurements and disclosure requirements and expands certain other disclosure requirements. ASU 2011-04 amends U.S. GAAP to provide common fair value measurements and disclosure requirements with International Financial Reporting Standards. The amendments in this ASU are effective prospectively for interim and annual periods beginning after December 15, 2011, with no early adoption permitted. The Company does not believe that the adoption of this standard will have a material impact on its consolidated financial statements.
In December 2010, FASB issued ASU No. 2010-29, “Disclosure of Supplementary Pro Forma Information for Business Combinations” (“ASU 2010-29”). ASU 2010-29 specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. ASU 2010-29 is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The adoption of this standard will not have a material impact on the Company’s consolidated financial statements.
In December 2010, FASB issued ASU No. 2010-28, “When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts” (“ASU 2010-28”). ASU 2010-28 modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. This eliminates an entity’s ability to assert that a reporting unit is not required to perform Step 2 because the carrying amount of the reporting unit is zero or negative despite the existence of qualitative factors that indicate the goodwill is more likely than not impaired. ASU 2010-28 is effective for fiscal and interim periods beginning after December 15, 2010. The adoption of this standard will not have a material impact on the Company’s consolidated financial statements.
F-22
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
4. RECENTLY ISSUED ACCOUNTING STANDARDS (continued)
In April 2010, FASB issued ASU No. 2010-13, “Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades” (“ASU 2010-13”). ASU 2010-13 addresses the classification of a share-based payment award with an exercise price denominated in the currency of a market in which the underlying equity security trades. FASB ASC 718 was amended to clarify that a share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity’s equity securities trade shall not be considered to contain a market, performance or service condition. Therefore, such an award is not to be classified as a liability if it otherwise qualifies for equity classification. The amendments in ASU 2010-13 are effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010, with early application permitted. The adoption of this standard will not have a material impact on the Company’s consolidated financial statements.
In March 2010, FASB issued new accounting guidance, under ASC 605 on “Revenue Recognition.” This standard provides that the milestone method is a valid application of the proportional performance model for revenue recognition if the milestones are substantive and there is substantive uncertainty about whether the milestones will be achieved. Determining whether a milestone is substantive requires judgment that should be made at the inception of the arrangement. To meet the definition of a substantive milestone, the consideration earned by achieving the milestone (1) would have to be commensurate with either the level of effort required to achieve the milestone or the enhancement in the value of the item delivered, (2) would have to relate solely to past performance, and (3) should be reasonable relative to all deliverables and payment terms in the arrangement. No bifurcation of an individual milestone is allowed and there can be more than one milestone in an arrangement. The standard is effective and did not have a material effect on the Company’s consolidated financial statements.
F-23
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
4. RECENTLY ISSUED ACCOUNTING STANDARDS (continued)
In February 2010, FASB issued Accounting Standards Update No. 2010-09, “Amendments to Certain Recognition and Disclosure Requirements” (“ASU No. 2010-09”). ASU No. 2010-09 amends FASB ASC 855-10, “Subsequent Events,” to remove the requirement for an SEC filer to disclose the date through which subsequent events have been evaluated in both issued and revised financial statements. This change alleviates potential conflicts between ASC 855-10 and the SEC’s requirements. The update did not have a material impact on the Company’s consolidated financial statements.
In January 2010, FASB issued Accounting Standards Update No. 2010-06, “Improving Disclosures about Fair Value Measurements” (“ASU No. 2010-06”). ASU No. 2010-06 amends FASB ASC 820, to require additional information to be disclosed principally regarding Level 3 measurements and transfers to and from Level 1 and 2. In addition, enhanced disclosure is required concerning inputs and valuation techniques used to determine Level 2 and Level 3 measurements. This guidance is generally effective for interim and annual reporting periods beginning after December 15, 2009; however, requirements to disclose separately purchases, sales, issuances, and settlements in the Level 3 reconciliation are effective for fiscal years beginning after December 15, 2010 (and for interim periods within such years). The update will not have a material impact on the Company’s consolidated financial statements.
In December 2009, FASB issued Accounting Standards Update 2009-17, “Consolidations (Topic 810) – Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities” (“ASU 2009-17”), which is effective for fiscal years beginning after November 15, 2009. The Company adopted ASU 2009-17, which requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a VIE. This analysis identifies the primary beneficiary of a VIE as the enterprise that has (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. In addition, the required changes provide guidance on shared power and joint venture relationships, remove the scope exemption for qualified special purpose entities, revise the definition of a VIE, and require additional disclosures. The Company has assessed the terms contained in the contractual agreements between its wholly-owned subsidiaries and Zhongxian Information and determined that Zhongxian Information is a VIE, and accordingly, is consolidated in the Company’s financial statements.
F-24
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at June 30 are summarized as follows:
|
2011
|
2010
|
|||||||
|
Machinery and equipment
|
$ | 81,171 | $ | 77,288 | ||||
|
Automobile
|
37,098 | 35,323 | ||||||
|
Building and building improvements
|
1,766,675 | 1,656,684 | ||||||
| 1,884,944 | 1,769,295 | |||||||
|
Less: accumulated depreciation
|
(430,096 | ) | (308,261 | ) | ||||
|
Property, plant and equipment, net
|
$ | 1,454,848 | $ | 1,461,034 | ||||
Depreciation expense charged to operations for the years ended June 30, 2011 and 2010 was $103,598 and $113,235, respectively.
6. BIOLOGICAL ASSETS
Biological assets at June 30 consist of the following:
|
2011
|
2010
|
|||||||
|
Immature biological assets
|
$ | 8,243,869 | $ | 5,963,455 | ||||
|
Mature biological assets
|
11,698,941 | 8,849,751 | ||||||
| 19,942,810 | 14,813,206 | |||||||
|
Less: accumulated depreciation
|
(2,738,194 | ) | (3,080,001 | ) | ||||
|
Biological assets, net
|
$ | 17,204,616 | $ | 11,733,205 | ||||
Depreciation expense for years ended June 30, 2011 and 2010 was $1,376,079 and $935,874, respectively, all of which was recorded in cost of goods sold in the consolidated statements of income and other comprehensive income.
F-25
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
7. NOTES RECEIVABLE
In June 2011, the Company sold 2,000 of its cows (mature biological assets) to local farmers. The cost and accumulated depreciation were removed from the accounts and a gain of $142,562 is included in non-operating income in the accompanying consolidated statements of income and other comprehensive income for the year ended June 30, 2011. According to the agreements with the local farmers, the sales price will be collected over five years, with a minimum payment of 20% of the sales price to be paid per year. The related receivable of $1,338,381 is recorded at its present value at a discount rate of 12%, which is commensurate with interest rates for notes with similar risk. The receivable is included in notes receivable in the accompanying consolidated balance sheets as of June 30, 2011. The Company considers the receivable fully collectible and, therefore, did not provide for an allowance for doubtful accounts, although the agreements do not provide any remedies in the event of default. The Company will continue to review the receivable on a periodic basis and where there is doubt as to the collectibility of individual balances, it will provide an allowance, when necessary.
At June 30, 2011, the notes receivable consists of the following:
|
Notes receivable
|
$ | 1,856,400 | ||
|
Less: discount for interest at 12%
|
(518,019 | ) | ||
| 1,338,381 | ||||
|
Less: current portion
|
(210,674 | ) | ||
|
Non-current portion
|
$ | 1,127,707 | ||
In connection with the sale discussed above, the Company also entered into agreements with these local farmers for a 30% commission of their monthly milk sales generated by the 2,000 cows in exchange for the Company’s assistance in arranging for the sale of the milk. Commission income of $126,059 is included in revenues in the consolidated statements of income and other comprehensive income for the year ended June 30, 2011. The related receivable of $126,059 at June 30, 2011 is included in accounts receivable in the consolidated balance sheets.
F-26
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
8. LEASES
The Company leased one of its offices from an unrelated third party at a monthly rental of approximately $1,100 under an operating lease, which expired in May 2010. The Company has a verbal agreement with the landlord to continue to use the office at no cost.
The Company also leases another office at no cost from an unrelated third party. On September 1, 2010, the Company entered into an operating lease agreement expiring on August 31, 2015. The lease agreement does not provide for payment of rent.
All land in China is government owned and cannot be sold to any individual or company. The Company obtained a “land use right” to use a track of land of 250,000 square meters at no cost for the period from December 2, 2005 to December 1, 2015.
9. RELATED PARTY TRANSACTIONS
The Company obtained demand loans from two of its stockholders which are non-interest bearing. The loans of $230,356 and $1,344,129 as of June 30, 2011 and 2010, respectively, are reflected as stockholder loans in the consolidated balance sheets.
10. FAIR VALUE MEASUREMENTS
FASB ASC 820, “Fair Value Measurements and Disclosures,” specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with ASC 820, the following summarizes the fair value hierarchy:
Level 1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.
Level 2 Inputs – Inputs other than the quoted prices in active markets that are observable either directly or indirectly.
Level 3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements.
F-27
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
10. FAIR VALUE MEASUREMENTS (continued)
ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurements. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company did not identify any assets and liabilities that are required to be presented in the consolidated balance sheets at fair value.
11. INCOME TAXES
The provision for income taxes consisted of the following for the years ended June 30:
|
2011
|
2010
|
|||||||
|
Current
|
$ | - | $ | - | ||||
|
Deferred
|
2,866,622 | 1,500,371 | ||||||
| $ | 2,866,622 | $ | 1,500,371 | |||||
The following table reconciles the effective income tax rates with the statutory rates for the years ended June 30:
|
2011
|
2010
|
|||||||
|
As calculated at the statutory rate
|
25.00 | % | 25.00 | % | ||||
|
Common stock issued for professional services
|
0.92 | % | - | |||||
|
Other
|
(1.73 | %) | - | |||||
|
As reported on the consolidated statements of income and other comprehensive income
|
24.19 | % | 25.00 | % | ||||
F-28
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
11. INCOME TAXES (continued)
Deferred tax assets and liabilities are recognized for expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effects for the year in which the differences are expected to reverse.
The laws of China permit the carry forward of net operating losses for a period of five years. Undistributed earnings from Xinhua Cattle are not taxable until such earnings are actually distributed.
Deferred tax assets (liabilities) are comprised of the following at June 30:
|
2011
|
2010
|
|||||||
|
Net operating losses carryforward
|
$ | 260,264 | $ | 472,692 | ||||
|
Undistributed earnings of subsidiary
under PRC law
|
(7,340,556 | ) | (4,412,354 | ) | ||||
|
Net deferred tax (liabilities)
|
$ | (7,080,292 | ) | $ | (3,939,662 | ) | ||
The Company’s tax filings are subject to examination by the tax authorities. The tax years 2006 to 2011 remain open to examination by tax authorities in the PRC.
12. CONCENTRATION OF CREDIT RISK
Substantially all of the Company’s bank accounts are located in The People’s Republic of China and are not covered by protection similar to that provided by the FDIC on funds held in United States banks.
The Company’s two customers for sales of milk accounted for 48% and 48% of sales for the year ended June 30, 2011, respectively, and 55% and 45% for the year ended June 30, 2010, respectively. The same two customers also accounted for 33% and 48% of accounts receivable, respectively at June 30, 2011, and 56% and 44% at June 30, 2010, respectively.
Six farmers accounted for the entire notes receivable at June 30, 2011.
F-29
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
13. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION
The following condensed financial information of registrant includes the US parent company only balance sheets as of June 30, 2011 and 2010, and the US parent company only statements of operations, and cash flows for the years ended June 30, 2011 and 2010:
Condensed Balance Sheets
|
ASSETS
|
June 30,
2011
|
June 30, 2010
|
||||||
|
Investment in subsidiaries and VIEs
|
$ | 22,810,276 | $ | 12,627,271 | ||||
|
TOTAL ASSETS
|
$ | 22,810,276 | $ | 12,627,271 | ||||
|
LIABILITIES AND STOCKHOLDERS’
EQUITY
|
||||||||
|
Accrued expenses and other payables
|
$ | - | $ | - | ||||
|
Total liabilities
|
- | - | ||||||
|
Stockholders’ equity
|
||||||||
|
Common stock, $0.001 par value; 75,000,000
shares authorized; 41,100,000 shares and
35,998,000 shares issued and outstanding at
June 30, 2011 and 2010, respectively
|
41,100 | 35,998 | ||||||
|
Additional paid-in capital
|
1,603,170 | 1,170,802 | ||||||
|
Retained earnings
|
21,166,006 | 11,420,471 | ||||||
|
Total stockholders’ equity
|
22,810,276 | 12,627,271 | ||||||
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY
|
$ | 22,810,276 | $ | 12,627,271 | ||||
F-30
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
13. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (continued)
Condensed Statements of Operations
|
For the years ended June 30,
|
||||||||
|
2011
|
2010
|
|||||||
|
Revenues
|
||||||||
|
Share of earnings from investment in
subsidiaries and VIEs
|
$ | 9,290,654 | $ | 4,501,114 | ||||
|
Operating expenses
|
||||||||
|
General and administrative
|
437,470 | - | ||||||
|
Net income
|
$ | 8,853,184 | $ | 4,501,114 | ||||
Condensed Statements of Cash Flows
|
For the years ended June 30,
|
||||||||
|
2011
|
2010
|
|||||||
|
Cash flows from operating activities
|
||||||||
|
Net income
|
$ | 8,853,184 | $ | 4,501,114 | ||||
|
Adjustments to reconcile net income to net cash
provided by (used in) operating activities
|
||||||||
|
Share of earnings from investment in
subsidiaries and VIEs
|
(9,290,654 | ) | (4,501,114 | ) | ||||
|
Value of stock issued for professional services
|
437,470 | - | ||||||
|
Net cash provided by (used in) operating activities
|
- | - | ||||||
|
Net increase in cash
|
- | - | ||||||
|
Cash, beginning of year
|
- | - | ||||||
|
Cash, end of year
|
$ | - | $ | - | ||||
F-31
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
13. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (continued)
Basis of Presentation
The Company records its investment in its subsidiaries and VIEs under the equity method of accounting. Such investment is presented as “Investment in subsidiaries and VIEs” on the condensed balance sheets and shares of the subsidiaries and VIEs’ profits is presented as “Share of earnings from investment in subsidiaries and VIEs” in the condensed statements of operations.
Certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. The parent only financial information has been derived from the Company’s consolidated financial statements and should be read in conjunction with the Company’s consolidated financial statements.
The US parent company has no assets other than investment in its subsidiaries and VIEs. There were no cash transactions in the parent company during the years ended June 30, 2011 and 2010. The only transaction the US parent company entered into was the issuance of 1,067,000 shares of its common stock for legal and consulting services rendered. The fair value of the stock of $437,470 has been included in general and administrative expenses in the condensed statements of operations for the year ended June 30, 2011.
Restricted Net Assets
Under PRC laws and regulations, the Company’s PRC subsidiaries and VIEs are restricted in their ability to transfer certain of its net assets to the Company in the form of dividend payments, loans or advances. The restricted net assets of the Company’s PRC subsidiaries and the VIEs amounted to $22,810,276 and $12,627,271 as of June 30, 2011 and 2010.
The Company’s operations and revenues are conducted and generated in PRC, and all of the Company’s revenues being earned and currency received are denominated in RMB. RMB is subject to the foreign exchange control regulation in China, and, as a result, the Company may be unable to distribute any dividends outside of China due to PRC foreign exchange control regulations that restrict the Company’s ability to convert RMB into US Dollars.
F-32
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
13. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (continued)
Schedule I of Article 5-04 of Regulation S-X requires the condensed financial information of registrant shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the above test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant’s proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party. The condensed parent company only financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X as the restricted net assets of the Company’s PRC subsidiaries and VIEs exceed 25% of the consolidated net assets of the Company.
14. SUBSEQUENT EVENTS
On July 10, 2011 (“Execution Date”), Zhongxian Information entered into a letter of intent (“Letter of Intent”) with Harbin JinShangjing Technology Investment Co., Ltd., a Chinese company (“Harbin JinShangjing”). Harbin JinShangjing is the sole equity owner of Shangzhi Yulong Cattle Co., Ltd., a Chinese company also owning cows and selling milk (“Shangzhi Yulong”). Subject to the terms and conditions of the Letter of Intent, within 90 days after the Execution Date, the parties intend to execute a definitive equity transfer agreement (the “Definitive Agreement”) providing for the acquisition by Zhongxian Information of 100% of the equity interests of Shangzhi Yulong (the “Proposed Acquisition”). The purchase price has not been agreed upon and will be determined at the time of the execution of the Definitive Agreement.
Pursuant to the Letter of Intent, on the execution date of the Letter of Intent, the loan receivable of RMB14 million (US$2,165,800) was converted to a non-interest bearing security deposit (“Security Deposit”) with Harbin Jinshangjing (see Note 3). If a Definitive Agreement is executed, the Security Deposit will be applied against the purchase price of the Proposed Acquisition. If a Definitive Agreement is not executed, the Security Deposit will be returned to the Company within 15 days of the termination of the Letter of Intent.
F-33
CHINA MODERN AGRICULTURAL INFORMATION, INC.
AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2011 AND 2010
14. SUBSEQUENT EVENTS (continued)
In August 2011, the Company sold 5,635 of its cows (mature biological assets) to local farmers, representing approximately 61% of the Company’s mature biological assets held at June 30, 2011 for a sales price of RMB41,219,400 (approximately US$6,385,000). In accordance with the agreements with the local farmers, 10% of the sales price was collected by the Company before September 15, 2011 and the remaining balance will be collected over three years, with a minimum payment of 30% of the sales price to be paid per year. The agreements also provide for certain penalties that may be imposed upon the farmers should the farmers fail to make a scheduled payment, including the repossession of the cows. In connection with the sale, the agreements with these local farmers also provide for a 30% commission of their monthly milk sales generated by the 5,635 cows in exchange for the Company’s assistance in arranging for the sale of the milk.
F-34
PART IV
Item 15. EXHIBITS
|
(a)
|
Exhibits
|
|
Exhibit Number
|
Description
|
|
|
2.1
|
Share Exchange Agreement between Trade Link Wholesalers, Inc. and Value Development Holdings Limited, dated January 28, 2011. (1)
|
|
|
10.1
|
Exclusive Consulting and Service Agreement between Harbin Jiasheng Consulting Managerial Co., Ltd. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010. (1)
|
|
|
10.2
|
Shareholders Voting Right Proxy Agreement between Mr. Wang Youliang, Mr. Liu Zhengxin, Harbin Jiasheng Consultation & Management Co., LTD. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010. (1)
|
|
|
10.3
|
Exclusive Call Options Agreement between Mr. Wang Youliang, Mr. Liu Zhengxin, Harbin Jiasheng Consultation & Management Co., LTD. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010. (1)
|
|
|
10.4
|
Equity Pledge Agreement between Mr. Wang Youliang, Mr. Liu Zhengxin, Harbin Jiasheng Consultation & Management Co., LTD. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010. (1)
|
|
|
10.5
|
Form Entrust Feeding Agreement (1)
|
|
|
10.6
|
Entrust Feeding Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd. and Longjiang Sanniu Dairy Farming Co., Ltd., dated September 30, 2010. (1)
|
|
|
10.7
|
Supplier Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd and Mengniu Dairy (Qiqihar) Co., Ltd., dated December 30, 2010. (1)
|
|
|
10.8
|
Supplier Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd. and Feihe Dairy (Gannan) Co., Ltd. Longjiang Branch, dated December 16, 2010. (1)
|
|
|
10.9
|
Feed Supplier Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd. and Agribrand Purina (Harbin) Feed Co., Ltd., dated December 26, 2010. (1)
|
|
|
10.10
|
Cow Purchase Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd. and Beijing Qinfeng Xiongte Cow Development Co., Ltd., dated September 24, 2010. (1)
|
|
|
10.11
|
Calves Purchase Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd. and Qiqihar Tianpeng Livestock Technology Co., Ltd. dated December 24, 2010. (1)
|
|
|
10.12
|
Culled Cow Sales Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd. and Heilongjiang Heji Agricultural Development Co., Ltd., dated December 28, 2010. (1)
|
|
|
10.13
|
Fertilizer Purchase Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd. and Qiqihar Jianfa Bio-Organic Fertilizer Plant dated December 26, 2010. (1)
|
|
|
10.14
|
Form Employment Agreement (1)
|
|
|
16.1
|
Letter from Ronald R. Chadwick, P.C. (1)
|
|
|
31.1*
|
|
Certifications of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
31.2*
|
Certifications of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
32.1+
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
32.2+
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
(1)
|
Incorporated by reference to the Current Report on Form 8-K filed on February 3, 2011, as amended.
|
|
*
|
Filed herewith
|
|
+
|
Furnished herewith
|
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
CHINA MODERN AGRICULTURAL INFORMATION, INC.
|
||
|
Dated: June 11, 2012
|
By:
|
/s/ Wang Youliang
|
|
Wang Youliang
|
||
|
Chief Executive Officer (Principal Executive Officer)
|
||
|
Dated: June 11, 2012
|
By:
|
/s/ Liu Yanyan
|
|
Liu Yanyan
|
||
|
Chief Financial Officer (Principal Financial Officer and Chief Accounting Officer)
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
Name
|
Title
|
Date
|
||
|
/s/ Liu Enjia
|
June 11, 2012
|
|||
|
Liu Enjia
|
Chairman of the Board of Directors
|
|||
|
/s/Wang Youliang
|
Chief Executive Officer and
|
June 11, 2012
|
||
|
Wang Youliang
|
Director
|
|||
|
/s/ Shan Yanqin
|
||||
|
Shan Yanqin
|
Director
|
June 11, 2012
|
||
|
/s/ Liu Yanyan
|
||||
|
Liu Yanyan
|
Chief Financial Officer
|
June 11, 2012
|
||
Exhibit Index
|
Exhibit Number
|
Description
|
|
|
2.1
|
Share Exchange Agreement between Trade Link Wholesalers, Inc. and Value Development Holdings Limited, dated January 28, 2011. (1)
|
|
|
10.1
|
Exclusive Consulting and Service Agreement between Harbin Jiasheng Consulting Managerial Co., Ltd. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010. (1)
|
|
|
10.2
|
Shareholders Voting Right Proxy Agreement between Mr. Wang Youliang, Mr. Liu Zhengxin, Harbin Jiasheng Consultation & Management Co., LTD. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010. (1)
|
|
|
10.3
|
Exclusive Call Options Agreement between Mr. Wang Youliang, Mr. Liu Zhengxin, Harbin Jiasheng Consultation & Management Co., LTD. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010. (1)
|
|
|
10.4
|
Equity Pledge Agreement between Mr. Wang Youliang, Mr. Liu Zhengxin, Harbin Jiasheng Consultation & Management Co., LTD. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010. (1)
|
|
|
10.5
|
Form Entrust Feeding Agreement (1)
|
|
|
10.6
|
Entrust Feeding Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd. and Longjiang Sanniu Dairy Farming Co., Ltd., dated September 30, 2010. (1)
|
|
|
10.7
|
Supplier Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd and Mengniu Dairy (Qiqihar) Co., Ltd., dated December 30, 2010. (1)
|
|
|
10.8
|
Supplier Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd. and Feihe Dairy (Gannan) Co., Ltd. Longjiang Branch, dated December 16, 2010. (1)
|
|
|
10.9
|
Feed Supplier Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd. and Agribrand Purina (Harbin) Feed Co., Ltd., dated December 26, 2010. (1)
|
|
|
10.10
|
Cow Purchase Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd. and Beijing Qinfeng Xiongte Cow Development Co., Ltd., dated September 24, 2010. (1)
|
|
|
10.11
|
Calves Purchase Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd. and Qiqihar Tianpeng Livestock Technology Co., Ltd. dated December 24, 2010. (1)
|
|
|
10.12
|
Culled Cow Sales Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd. and Heilongjiang Heji Agricultural Development Co., Ltd., dated December 28, 2010. (1)
|
|
|
10.13
|
Fertilizer Purchase Agreement between Heilongjiang Xinhua Cattle Industry Co., Ltd. and Qiqihar Jianfa Bio-Organic Fertilizer Plant dated December 26, 2010. (1)
|
|
|
10.14
|
Form Employment Agreement (1)
|
|
|
16.1
|
Letter from Ronald R. Chadwick, P.C. (1)
|
|
|
31.1*
|
|
Certifications of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
31.2*
|
Certifications of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
32.1+
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
32.2+
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
(1)
|
Incorporated by reference to the Current Report on Form 8-K filed on February 3, 2011, as amended.
|
|
*
|
Filed herewith
|
|
+
|
Furnished herewith
|