4. BUSINESS COMBINATION On November 23, 2011, Zhongxian Information acquired 100% of the equity of Yulong Cattle for consideration of 9,000,000 shares of the Company s common stock valued at $3,060,000 and cash consideration of RMB28,000,000 (US$4,396,000), of which RMB14,000,000 (US$2,186,800) was paid by a security deposit pursuant to a letter of intent with respect to the acquisition dated July 11, 2011, as amended on September 26, 2011. The acquisition was accounted for under the purchase method of accounting in accordance with ASC 805. Under the purchase method, the total purchase price is allocated to the net tangible and intangible assets of Yulong Cattle based on their estimated fair values. Management has made the allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed that existed as of the date of completion of the acquisition as follows: Cash consideration $ 4,396,000 Fair value of 9,000,000 shares of common stock issued 3,060,000 Total consideration transferred $ 7,456,000 Cash $ 4,405,442 Net working capital other than cash (716,733 ) Property, plant and equipment 2,528,279 Biological assets 6,960,608 Total net assets acquired 13,177,596 Bargain purchase gain (5,721,596 ) Total consideration transferred $ 7,456,000 The nonrecurring bargain purchase gain of $5,721,596 was included in other income in the consolidated statements of income and other comprehensive income for the year ended June 30, 2012. In accordance with ASC 805, the Company had two independent valuations of Yulong Cattle to verify that the bargain purchase gain was reasonable. The bargain purchase gain arose mainly due to a higher share market price in July 2011 when the letter of intent was signed. In accordance with SEC Regulation S-X Rule 3-05, Yulong Cattle was a significant subsidiary as of the acquisition date, and the conditions set by SEC Regulation S-X Rule 1-02(w) exceeded 40 percent, but none exceeded 50 percent. The separate audited financial statements of Yulong Cattle for t