CONTRACT DEPOSIT (Tables)

12 Months Ended

Mar. 31, 2013

Contract Deposit Assets Disclosures [Table Text Block]

As of March 31, 2013 and 2012, contract deposit consists the following:

	March 31, 2013		March 31, 2012
Contract deposit-Tonghua (1)	$	-	$	3,444,658
Contract deposit-Xinyu (2)		-		214,509
Contract deposit-Ginshenwubao (3)		2,074,490		-
Contract deposit-Qiangshu (4)		2,952,159		-
Contract deposit-Yinge (5)		2,952,159		-
Contract deposit-Zexiejuemingzi (6)		303,195		-
Contract deposit-Songezhenzhu (7)		478,728		-
		8,760,731		3,659,167
Less: current portion		-		(3,189,441	)
Total	$	8,760,731	$	469,726

On March 21, 2010, the Company entered into a New Drug Assignment Agreement (the “Tonghua Agreement”) with TonghuaYisheng Pharmaceuticals Company Limited (“Tonghua”) pursuant to which the Company agreed to purchase a new drug candidate, called Nafarelin, from Tonghua for a purchase price of RMB33,000,000 (approximately $4.85 million). The total purchase price is payable in three installments: 33% of the total purchase price (approximately $1.6 million) was paid upon execution of the Tonghua Agreement in March 2010; another 33% (approximately $1.6 million) was paid in March 2011 (although it is required to be paid upon conclusion of third clinical trial for the product pursuant to the terms of the Tonghua Agreement) and the balance is payable upon conclusion of the transfer.

On June 6, 2012, the Company entered into a Termination Agreement with Tonghua pursuant to which the Tonghua Agreement was terminated. Pursuant to the Termination Agreement, Tonghua will refund prepayment of RMB 22,000,000 (approximate to $3.5 million) in four installments. The refund has all been received as of March 31, 2013.

On April 30, 2012, the Company entered into Xinyu Breath Spray purchase agreement with Harbin Junde Healthcare product Company. Pursuant to the agreement, the total purchase price is RMB 8,500,000(approximately $1.33 million). The Company will pay 50% of the purchase price after commencement of the Xinyu Breath Spray purchase agreement and pay the rest of the purchase price after the Company manufactured three batches of Xinyu Breath Spray that meet the quality standards of the product. As of March 31, 2013, the Company paid the full amount price of RMB8, 500,000 (approximately $1.36 million). (see note 6)

On August 10, 2012, the Company entered into Ginshenwubao purchase agreement with Harbin Junde Healthcare Product Company. Pursuant to the agreement, the Company will acquire the exclusive right to manufacture Ginshenwubao at the total purchase price of RMB13,000,000 (approximately $2.06 million). The Company paid RMB3,000,000 (approximately $475,000) as the deposit at the closing of Ginshenwubao purchase agreement. The balance of the purchase price will be paid in installments according to the payment schedule. As of March 31, 2013, the Company paid RMB13,000,000(approximately to $2.07 million).The Company manufactured samples of this product using a subcontractor in the United States in November 2012 in order to provide samples to potential customers. The Company expected to market Ginshenwubao during the third quarter of fiscal 2013.

On November 1, 2012, the Company entered into Qiangshu purchase agreement with Harbin Junde Healthcare Product Company. Pursuant to the agreement, the Company will acquire the exclusive right to manufacture the product Qiangshu at the total purchase price of RMB18,500,000 (approximately $2.94 million). As of March 31, 2013, the Company paid the full amount of RMB18,500,000 (approximately $2.95 million). The application for the trademark of Qiangshu is under review by United States Patent and Trademark Office at the date of the report.

On December 18, 2012, the Company entered into Yinge purchase agreement with Harbin Junde Healthcare Product Company. Pursuant to the agreement, the Company will acquire the exclusive right to manufacture the product Yinge at the total purchase price of RMB18,500,000 (approximately $2.94 million). As of March 31, 2013, the Company paid the full amount of RMB18,500,000 (approximately $2.95 million). The application for the trademark of Yinge is under review by United States Patent and Trademark Office at the date of the report.

On March 1, 2013, the Company entered into Zexiejuemingzi purchase agreement with Harbin Junde Healthcare Product Company. Pursuant to the agreement, the Company will acquire the exclusive right to manufacture the product Zexiejuemingzi at the total purchase price of RMB12,000,000 (approximately $1.91 million). The Company paid RMB1.900,000 (approximately $0.30 million) as the deposit at the closing of Zexiejuemingzi purchase agreement in March 2013. The balance of the purchase price will be paid in installments according to the progress of performance under the contract. The Company paid RMB2,500,000(approximately $0.40 million) in April 2013.

On March 1, 2013, the Company entered into Songgezhenzhu purchase agreement with Harbin Junde Healthcare Product Company. Pursuant to the agreement, the Company will acquire the exclusive right to manufacture the product Songgezhenzhu at the total purchase price of RMB16,000,000 (approximately $2.55 million). The Company paid RMB3,000,000 (approximately $0.48 million) as the deposit at the closing of Songgezhenzhu purchase agreement in March 2013. The balance of the purchase price will be paid in installments according to the progress of performance under the contract. The Company paid RMB2,300,000(approximately $0.37 million) in April 2013.

Tongli Pharmaceuticals (USA), Inc. 10-K