The interest expense from short-term loans was ~~$457,885~~$70,789 and ~~$452,640~~$93,122 for the ~~nine months~~period ended ~~March 31,~~September 30, 2019 and 2018 respectively.

Relating to the acquisition of the VIE Companies, the Company subsidiary, Jinong, issued to the VIE Companies shareholders convertible notes payable twice, in the aggregate notional amount of RMB 51,000,000 ($~~7,599,000)~~7,129,800) with a term of three years and an annual interest rate of 3%.

The convertible notes take priority over the preferred stock and common stock of Jinong, and any other class or series of capital stocks Jinong issues in the future in terms of interests and payments in the event of any liquidation, dissolution or winding up of Jinong. On or after the third anniversary of the issuance date of the note, noteholders may request Jinong to process the note conversion to convert the note into shares of the Company’s common stock. The notes cannot be converted prior to the ~~maturity~~mature date. The per share conversion price of the notes is the higher of the following: (i) $5.00 per share or (ii) 75% of the closing price of the Company’s common stock on the date the noteholder delivers the conversion notice. Due to the discontinuation of VIE agreements with Zhenbai’s shareholders, certain convertible notes issued on June 30, 2016 with a face amount of RMB 12,000,000 ($~~1,788,000)~~1,677,600) were tendered back to the Company. All outstanding balance of unpaid principal and accrued interest in the tendered convertible notes were forfeited.

The Company determined that the fair value of the convertible notes payable ~~outstanding~~ was RMB ~~50,927,525 (or $7,588,201)~~51,776,525 ($7,238,358) and ~~RMB48, 820,525~~RMB 51,629,859 ($~~7,274,258)~~7,217,854) as of ~~March 31,~~September 30, 2019 and June 30, ~~2018,~~2019, respectively. Aside from the forfeiture of the convertible notes previously issued to Zhenbai’s shareholders, the difference between the fair value of the notes and the face amount of the notes is being amortized to accretion implied interest expense over the three-year life of the notes. As of ~~March 31,~~September 30, 2019, the accumulated amortization of this discount into accretion expenses was ~~$1,230,864.~~$1,354,691.

Effective January 1, 2008, the Enterprise Income Tax (“EIT”) law of the PRC replaced the tax laws for Domestic Enterprises (“DEs”) and Foreign Invested Enterprises (“FIEs”). The EIT rate of 25% replaced the 33% rate that was applicable to both DEs and FIEs. The ~~two year~~two-year tax exemption and ~~three year~~three-year 50% tax reduction tax holiday for production-oriented FIEs was eliminated. Since January 1, 2008, Jinong became subject to income tax in China at a rate of 15% as a high-tech company, ~~as a result~~because of the expiration of its tax exemption on December 31, 2007. Accordingly, it made provision for income taxes for the ~~nine months~~three-month period ended ~~March 31,~~September 30, 2019 and 2018 of ~~$1,007,503~~$449,131 and ~~$2,689,188,~~$1,654,416, respectively, which is mainly due to the operating income from ~~Jinong. Gufeng is subject to 25% EIT rate and thus it made provision for income taxes of $ 2,916,912 and $1,899,873 for the nine months ended March 31, 2019 and 2018, respectively.~~VIEs.

All of the Company’s fertilizer products that are produced and sold in the PRC were subject to a Chinese Value-Added Tax (VAT) of 13% of the gross sales price. On April 29, 2008, the PRC State of Administration of Taxation (SAT) released Notice #56, “Exemption of VAT for Organic Fertilizer Products”, which allows certain fertilizer products to be exempt from VAT beginning June 1, 2008. The Company submitted the application for exemption in May 2009, which was granted effective September 1, 2009, continuing through December 31, 2015. On August 10, 2015 and August 28, 2015, the SAT released Notice #90. “Reinstatement of VAT for Fertilizer Products”, and Notice #97, “Supplementary Reinstatement of VAT for Fertilizer Products”, which restore the VAT of 13% of the gross sales price on certain fertilizer products includes non-organic fertilizer products starting from September 1, 2015, but granted taxpayers a reduced rate of 3% from September 1, 2015 through June 30, 2016.

On April 28, 2017, the PRC State of Administration of Taxation (SAT) released Notice 2017 #37, “Notice on Policy of Reduced Value Added Tax Rate,” under which, effective July 1, 2017, all of the Company’s fertilizer products that are produced and sold in the PRC are subject to a Chinese Value-Added Tax (VAT) of 11% of the gross sales price. The tax rate was reduced 2% from 13%.

On April 4, 2018, the PRC State of Administration of Taxation (SAT) released Notice 2018 #32, “Notice on Adjustment of VAT Tax Rate,” under which, effective May 1, 2018, all of the Company’s fertilizer products that are produced and sold in the PRC are subject to a Chinese Value-Added Tax (VAT) of 10% of the gross sales price. The tax rate was reduced 1% from 11%.

On March 20, 2019, the PRC State of Administration of Taxation (SAT) released Notice 2019 #39, “Announcement on Policies Concerning Deepening the Reform of Value Added Tax,” under which, effective April 1, 2019, all of the Company’s fertilizer products that are produced and sold in the PRC are subject to a Chinese Value-Added Tax (VAT) of 9% of the gross sales price. The tax rate was reduced 1% from 10%.

Our effective tax rates were approximately ~~24.2%~~-6.5% and ~~19.8%~~15.5% for the ~~nine months ended March 31,~~three Months Ended September 30, 2019 and 2018, respectively. Substantially all of the Company’s income before income taxes and related tax expense are from PRC sources. Actual income tax benefit reported in the consolidated statements of income and comprehensive income differ from the amounts computed by applying the US statutory income tax rate of 21% to income before income taxes for the ~~nine~~three months ~~ended March 31,~~Ended September 30, 2019 and 2018 for the following reasons:

~~There was no issuance share of common stock during~~On July 2, 2019, the ~~three and nine months ended March 31, 2019.~~

~~As of March 31, 2019, and June 30, 2018, there were 39,546,945 and 38,896,945~~Company issued 59,567 shares of common stock ~~issued~~to pay off consulting services under the 2009 Plan. The value of the stock was $330,000 and ~~outstanding.~~was based on the fair value of the Company’s common stock on the grant date.

On April 25, 2019, the Company entered into a Stock Purchase Agreement (the “SPA”) with certain non-US persons, as defined in Regulation S promulgated under the Securities Act of 1933, in connection with a private placement offering of 6,000,000 shares of common stock, par value $0.001 per share, of the Company. The purchase price per share of the offering is $1.00. On April 26, 2019, the Company issued 6,000,000 Shares of the Company’s Common Stock, par value $0.001 per share, pursuant to the SPA. The Shares issued in the offering are exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act and/or Regulation S promulgated thereunder.

~~On May 10,~~August 13, 2019, the Company sold ~~2,270,000~~212,000 shares of common stock at the price of ~~$1.00~~$10.00 per share for total proceeds of ~~$2,270,000~~$2,120,000 to certain third-party individuals. The issuances were completed pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended.

On August 15, 2019, Shaanxi Baoyu Science and Technology Investment Company, a limited liability investment company incorporated in the People’s Republic of China (“Shaanxi Baoyu”), entered into a certain Stock Purchase Agreement (the “SPA”) pursuant to Regulation S promulgated under the Securities Act of 1933 with the Company in connection with a private placement offering of 471,000 shares of Common Stock, par value $0.001 per share, of the Company. The purchase price per share of the offering was $12.00 for total proceeds of $5,652,000. On August 16, 2019, the Company issued 471,000 Shares of the Company’s Common Stock, par value $0.001 per share, to Shaanxi Baoyu, pursuant to the SPA.

On August 19, 2019, the Company sold 248,000 shares of common stock at the price of $10.00 per share for total proceeds of $2,480,000 to certain unrelated individuals. The issuances were completed pursuant to the exemption from registration provided by Regulation S promulgated under the Securities Act of 1933, as amended.

On November 15, 2019, the Company issued 995,000 shares of common stock at the price of $5.00 per share for the total amount of $4,975,000 to the holders of the Company’s convertible notes payable in connection with the payment of the convertible notes’ principal and interests. The convertible notes were issued on June 30, 2016 and matured on June 30, 2019.

There were no shares of common stock issued during the quarter ended September 30, 2018.

As of September 30, 2019, and June 30, 2019, there were 4,977,479 and 3,986,912 shares of common stock issued and outstanding, respectively.

Under the Company’s Articles of Incorporation, the Board has the authority, without further action by stockholders, to designate up to 20,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges, qualifications and restrictions granted to or imposed upon the preferred stock, including dividend rights, conversion rights, voting rights, rights and terms of redemption, liquidation preference and sinking fund terms, any or all of which may be greater than the rights of the common stock. If the Company sells preferred stock under its registration statement on Form S-3, it will fix the rights, preferences, privileges, qualifications and restrictions of the preferred stock of each series in the certificate of designation relating to that series and will file the certificate of designation that describes the terms of the series of preferred stock the Company offers before the issuance of the related series of preferred stock.

As of ~~March 31,~~September 30, 2019, the Company has 20,000,000 shares of preferred stock authorized, with a par value of $.001 per share, of which no shares are issued or outstanding.

All of the ~~Company's~~Company’s revenue-generating operations are conducted in the PRC. Accordingly, the ~~Company's~~Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC, and by the general state of the ~~PRC's~~PRC’s economy.

The ~~Company's~~Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among other things, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by, among other things, changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation.

There were ~~three vendors,~~only one vendor from which the Company purchased ~~14.2%, 13.7% and 11.8%~~more than 10% of its raw materials, with the total of 10.6% of its raw materials for ~~fertilizer manufacturing during~~ the ~~year~~three months ended ~~March 31,~~September 30, 2019. Total ~~purchase~~purchases from this vendor are $1,859,830 for the three-month period ended September 30, 2019.

There were four vendors from each of which the Company purchased more than 10% of its raw materials, with the total of 47.6% of its raw materials for the three months ended September 30, 2018. Total purchases from these ~~three~~four vendors ~~was~~ amounted to ~~$58,658,521 as March 31, 2019.~~

~~None of the vendors accounted over 10% of the Company’s purchase of raw materials and supplies~~$26,676,809 for the ~~nine months~~three-month period ended ~~March 31,~~September 30, 2018.

No customer accounted for over 10% of the Company’s sales for the ~~nine~~three months ~~ended March 31,~~Ended September 30, 2019 and 2018.

The Company ~~was~~is organized into four main business segments, based on location and product: Jinong (fertilizer production), Gufeng (fertilizer production), Yuxing (agricultural products production) and the sales VIEs. Each of the four operating segments referenced above has separate and distinct general ledgers. The chief operating decision maker (“CODM”) receives financial information, including revenue, gross margin, operating income and net income produced from the various general ledger systems to make decisions about allocating resources and assessing performance; however, the principal measure of segment profitability or loss used by the CODM is net income by segment.

On ~~June 29,~~July 1, 2018, Jinong ~~renewed~~signed an office lease with Kingtone ~~Information.~~Information Technology Co., Ltd. (“Kingtone Information”), of which Mr. Zhuoyu Li, Chairman and CEO of the Company, served as Chairman. Pursuant to the lease, Jinong rented 612 square meters (approximately 6,588 square feet) of office space from Kingtone Information. The lease ~~provided~~provides for a ~~four-year~~two-year term effective as of July 1, 2018 with a monthly rent of ~~$3,648~~RMB24,480 (approximately ~~RMB 24,480)~~$3,488).

In February 2004, Tianjuyuan signed a fifty-year lease with the village committee of Dong Gao Village and Zhen Nan Zhang Dai Village in the Beijing Ping Gu District, at a monthly rent of ~~$441 (RMB 2,958)~~RMB 2,958(approximately $422).

Accordingly, the Company recorded an aggregate of ~~$36,794~~$11,729 and ~~$44,252~~$11,985 as rent expenses from these committed property leases for the ~~nine-month~~three-month periods ended ~~March 31,~~September 30, 2019 and 2018, respectively. The contingent rent expenses herein for the next five twelve-month periods ended ~~March 31~~September 30, are as follows:

In accordance with accounting standards regarding consolidation of variable interest entities, VIEs are generally entities that lack ~~enough~~sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate ~~decision-making~~decision making ability. All VIEs with which a company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

Green Nevada through one of its subsidiaries, Jinong, entered into a series of agreements (the “VIE Agreements”) with Yuxing for it to qualify as a VIE, effective June 16, 2013.

The Company has concluded, based on the contractual arrangements, that Yuxing is a VIE and that the Company’s wholly-owned subsidiary, Jinong, absorbs ~~most~~a majority of the risk of loss from the activities of Yuxing, thereby enabling the Company, through Jinong, to receive a majority of Yuxing expected residual returns.

On June 30, 2016 and January 1, 2017, the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and also into a series of contractual agreements to qualify as VIEs with the shareholders of the sales VIE Companies.

Jinong, the sales VIE Companies, and the shareholders of the sales VIE Companies also entered into a series of contractual agreements for the sales VIE Companies to qualify as VIEs (the “VIE Agreements”).

On November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, exited the VIE agreements with the shareholders of Zhenbai.

As a result of these contractual arrangements, with Yuxing and the sales VIE Companies the Company is entitled to substantially all of the economic benefits of Yuxing and the VIE Companies. The following financial statement amounts and balances of the VIEs were included in the accompanying consolidated financial statements as of ~~March 31,~~September 30, 2019 and June 30, ~~2018:~~2019:

	Three Months Ended September 30,
	2019		2018
Revenue	$	15,443,538	$	17,985,020
Expenses		11,420,496		15,371,814
Net income	$	4,023,042	$	2,613,206

NOTE 17 – BUSINESS COMBINATIONS

On June 30, 2016, the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and also into a series of contractual agreements to qualify as VIEs with the shareholders of Shaanxi Lishijie Agrochemical Co., Ltd., Songyuan Jinyangguang Sannong Service Co., Ltd., Shenqiu County Zhenbai Agriculture Co., Ltd., Weinan City Linwei District Wangtian Agricultural Materials Co., Ltd., Aksu Xindeguo Agricultural Materials Co., Ltd., and Xinjiang Xinyulei Eco-agriculture Science and Technology Co., Ltd.

Subsequently, on January 1, 2017, Jinong entered into similar strategic acquisition agreements and a series of contractual agreements to qualify as VIEs with the shareholders of Sunwu County Xiangrong Agricultural Materials Co., Ltd., and Anhui Fengnong Seed Co., Ltd.

The VIE Agreements are as follows:

Entrusted Management Agreements

Pursuant to the terms of certain Entrusted Management Agreements dated June 30, 2016 and January 1, 2017, between Jinong and the shareholders of the sales VIE Companies (the “Entrusted Management Agreements”), the sales VIE Companies and their shareholders agreed to entrust the operations and management of its business to Jinong. According to the Entrusted Management Agreement, Jinong possesses the full and exclusive right to manage the sales VIE Companies’ operations, assets and personnel, has the right to control all the sales VIE Companies’ cash flows through an entrusted bank account, is entitled to the sales VIE Companies’ net profits as a management fee, is obligated to pay all the sales VIE Companies’ payables and loan payments, and bears all losses of the sales VIE Companies. The Entrusted Management Agreements will remain in effect until (i) the parties mutually agree to terminate the agreement; (ii) the dissolution of the sales VIE Companies; or (iii) Jinong acquires all the assets or equity of the sales VIE Companies (as more fully described below under “Exclusive Option Agreements”).

Exclusive Technology Supply Agreements

Pursuant to the terms of certain Exclusive Technology Supply Agreements dated June 30, 2016 and January 1, 2017, between Jinong and the sales VIE companies (the “Exclusive Technology Supply Agreements”), Jinong is the exclusive technology provider to the sales VIE companies. The sales VIE companies agreed to pay Jinong all fees payable for technology supply prior to making any payments under the Entrusted Management Agreement. The Exclusive Technology Supply Agreements shall remain in effect until (i) the parties mutually agree to terminate the agreement; (ii) the dissolution of the sales VIE companies; or (iii) Jinong acquires the sales VIE companies (as more fully described below under “Exclusive Option Agreements”).

Shareholder’s Voting Proxy Agreements

Pursuant to the terms of certain Shareholder’s Voting Proxy Agreements dated June 30, 2016 and January 1, 2017, among Jinong and the shareholders of the sales VIE companies (the “Shareholder’s Voting Proxy Agreements”), the shareholders of the sales VIE companies irrevocably appointed Jinong as their proxy to exercise on such shareholders’ behalf all of their voting rights as shareholders pursuant to PRC law and the Articles of Association of the sales VIE companies, including the appointment and election of directors of the sales VIE companies. Jinong agreed that it shall maintain a board of directors, the composition and appointment of which shall be approved by the Board of the Company. The Shareholder’s Voting Proxy Agreements will remain in effect until Jinong acquires all the assets or equity of the sales VIE companies.

Exclusive Option Agreements

Pursuant to the terms of certain Exclusive Option Agreements dated June 30, 2016 and January 1, 2017, among Jinong, the sales VIE companies, and the shareholders of the sales VIE companies (the “Exclusive Option Agreements”), the shareholders of the sales VIE companies granted Jinong an irrevocable and exclusive purchase option (the “Option”) to acquire the sales VIE companies’ equity interests and/or remaining assets, but only to the extent that the acquisition does not violate limitations imposed by PRC law on such transactions. The Option is exercisable at any time at Jinong’s discretion so long as such exercise and subsequent acquisition of the sales VIE companies does not violate PRC law. The consideration for the exercise of the Option is to be determined by the parties and memorialized in the future by definitive agreements setting forth the kind and value of such consideration. Jinong may transfer all rights and obligations under the Exclusive Option Agreements to any third parties without the approval of the shareholders of the sales VIE companies so long as a written notice is provided. The Exclusive Option Agreements may be terminated by mutual agreements or by 30 days written notice by Jinong.

Equity Pledge Agreements

Pursuant to the terms of certain Equity Pledge Agreements dated June 30, 2016 and January 1, 2017, among Jinong and the shareholders of the sales VIE companies (the “Pledge Agreements”), the shareholders of the sales VIE companies pledged all of their equity interests in the sales VIE companies to Jinong, including the proceeds thereof, to guarantee all of Jinong’s rights and benefits under the Entrusted Management Agreements, the Exclusive Technology Supply Agreements, the Shareholder’ Voting Proxy Agreements and the Exclusive Option Agreements. Prior to termination of the Pledge Agreements, the pledged equity interests cannot be transferred without Jinong’s prior written consent. The Pledge Agreements may be terminated only upon the written agreement of the parties.

Non-Compete Agreements

Pursuant to the terms of certain Non-Compete Agreements dated June 30, 2016 and January 1, 2017, among Jinong and the shareholders of the sales VIE companies (the “Non-Compete Agreements”), the shareholders of the sales VIE companies agreed that during the period beginning on the initial date of their services with Jinong, and ending five (5) years after termination of their services with Jinong, without Jinong’s prior written consent, they will not provide services or accept positions including but not limited to partners, directors, shareholders, managers, proxies or consultants, provided by any ~~profit-making~~profit making organizations with businesses that may compete with Jinong. They will not solicit or interfere with any of the Jinong’s customers, or solicit, induce, recruit or encourage any person engaged or employed by Jinong to terminate his or her service or engagement. If the shareholders of the sales VIE companies breach the non-compete obligations contained therein, Jinong is entitled to all loss and damages; if the damages are difficult to determine, remedies bore the shareholders of the sales VIE companies shall be no less than 50% of the salaries and other expenses Jinong provided in the past.

The Company entered into these VIE Agreements as a way for the Company to have more control over the distribution of its products. The transactions are accounted for as business combinations in accordance with ASC 805. A summary of the purchase price allocations at fair value is below:

For acquisitions made on June 30, 2016:

Cash	$	708,737
Accounts receivable		6,422,850
Advances to suppliers		1,803,180
Prepaid expenses and other current assets		807,645
Inventories		7,787,043
Machinery and equipment		140,868
Intangible assets		270,900
Other assets		3,404,741
Goodwill		3,158,179
Accounts payable		(3,962,670	)
Customer deposits		(3,486,150	)
Accrued expenses and other payables		(4,653,324	)
Taxes payable		(16,912	)
Purchase price	$	12,385,087

A summary of the purchase consideration paid is below:

Cash	$	5,568,500
Convertible notes		6,671,769
Derivative liability		144,818
	$	12,385,087

The cash component of the purchase price for these acquisitions made on June 30, 2016 was paid in July and August 2016.

For acquisitions made on January 1, 2017:

Working Capital	$	941,192
Machinery and equipment		222,875
Intangible assets		1440
Goodwill		684,400
Customer Relationship		522,028
Non-compete Agreement		392,852
Purchase price	$	2,764,787

A summary of the purchase consideration paid is below:

Cash	$	1,201,888
Convertible notes		1,559,350
Derivative liability		3,549
	$	2,764,787

The cash component of the purchase price for these acquisitions made on January 1, 2017 was paid during March 2017.

On November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Zhenbai. In return, the shareholders of Zhenbai agreed to tender the whole payment consideration in the SAA back to the Company with early termination penalties. The convertible notes paid to Zhenbai’s shareholders and the accrued interest has been forfeited.

For the discontinuation of Zhenbai made on November 30, 2017, the Company gave up the control of the following assets in Zhenbai:

Working Capital	$	1,175,696	$	1,179,352
Intangible assets		893,780		896,559
Customer Relationship		682,604		684,727
Non-compete Agreement		211,176		211,833
Goodwill		536,819		538,488
Total Asset	$	2,606,296	$	2,614,401

In return, the purchase consideration returned to the Company from Zhenbai’s shareholders is summarized below:

Cash	$	459,900		$	461,330
Interest Payable		82,782			83,039
Convertible notes		1,719,336			1,724,683
Derivative liability		13,312			13,353
Total Payback	$	2,275,330		$	2,282,406
Net Loss		(330,966	)		(331,995	)

NOTE 18 – SUBSEQUENT EVENTS

On October 9, 2019, a lawsuit was filed against the Company and certain of our officers in the United States District Court for the District of Nevada (the “Nevada Federal Court”) by Plaintiff Glenn Little. The complaint alleges breach of fiduciary duty and shareholder oppression. The Company believes the action is without merit and intends to vigorously oppose it.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes to those financial statements appearing elsewhere in this report. This discussion and analysis contain forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as the slow-down of the macro-economic environment in China and its impact on economic growth in general, the competition in the fertilizer industry and the impact of such competition on pricing, revenues and margins, the weather conditions in the areas where our customers are based, the cost of attracting and retaining highly skilled personnel, the prospects for future acquisitions, and the factors set forth elsewhere in this report, our actual results may differ materially from those anticipated in these forward-looking statements. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this report will in fact occur. You should not place undue reliance on the forward-looking statements contained in this report.

The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by U.S. federal securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. Further, the information about our intentions contained in this report is a statement of our intention as of the date of this report and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices, and our assumptions as of such date. We may change our intentions, at any time and without notice, based upon any changes in such factors, in our assumptions or otherwise.

Unless the context indicates otherwise, as used in the notes to the financial statements of the Company, the following are the references herein of all the subsidiaries of the Company (i) Green Agriculture Holding Corporation (“Green New Jersey”), a wholly-owned subsidiary of Green Nevada incorporated in the State of New Jersey; (ii) Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (“Jinong”), a wholly-owned subsidiary of Green New Jersey organized under the laws of the PRC; (iii) Xi’an Hu County Yuxing Agriculture Technology Development Co., Ltd. (“Yuxing”), a Variable Interest Entity in the PRC (“VIE”) controlled by Jinong through contractual agreements; (iv) Shaanxi Lishijie Agrochemical Co., Ltd. (“Lishijie”), a VIE controlled by Jinong through contractual agreements; (v) Songyuan Jinyangguang Sannong Service Co., Ltd. (“Jinyangguang”), a VIE in the PRC controlled by Jinong through contractual agreements; (vi) Weinan City Linwei District Wangtian Agricultural Materials Co., Ltd. (“Wangtian”), a VIE controlled by Jinong through contractual agreements; (vii) Aksu Xindeguo Agricultural Materials Co., Ltd. (“Xindeguo”), a VIE controlled by Jinong through contractual agreements; (vii) Xinjiang Xinyulei Eco-agriculture Science and Technology Co., Ltd (“Xinyulei”), a VIE controlled by Jinong through contractual agreements; (ix) Sunwu County Xiangrong Agricultural Materials Co., Ltd. (“Xiangrong”), a VIE controlled by Jinong through contractual agreements; (x) Anhui Fengnong Seed Co., Ltd. (“Fengnong”), a VIE controlled by Jinong through contractual agreements; (xi) Beijing Gufeng Chemical Products Co., Ltd., a wholly-owned subsidiary of Jinong in the PRC (“Gufeng”); and (xii) Beijing Tianjuyuan Fertilizer Co., Ltd., Gufeng’s wholly-owned subsidiary in the PRC (“Tianjuyuan”). Yuxing, Lishijie, Jinyangguang, Wangtian, Xindeguo, Xinyulei, Xiangrong and Fengnong may also collectively be referred to as the “the VIE Companies”; Lishijie, Jinyangguang, Wangtian, Xindeguo, Xinyulei, Xiangrong and Fengnong may also collectively be referred to as “the sales VIEs” or “the sales VIE companies”.

Unless the context otherwise requires, all references to (i) “PRC” and “China” are to the People’s Republic of China; (ii) “U.S. dollar,” “$” and “US$” are to United States dollars; and (iii) “RMB”, “Yuan” and Renminbi are to the currency of the PRC or China.

Overview

We are engaged in research, development, production and sale of various types of fertilizers and agricultural products in the PRC through our wholly-owned Chinese subsidiaries, Jinong and Gufeng (including Gufeng’s subsidiary Tianjuyuan), and our VIE, Yuxing. Our primary business is fertilizer products, specifically humic-acid based compound fertilizer produced by Jinong and compound fertilizer, blended fertilizer, organic compound fertilizer, slow-release fertilizer, highly-concentrated water-soluble fertilizer and mixed organic-inorganic compound fertilizer produced by Gufeng. In addition, through Yuxing, we develop and produce various agricultural products, such as top-grade fruits, vegetables, flowers and colored seedlings. For financial reporting purposes, our operations are organized into three business segments: fertilizer products (Jinong), fertilizer products (Gufeng) and agricultural products production (Yuxing).

The fertilizer business conducted by Jinong and Gufeng generated approximately ~~91.4%~~69.6% and ~~90.3%~~69.0% of our total revenues for the ~~nine~~three months ~~ended March 31,~~Ended September 30, 2019 and 2018, respectively. The sales VIEs generated 25.4% and 26.9% of our revenues for the three months Ended September 30, 2019 and 2018, respectively. Yuxing serves as a research and development base for our fertilizer products.

Fertilizer Products

As of ~~March 31,~~September 30, 2019, we had developed and produced a total of ~~727~~730 different fertilizer products in use, of which ~~143~~145 were developed and produced by Jinong, ~~and 333~~334 by Gufeng, and 251 by the VIE ~~companies.~~Companies.

Below is a table that shows the metric tons of fertilizer sold by Jinong and Gufeng and the revenue per ton for the periods indicated:

										Three Months Ended
	Three Months Ended March 31,				Change from 2018 to 2019					September 30,				Change 2018 to 2019
	2019		2018		Amount		%			2019		2018		Amount		%
	(metric tons)									(metric tons)
Jinong		17,014		12,606		4,408		35.0	%		18,623		18,605		18		0.1	%
Gufeng		190,691		104,207		86,484		83.0	%		52,451		49,247		3,204		6.5	%
		207,704		116,813		90,891		77.8	%		71,074		67,851		3,222		4.7	%

Three Months Ended
March 31,
2019 2018
(revenue per ton)
Jinong $ 1,324 $ 2,302
Gufeng 357 382

Nine months Ended
March 31, Change from
2018 to 2019
2019 2018 Amount %
(metric tons)
Jinong 53,008 40,297 12,711 31.5 %
Gufeng 305,288 225,053 80,235 35.7 %
358,295 265,350 92,945 35.0 %

	Nine months Ended March 31,				Three Months Ended September 30,
	2019		2018		2019		2018
	(revenue per ton)				(revenue per tons)
Jinong	$	1,209	$	2,205	$	1,035	$	1,294
Gufeng		349		375		311		348

For the three months ended ~~March 31,~~September 30, 2019, we sold approximately ~~207,704~~71,704 tons of fertilizer products, as compared to 67,851 metric tons for the three months ended September 30, 2018. For the three months ended September 30, 2019, Jinong sold approximately 18,623 metric tons of fertilizer products, as compared to ~~116,813~~18,605 metric tons for the three months ended ~~March 31,~~September 30, 2018. For the three months ended March 31, 2019, Jinong sold approximately 17,014 metric tons of fertilizer products, an increase of 4.408 metric tons, or 35.0%, as compared to 12,606 metric tons for the three months ended March 31, 2018. For the three months ended March 31,September 30, 2019, Gufeng sold approximately ~~190,691~~52,451 metric tons of fertilizer products, as compared to ~~104,207~~49,247 metric tons for the three months ended ~~March 31, 2018, an increase of 86,484 metric tons, or 83.0%.~~

~~For the nine months ended March 31, 2019, we sold approximately 358,295 metric tons of fertilizer products, as compared to 265,350 metric tons for the nine months ended March 31,~~September 30, 2018. For the nine months ended March 31, 2019, Jinong sold approximately 53,008 metric tons of fertilizer products, an increase of 12,711 metric tons, or 31.5%, as compared to 40,297 metric tons for the nine months ended March 31, 2018. For the nine months ended March 31, 2019, Gufeng sold approximately 305,288 metric tons of fertilizer products, an increase of 80,235 metric tons, or 35.7%, as compared to 225,053 metric tons for the nine months ended March 31, 2018.

Our sales of fertilizer products to customers in five provinces within China accounted for approximately ~~55.9%~~56.7% of our fertilizer revenue for the three months ended ~~March 31,~~September 30, 2019. Specifically, the provinces and their respective percentage ~~contributed~~contributing to our fertilizer revenues were: Hebei ~~(24.1%), Shaanxi (9.2%~~(25.9%), Heilongjiang ~~(8.3%~~(10.9%), Inner Mongolia (9.0%), Liaoning ~~(7.3%~~(6.8%), and ~~Shandong (7.0%~~Shaanxi (4.1%).

As of ~~March 31,~~September 30, 2019, we had a total of ~~2,033~~2,063 distributors covering 22 provinces, 4 autonomous regions and 4 central government-controlled municipalities in China. Jinong had ~~1,211~~1,239 distributors in China. Jinong’s sales are not dependent on any single distributor or any group of distributors. Jinong’s top five distributors accounted for ~~5.1%~~3.39% of its fertilizer revenues for the three months ended ~~March 31,~~September 30, 2019. Gufeng had ~~324~~326 distributors, including some large state-owned enterprises. Gufeng’s top five distributors accounted for ~~84.9%~~83.8% of its revenues for the three months ended ~~March 31,~~September 30, 2019.

Agricultural Products

Through Yuxing, we develop, produce and sell high-quality flowers, green vegetables and fruits to local marketplaces and various horticulture and planting companies. We also use certain of Yuxing’s greenhouse facilities to conduct research and development activities for our fertilizer products. The three PRC provinces and municipalities that accounted for ~~83.4%~~80.8% of our agricultural products revenue for the three months ended ~~March 31,~~September 30, 2019 were Shaanxi ~~(71.6%~~(71.3%), Sichuan ~~(7.1%~~(4.9%), and Gansu (4.6%).

Recent Developments

New ~~products and distributors~~Products

During the three months ended ~~March 31,~~September 30, 2019, Jinong launched 1one new fertilizer ~~products~~product and added 4419 new ~~distributors during this period.~~distributors. During the three months ended September 30, 2019, Gufeng did not launch any new fertilizer products but added 5one new ~~distributors.~~distributor.

Strategic Acquisitions

On June 30, 2016 and January 1, 2017, through Jinong, we entered into (i) Strategic Acquisition Agreements (the “SAA”), and (ii) Agreements for Convertible Notes (the “ACN”), with the shareholders of the companies as identified below (the “Targets”).

June 30, 2016:

Cash

Principal of

Cash

Principal of

Payment for

Notes for

Payment for

Notes for

Acquisition

Company Name

Business Scope

(RMB^[1])

(RMB)

Business Scope

(RMB^[1])

(RMB)

Shaanxi Lishijie Agrochemical Co., Ltd.

Sales of pesticides, agricultural chemicals, chemical fertilizers, agricultural materials; Manufacture and sales of mulches.

10,000,000

3,000,000

Sales of pesticides, agricultural chemicals, chemical fertilizers, agricultural materials; Manufacture and sales of mulches.

10,000,000

3,000,000

Songyuan Jinyangguang Sannong Service Co., Ltd.

Promotion and consulting services regarding agricultural technologies; Retail sales of chemical fertilizers (including compound fertilizers and organic fertilizers); Wholesale and retail sales of pesticides, agricultural machinery and accessories; Collection of agricultural information; Development of saline-alkali soil; Promotion and development of high-efficiency agriculture and related information technology solutions for agriculture, agricultural and biological engineering high technologies; E-commerce; Cultivation of freshwater fish, poultry, fruits, flowers, vegetables, and seeds; Recycling and complex utilization of straw and stalk; Technology transfer and training; Recycling of agricultural materials ; Ecological industry planning.

8,000,000

12,000,000

8,000,000

12,000,000

Shenqiu County Zhenbai Agriculture Co., Ltd.^[2]

Cultivation of crops; Storage, sales, preliminary processing and logistics distribution of agricultural by-products; Promotion and application of agricultural technologies; Purchase and sales of agricultural materials; Electronic commerce.

3,000,000

12,000,000

Shenqiu County Zhenbai Agriculture Co., Ltd.

3,000,000

12,000,000

Weinan City Linwei District Wangtian Agricultural Materials Co., Ltd.

Promotion and application of new agricultural technologies; Professional prevention of plant diseases and insect pests; Sales of plant protection products, plastic mulches, material, chemical fertilizers, pesticides, agricultural medicines, micronutrient fertilizers, hormones, agricultural machinery and medicines, and gardening tools.

6,000,000

12,000,000

6,000,000

12,000,000

Aksu Xindeguo Agricultural Materials Co., Ltd.

Wholesale and retail sales of pesticides; Sales of chemical fertilizers, packaged seeds, agricultural mulches, micronutrient fertilizers, compound fertilizers, plant growth regulators, agricultural machineries, and water economizers; Consulting services for agricultural technologies; Purchase and sales of agricultural by- products.

10,000,000

12,000,000

10,000,000

12,000,000

Xinjiang Xinyulei Eco-agriculture Science and Technology Co., Ltd

Sales of chemical fertilizers, packaged seeds, agricultural mulches, micronutrient fertilizers, organic fertilizers, plant growth regulators, agricultural machineries, and water economizers; Purchase and sales of agricultural by-products; Cultivation of fruits and vegetables; Consulting services and training for agricultural technologies; Storage services; Sales of articles of daily use, food and oil; On-line sales of the above-mentioned products.

Total

37,000,000

51,000,000

37,000,000

51,000,000

(1)	The exchange rate between RMB and U.S. dollars on June 30, 2016 is RMB1=US$0.1508, according to the exchange rate published by Bank of China.

(2)	On November 30, 2017, the Company, through its wholly-owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Zhenbai. In return, the shareholders of Zhenbai agreed to tender the whole payment consideration in the SAA back to the Company with early termination penalties. The convertible notes paid to Zhenbai’s shareholders and the accrued interest has been forfeited.

January 1, 2017:

		Cash		Principal of
		Payment for		Notes for
		Acquisition		Acquisition
Company Name	Business Scope	(RMB^[1])		(RMB)
Sunwu County Xiangrong Agricultural Materials Co., Ltd.	Sales of pesticides, agricultural chemicals, chemical fertilizers, agricultural materials; Manufacture and sales of mulches.		4,000,000		6,000,000

Anhui Fengnong Seed Co., Ltd.	Wholesale and retail sales of pesticides; Sales of chemical fertilizers, packaged seeds, agricultural mulches, micronutrient fertilizers, compound fertilizers and plant growth regulators		4,000,000		6,000,000

Total			8,000,000		12,000,000

~~(2)~~

(1)

The exchange rate between RMB and U.S. dollars on January 1, 2017 is RMB1=US$0.144, according to the exchange rate published by Bank of China.

Pursuant to the SAA and the ACN, the shareholders of the Targets, while retaining possession of the equity interests and continuing to be the legal owners of such interests, agreed to pledge and entrust all of their equity interests, including the proceeds thereof but excluding any claims or encumbrances, and the operations and management of its business to Jinong, in exchange of an aggregate amount of RMB45,000,000 (approximately ~~$6,705,000)~~$6,291,000) to be paid by Jinong within three days following the execution of the SAA, ACN and the VIE Agreements, and convertible notes with an aggregate face value of RMB 63,000,000 (approximately ~~$9,387,000)~~$8,807,400) with an annual fixed compound interest rate of 3% and term of three years.

Jinong acquired the Targets using the VIE arrangement based on our need to further develop our business and comply with the regulatory requirements under the PRC laws.

As our business focuses on the production of fertilizer, all our business activities intertwine with those in the agriculture industry in China. Specifically, we deal with compliance, regulation, safety, inspection, and licenses in fertilizer production, ~~farmland~~farm land use and transfer, growing and distribution of agriculture goods, agriculture basic supplies, seeds, pesticides, and trades of grains. It is an industry in which heavy regulations get implemented and strictly enforced. In addition, E-commerce, which is also under strict government regulation in the PRC, has lately become a sales and distribution channel for agricultural products. Currently, we are developing an online platform to connect the physical distribution network we either own or lease.

Compared with the regulatory environment in other jurisdictions, the regulatory environment in the PRC is unique. For example, the “M&A Rules” purports to require that an offshore special purpose vehicle controlled directly or indirectly by PRC companies or individuals and formed for purposes of overseas listing through acquisition of PRC domestic interests held by such PRC companies or individuals obtain the approval of the China Securities Regulatory Commission (the “CSRC”) prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published procedures regarding its approval of overseas listings by special purpose vehicles.

For both e-commerce and agriculture industries, PRC regulators limit the investment from foreign entities and set particularly rules for foreign-owned entities to conduct business. We expect these limitations on foreign-owned entities will continue to exist in e-commerce and agriculture industries. The VIE arrangement, however, provides feasibility for obtaining administrative approval process and avoiding industry restrictions that can be imposed on an entity that is a wholly-owned subsidiary of a foreign entity. The VIE agreements reduce uncertainty and the current limitation risk. It is our understanding that the VIE agreements, as well as the control we obtained through VIE arrangement, are valid and enforceable. Such a legal structure does not violate the known, published, and current PRC laws. While there are substantial uncertainties regarding the interpretation and application of PRC Laws and future PRC laws and regulations, and there can be no assurance that the PRC authorities will take a view that is not contrary to or otherwise different from our belief and understanding stated above, we believe the substantial difficulty that we experienced previously to conduct business in agriculture as a foreign ownership can be greatly reduced by the VIE arrangement. Further, as an integral part of the VIE arrangement, the underlying equity pledge agreements provide legal protection for the control we obtained. Pursuant to the equity pledge agreements, we have completed the equity pledge processes with the Targets to ensure the complete control of the interests in the Targets. The shareholders of the Targets are not entitled to transfer any shares to a third party under the exclusive option agreements. If necessary, they may transfer shares to our company without consideration.

While the VIE arrangement provides us with the feasibility to conduct our business in the E-Commerce and agriculture industries, validity and enforceability of VIE arrangement is subject to (i) any applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar laws affecting creditors’ rights generally, (ii) possible judicial or administrative actions or any PRC Laws affecting creditors’ rights, (iii) certain equitable, legal or statutory principles affecting the validity and enforceability of contractual rights generally under concepts of public interest, interests of the State, national security, reasonableness, good faith and fair dealing, and applicable statutes of limitation; (iv) any circumstance in connection with formulation, execution or implementation of any legal documents that would be deemed materially mistaken, clearly unconscionable, fraudulent, coercive at the conclusions thereof; and (v) judicial discretion with respect to the availability of indemnifications, remedies or defenses, the calculation of damages, the entitlement to attorney’s fees and other costs, and the waiver of immunity from jurisdiction of any court or from legal process. Validity and enforceability of VIE arrangement ~~are~~is also subject to risk derived from the discretion of any competent PRC legislative, administrative or judicial bodies in exercising their authority in the PRC. As a result, there can no assurance that any of such PRC Laws will not be changed, amended or replaced in the immediate future or in the longer term with or without retrospective effect.

~~Business development~~

Results of Operations

~~Results of Operations~~

Three Months ended ~~March 31,~~September 30, 2019 Compared to the Three Months ended ~~March 31,~~September 30, 2018.

	Three Months Ended March 31,
	2019			2018			Change$			Change%			2019			2018			Change $			Change %
Sales
Jinong		22,077,336			27,490,333			(5,412,997	)		-19.7	%		19,054,816			22,496,533			(3,441,717	)		-15.3	%
Gufeng		67,167,427			38,932,597			28,234,830			72.5	%		16,323,217			17,473,251			(1,150,034	)		-6.6	%
Yuxing		2,817,942			3,041,891			(223,949	)		-7.4	%		2,539,711			2,387,546			152,165			6.4	%
VIEs-others		16,057,865			13,086,062			2,971,803			22.7	%
Sales VIEs														12,903,827			15,597,476			(2,693,649	)		-17.3	%
Net sales		108,120,570			82,550,883			25,569,687			31.0	%		50,821,571			57,954,806			(7,133,235	)		-12.3	%
Cost of goods sold
Jinong		11,091,419			13,526,095			(2,434,676	)		-18.0	%		10,492,530			11,203,172			(710,642	)		-6.3	%
Gufeng		59,475,263			34,114,896			25,360,367			74.3	%		14,454,008			15,304,863			(850,855	)		-5.6	%
Yuxing		2,445,246			2,517,989			(72,743	)		-2.9	%		2,051,996			2,047,163			4,833			0.2	%
VIEs		13,951,667			11,231,992			2,719,675			24.2	%
Sales VIEs														10,663,790			12,929,968			(2,266,178	)		-17.5	%
Cost of goods sold		86,963,595			61,390,972			25,572,623			41.7	%		37,662,324			41,485,166			(3,822,842	)		-9.2	%
Gross profit		21,156,975			21,159,911			(2,936	)		0.0	%		13,159,247			16,469,640			(3,310,393	)		-20.1	%
Operating expenses
Selling expenses		6,880,994			3,553,306			3,327,688			93.7	%		3,630,355			3,420,427			209,928			6.1	%
General and administrative expenses		6,826,669			7,980,606			(1,153,937	)		-14.5	%		16,341,792			2,309,359			14,032,432			607.6	%
Total operating expenses		13,707,663			11,533,912			2,173,751			18.8	%		19,972,147			5,729,786			14,242,360			248.6	%
Income from operations		7,449,312			9,625,999			(2,176,687	)		-22.6	%		(6,812,900	)		10,739,854			(17,552,753	)		-163.4	%
Other income (expense)
Other income (expense)		(101,350	)		(145,311	)		43,961			-30.3	%		(30,191	)		(38,330	)		8,139			-21.2	%
Interest income		55,168			138,009			(82,841	)		-60.0	%		53,624			127,383			(73,759	)		-57.9	%
Interest expense		(145,621	)		(178,478	)		32,857			-18.4	%		(77,202	)		(162,686	)		85,484			-52.5	%
Total other income (expense)		(191,803	)		(185,780			(6,023	)		3.2	%		(53,769	)		(73,633	)		19,864			-27.0	%
Income before income taxes		7,257,509			9,440,220			(2,182,711	)		-23.1	%		(6,866,668	)		10,666,221			(17,532,889	)		-164.4	%
Provision for income taxes		2,139,610			1,813,187			326,423			18.0	%		449,131			1,654,416			(1,205,285	)		-72.9	%
Net income		5,117,899			7,627,033			(2,509,134	)		-32.9	%		(7,315,799	)		9,011,805			(16,327,604	)		-181.2	%
Other comprehensive income (loss)
Foreign currency translation gain (loss)		10,564,053			16,213,419			(5,649,366	)		-34.8	%		(17,367,485	)		(15,987,792	)		(1,379,693	)		8.6	%
Comprehensive income (loss)		15,681,952			23,840,452			(8,158,500	)		-34.2	%		(24,683,284	)		(6,975,987	)		(17,707,297	)		253.8	%

Basic weighted average shares outstanding		39,546,944			38,551,264			995,680			2.6	%
Basic net earnings per share		0.13			0.20			(0.06	)		-32.5	%
Diluted weighted average shares outstanding		39,546,944			38,551,264			995,680			2.6	%
Diluted net earnings per share		0.13			0.20			(0.06	)		-32.5	%

Net Sales

Total net sales for the three months ended ~~March 31,~~September 30, 2019 were ~~$108,120,570, an increase~~$50,821,571 a decrease of ~~$25,569,687,~~$7,133,235 or ~~31.0%~~12.3%, from ~~$82,550,883~~$57,954,806 for the three months ended ~~March 31, 2018.This increase~~September 30, 2018. This decrease was ~~largely~~primarily due to ~~the increase~~a decrease in ~~Gufeng’s sales volume.~~

~~For the three months ended March 31, 2019,~~ Jinong’s and VIEs’ net sales decreased by $5,412,997, or 19.7%, to $22,077,336 from $27,490,333 for the three months ended March 31, 2018. The decrease was due to the change of market strategy. Jinong sold more low-selling price products answering to market demand.

sales.

For the three months ended ~~March 31,~~September 30, 2019, Jinong’s net sales decreased $3,441,717, or 15.3%, to $19,054,816 from $22,496,533 for the three months ended September 30, 2018. This decrease was mainly attributable to the decrease in Jinong’s sales price in the last three months.

For the three months ended September 30, 2019, Gufeng’s net sales were ~~$67,167,427, an increase~~$16,323,217, a decrease of ~~$28,234,830~~$1,150,034, or ~~72.5%~~6.6%, from ~~$38,932,597~~$17,473,251 for the three months ended ~~March 31,~~September 30, 2018. This ~~increase~~decrease was mainly attributable to the decrease in Gufeng’s ~~increase~~sales price in ~~sales volume during~~ the last three ~~months ended March 31, 2019.~~months.

For the three months ended ~~March 31,~~September 30, 2019, Yuxing’s net sales were ~~$2,817,942, a decrease of $223,949 or 7.4%, from $3,041,891 during the three months ended March 31, 2018. The decrease was mainly due to the decrease in market demand.~~

~~For the three months ended March 31, 2019, VIEs’ net sales were $16,057,865,~~$2,539,711, an increase of ~~$2,971,803~~$152,165 or ~~22.7%~~6.4%, from ~~$13,086,062~~$2,387,546 for the three months ended ~~March 31,~~September 30, 2018. The increase was mainly attributable to the increase in market demand and the higher prices on Yuxing’s top grade flowers during the ~~last~~ three ~~months.~~months ended September 30, 2019.

Cost of Goods Sold

Total cost of goods sold for the three months ended ~~March 31,~~September 30, 2019 was ~~$86,963,595, an increase~~$37,662,324, a decrease of ~~$25,572,623,~~$3,822,842, or ~~41.7%~~9.2%, from ~~$61,390,972~~$41,485,166 for the three months ended ~~March 31,~~September 30, 2018. The ~~increase~~decrease was mainly due to the ~~increase~~decrease in ~~sales volumes for Gufeng~~Jinong’s and ~~Jinong.~~VIEs’ cost of goods sold which increased 6.3% and 17.5% respectively.

Cost of goods sold by Jinong for the three months ended ~~March 31,~~September 30, 2019 was ~~$11,091,419,~~$10,492,530, a decrease of ~~$2,434,676,~~$710,642, or ~~18.0%~~6.3%, from ~~$13,526,095~~$11,203,172 for the three months ended ~~March 31,~~September 30, 2018. The decrease ~~for~~in cost of goods ~~sold~~ was primarily due to the 15.3% decrease in ~~Jinong’s~~ net ~~sales~~sale during the last three months.

Cost of goods sold by Gufeng for the three months ended ~~March 31,~~September 30, 2019 was ~~$59,475,263, an increase~~$14,454,008, a decrease of ~~$25,360,367,~~$850,755, or ~~74.3%~~5.6%, from ~~$34,114,896~~$15,304,863 for the three months ended ~~March 31,~~September 30, 2018. This ~~increase~~decrease was primarily ~~attributable~~due to the ~~more products sold~~6.6% decrease in net sale during the last three months.

For ~~the~~ three months ended ~~March 31,~~September 30, 2019, cost of goods sold by Yuxing was ~~$2,445,246, a decrease~~$2,051,996, an increase of ~~$72,743,~~$4,833, or ~~2.9%~~0.2%, from ~~$2,517,989~~$2,047,163 for the three months ended ~~March 31,~~September 30, 2018. This ~~decrease~~increase was mainly due to the ~~decrease~~increase in Yuxing’s net sales during the last three months.

Cost of goods sold by VIEs for the three months ended March 31, 2019 was $13,951,667, an increase of $2,719,675, or 24.2%, from $11,231,992 for the three months ended March 31, 2018. This increase was primarily attributable to the greater number of products sold during the last three months.

Gross Profit

Total gross profit for the three months ended ~~March 31,~~September 30, 2019 decreased by ~~$2,936~~$3,310,393, or 20.1%, to ~~$21,156,975,~~$13,159,247, as compared to ~~$21,159,911~~$16,469,640 for the three months ended ~~March 31,~~September 30, 2018. Gross profit margin was ~~19.6%~~25.9% and ~~25.6%~~28.4% for the three ~~months ended March 31,~~Months Ended September 30, 2019 and 2018, respectively. ~~The decrease in gross profit margin was mainly due to the decrease in Jinong’s net sales since Jinong is the most profitable business segment, with 49.8% of gross profit margin.~~

Gross profit generated by Jinong decreased by ~~$2,978,321,~~$2,731,075, or ~~21.3%~~24.2%, to ~~$10,985,917~~$8,562,286 for the three months ended ~~March 31,~~September 30, 2019 from ~~$13,964,238~~$11,293,361 for the three months ended ~~March 31,~~September 30, 2018. Gross profit margin from Jinong’s sales was approximately ~~49.8%~~44.9% and ~~50.8%~~50.2% for the three ~~months ended March 31,~~Months Ended September 30, 2019 and 2018, respectively. The decrease in gross profit margin was mainly due to the lower ~~selling price during the last three months.~~sales prices.

For the three months ended ~~March 31,~~September 30, 2019, gross profit generated by Gufeng was ~~$7,692,164, an increase~~$1,869,209, a decrease of ~~$2,874,463,~~$299,179, or ~~59.7%~~13.8%, from ~~$4,817,701,~~$2,168,388 for the three months ended ~~March 31,~~September 30, 2018. Gross profit margin from Gufeng’s sales was approximately 11.5% and 12.4% for the three ~~months ended March 31,~~Months Ended September 30, 2019 and 2018, respectively. The decrease in gross profit ~~margin~~ was mainly due to the ~~higher labor cost~~increase in product costs and ~~raw materials cost during~~ the ~~three months ended March 31, 2019.~~decrease in sales prices.

For the three months ended ~~March 31,~~September 30, 2019, gross profit generated by Yuxing was ~~$372,696, a decrease~~$487,715, an increase of ~~$151,206~~$147,332, or ~~28.9%~~43.3% from ~~$523,902~~$340,383 for the three months ended ~~March 31,~~September 30, 2018. The gross profit margin was approximately ~~13.2%~~19.2% and ~~17.2%~~14.3% for the three months ~~ended March 31,~~Ended September 30, 2019 and 2018, respectively. The ~~decrease~~increase in gross profit ~~margin~~percentage was mainly due to the ~~higher cost of raw materials during the three months ended March 31, 2019.~~ decrease in product costs.

Gross profit generated by VIEs ~~increased~~decreased by ~~$ 252,128,~~$427,471, or ~~13.6%~~16.0%, to ~~$2,106,198~~$2,240,037 for the three months ended ~~March 31,~~September 30, 2019 from ~~$1,854,070~~$2,667,508 for the three months ended ~~March 31,~~September 30, 2018. Gross profit margin from VIE’s sales was approximately ~~13.1%~~17.4% and ~~14.2%~~17.1% for the three months ~~ended March 31,~~Ended September 30, 2019 and 2018, ~~respectively.~~respectively, which was slightly increased.

Selling Expenses

Our selling expenses consisted primarily of salaries of sales personnel, advertising and promotion expenses, freight-out costs and related compensation. Selling expenses were ~~$6,880,994,~~$3,630,355, or ~~6.4%~~7.1%, of net sales for the three months ended ~~March 31,~~September 30, 2019, as compared to ~~$3,553,306,~~$3,420,427, or ~~4.3%~~5.9%, of net sales for the three months ended ~~March 31,~~September 30, 2018, an increase of ~~$3,327,688,~~$209,928, or ~~93.7%~~6.1%.

The selling expenses of Yuxing were $9,352 or 0.4% of Yuxing’s net sales for the three months ended September 30, 2019, as compared to $17,729 or 0.7% of Yuxing’s net sales for the three months ended September 30, 2018. The selling expenses of Gufeng were $69,291 or 0.4% of Gufeng’s net sales for the three months ended September 30, 2019, as compared to $76,764 or 0.4% of Gufeng’s net sales for the three months ended September 30, 2018. The selling expenses of Jinong for the three months ended ~~March 31,~~September 30, 2019 were ~~$6,480,278,~~$3,300,195 or ~~29.4%,~~17.3% of Jinong’s net sales, as compared to selling expenses of ~~$3,162,789,~~$3,071,231 or ~~11.5%~~13.7% of Jinong’s net sales for the three months ended ~~March 31,~~September 30, 2018. ~~The~~

Selling Expenses – amortization of deferred assets

Our selling expenses - amortization of ~~Yuxing~~our deferred assets were ~~$14,779, or 0.5%, of Yuxing’s net sales~~0 for the three months ended ~~March 31,~~September 30, 2019 ~~as compared to $12,691, or 0.4%,~~and 2018. All of ~~Yuxing’s net sales~~the deferred assets were fully amortized and therefore no amortization was recorded on the fully amortized assets for the three months ended March 31, 2018. The selling expenses of Gufeng were $46,228, or 0.1%, of Gufeng’s net sales for the three months ended March 31, 2019, as compared to $94,665, or 0.2%, of Gufeng’s net sales for the three months ended March 31, 2018. The selling expenses of VIEs were $291,617, or 1.8%, of VIEs’ net sales for the three months ended March 31, 2019, as compared to $283,161, or 2.2%, of VIEs’ net sales for the three months ended March 31, 2018.September 30, 2019.

General and Administrative Expenses

General and administrative expenses consisted primarily of related salaries, rental expenses, business development, depreciation and travel expenses incurred by our general and administrative departments and legal and professional expenses including expenses incurred and accrued for certain litigation. General and administrative expenses were ~~$6,826,669,~~$16,341,792, or ~~6.3%,~~32.2% of net sales for the three months ended ~~March 31,~~September 30, 2019, as compared to ~~$7,980,606,~~$2,309,359, or ~~9.7%,~~4.0% of net sales for the three months ended March 31, 2018, a decrease of $1,153,937, or 14.5%. The decrease in general and administrative expenses was mainly due to Gufeng, which had $486,010 of general and administrative expenses during the last three months, a decrease of $1,026,061 or 67.9% as compared to $1,512,071 of general and administrative expenses for the three months ended March 31, 2018.

~~Total Other Income and Expense~~

Total other income and expense consisted of income from subsidies received from the PRC government, interest income, interest expenses and bank charges. The total other expense for the three months ended March 31, 2019 was $191,803 as compared to total other expense of $185,780 for the three months ended March 31, 2018, a decrease of $6,023, or 3.2%. The decrease in total other expense mainly resulted from the decrease for bank charges.

~~Income Taxes~~

Jinong is subject to a preferred tax rate of 15% as a result of its business being classified as a High-Tech project under the PRC Enterprise Income Tax Law (“EIT”) that became effective on January 1, 2008. Jinong incurred income tax expenses of 0 for the three months ended March 31, 2019, as compared to $860,801 for the three months ended March 31, 2018, a decrease of $860,801 or 100%.

~~Gufeng, subject to a tax rate of 25%, incurred income tax expenses of $1,775,037 for the three months ended March 31, 2019, as compared to $764,051 for the three months ended March 31,~~September 30, 2018, an increase of ~~$1,010,986,~~$14,032,432, or ~~132.3%~~607.6%.

Yuxing has no income tax for the three months ended March 31, 2019 as a result of being exempted from paying income tax due to the fact its products fall into the tax exemption list set out in the EIT.

~~Net Income~~Total Other Expenses

Net income for the three months ended March 31, 2019 was $5,117,899, a decrease of $2,509,134, or 32.9%, compared to $7,627,033 for the three months ended March 31, 2018. Net income as a percentage of total net sales was approximately 4.7% and 9.2% for the three months ended March 31, 2019 and 2018, respectively. The decrease in net income was mainly due to higher selling expense during the last three months.

~~Nine months ended March 31, 2019 Compared to the Nine months ended March 31, 2018.~~

Nine Months Ended
March 31,
2019 2018 Change$ Change%
Sales
Jinong $ 61,561,229 80,475,373 (18,914,144 ) -23.5 %
Gufeng 106,996,368 81,602,384 25,393,984 31.1 %
Yuxing 7,828,981 6,788,282 1,040,699 15.3 %
VIEs 41,943,261 39,412,820 2,530,441 6.4 %
Net sales 218,329,839 208,278,859 10,050,980 4.8 %
Cost of goods sold
Jinong 31,289,473 39,904,678 (8,615,205 ) -21.6 %
Gufeng 94,544,943 71,261,349 23,283,594 32.7 %
Yuxing 6,658,975 5,446,780 1,212,195 22.3 %
VIEs 35,965,608 33,060,645 2,904,963 8.8 %
Cost of goods sold 168,458,999 149,673,452 18,785,547 12.6 %
Gross profit 49,870,840 58,605,407 (8,734,567 ) -14.9 %
Operating expenses
Selling expenses 18,370,524 16,375,971 1,994,553 12.2 %
General and administrative expenses 9,036,397 15,798,290 (6,761,894 ) -42.8 %
Total operating expenses 27,406,921 32,174,261 (4,767,341 ) -14.8 %
Income from operations 22,463,919 26,431,146 (3,967,226 ) -15.0 %
Other income (expense)
Other income (expense) (327,433 ) (760,324 ) 432,891 -56.9 %
Interest income 278,509 356,172 (77,663 ) -21.8 %
Interest expense (457,885 ) (452,640 ) (5,245 ) 1.2 %
Total other income (expense) (506,809 ) (856,792 ) 349,983 -40.8 %
Income before income taxes 21,957,110 25,574,353 (3,617,243 ) -14.1 %
Provision for income taxes 5,321,671 5,066,780 254,891 5.0 %
Net income from continuing operations, net of tax 16,635,439 20,507,573 (3,872,134 ) -18.9 %
Net income from discontinued operation, net of tax 0 40,394 (40,394 ) -100 %
Net income, net of tax 16,635,439 20,547,967 (3,912,528 ) -19.0 %
Other comprehensive income (loss)
Foreign currency translation gain (loss) (5,895,808 ) 24,710,375 (30,606,183 ) -123.9 %
Comprehensive income (loss) $ 10,739,631 45,258,342 (34,518,711 ) -76.3 %

Basic weighted average shares outstanding 39,165,010 38,551,264 613,746 1.6 %
Basic net earnings per share $ 0.42 0.53 (0.11 ) -20.3 %
Diluted weighted average shares outstanding 39,165,010 38,551,264 613,746 1.6 %
Diluted net earnings per share 0.42 0.53 (0.11 ) -20.3 %

~~Net Sales~~

Total net sales for the nine months ended March 31, 2019 were $218,329,839, an increase of $9,046,811, or 4.3%, from $209,283,028 for the nine months ended March 31, 2018.This increase was largely due to the increase of Gufeng’s net sales offset by decrease in Jinong’s net sales for the nine months ended March 31, 2019.

For the nine months ended March 31, 2019, Jinong’s net sales decreased of $18,914,144, or 23.5%, to $61,561,229 from $80,475,373 for the nine months ended March 31, 2018. This decrease was mainly due to Jinong’s increased weight for lower-selling price products sales in Jinong’s total sales, which was result of Jinong’s implementation of its sales strategy that rebalances the production of fertilizer types during the last nine months.

For the nine months ended March 31, 2019, Gufeng’s net sales were $106,996,368, an increase of $25,393,984, or 31.1%, from $81,602,384 for the nine months ended March 31, 2018. This increase was mainly attributable to Gufeng’s higher sales volumes to answer market demand during the nine months ended March 31, 2019.

~~For the nine months ended March 31, 2019, Yuxing’s net sales were $7,828,981, an increase of $1,040,699, or 15.3%, from $6,788,282 during the nine months ended March 31, 2018.~~

For the nine months ended March 31, 2019, VIEs’ net sales were $ 41,943,261, an increase of $2,530,441 or 6.4% from $39,412,820 for the nine months ended March 31, 2018. This increase was mainly attributable to the increase in VIEs’ sales volume, which was result of the increase in market demand during the nine months ended March 31, 2019.

~~Cost of Goods Sold~~

Total cost of goods sold for the nine months ended March 31, 2019 was $168,458,999, an increase of $18,785,547, or 12.6%, from $149,673,452 for the nine months ended March 31, 2018. This increase was mainly due to the increase in Gufeng’s net sales.

Cost of goods sold by Jinong for the nine months ended March 31, 2019 was $31,289,473, a decrease of $8,615,205, or 21.6%, from $39,904,678 for the nine months ended March 31, 2018. The decrease was primarily due to the decrease in Jinong’s net sales during the nine months ended March 31, 2019.

Cost of goods sold by Gufeng for the nine months ended March 31, 2019 was $94,544,943, an increase of $23,283,594, or 32.7%, from $71,261,349 for the nine months ended March 31, 2018. This increase was primarily attributable to the more products sold during the last nine months.

For the nine months ended March 31, 2019, cost of goods sold by Yuxing was $6,658,975, an increase of $1,212,195, or 22.3%, from $5,446,780 for the nine months ended March 31, 2018. This increase was mainly attributable to the increase in Yuxing’s net sales.

Cost of goods sold by VIEs for the nine months ended March 31, 2019 was $35,965,608, an increase of $2,904,963, or 8.8%, from $33,060,645 for the nine months ended March 31, 2018. This increase was primarily attributable to the increase in net sales during the last nine months.

~~Gross Profit~~

Total gross profit for the nine months ended March 31, 2019 decreased by $8,734,567, or 14.9%, to $49,870,840, as compared to $58,605,407 for the nine months ended March 31, 2018. Gross profit margin was 22.8% and 28.1% for the nine months ended March 31, 2019 and 2018, respectively. The decrease in gross profit margin was mainly due to the decrease in Jinong’s net sales since Jinong is the most profitable business segment with 49.2% of gross profit margin.

Gross profit generated by Jinong decreased by $10,298,939, or 25.4%, to $30,271,756 for the nine months ended March 31, 2019 from $40,570,695 for the nine months ended March 31, 2018. Gross profit margin from Jinong’s sales was approximately 49.2% and 50.4% for the nine months ended March 31, 2019 and 2018, respectively. The decrease in gross profit margin was mainly due to lower selling prices.

For the nine months ended March 31, 2019, gross profit generated by Gufeng was $12,451,425, an increase of $2,110,390, or 20.4%, from $10,341,502 for the nine months ended March 31, 2018. Gross profit margin from Gufeng’s sales was approximately 11.6% and 12.7% for the nine months ended March 31, 2019 and 2018, respectively. The decrease in gross profit percentage was mainly due to the decreased weight for higher-margin products sales in Gufeng’s total sales.

For the nine months ended March 31, 2019, gross profit generated by Yuxing was $1,170,006, a decrease of $171,496, or 12.8% from $1,341,502 for the nine months ended March 31, 2018. The gross profit margin was approximately 14.9% and 19.8% for the nine months ended March 31, 2019 and 2018, respectively. The decrease in gross profit margin was mainly due to the higher labor cost during the nine months ended March 31, 2019.

For the nine months ended March 31, 2019, gross profits generated by VIEs were $5,977,653, a decrease of $374,522, or 5.9%, from $6,352,175 for the nine months ended March 31, 2018. Gross profit margin from VIEs’ sales was approximately 14.3% and 16.1% for the nine months ended March 31, 2019 and 2018, respectively. The decrease in gross profit percentage was mainly due to lower selling prices.

~~Selling Expenses~~

Our selling expenses consisted primarily of salaries of sales personnel, advertising and promotion expenses, freight-out costs and related compensation. Selling expenses were $18,370,524, or 8.4%, of net sales for the nine months ended March 31, 2019, as compared to $16,375,971, or 7.9% of net sales for the nine months ended March 31, 2018, an increase of $1,994,553, or 12.2%. The selling expenses of Jinong for the nine months ended March 31, 2019 were $16,538,328, or 26.9% of Jinong’s net sales, as compared to selling expenses of $15,178,740, or 18.9% of Jinong’s net sales for the nine months ended March 31, 2018. The selling expenses of Yuxing were $42,952 or 0.5% of Yuxing’s net sales for the nine months ended March 31, 2019, as compared to $32,835 or 1.1% of Yuxing’s net sales for the nine months ended March 31, 2018.The selling expenses of Gufeng were $331,949 or 0.3% of Gufeng’s net sales for the nine months ended March 31, 2019, as compared to $380,386 or 1.0% of Gufeng’s net sales for the nine months ended March 31, 2018. The selling expenses of VIEs were $1,457,296, or 3.5%, of VIEs’ net sales for the nine months ended March 31, 2019, as compared to $784,010, or 2.0% of VIEs’ net sales for the nine months ended March 31, 2018.

~~General and Administrative Expenses~~

General and administrative expenses consisted primarily of related salaries, rental expenses, business development, depreciation and travel expenses incurred by our general and administrative departments and legal and professional expenses including expenses incurred and accrued for certain litigation. General and administrative expenses were $9,036,397, or 4.1% of net sales for the nine months ended March 31, 2019, as compared to $15,798,290, or 7.6%, of net sales for the nine months ended March 31, 2018, a decrease of $6,761,894, or 42.8%. The decrease in general and administrative expenses was mainly due to the adjustment for bad debt expense during the last nine months.

~~Total Other Income and Expenses~~

Total other ~~income and~~ expenses consisted of income from subsidies received from the PRC government, interest income, interest expenses and bank charges. ~~The total~~Total other expense for the ~~nine~~three months ended ~~March 31,~~September 30, 2019 was ~~$506,809,~~$73,633, as compared to ~~$856,792~~$53,769 for the ~~nine~~three months ended ~~March 31,~~September 30, 2018, a decrease in expense of ~~$349,983,~~$19,864, or ~~40.8%~~27.0%. The decrease ~~was mainly due to~~in total other expense resulted from the decrease ~~for bank charges.~~in net interest expenses.

Income Taxes

Jinong is subject to a preferred tax rate of 15% as a result of its business being classified as a High-Tech project under the PRC Enterprise Income Tax Law (“EIT”) that became effective on January 1, 2008. Jinong incurred income tax expenses of ~~$1,007,503~~$ 92,488 for the ~~nine~~three months ended ~~March 31,~~September 30, 2019, as compared to ~~$2,689,188~~$1,041,180 for the ~~nine~~three months ended ~~March 31,~~September 30, 2018, a decrease of ~~$1,681,685,~~$948,692, or ~~62.5%~~91.1%.

Gufeng is subject to a tax rate of 25%, incurred income tax expenses of ~~$ 2,768,465~~$(68,276) for the ~~nine~~three months ended ~~March 31,~~September 30, 2019, as compared to ~~$1,899,873~~$395,255 for the ~~nine~~three months ended ~~March 31,~~September 30, 2018, ~~an increase~~a decrease of ~~$ 868,592,~~$463,531, or ~~45.7%.~~117.3%, which was primarily due to Gufeng’s decreased net income.

Yuxing has no income tax for the ~~nine~~three months ~~ended March 31,~~Ended September 30, 2019 and 2018 as a result of being exempted from paying income tax due to ~~the fact that~~ its products fall into the tax exemption list set out in the EIT.

Net Income (loss)

~~Net Income~~

Net income (loss) for the ~~nine~~three months ended ~~March 31,~~September 30, 2019 was ~~$16,635,439,~~$(7,315,799), a decrease of ~~$3,912,528,~~$16,327,604, or ~~19.0%~~181.2%, compared to ~~$20,547,967~~$9,011,805 for the ~~nine~~three months ended ~~March 31,~~September 30, 2018. Net income as a percentage of total net sales was approximately ~~7.6%~~-14.4% and ~~9.8 %~~15.5% for the ~~nine~~three months ~~ended March 31,~~Ended September 30, 2019 and 2018, respectively.

Discussion of Segment Profitability Measures

As of ~~March 31,~~September 30, 2019, we were engaged in the following businesses: the production and sale of fertilizers through Jinong and Gufeng, the production and sale of high-quality agricultural products by Yuxing, and the sales of agriculture materials by the sales VIEs. For financial reporting purpose, our operations were organized into four main business segments based on locations and products: Jinong (fertilizer production), Gufeng (fertilizer production) and Yuxing (agricultural products production) and the sales VIEs. Each of the segments has its own annual budget ~~for~~about development, production and sales.

Each of the four operating segments referenced above has separate and distinct general ledgers. The chief operating decision maker (“CODM”) makes decisions with respect to resources allocation and performance assessment upon receiving financial information, including revenue, gross margin, operating income and net income produced from the various general ledger systems; however, net income by segment is the principal benchmark to measure profit or loss adopted by the CODM.

For Jinong, the net income decreased by ~~$9,619,550~~$5,375,915, or ~~62.8%~~91.1%, to ~~$5,709,185~~$524,101 for three months ended September 30, 2019, from $5,900,016 for the ~~nine~~three months ended ~~March 31, 2019 from $15,238,735 for the nine months ended March 31,~~September 30, 2018. The decrease was principally due to ~~a decrease~~the increase in ~~net sales.~~general and administrative expense.

For Gufeng, the net income ~~increased~~decreased by ~~$2,585,024~~$12,632,298, or ~~46.8%~~1,127.5%, to ~~$8,111,897~~$(11,511,954) for ~~the nine~~three months ended ~~March 31,~~September 30, 2019 from ~~$5,526,873~~$1,120,344 for ~~the nine~~three months ended ~~March 31,~~September 30, 2018. The ~~increase~~decrease was principally due to ~~a significant~~the increase in ~~net sales.~~general and administrative expense.

For Yuxing, the net ~~losses increased by $2,924,775~~income decreased $38,623, or ~~528.6%~~20.1%, to ~~net losses of $3,478,089~~$154,555 for ~~the nine~~three months ended ~~March 31,~~September 30, 2019 from ~~$553,314~~$193,178 for ~~the nine~~three months ended ~~March 31,~~September 30, 2018. The ~~increase of net losses~~decrease was mainly due to ~~a virus infection. Yuxing's major products are flowers, green vegetables~~the increase in general and ~~fruits. The virus killed many of the plants.~~ administrative expense.

For the sales VIEs, the net income was ~~$7,668,280~~$3,868,490 for ~~year~~period ended ~~March 31,~~September 30, 2019, increased by ~~$7,332,607~~$ 1,488,855, or ~~2,184.4%~~62.6%, from ~~$335,673~~$ 2,379,635 for ~~nine~~three months ended ~~March 31,~~September 30, 2018. The increase was mainly due to the decrease in general and administrative expenses for the sales ~~VIEs caused by the adjustment for bad debt expense.~~VIEs.

Liquidity and Capital Resources

Our principal sources of liquidity include cash from operations, borrowings from local commercial banks and net proceeds of offerings of our ~~securities consummated in July 2009 and November/December 2009 (collectively the “Public Offerings”).~~securities.

As of ~~March 31,~~September 30, 2019, cash and cash equivalents were ~~$69,242,037, a decrease~~$82,953,941, an increase of ~~$81,563,602,~~$10,694,137, or ~~54.1%~~14.8%, from ~~$150,805,639~~$72,259,804 as of June 30, ~~2018.~~2019.

We intend to use some of the remaining net proceeds from ~~the Public Offerings,~~our securities offerings, as well as other working capital if required, to acquire new businesses, upgrade production lines and complete Yuxing’s new greenhouse facilities for agriculture products located on 88 acres of land in Hu County, 18 kilometers southeast of Xi’an city. Yuxing purchased a set of agricultural products testing equipment for the year of 2016. We believe that we have sufficient cash on hand and positive projected cash flow from operations to support our business growth for the next twelve months to the extent we do not have further significant acquisitions or expansions. However, if events or circumstances occur and we do not meet our operating plan as expected, we may be required to seek additional capital and/or to reduce certain discretionary spending, which could have a material adverse effect on our ability to achieve our business objectives. Notwithstanding the foregoing, we may seek additional financing as necessary for expansion purposes and when we believe market conditions are most advantageous, which may include additional debt and/or equity financings. There can be no assurance that any additional financing will be available on acceptable terms, if at all. Any equity financing may result in dilution to existing stockholders and any debt financing may include restrictive covenants.

The following table sets forth a summary of our cash flows for the periods indicated:

							Three Months Ended
	Nine Months Ended March 31,						September 30,
	2019			2018			2019			2018
Net cash provided by (used in) operating activities	$	(77,964,267	)	$	28,434,766			3,079,634			8,518,839
Net cash provided by (used in) investing activities		(42,880	)		(55,691	)		(18,596	)		(31,273	)
Net cash provided by (used in) financing activities		218,694			(5,935,789			10,731,600			(191,056	)
Effect of exchange rate change on cash and cash equivalents		(3,775,148	)		8,145,894	)		(3,098,502	)		(5,947,491	)
Net increase (decrease) in cash and cash equivalents		(81,563,601	)		30,589,179
Net increase in cash and cash equivalents								10,694,136			2,349,019
Cash and cash equivalents, beginning balance		150,805,639			123,050,548			72,259,804			150,805,639
Cash and cash equivalents, ending balance	$	69,242,037		$	153,639,728		$	82,953,940		$	153,154,657

Operating Activities

Net cash ~~used~~provided in operating activities was ~~$77,964,267~~$3,079,634 for the ~~nine~~three months ended ~~March 31,~~September 30, 2019, ~~an increase~~a decrease of ~~$106,399,032,~~$5,439,205, or ~~374.2%~~63.8%, ~~compared to net~~from cash provided by operating activities of ~~$ 28,434,766~~$8,518,839 for the ~~nine~~three months ended ~~March 31,~~September 30, 2018. The ~~increase of net cash used in~~decrease was mainly ~~attributable~~due to ~~the increase~~a decrease in ~~inventory,~~accounts receivable, decrease in advances to suppliers and ~~other assets, offset by a~~ decrease in ~~account receivable~~net income during the ~~nine~~three months ended ~~March 31,~~September 30, 2019 as compared to the same period in 2018.

Investing Activities

Net cash used in investing activities for the ~~nine~~three months ended ~~March 31,~~September 30, 2019 was ~~$42,880, a decrease~~$18,596, compared to cash used in investing activities of ~~$12,811, or 23.0%, from $55,691~~$31,273 for the ~~nine~~three months ended ~~March 31,~~September 30, 2018. The ~~decrease~~different was ~~mainly attributable~~due to ~~the decrease in purchase of~~Company purchased less plant, property and ~~equipment.~~equipment during the last three months compared to the same period last year.

Financing Activities

Net cash provided by financing activities for the three months ended September 30, 2019 was $10,731,600, compared to $191,056 net cash used in financing activities for the ~~nine~~three months ended ~~March 31, 2019 was $218,694, an increase of $6,154,483 or 103.7%, compared to cash provided by financing activities of $ 5,935,789 for the nine months ended March 31,~~September 30, 2018, which was largely ~~due~~attribute to ~~we had repayment~~$10,252,000 proceeds from the sale of ~~loans~~common stock for the ~~nine~~three months ended ~~March 31, 2018.~~September 30, 2019, compared to 0 in the same period last year.

As of ~~March 31,~~September 30, 2019 and June 30, ~~2018,~~2019, our loans ~~payables~~payable were as follows:

					September 30,		June 30,
	March 31, 2019		June 30, 2018		2019		2019
Short term loans payable:	$	4,470,000	$	4,726,300	$	3,774,600	$	3,640,000
Total	$	4,470,000	$	4,726,300	$	3,774,600	$	3,640,000

Accounts Receivable

We had accounts receivable of ~~$177,715,883~~$138,984,949 as of ~~March 31,~~September 30, 2019, as compared to ~~$178,750,045~~$145,190,160 as of June 30, ~~2018,~~2019, a decrease of ~~$1,034,162~~$6,205,211, or ~~0.6%, which is mainly~~4.3%. The decrease was primarily attributable to ~~Jinong.~~Gufeng’s accounts receivable. As of ~~March 31,~~September 30, 2019, ~~Jinong had~~Gufeng’s accounts receivable ~~of $56,507,852,~~was $72,717,257, a decrease of ~~$5,020,922~~$12,714,906, or ~~8.2%~~14.9%, compared to ~~$ 61,528,774~~$85,432,163 as of June 30, ~~2018.~~2019.

Allowance for doubtful accounts in accounts receivable for the ~~nine~~three months ended ~~March 31,~~September 30, 2019 was ~~$23,158,524, an increase~~$27,993,503, a decrease of ~~$ 3,700,005~~$5,521,907, or 16.5%, from ~~$19,458,519~~$33,515,410 as of June 30, ~~2018, and~~2019. And the allowance for doubtful accounts as a percentage of accounts receivable was ~~13.0%~~16.8% as of ~~March 31,~~September 30, 2019 and ~~10.9%~~18.8% as of June 30, ~~2018.~~2019.

Deferred assets

We had no deferred assets as of ~~March 31,~~September 30, 2019 orand June 30, ~~2018.~~2019. During the ~~nine~~three months, we assisted the distributors in certain marketing efforts and developing standard stores to expand our competitive advantage and market shares. Based on the distributor agreements, the amount owed by the distributors in certain marketing efforts and store development will be expensed over three years if the distributors are actively selling our products. If a distributor defaults, breaches, or terminates the agreement with us earlier than the contractual terms, the unamortized portion of the amount owed by the distributor is payable to us immediately. The deferred assets had been fully amortized as of ~~March 31,~~September 30, 2019.

Inventories

We had ~~inventory~~inventories of ~~$132,579,212~~$146,848,526 as of ~~March 31,~~September 30, 2019, as compared to ~~$ 53,784,814~~$162,013,889 as of June 30, ~~2018, an increase~~2019, a decrease of ~~$78,794,398,~~$15,165,363, or ~~146.5%~~9.4%. The ~~increase~~decrease was primarily attributable to Gufeng’s inventory. As of September 30, 2019, Gufeng’s inventory was ~~$108,304,666 as of March 31, 2019, an increase of $ 52,287,318 or 93.3%~~$125,956,806, compared to ~~$ 56,017,348~~$141,210,160 as of June 30, ~~2018.~~ 2019, a decrease of $15,253,354, or 10.8%.

Advances to Suppliers

We had advances to suppliers of ~~$51,055,495~~$29,136,516 as of ~~March 31,~~September 30, 2019 as compared to ~~$25,194,463~~$32,713,817 as of June 30, ~~2018,~~2019, representing ~~an increase~~a decrease of ~~$25,861,032~~$3,577,301, or ~~102.6%~~10.9%. Our inventory level may fluctuate from time to time, depending how quickly the raw material is consumed and replenished during the production process, and how soon the finished goods are sold. The replenishment of raw material relies on management’s estimate of numerous factors, including but not limited to, the raw materials future price, and spot price along with its volatility, as well as the seasonal demand and future price of finished fertilizer products. Such estimate may not be accurate, and the purchase decision of raw materials based on the estimate can cause excessive inventories in times of slow sales and insufficient inventories in peak times.

Accounts Payable

We had accounts payable of ~~$9,436,035~~$17,349,392 as of ~~March 31,~~September 30, 2019 as compared to ~~$27,128,921~~$19,004,548 as of June 30, ~~2018,~~2019, representing a decrease of ~~$17,692,886,~~$1,655,156, or ~~65.2%~~8.7%. The decrease was primarily due to the decrease of accounts payable for ~~Gufeng. Gufeng’s~~VIEs. They have accounts payable ~~were $548,395~~of $15,634,763 as of ~~March 31,~~September 30, 2019 as compared to ~~$1,782,064~~$17,073,229 as of June 30, ~~2018,~~2019, representing a decrease of ~~$1,233,669,~~$1,438,466, or ~~69.2%~~8.4%.

Unearned Revenue (Customer Deposits)

We had ~~unearned revenue~~customer deposits of ~~$7,793,572~~$6,164,137 as of ~~March 31,~~September 30, 2019 as compared to ~~$7,251,967~~$6,514,619 as of June 30, ~~2018,~~2019, representing ~~an increase~~a decrease of ~~$541,605,~~$350,482, or ~~7.5%~~5.4%. The ~~increase~~decrease was mainly attributable to ~~the increase of~~Jinong’s $1,432,745 unearned revenue ~~for Gufeng. Gufeng’s unearned revenue was $ 5,415,715~~ as of ~~March 31,~~September 30, 2019, compared to ~~$ 3,178,157~~$1,589,158 unearned revenue as of June 30, ~~2018, representing an increase of $ 2,237,558,~~2019, decreased $156,413, or ~~70.4%.~~9.8%, caused by the advance deposits made by clients. This ~~increase~~decrease was adue to seasonal fluctuation and we expect to deliver products to our customers during the next three months at which time we will recognize the revenue.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of its financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with ~~the~~ United States generally accepted accounting principles. Our financial statements reflect the selection and application of accounting policies which require management to make significant estimates and judgments. See Note 2 to our consolidated financial statements, “Basis of Presentation and Summary of Significant Accounting Policies.” We believe that the following paragraphs reflect the most critical accounting policies that currently affect our financial condition and results of operations:

Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates.

Revenue recognition

Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, we have no other significant obligations and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.

Our revenue consists of ~~the~~ invoiced value of goods, net of a value-added tax (VAT). No product return or sales discount allowance is made as products delivered and accepted by customers are normally not returnable and sales discounts are normally not granted after products are delivered.

Cash and cash equivalents

For ~~the~~ statement of cash flows purposes, we consider all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

Accounts receivable

Our policy is to maintain reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer ~~creditworthiness,~~credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Any accounts receivable of Jinong and Gufeng that are outstanding for more than 180 days will be accounted as an allowance for bad debts, and any accounts receivable of Yuxing that are outstanding for more than 90 days will be accounted as an allowance for bad debts.

Deferred assets

Deferred assets represent amounts the Company advanced to the distributors in their marketing and stores development to expand our competitive advantage and market shares. Based on the distributor agreements, the amount owed by the distributors in certain marketing efforts and store development will be expensed over three years if the distributors are actively selling our products. If a distributor defaults, breaches, or terminates the agreement with us earlier than the realization of the contractual terms, the unamortized portion of the amount owed by the distributor is to be refunded to us immediately. The deferred assets had been fully amortized as of ~~March 31,~~September 30, 2019.

Segment reporting

FASB ASC 280 requires ~~the~~ use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other way management disaggregates a company.

As of ~~March 31,~~September 30, 2019, we were organized into ten main business units: Jinong (fertilizer production), Gufeng (fertilizer production), Yuxing (agricultural products production), Lishijie (agriculture sales), Jinyangguang (agriculture sales), Wangtian (agriculture sales), Xindeguo (agriculture sales), Xinyulei (agriculture sales), Fengnong (agriculture sales) and Xiangrong (agriculture sales). For financial reporting purpose, our operations were organized into four main business segments based on locations and products: Jinong (fertilizer production), Gufeng (fertilizer production) and Yuxing (agricultural products production) and the sales VIEs. Each of the segments has its own annual budget regarding development, production and sales.

Item 3. Quantitative and Qualitative Disclosures ~~about~~About Market Risk

Disclosures ~~about~~About Market Risk

We may be exposed to changes in financial market conditions in the normal course of business. Market risk generally represents the risk that losses may occur as a result of movements in interest rates and equity prices. We currently do not, in the normal course of business, use financial instruments that are subject to changes in financial market conditions.

Currency Fluctuations and Foreign Currency Risk

Substantially all of our revenues and expenses are denominated in RMB. However, we use the U.S. dollar for financial reporting purposes. Conversion of RMB into foreign currencies is regulated by the People’s Bank of China through a unified floating exchange rate system. Although the PRC government has stated its intention to support the value of RMB, there can be no assurance that such exchange rate will not again become volatile or that RMB will not devalue significantly against U.S. dollar. Exchange rate fluctuations may adversely affect the value, in U.S. dollar terms, of our net assets and income derived from our operations in the PRC.

Our reporting currency is the U.S. dollar. Except for U.S. holding companies, all of our consolidated revenues, consolidated costs and expenses, and our assets are denominated in RMB. As a result, we are exposed to foreign exchange risk as our revenues and results of operations may be affected by fluctuations in the exchange rate between the U.S. dollars and RMB. If RMB depreciates against the U.S. dollar, the value of our RMB revenues, earnings and assets as expressed in our U.S. dollar financial statements will decline. Assets and liabilities are translated at the exchange rates as of the balance sheet dates, revenues and expenses are translated at the average exchange rates, and shareholders’ equity is translated at historical exchange rates. Any resulting translation adjustments are not included in determining net income but are included in determining other comprehensive income, a component of shareholders’ equity. As of ~~March 31,~~September 30, 2019, our accumulated other comprehensive ~~income~~loss was ~~$9.5~~$37 million. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk. The value of the RMB against the U.S. dollar and other currencies is affected by, among other things, changes in ~~the~~ PRC’s political and economic conditions. Between July 1, ~~2018~~2019 and ~~March 31,~~September 30, 2019, China’s currency dropped by a cumulative ~~1.3%~~4.2% against the U.S. dollar, making Chinese exports cheaper and imports into China more expensive by that percentage. The effect on trade can be substantial. Moreover, it is possible that in the future, the PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

Interest Rate Risk

We deposit surplus funds with Chinese banks earning daily interest. We do not invest in any instruments for trading purposes. All of our outstanding debt instruments carry fixed rates of ~~interests.~~interest. The amount of short-term debt outstanding as of ~~March 31,~~September 30, 2019 and June 30, ~~2018~~2019 was ~~$4.5~~$3.8 million and ~~$4.7~~$3.6 million, respectively. We are exposed to interest rate risk primarily with respect to our short-term bank loans. Although the interest rates, which are based on the banks’ prime rates with respect to our short-term loans, are fixed for the terms of the loans, the terms are typically three to twelve months for short-term bank loans and interest rates are subject to change upon renewal. There ~~were~~was no material ~~changes~~change in interest rates for short-term bank loans renewed during the three months ended ~~March 31,~~September 30, 2019. The original loan term on average is one year, and the remaining average life of the short term-loans is approximately ~~three~~nine months.

Management monitors the banks’ prime rates in conjunction with our cash requirements to determine the appropriate level of debt balances relative to other sources of funds. We have not entered into any hedging transactions in an effort to reduce our exposure to interest rate risk.

Credit Risk

We have not experienced significant credit risk, as most of our customers are long-term customers with superior payment records. Our receivables are monitored regularly by our credit managers.

Inflation Risk

Inflationary factors such as increases in the cost of our products and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of net revenues if the selling prices of our products do not increase with these increased costs.

Item 4. Controls and Procedures

(a)Evaluation of disclosure controls and procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), at the conclusion of the period ended ~~March 31,~~September 30, 2019 we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this Report, our disclosure controls and procedures were effective and adequately designed to ensure that the information required to be disclosed by us in the reports we submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and that such information was accumulated and communicated to our Chief Executive Officer and Chief Financial Officer, in a manner that allowed for timely decisions regarding required disclosure.

(b)Changes in internal controls

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter ended ~~March 31,~~September 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

There are no other actions, suits, proceedings, inquiries or ~~investigation~~investigations before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no unregistered sales of the Company’s equity securities during the three months ended ~~March 31,~~September 30, 2019, that were not otherwise disclosed in a Current Report on Form 8-K.

Item 3. Defaults Upon Senior Securities

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

There is no other information required to be disclosed under this item which was not previously disclosed.

Item 6. Exhibits

The exhibits required by this item are set forth in the Exhibit Index attached hereto.

SIGNATURES

Pursuant to the requirements 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 GREEN AGRICULTURE, INC.

Date: ~~May 15,~~November 19, 2019	By:	/s/Zhuoyu ~~“Richard”~~ Li
	Name:	Zhuoyu ~~“Richard”~~ Li
	Title:	Chief Executive Officer
		(principal executive officer)

Date: ~~May 15,~~November 19, 2019	By:	/s/Yongcheng Yang
	Name:	Yongcheng Yang
	Title:	Chief Financial Officer
		(principal financial officer and principal accounting officer)

EXHIBIT INDEX

No.		Description

21.1*		List of Subsidiaries of the Company
31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1+		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2+		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith

+ In accordance with the SEC Release 33-8238, deemed being furnished and not filed.

4537

Nevada		36-3526027
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification No.)

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		CGA		NYSE

		Page

PART I	FINANCIAL INFORMATION	1

Item 1.	Financial Statements	1

	Consolidated Condensed Balance Sheets As of ~~March 31,~~September 30, 2019 (Unaudited) and June 30, ~~2018 (Unaudited)~~2019	1

	Consolidated Condensed Statements of Income and Comprehensive Income For the Three ~~and Nine months~~Months Ended ~~March 31,~~September 30, 2019 and 2018 (Unaudited)	2

	Consolidated Condensed Statements of ~~Cash Flows~~Stockholders’ Equity For the ~~Nine months~~Years Ended ~~March 31,~~September 30, 2019 and 2018 ~~(Unaudited)~~	3

	~~Notes to~~ Consolidated Condensed ~~Financial~~ Statements As of ~~March 31,~~Cash Flows For the Three Months Ended September 30, 2019 and 2018 (Unaudited)	4

	Notes to Consolidated Condensed Financial Statements As of September 30, 2019 (Unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2523

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4133

Item 4.	Controls and Procedures	4234

PART II	OTHER INFORMATION	4335

Item 16.	~~Legal Proceedings.~~Exhibits	43 35

~~Item 1A~~Signatures		~~Risk Factors.~~	43

~~Item 2~~	~~Unregistered Sales of Equity Securities and Use of Proceeds.~~	43

~~Item 3~~	~~Defaults Upon Senior Securities.~~	43

~~Item 4~~	~~Mine Safety Disclosures.~~	43

~~Item 5.~~	~~Other Information.~~	43

~~Item 6.~~	~~Exhibits~~	43

~~Signatures~~		4436

Exhibits/Certifications		4537

							September 30, 2019			June 30, 2019
	March 31, 2019			June 30, 2018			(unaudited)

ASSETS
Current Assets
Cash and cash equivalents	$	69,242,037		$	150,805,639		$	82,953,941		$	72,259,804
Accounts receivable, net		154,557,359			174,460,937			138,984,949			145,190,160
Inventories		132,579,212			53,784,814			146,848,526			162,013,889
Prepaid expenses and other current assets		4,887,732			2,945,247			3,305,910			2,776,370
Amount due from related parties		0			235,551			79,380			0
Advances to suppliers, net		51,055,495			25,194,463			29,136,516			32,713,817
Total Current Assets		412,321,835			407,426,651			401,309,221			414,954,039

Plant, Property and Equipment, Net		28,120,511			30,894,683			24,830,646			26,669,938
Other Assets		274,163			294,550			264,294			267,907
Other Non-current Assets		14,164,932			15,885,696			12,375,236			13,352,645
Intangible Assets, Net		18,736,458			20,317,914			16,758,281			17,881,449
Goodwill		8,058,302			8,166,467			7,560,742			7,874,421
Total Assets	$	481,676,201		$	482,985,960		$	463,098,420		$	481,000,399

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	9,436,035		$	27,128,921		$	17,349,392		$	19,004,548
Customer deposits		7,793,572			7,251,967			6,164,137			6,514,619
Accrued expenses and other payables		11,218,642			10,207,058			11,995,286			12,029,722
Amount due to related parties		3,666,440			3,271,619			3,800,160			3,641,945
Taxes payable		33,176,555			29,952,206			29,621,164			31,357,690
Short term loans		4,470,000			4,726,300			3,774,600			3,640,000
Interest payable		667,148			462,060			698,301			720,720
Derivative liability		1,690			66,143			2,620			18,162
Convertible notes payable								7,238,358			7,517,307
Total Current Liabilities		70,430,082			83,066,274			80,644,018			84,444,714

Long-term Liabilities								-			-
Convertible notes payable		7,588,201			7,371,899
Total Liabilities	$	78,018,283		$	90,438,173		$	80,644,018			84,444,714

Stockholders’ Equity
Preferred Stock, $.001 par value, 20,000,000 shares authorized, zero shares issued and outstanding		-			-			-			-
Common stock, $.001 par value, 115,197,165 shares authorized, 39,546,945 and 38,896,945, shares issued and outstanding as of March 31, 2019 and June 30, 2018, respectively		39,547			38,897
Common stock, $.001 par value, 115,197,165 shares authorized, 4,977,479 and 3,986,912 shares issued and outstanding as of September 30, 2019 and June 30, 2019, respectively								4,977			3,987
Additional paid-in capital		129,706,886			129,337,035			148,593,455			138,012,445
Statutory reserve		31,196,016			30,947,344			31,306,794			31,237,891
Retained earnings		252,209,492			235,822,726			239,737,872			247,122,574
Accumulated other comprehensive income		(9,494,023	)		(3,598,215	)		(37,188,696	)		(19,821,211	)
Total Stockholders’ Equity		403,657,917			392,547,787			382,454,402			396,555,686

Total Liabilities and Stockholders’ Equity	$	481,676,201		$	482,985,960		$	463,098,420		$	481,000,399

	~~+86-29-88266368~~
	~~(Issuer's telephone number, including area code)~~

	Three Months Ended September 30,
	2019			2018
Sales
Jinong	$	19,054,816		$	22,496,533
Gufeng		16,323,217			17,473,251
Yuxing		2,539,711			2,387,546
VIEs - others		12,903,827			15,597,476
Net sales		50,821,571			57,954,806
Cost of goods sold
Jinong		10,492,530			11,203,172
Gufeng		14,454,008			15,304,863
Yuxing		2,051,996			2,047,163
VIEs - others		10,663,790			12,929,968
Cost of goods sold		37,662,324			41,485,166
Gross profit		13,159,247			16,469,640
Operating expenses
Selling expenses		3,630,355			3,420,427
General and administrative expenses		16,341,792			2,309,359
Total operating expenses		19,972,147			5,729,786
Income from operations		(6,812,900	)		10,739,854
Other income (expense)
Other income (expense)		(30,191	)		(38,330	)
Interest income		53,624			127,383
Interest expense		(77,202	)		(162,686	)
Total other income (expense)		(53,769	)		(73,633	)
Income before income taxes		(6,866,668	)		10,666,221
Provision for income taxes		449,131			1,654,416
Net income		(7,315,799	)		9,011,805

Other comprehensive income (loss)
Foreign currency translation gain (loss)		(17,367,485	)		(15,987,792	)
Comprehensive income (loss)	$	(24,683,284	)	$	(6,975,987	)

Basic weighted average shares outstanding		4,504,510			3,241,412
Basic net earnings per share	$	(1.62	)	$	2.78

Diluted weighted average shares outstanding		4,504,510			3,241,412
Diluted net earnings per share	$	(1.62	)		2.78

					Additional							Accumulated Other			Total
	Number		Common		Paid In		Statutory		Retained			Comprehensive			Stockholders’
	Of Shares		Stock		Capital		Reserve		Earnings			Income			Equity
BALANCE, JUNE 30, 2019		3,986,912	$	3,987	$	138,012,445		31,237,891		247,122,574			(19,821,211	)		396,555,685

Net income										(7,315,799	)					(7,315,799	)

Issuance of stock		931,000		931		10,251,069										10,252,000

Stock issued for accrued expenses		59,567		60		329,940										330,000

Transfer to statutory reserve								68,903		(68,903	)

Other comprehensive income													(17,367,484	)		(17,367,484	)

BALANCE, SEPTEMBER 30, 2019		4,977,479	$	4,978	$	148,593,454	$	31,306,794	$	239,737,872		$	(37,188,696	)	$	382,454,402

	Three Months Ended
	March 31,
	2019		2018
Net Income from continuing operations for Basic Earnings Per Share		5,117,899		7,627,033
Net Income from discontinued operations for Basic Earnings Per Share	$	0	$	0
Basic Weighted Average Number of Shares		39,546,944		38,511,264
Basic net earnings per share from continuing operations		0.13		0.20
Basic net earnings per share from discontinued operations	$	0	$	0
Net Income from continuing operations for Diluted Earnings Per Share		5,117,899		7,627,033
Net Income from discontinued operations for Diluted Earnings Per Share	$	0	$	0
Diluted Weighted Average Number of Shares		39,546,944		38,511,264
Diluted net earnings per share from continuing operations		0.13		0.20
Diluted net earnings per share from discontinued operations	$	0	$	0

	Nine Months Ended
	March 31,
	2019		2018
Net Income from continuing operations for Basic Earnings Per Share		16,635,439		20,507,573
Net Income from discontinued operation for Basic Earnings Per Share	$	0	$	40,394
Basic Weighted Average Number of Shares		39,165,010		38,551,264
Basic net earnings per share from continuing operations		0.42		0.53
Basic net earnings per share from discontinued operations	$	0	$	0
Net Income from continuing operations for Diluted Earnings Per Share		16,635,439		20,507,573
Net Income from discontinued operations for Diluted Earnings Per Share	$	0	$	40,394
Diluted Weighted Average Number of Shares		39,165,010		38,551,264
Diluted net earnings per share from continuing operations		0.42		0.53
Diluted net earnings per share from discontinued operations	$	0	$	0

Twelve Months Ending March 31,	Expense ($)
Twelve Months Ended on September 30,			Expense ($)
2020		1,865,109		1,501,676
2021		1,096,543		744,046
2022		681,884		560,232
2023		577,619		509,657
2024		464,116		371,644

Twelve months ending March 31,
Twelve months ending September 30,
2020	$	2,000,325	$	1,876,815
2021	$	2,000,325	$	1,876,815
2022	$	2,000,325	$	1,876,815
2023	$	2,000,325	$	1,876,815
2024 and thereafter	$	8,163,957	$	6,744,791

No.	Payee	Loan period per agreement	Interest Rate			March 31, 2019
1	Bank of Beijing - Pinggu Branch	May 22, 2018-May 21, 2019		5.22	%		1,490,000
2	Postal Saving Bank of China - Pinggu Branch	June 19, 2018-June 18, 2019		6.31	%		2,980,000
	Total					$	4,470,000

No.	Related Acquisitions of Sales VIEs	Issuance Date	Maturity Date	Notional Interest Rate			Conversion Price		Notional Amount (in RMB)		Related Acquisitions of Sales VIEs	Issuance Date	Maturity Date	Notional Interest Rate		Conversion Price		Notional Amount (in RMB)
1	Wangtian, Lishijie, Shenqiu, Xindeguo, Xinyulei, Jinyangguang	June 30, 2016	June 30, 2019		3	%	$	5.00		39,000,000	Wangtian, Lishijie, Xindeguo, Xinyulei, Jinyangguang	June 30, 2016	June 30, 2019	3	%	$	5.00		39,000,000
2	Fengnong, Xiangrong	January 1, 2017	December 31, 2019		3	%	$	5.00		12,000,000	Fengnong, Xiangrong	January 1, 2017	December 31, 2019	3	%	$	5.00		12,000,000

	Sept 30,			June 30,
	2019			2019
VAT provision	$	(395,421	)	$	(424,535	)
Income tax payable		(179,628	)		1,550,830
Other levies		1,185,679			1,220,859
Total	$	610,630		$	2,347,154

	March 31,		June 30,		September 30,		June 30,
	2019		2018		2019		2019
Raw materials	$	88,221,690	$	13,154,465	$	62,610,039	$	102,268,620
Supplies and packing materials	$	511,574	$	566,254	$	479,704	$	496,138
Work in progress	$	403,463	$	417,130	$	368,578	$	390,708
Finished goods	$	43,442,485	$	39,646,965	$	83,390,205	$	58,858,423
Total	$	132,579,212	$	53,784,814	$	146,848,526	$	162,013,889

March 31, 2019
	China					United States
	15% - 25%					34%					Total

Pretax income (loss)	$	23,320,275		-			(1,363,166	)	-		$	21,957,109

Expected income tax expense (benefit)		5,830,069		25.0	%		(286,265	)	21.0	%		5,543,804
High-tech income benefits on Jinong		(671,669	)	(2.9	)%				-			(671,669	)
Losses from subsidiaries in which no benefit is recognized		163,271		0.7	%				-			163,271
Change in valuation allowance on deferred tax asset from US tax benefit		0		-			286,265		(21.0	)%		286,265
Actual tax expense	$	5,321,671		22.8	%	$	-		-	%	$	5,321,671		24.2	%

March 31, 2018
	China					United States
	15% - 25%					34%						Total

Pretax income (loss)	$	26,650,476		-			(1,035,728	)		-		$	25,614,748

Expected income tax expense (benefit)		6,662,619		25.0	%		(352,147	)		34.0	%		6,310,472
High-tech income benefits on Jinong		(2,689,188	)	(10	)%					-			(2,689,188	)
Losses from subsidiaries in which no benefit is recognized		(1,093,349	)	4	%					-			(1,093,349	)
Change in valuation allowance on deferred tax asset from US tax benefit		0		-			352,147		352,147	(34.0	)%		352,147
Actual tax expense	$	5,066,780		19	%	$	-			-	%	$	5,066,780		19.8	%

	As of
	March 31,			June 30,
	2019			2018
Identifiable assets:
Jinong	$	148,860,709		$	226,335,489
Gufeng		255,784,087			168,572,947

Sales VIES		76,434,439			87,567,782
Reconciling item (1)		599,845			512,622
Reconciling item (2)		(2,879	))		(2,879	)
Consolidated	$	481,676,200		$	482,985,960

	Three Months Ended September 30,
Revenues from unaffiliated customers:	2019			2018
Jinong	$	19,054,816		$	22,496,533
Gufeng		16,323,217			17,473,251
Yuxing		2,539,711			2,387,546
Sales VIEs		12,903,827			15,597,474
Consolidated	$	50,821,571		$	57,954,804

Operating income :
Jinong	$	578,043		$	6,928,090
Gufeng		(11,500,258	)		1,609,052
Yuxing		154,678			193,177
Sales VIEs		4,293,317			2,631,299
Reconciling item (1)		0			0
Reconciling item (2)		(338,680	)		(621,764	)
Consolidated	$	(6,812,900	)	$	10,739,854

Net income:
Jinong	$	524,101		$	5,900,016
Gufeng		(11,511,954	)		1,120,344
Yuxing		154,555			193,178
Sales VIEs		3,868,486			2,420,029
Reconciling item (1)		6			2
Reconciling item (2)		(338,680	)		(621,766	)
Reconciling item (3)		(12,315	)
Consolidated	$	(7,315,800	)	$	9,011,805

Depreciation and Amortization:
Jinong	$	191,078		$	198,258
Gufeng		520,335			536,619
Yuxing		295,654			304,818
Sales VIEs		181,123			186,806
Consolidated	$	1,188,190		$	1,226,500

Interest expense:
Jinong		6,412			69,442
Gufeng		70,789			93,122
Sales VIEs		1			123
Consolidated	$	77,202		$	162,686

Capital Expenditure:
Jinong	$	4,578		$	3,036
Gufeng		0			26,988
Yuxing		6,823			1,249

Consolidated	$	11,401		$	31,273

Twelve Months ending March 31,
Years ending September 30,
2020	$	49,059	$	46,918
2021		49,059		46,918
2022		49,059		46,918
2023		49,059		46,918
2024		49,059		46,918

	Three months ended Three Months Ended March 31,				Nine months ended Nine Months Ended March 31,
	2019		2018		2019		2018
Revenue	$	18,875,808	$	16,127,953	$	49,772,242	$	47,205,271
Expenses		16,638,610		13,749,981		45,582,052		39,340,523
Net income (loss)	$	2,237,198	$	940,622	$	4,190,190	$	1,140,302