~~[X]~~☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~[ ]~~☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ~~[X]~~ ☒ No ~~[ ]~~☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ~~[X]~~ ☒ No ~~[ ]~~☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ~~[ ]~~☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No ~~[X]~~ ☒

As of ~~May 14, 2021,~~February 10, 2022, there were ~~4,009,288~~9,616,632 shares of common stock, par value $0.001 per share, outstanding.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements


	For the Nine Months Ended March 31,						For the Three Months Ended March 31,						For the Six Months Ended December 31,						For the Three Months Ended December 31,
	2021			2020			2021			2020			2021			2020			2021			2020

REVENUE	$	9,197,101		$	18,649,715		$	1,990,737		$	3,734,322		$	1,362,332		$	1,797,639		$	732,574		$	789,662

COST OF REVENUE
Cost of product and services		8,563,090			14,191,705			2,261,864			3,308,857			1,748,730			1,870,248			883,669			1,128,958
Stock written off due to natural disaster		3,358,716			-			729,029			-			901,581			2,629,687			408,594			2,629,687
Business and sales related tax		29,100			43,004			7,160			15,341			3,257			3,013			2,002			1,964
Total cost of revenue		11,950,906			14,234,709			2,998,053			3,324,198			2,653,568			4,502,948			1,294,265			3,760,609

GROSS PROFIT (LOSS)		(2,753,805	)		4,415,006			(1,007,316	)		410,124
GROSS LOSS														(1,291,236	)		(2,705,309	)		(561,691	)		(2,970,947	)

OPERATING EXPENSES
General and administrative expenses		13,625,060			9,343,435			5,016,939			3,896,478			10,506,466			4,636,520			1,932,810			3,213,210
Selling expenses		86,870			340,681			32,525			145,526			18,332			22,936			9,990			10,290
Impairment loss of distribution rights														1,140,551			-			-			-
Total operating expenses		13,711,930			9,684,116			5,049,464			4,042,004			11,665,349			4,659,456			1,942,800			3,223,500

LOSS FROM OPERATIONS		(16,465,735	)		(5,269,110	)		(6,056,780	)		(3,631,880	)		(12,956,585	)		(7,364,765	)		(2,504,491	)		(6,194,447	)

OTHER INCOME (EXPENSE)																					��
Income (loss) from equity method investments		(3,753,280	)		97,528			(1,777,551	)		(43,054	)
Other income (expense), net		(2,066,268	)		39,084			(28,076	)		627
Interest expense, net		(30,977	)		(8,250	)		(452	)		(7,942	)
Total other income (expense)		(5,850,525	)		128,362			(1,806,079	)		(50,369	)
Impairment loss on an unconsolidated entity														(149,790	)		-			(149,790	)		-
Loss from equity method investments														(106,988	)		-			(79,068	)		-
Other income, net														1,443			85,916			473			83,128
Amortization of debt issuance costs														(854,318	)		-			(395,340	)		-
Interest income, net														67,139			11,687			237,338			7,462
Total other income (loss)														(1,042,514	)		97,603			(386,387	)		90,590

LOSS BEFORE PROVISION FOR INCOME TAXES		(22,316,260	)		(5,140,748	)		(7,862,859	)		(3,682,249	)
LOSS BEFORE PROVISION FOR INCOME TAXES FROM CONTINUING OPERATIONS														(13,999,099	)		(7,267,162	)		(2,890,878	)		(6,103,857	)

PROVISION (BENEFIT) FOR INCOME TAXES		-			274,569			(83,106	)		110,177			(6,478	)		4,530			(6,478	)		4,530

NET LOSS FROM CONTINUING OPERATIONS														(13,992,621	)		(7,271,692	)		(2,884,400	)		(6,108,387	)

DISCONTINUED OPERATIONS:
Loss from discontinued operations, net of taxes														-			(7,264,815	)		-			(7,375,140	)
Loss on disposal of discontinued operations														(3,135,237	)		-			-			-
Net loss from discontinued operations														(3,135,237	)		(7,264,815	)		-			(7,375,140	)

NET LOSS		(22,316,260	)		(5,415,317	)		(7,779,753	)		(3,792,426	)		(17,127,858	)		(14,536,507	)		(2,884,400	)		(13,483,527	)

Net income (loss) attributable to non-controlling interest		(732,572	)		82,530			(272,488	)		25,267
Net loss attributable to non-controlling interest														(11,815	)		(460,084	)		(6,689	)		(464,614	)

NET LOSS ATTRIBUTABLE TO SHINECO, INC.	$	(21,583,688	)	$	(5,497,847	)	$	(7,507,265	)	$	(3,817,693	)	$	(17,116,043	)	$	(14,076,423	)	$	(2,877,711	)	$	(13,018,913	)

COMPREHENSIVE LOSS
Net loss	$	(22,316,260	)	$	(5,415,317	)	$	(7,779,753	)	$	(3,792,426	)	$	(17,127,858	)	$	(14,536,507	)	$	(2,884,400	)	$	(13,483,527	)
Other comprehensive income (loss): foreign currency translation income (loss)		4,911,863			(2,320,277	)		(164,631	)		(1,209,436	)
Total comprehensive income loss		(17,404,397	)		(7,735,594	)		(7,944,384	)		(5,001,862	)
Other comprehensive income: foreign currency translation income														814,306			5,076,494			813,736			2,408,563
Total comprehensive loss														(16,313,552	)		(9,460,013	)		(2,070,664	)		(11,074,964	)
Less: comprehensive income (loss) attributable to non-controlling interest		(653,158	)		47,067			(273,806	)		5,280			3,511			(379,352	)		(12,568	)		(430,794	)

COMPREHENSIVE LOSS ATTRIBUTABLE TO SHINECO, INC.	$	(16,751,239	)	$	(7,782,661	)	$	(7,670,578	)	$	(5,007,142	)	$	(16,317,063	)	$	(9,080,661	)	$	(2,058,096	)	$	(10,644,170	)

Weighted average number of shares basic and diluted*		3,372,327			2,920,086			3,184,593			3,037,048
Weighted average number of shares basic and diluted														8,720,539			3,112,268			9,126,082			3,184,593

Basic and diluted loss per common share	$	(6.40	)	$	(1.88	)	$	(2.36	)	$	(1.26	)	$	(1.96	)	$	(4.52	)	$	(0.32	)	$	(4.09	)

Loss per common share
Continuing operations - Basic and Diluted														(1.60	)		(2.33	)		(0.32	)		(1.92	)
Discontinued operations - Basic and Diluted														(0.36	)		(2.19	)		-			(2.17	)
Net loss per common share - basic and diluted														(1.96	)		(4.52	)		(0.32	)		(4.09	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements


	For the Nine Months Ended March 31,						For the Six Months Ended December 31,
	2021			2020			2021			2020

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(22,316,260	)	$	(5,415,317	)	$	(17,127,858	)	$	(14,536,507	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Net loss from discontinued operations, net of tax								(3,135,237	)		(7,264,815	)
Net loss from continuing operations								(13,992,621	)		(7,271,692	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		520,005			891,727			740,533			203,801
Loss from disposal of property and equipment		2,154,151			60,111
Provision for doubtful accounts		11,141,211			5,748,507			5,815,640			3,341,730
Provision for inventory reserve		216,629			242,015			128,773			90,174
Stock written off due to natural disaster		3,358,716			-			901,581			2,629,687
Deferred tax benefit		-			(202,293	)
Loss (income) from equity method investments		3,753,280			(97,528	)
Loss from equity method investments								106,988			-
Amortization of right of use assets		424,638			-			522,866			268,872
Restricted shares issued for management		-			1,022,661
Impairment loss on distribution rights								1,140,551			-
Impairment loss on an unconsolidated entity								149,790
Amortization of debt issuance costs								854,318			-
Accrued interest expense for convertible notes								414,778			-
Accrued interest income due from third parties								(411,167	)		-
Accrued interest income due from related parties								(78,422	)		-

Changes in operating assets and liabilities:
Accounts receivable		(2,420,160	)		(1,037,487	)		(46,681	)		(1,678,707	)
Advances to suppliers		(4,332,686	)		3,268,646			1,577,386			(4,610,908	)
Inventories		(3,990,001	)		209,054			(948,863	)		(3,982,225	)
Other receivables		(3,813,081	)		(767,368	)
Prepaid expense and other assets		4,450			441,640
Due from related parties		-			62,570
Right of use assets		-			(32,376	)
Other current assets								(4,559,032	)		(1,436,168	)
Accounts payable		116,677			(52,865	)		(75,278	)		(5,828	)
Advances from customers		-			(367,705	)		(546	)		(38	)
Other payables		3,641,524			293,804			2,559,798			1,302,679
Operating lease liabilities		(11,513	)		-			(299,428	)		(8,103	)
Taxes payable		(301,821	)		29,733			(111,509	)		32,828
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(11,854,241	)		4,297,529
Net cash used in operating activities from continuing operations								(5,610,545	)		(11,123,898	)
Net cash used in operating activities from discontinued operations								-			(312,586	)
Net cash used in operating activities								(5,610,545	)		(11,436,484	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment		-			(1,497	)		(308,637	)		-
Proceeds from disposal of property and equipment		1,497,675			79,414
Proceeds from withdrawal of investments		1,027,405			-
Repayments (advances) of loans to third parties		(1,273,024	)		38,377
NET CASH PROVIDED BY INVESTING ACTIVITIES		1,252,056			116,294
Payment made for loans to third parties								(12,200,000	)		-
Repayments of loans from related parties								(6,633,811	)		-
Investment in unconsolidated entity								(750,000	)		-
Acquisition of a VIE - Guangyuan, net of cash								112,070			-
Disposal of a VIE - Ankang, net of cash								(12,669,913	)		-
Net cash used in investing activities from continuing operations								(32,450,291	)		-
Net cash provided by investing activities from discontinued operations								-			221,518
Net cash provided (used in) by investing activities								(32,450,291	)		221,518

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term loans		299,535			2,352,488
Repayment of short-term loans		(973,489	)		(2,352,488	)
Repayment of other short-term loans		-			(7,129	)
Proceeds from issuance of common stock		2,736,422			1,500,203			7,481,203			1,643,087
Proceeds from (repayments of) advances from related parties		(297,510	)		614,526			754,308			(21,208	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		1,764,958			2,107,600
Proceeds from issuance of convertible notes								17,000,000			-
Net cash provided by financing activities from continuing operations								25,235,511			1,621,879
Net cash used in financing activities from discontinued operations								-			(664,554	)
Net cash provided by financing activities								25,235,511			957,325

EFFECT OF EXCHANGE RATE CHANGE ON CASH		2,314,452			(1,206,310	)		421,826			2,245,261

NET INCREASE (DECREASE) IN CASH		(6,522,775	)		5,315,113
NET DECREASE IN CASH								(12,403,499	)		(8,012,380	)

CASH - Beginning of the Period		32,371,372			35,330,676			29,024,394			32,371,372

CASH - End of the Period	$	25,848,597		$	40,645,789
CASH - End of the period								16,620,895			24,358,992

Less: cash of discontinued operations - Ended of the Period								-			10,441,139

Cash of continuing operations - Ended of the Period							$	16,620,895		$	13,917,853

SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for income taxes	$	619,704		$	530,299		$	-		$	611,061
Cash paid for interest	$	88,894		$	84,432		$	-		$	63,267

SUPPLEMENTAL NON-CASH OPERATING ACTIVITY:
Issuance of common shares for convertible notes redemption							$	7,970,876		$	-
Right-of-use assets obtained in exchange for operating lease obligations	$	-		$	413,955		$	1,275,378		$	-

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements~~

Shineco, Inc. (“Shineco” or the “Company”) was incorporated in the State of Delaware on August 20, 1997. The Company is a holding company whose primary purpose is to develop business opportunities in the People’s Republic of China (the “PRC” or “China”).

On December 30, 2004, the Company acquired all of the issued and outstanding shares of Beijing Tenet-Jove Technological Development Co., Ltd. (“Tenet-Jove”), a PRC company, in exchange for restricted shares of the Company’s common stock, and the sole operating business of the Company became that of its subsidiary, Tenet-Jove. Tenet-Jove was incorporated on December 15, 2003 under the laws of China. Consequently, Tenet-Jove became a 100% owned subsidiary of Shineco and was officially granted the status of a wholly foreign-owned entity by Chinese authorities on July 14, 2006. This transaction was accounted for as a recapitalization. Tenet-Jove owns 90% interest of Tianjin Tenet Huatai Technological Development Co., Ltd. (“Tenet Huatai”).

On December 31, 2008, June 11, 2011, and May 24, 2012, Tenet-Jove entered into a series of contractual agreements including an Executive Business Cooperation Agreement, a Timely Reporting Agreement, an Equity Interest Pledge Agreement, and an Executive Option Agreement (collectively, the “VIE Agreements”), with each one of the following entities, Ankang Longevity Pharmaceutical (Group) Co., Ltd. (“Ankang Longevity Group”), Yantai Zhisheng International Freight Forwarding Co., Ltd. (“Zhisheng Freight”), Yantai Zhisheng International Trade Co., Ltd. (“Zhisheng Trade”), Yantai Mouping District Zhisheng Agricultural Produce Cooperative (“Zhisheng Agricultural”), and Qingdao Zhihesheng Agricultural Produce Services., Ltd. (“Qingdao Zhihesheng”). On February 24, 2014, Tenet-Jove entered into the same series of contractual agreements with Shineco Zhisheng (Beijing) Bio-Technology Co., Ltd. (“Zhisheng Bio-Tech”), which was incorporated in 2014. Zhisheng Bio-Tech, Zhisheng Freight, Zhisheng Trade, Zhisheng Agricultural, and Qingdao Zhihesheng are collectively referred to herein as the “Zhisheng VIEs.”

Pursuant to the VIE Agreements, Tenet-Jove has the exclusive right to provide to the Zhisheng VIEs and Ankang Longevity Group consulting services related to their business operations and management. All the above contractual agreements obligate Tenet-Jove to absorb a majority of the risk of loss from the Zhisheng VIEs and Ankang Longevity Group’s activities and entitle Tenet-Jove to receive a majority of their residual returns. In essence, Tenet-Jove has gained effective control over the Zhisheng VIEs and Ankang Longevity Group. Therefore, the Zhisheng VIEs and Ankang Longevity Group are treated as variable interest entities (“VIEs”) under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 “Consolidation.” Accordingly, the accounts of these entities are consolidated with those of Tenet-Jove.

Since Shineco is effectively controlled by the majority shareholders of the Zhisheng VIEs and Ankang Longevity Group, Shineco owns 100% of Tenet-Jove. Accordingly, Shineco, Tenet-Jove, and its VIEs, the Zhisheng VIEs and Ankang Longevity Group are effectively controlled by the same majority shareholders. Therefore, Shineco, Tenet-Jove, and the VIEs of Tenet-Jove are considered under common control. The consolidation of Tenet-Jove and its VIEs into Shineco was accounted for at historical cost and prepared on the basis as if the aforementioned exclusive contractual agreements between Tenet-Jove and its VIEs had become effective as of the beginning of the first period presented in the accompanying ~~unaudited condensed~~ consolidated financial statements.

On May 2, 2017, the Company entered into a Strategic Cooperation Agreement with Beijing Zhongke Biorefinery Engineering Technology Co., Ltd. (“Biorefinery”), a leading high-tech biomass refining company financially backed by the Chinese Academy of Sciences Institute of Process Engineering, to establish the Institute of Chinese Apocynum Industrial Technology Research (“ICAITR”). Pursuant to the Strategic Cooperation Agreement, the two parties agreed to establish the ICAITR, with the Company and Biorefinery owning 80% and 20% of the equity interests of ICAITR, ~~respectively.~~respectively. Shineco invested ~~RMB5.0~~RMB5.0 million (US$~~737,745)~~737,745) as the registered capital, and Biorefinery would invest a technology patent named “Steam Explosion Degumming.”

On September 30, 2017, Tenet-Jove established Xinjiang Shineco Taihe Agriculture Technology Ltd. (“Xinjiang Taihe”) with registered capital of ~~RMB10.0~~RMB10.0 million (US$~~1,502,650)~~1,502,650). On September 30, 2017, Tenet-Jove established Xinjiang Tianyi Runze Bioengineering Co., Ltd. (“Runze”) with registered capital of ~~RMB10.0~~RMB10.0 million (US$~~1,502,650)~~1,502,650). Xinjiang Taihe and Runze became wholly-owned subsidiaries of Tenet-Jove.

On December 10, 2016, Tenet-Jove entered into a purchase agreement with Tianjin Tajite E-Commerce Co., Ltd. (“Tianjin Tajite”), an online e-commerce company based in Tianjin, China, specializing in distributing Luobuma related products and branded products of Daiso 100-yen shops, pursuant to which Tenet-Jove would acquire a ~~51%~~51% equity interest in Tianjin Tajite for cash consideration of ~~RMB14,000,000~~RMB14,000,000 (approximately US$2.1 million). On December 25, 2016, the Company paid the full amount as the deposit to secure the deal. In May, 2017, the Company amended the agreement and required Tianjin Tajite to satisfy certain preconditions related to product introductions into China. On October 26, 2017, the Company completed the acquisition for 51% of the shares in Tianjin Tajite.

On October 27, 2017, the Company, through its subsidiary Tianjin Tajite, obtained contractual rights to distribute branded products of Daiso Industries Co., Ltd. (“Daiso”), a large franchise of 100-yen shops founded in Japan, via JD.com, one of the largest e-commerce companies and one of the largest retailers in China. On November 3, 2017, the Company further developed the cooperation with Daiso by entering into a supply and purchase agreement (the “Daiso Agreement”) for the purpose of establishing a continuous supply and sale of Daiso’s products in China. Pursuant to the Daiso Agreement, the Company planned to purchase Daiso Products in the amount of approximately ~~RMB20~~RMB20 million by August 2018 and add orders as circumstance requires. The term of the Daiso Agreement is for one year, and it renews for an additional one-year at the end of each term unless terminated by written notice by either Tianjin Tajite or Daiso. Due to the policy of China Customs, many of the bestselling products of Daiso are not allowed to be imported through the general form of trade model, but only through cross-border e-commence business model. As a result, the Company and Daiso agreed to suspend the cooperation temporarily and wait for the opening of the China-Japan-South Korea Free Trade Zone.

On November 1, 2017, the Company established an Apocynum Industrial Park in Xinjiang, China. The industrial park is focusing on planting and purchasing Bluish Dogbane and processing and distributing Bluish Dogbane preliminary products.

On March 13, 2019, Tenet-Jove established Beijing Tenjove Newhemp Biotechnology Co., Ltd. (“TNB”) with registered capital of ~~RMB10.0~~RMB10.0 million (US$~~1,502,650)~~1,502,650). TNB became a wholly-owned subsidiary of Tenet-Jove.

On August 22, 2019, Tenet-Jove established Shineco Zhong Hemp Group Co., Ltd. (“Zhong Hemp”) with registered capital of ~~RMB200.0~~RMB200.0 million (US$~~28,237,022)~~28,237,022) and owns ~~60%~~60% interest of Zhong Hemp.

WeThe Company ceased the business operation of Xinjiang Taihe and Runze in September 2020 and October 2020, respectively.

The Company, its subsidiaries, its VIEs, and its VIEs’ subsidiaries (collectively the “Group”) operate three main business segments: 1) Tenet-Jove is engaged in manufacturing and selling Bluish Dogbane and related products, also known in Chinese as “Luobuma,” including therapeutic clothing and textile products made from Luobuma; 2) the Zhisheng VIEs and Guanyuan are engaged in planting, processing, and distributing green agricultural produce, ~~as well as~~and the Zhisheng VIEs is also providing domestic and international logistic services for agricultural products and (“Agricultural Products”); and, 3) Ankang Longevity Group, which is reclassified as discontinued operations, manufactures traditional Chinese medicinal herbal products as well as other retail pharmaceutical products. These different business activities and products can potentially be integrated and benefit from one another.

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“~~U.S.~~US GAAP”) for interim financial information pursuant to the rules of the SEC and have been consistently applied. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for the full year. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended June 30, ~~2020,~~2021, which was filed on September ~~28, 2020.~~30, 2021.

The unaudited condensed consolidated financial statements of the Company reflect the principal activities of the Company, its subsidiaries, its VIEs and its VIEs’ subsidiaries. The non-controlling interest represents the minority shareholders’ interest in the Company’s majority owned subsidiaries and VIEs. All intercompany accounts and transactions have been eliminated in consolidation.

VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs and their subsidiaries with which the 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.

The total carrying amount of the VIEs and their subsidiaries’ consolidated assets and liabilities and income information were as follows:

	March 31, 2021			June 30, 2020			December 31, 2021			June 30, 2021

Current assets	$	52,240,926		$	58,350,565		$	39,411,842		$	44,631,744
Plant and equipment, net		4,679,535			8,168,594			895,268			4,698,184
Other non-current assets		4,369,823			11,054,954			3,920,371			4,894,445
Total assets		61,290,284			77,574,113			44,227,481			54,224,373
Total liabilities		(7,046,069	)		(6,189,172	)		(8,955,153	)		(7,377,886	)
Net assets	$	54,244,215		$	71,384,941		$	35,272,328		$	46,846,487

The carrying amount of the VIEs and their subsidiaries’ consolidated assets and liabilities and income information held for discontinued operations were as follows:

U.S. GAAP requires that non-controlling interests in subsidiaries and affiliates be reported in the equity section of a company’s balance sheet. In addition, the amounts attributable to the non-controlling interests in the net income of these entities are reported separately in the unaudited condensed consolidated statements of loss and comprehensive loss.

The operations of the Company are located in the PRC and are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political, regulatory, and social conditions in the PRC, and by changes in governmental policies or interpretations with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. Although the Company has not experienced losses from these factors and believes that it is in compliance with existing laws and regulations, there is no guarantee that the Company will continue to do so in the future.

Members of the current management team own controlling interests in the Company and are also the owners of the VIEs in the PRC. The Company only controls the VIEs through contractual arrangements, which obligate it to absorb the risk of loss and to receive the residual expected returns. As such, the controlling shareholders of the Company and the VIEs could cancel these agreements or permit them to expire at the end of the agreement terms, as a result of which the Company would not retain control of the VIEs. In addition, should these agreements be challenged or litigated, they would also be subject to the laws and courts of the PRC legal system, which could make enforcing the Company’s rights difficult.

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP 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 unaudited condensed consolidated financial statements as well as the reported amounts of revenue and expenses during the reporting periods. Significant estimates required to be made by management include, but are not limited to, useful lives of property, plant, and equipment, and intangible assets, the recoverability of long-lived assets, and the valuation of accounts receivable, deferred taxes, and inventory reserves. Actual results could differ from those estimates.

~~The Company~~We previously recognized revenue from sales of Luobuma products, Chinese medicinal herbal products, and agricultural products, as well as providing logistic services and other processing services to external customers. ~~The Company~~We recognized revenue when all of the following have occurred: (i) there was persuasive evidence of an arrangement with a customer; (ii) delivery had occurred or services had been rendered; (iii) the sales price was fixed or determinable; and (iv) ~~the Company’s~~our collection of such fees was reasonably assured. These criteria, as related to ~~the Company’s~~our revenue, were considered to have been met as follows:

Sales of products: The Company recognized revenue from the sale of products when the goods were delivered and title to the goods passed to the customer, provided that there were no uncertainties regarding customer acceptance; persuasive evidence of an arrangement existed; the sales price was fixed or determinable; and collectability was deemed probable.

Revenue from the provision of services: Revenue from international freight forwarding, domestic air, and overland freight forwarding services was recognized upon the performance of services as stipulated in the underlying contract or when commodities were being released from the customer’s warehouse; the service price was fixed or determinable; and collectability was deemed probable.

With the adoption of ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when all of the following five steps are met: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied. The Company adopted the new revenue standard beginning July 1, 2018, and adopted a modified retrospective approach upon adoption. The Company believes that its previous revenue recognition policies are generally consistent with the new revenue recognition standards set forth in ASC 606. Potential adjustments to input measures are not expected to be pervasive to the majority of the Company’s contracts. There is no significant impact upon adoption of the new guidance.

Cash and cash equivalents consist of cash on hand, cash on deposit, and other highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when purchased. The Company maintains cash with various financial institutions mainly in the PRC. As of ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, the Company had no0 cash equivalents.

Under PRC law, it is generally required that a commercial bank in the PRC that holds third-party cash deposits protect the depositors’ rights over and interests in their deposited money. PRC banks are subject to a series of risk control regulatory standards, and PRC bank regulatory authorities are empowered to take over the operation and management of any PRC bank that faces a material credit crisis. The Company monitors the banks utilized and has not experienced any problems.

Accounts receivable are recorded at net realizable value, consisting of the carrying amount less an allowance for uncollectible accounts, as necessary. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, the customers’ historical payment history, their current credit-worthiness, and current economic trends. The fair value of long-term receivables is determined using a present value technique by discounting the future expected contractual cash flows using current rates at which similar instruments would be issued at the measurement date. As of ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, the allowance for doubtful accounts from the continuing operations was US$~~13,539,904~~6,396,666 and US$~~5,235,436,~~5,959,887, respectively. As of December 31, 2021 and June 30, 2021, the allowance for doubtful accounts from the discontinued operations was US$ nil and US$3,675,619, respectively. Accounts are written off against the allowance after efforts at collection prove unsuccessful.

Inventories, which are stated at the lower of cost or net realizable value, consist of raw materials, work-in-progress, and finished goods related to the Company’s products. Cost is determined using the first in first out (“FIFO”) method. Agricultural products that the Company farms are recorded at cost, which includes direct costs such as seed selection, fertilizer, labor cost and contract fees that are spent in growing agricultural products on the leased farmland, and indirect costs which include amortization of prepayments of farmland leases and farmland development costs. All the costs are accumulated until the time of harvest and then allocated to the harvested crops costs when they are sold. The Company periodically evaluates its inventory and records an inventory reserve for certain inventories that may not be saleable or whose cost exceeds net realizable value. As of ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, the inventory reserve from the continuing operations was US$~~1,429,804~~1,330,999 and US$~~1,121,408,~~1,229,158, respectively. As of December 31, 2021 and June 30, 2021, the inventory reserve from the discontinued operations were both US$ nil.

Advances to suppliers consist of payments to suppliers for materials that have not been received. Advances to suppliers are reviewed periodically to determine whether their carrying value has become impaired. As of ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, the Company had an allowance for uncollectible advances to suppliers from the continuing operations of US$~~5,629,606~~14,748,577 and US$~~3,342,590,~~9,111,566, respectively. As of December 31, 2021 and June 30, 2021, the Company had an allowance for uncollectible advances to suppliers from the discontinued operations of US$ nil and US$1,773,698, respectively.

Business acquisitions are accounted for under the acquisition method. The acquisition method requires the reporting entity to identify the acquirer, determine the acquisition date, recognize and measure the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity, and recognize and measure goodwill or a bargain gain from the purchase. The acquiree’s results are included in the Company’s consolidated financial statements from the date of acquisition. Assets acquired and liabilities assumed are recorded at their fair values on the date acquired and the excess of the purchase price over the amounts assigned is recorded as goodwill, or if the fair value of the net assets acquired exceeds the purchase price consideration, a bargain purchase gain is recorded. Adjustments to fair value assessments are generally recorded to goodwill over the measurement period (not longer than 12 months). The acquisition method also requires that acquisition-related transaction and post-acquisition restructuring costs be charged to expense as committed, and requires the Company to recognize and measure certain assets and liabilities, including those arising from contingencies and contingent consideration in a business combination.

Goodwill represents the excess of the purchase price over the fair value of assets acquired. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination. If the carrying amount of a reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. For each of these tests, the fair value of each of the Company’s reporting units is determined using a combination of valuation techniques, including a discounted cash flow methodology. To corroborate the discounted cash flow analysis performed at each reporting unit, a market approach is utilized using observable market data such as comparable companies in similar lines of business that are publicly traded or which are part of a public or private transaction (to the extent available).

The Company adopted ASU 2016-02, “Leases” on July 1, 2019 and used the alternative transition approach, which permits the effects of adoption to be applied at the effective date. The new standard provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients,” which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs. The Company also elected the short-term lease exemption and combining the lease and non-lease components practical expedients. The most significant impact upon adoption relates to the recognition of new Right-of-use (“ROU”) assets and lease liabilities on the Company’s balance sheet for office space operating leases. Upon adoption, the Company recognized additional operating liabilities of approximately US$0.5 million, with corresponding ROU assets of US$3.6 million based on the present value of the remaining rental payments under current leasing standards for existing operating leases. There was no cumulative effect of adopting the standard.

Property and equipment are stated at cost, less accumulated depreciation and amortization. Expenditures for additions, major renewals, and betterments are capitalized, and expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is provided on a straight-line basis, less estimated residual value, if any, over an asset’s estimated useful life. Farmland leasehold improvements are amortized over the shorter of lease term or estimated useful lives of the underlying assets. The estimated useful lives of the Company’s property and equipment are as follows:

According to Chinese laws and regulations regarding land use rights, land in urban districts is owned by the state, while land in the rural areas and suburban areas, except otherwise provided for by the state, is collectively owned by individuals designated as resident farmers by the state. In accordance with the legal principle that land ownership is separate from the right to the use of the land, the government grants individuals and companies the rights to use parcels of land for a specified period of time. Land use rights, which are usually prepaid, are stated at cost less accumulated amortization. Amortization is provided over the life of the land use rights, using the straight-line method. The useful life is 50 years, based on the term of the land use rights.

Finite-lived assets and intangibles are reviewed for impairment testing when circumstances require. For purposes of evaluating the recoverability of long-lived assets, when undiscounted future cash flows will not be sufficient to recover an asset’s carrying amount, the asset is written down to its fair value. The long-lived assets of the Company that are subject to evaluation consist primarily of property, plant and equipment, land use rights, investments, and long-term prepaid leases. For the ~~nine~~six and three months ended ~~March~~December 31, 2021 and 2020, the Company did not recognize any impairment of its long-lived ~~assets.~~assets from the continuing operations and the discontinued operations.

The Company follows the provisions of ASC 820, “Fair Value Measurements and Disclosures.” ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which there are inputs, other than quoted prices in level, that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the asset or liability.

The carrying value of financial instruments included in current assets and liabilities approximate their fair values because of the short-term nature of these instruments.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the unaudited condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The provisions of ASC 740-10-25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for unaudited condensed consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This ASC also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Company did not have any uncertain tax positions from the continuing operations and the discontinued operations at ~~March~~December 31, 2021 and June 30, ~~2020.~~2021. The Company had not provided deferred taxes for undistributed earnings of non-U.S. subsidiaries from the continuing operations and the discontinued operations at ~~March~~December 31, 2021, as it is the Company’s policy to indefinitely reinvest these earnings in non-U.S. operations. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested earnings is not practicable.

The statute of limitations for the Company’s U.S. federal income tax returns and certain state income tax returns remains open for tax year 2017 and thereafter. As of ~~March~~December 31, 2021, the tax years ended December 31, ~~2016~~2017 through December 31, ~~2020~~2021 for the Company’s PRC subsidiaries remained open for statutory examination by PRC tax authorities.

On December 22, 2017, the “Tax Cuts and Jobs Act” (“The Act”) was enacted. Under the provisions of The Act, the U.S. corporate tax rate decreased from ~~35%~~35% to ~~21%~~21%. As the Company has a June 30 fiscal year end, the lower corporate income tax rate was phased in, resulting in a U.S. statutory federal rate of approximately 28% for our fiscal year ended June 30, 2018, and ~~21%~~21% for subsequent fiscal years. Additionally, The Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The change in rate caused the Company to re-measure its income tax liability and record an estimated income tax expense of US$744,766 for the year ended June 30, 2018. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of The Act. In accordance with SAB 118, additional work is necessary to do a more detailed analysis of The Act as well as potential correlative adjustments. Any subsequent adjustment to these amounts will be recorded to current tax expense in fiscal 2019 when the analysis is complete. The Company elects to pay the transition tax over an eight-year period using specified percentages (eight percent per year for the first five years, 15 percent in year six, 20 percent in year seven, and 25 percent in year eight).

Sales revenue represents the invoiced value of goods, net of a value-added tax (“VAT”). Before May 1, 2018, all of the Company’s products that were sold in the PRC were subject to a Chinese value-added tax at a rate of 17% of the gross sales price. After May 1, 2018, the Company was subject a tax rate of 16%, and after April 1, 2019, the tax rate was further reduced to 13% based on the new Chinese tax ~~law.~~law. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing finished products or acquiring finished products. The Company records a VAT payable or VAT receivable in the accompanying unaudited condensed consolidated financial statements.

The Company uses the United States dollar (“U.S. dollars,” “USD,” or “US$”) for financial reporting purposes. The Company’s subsidiaries and VIEs maintain their books and records in their functional currency of Renminbi (“RMB”), the currency of the PRC.

In general, for consolidation purposes, the Company translates the assets and liabilities of its subsidiaries and VIEs into U.S. dollars using the applicable exchange rates prevailing at the balance sheet date, and the statements of income and cash flows are translated at average exchange rates during the reporting periods. As a result, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the financial statements of the subsidiaries and VIEs are recorded as accumulated other comprehensive loss.

The balance sheet amounts, with the exception of equity, at ~~March~~December 31, 2021 and June 30, ~~2020~~2021 were translated at 1 RMB to ~~0.1525~~ 0.1572 USD and at 1 RMB to ~~0.1414~~ 0.1549 USD, respectively. The average translation rates applied to the income and cash flow statement amounts for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020 were 1 RMB to ~~0.1498~~ 0.1555USD and 1RMB to ~~0.1426~~ 0.1477USD, respectively. The average translation rates applied to income and cash flow statement amounts for the three months ended ~~March~~December 31, 2021 and 2020 were 1RMB to ~~0.1542~~0.1564 USD and 1RMB to ~~0.1432~~ 0.1510USD, respectively.

In accordance with ASC 470 Debt with conversion and other option, an embedded beneficial conversion feature present in a convertible instrument shall be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. Issuance costs should be allocated proportionally to the debt host and conversion feature. Deferred financing costs will be discounted and amortized subsequently, and the fair value of the convertible notes will be assessed by an independent appraiser.

Comprehensive loss consists of two components, net loss and other comprehensive ~~income (loss).~~income. The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to USD is reported in other comprehensive income ~~(loss)~~ in the unaudited condensed consolidated statements of loss and comprehensive loss.

An investment in which the Company has the ability to exercise significant influence, but does not have a controlling interest, is accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest in the voting stock between ~~20%~~20% and ~~50%~~50%, and other factors, such as representation on the board of directors, voting rights, and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate.

The Company computes loss per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net loss divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., outstanding convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. There is no0 anti-dilutive effect for the ~~nine~~six and three months ended ~~March~~December 31, 2021 and 2020.

The following table presents a reconciliation of basic and diluted loss per share for the six and three months ended December 30, 2021 and 2020:

Certain prior year balances were reclassified to conform to the current year’s presentation with consideration of reflecting the Company’s Ankang Longevity Group as discontinued operations. None of these reclassifications had an impact on reported financial position or cash flows for any of the periods presented.

In November 2019, the FASB issued ASU No. 2019-08, Compensation - Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606). The guidance identifies, evaluates, and improves areas of GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided. The amendments in that ASU expanded the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. For entities that have adopted the amendments in Update 2018-07, the updated guidance is effective for annual periods beginning after December 15, 2019, and is applicable to the Company in fiscal 2021. Early adoption is permitted. The Company adopted this ASU on July 1, 2020 and the adoption of this ASU did not have a material impact on its financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. The FASB is issuing this Update as part of its initiative to reduce complexity in accounting standards (the “Simplification Initiative”). The objective of the Simplification Initiative is to identify, evaluate, and improve areas of GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. The specific areas of potential simplification in this ASU were submitted by stakeholders as part of the Simplification Initiative. For public business entities, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company ~~expects that~~adopted this ASU on July 1, 2021 and the adoption of this ASU ~~will~~did not have a material impact on its financial statements.

In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, (“ASU 2020-03”). ASU 2020-03 improves various financial instruments topics, including the CECL Standard. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments related to Issue 1, Issue 2, Issue 4, and Issue 5 were effective upon issuance of ASU 2020-03. The amendments related to Issue 3, Issue 6, and Issue 7 were effective for the Company beginning on January 1, 2020. The Company adopted this ASU on July 1, 2020 and the adoption of this ASU did not have a material impact on its financial statements.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. The amendments in this standard can be applied anytime between the first quarter of 2020 and the fourth quarter of 2022. The Company is currently in the process of evaluating the impact of adoption of the new rules on the Company’s financial condition, results of operations, cash flows, and disclosures.

The Company believes that other recent accounting pronouncement updates will not have a material effect on the Company’s unaudited condensed ~~unaudited~~ consolidated financial statements.

	March 31, 2021			June 30, 2020			December 31, 2021			June 30, 2021

Raw materials	$	298,414		$	958,206		$	77,355		$	208,253
Work-in-process		1,757,429			529,655			21,012,413			1,232,787
Finished goods		1,737,011			1,433,423			1,254,773			1,392,754
Less: inventory reserve		(1,429,804	)		(1,121,408	)		(1,330,999	)		(1,229,158	)
Total inventories, net	$	2,363,050		$	1,799,876			21,013,542			1,604,636
Less: inventories, net, held for discontinued operations								-			281,245
Inventories, net, held for continuing operations							$	21,013,542		$	1,323,391

Work-in-process includes direct costs such as seed selection, fertilizer, labor cost, and subcontractor fees that are spent in growing agricultural products on the leased farmland, and indirect costs which include amortization of the prepayment of the farmland lease fees and farmland development costs. All the costs are accumulated until the time of harvest and then allocated to harvested crop costs when they are sold.

The Company wrote off inventory amounted to US$ 901,581 and US$ 2,629,687 during the six months ended December 31, 2021 and 2020, respectively. The Company wrote off inventory amounted to US$ 408,594 and US$ 2,629,687 during the three months ended December 31, 2021 and 2020, respectively. It was due to flood disaster caused by severe typhoon weather in autumn, which resulted in the damage and death of a large number of yew trees.

Advances to suppliers consist of mainly payments to suppliers for yew trees that have not been received.

SCHEDULE OF MOVEMENT OF ALLOWANCE FOR DOUBTFUL ACCOUNTS ON ADVANCES TO SUPPLIERS

Other current assets include loans to third parties, deposits, advances to employees, prepaid expenses and others. During the six months ended December 31, 2021, the Company entered into three of short-term loan agreements with the Company’s external business partners in an amount of US$12,200,000 for their working capital for one year, with a maturity date of July 25, 2022, September 18, 2022 and September 14, 2022, respectively. The loans bore a fixed annual interest rate of 6.0% and 10.0%. The Company accrued interest income amounted to US$411,167 during the six months ended December 31, 2021.The Company periodically reviewed the loans to the third parties as to whether their carrying values remain realizable. The Company believes that the risk associated with the above loans are relatively low based on the evaluation of the creditworthiness of the third-party debtors and the relationships with them.

	March 31, 2021			June 30, 2020			December 31, 2021			June 30, 2021

Buildings	$	8,157,093		$	11,525,458		$	1,903,762		$	8,242,357
Machinery and equipment		927,978			860,610			28,797			688,979
Motor vehicles		62,141			57,630			158,644			63,090
Office equipment		249,272			231,174			185,855			243,543
Leasehold improvement								196,163			-
Farmland leasehold improvements		3,207,353			2,974,508			3,305,713			3,256,339
		12,603,837			15,649,380
Total property and equipment, gross								5,778,934			12,494,308
Less: accumulated depreciation and amortization		(6,544,912	)		(6,159,896	)		(3,394,875	)		(6,556,839	)
Total property and equipment, net	$	6,058,925		$	9,489,484			2,384,059			5,937,469
Less: property and equipment, net, held for discontinued operations								-			3,683,525
Property and equipment, net held for continuing operations							$	2,384,059		$	2,253,944

Depreciation and amortization expense charged to the continuing operations was US$~~446,236~~214,731 and US$~~524,239~~157,240 for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020, respectively. Depreciation and amortization expense charged to the discontinued operations was US$~~135,511~~nil and US$~~104,281~~153,485 for the six months ended December 31, 2021 and 2020, respectively.

Depreciation and amortization expense charged to the continuing operations was US$133,258 and US$ 80,250 for the three months ended ~~March~~December 31, 2021 and 2020, respectively. Depreciation and amortization expense charged to the discontinued operations was US$ nil and US$ 78,368 for the three months ended December 31, 2021 and 2020, respectively.

	March 31, 2021		June 30, 2020		December 31, 2021		June 30, 2021

Blueberry farmland leasehold improvements	$	2,464,031	$	2,285,149	$	2,539,595	$	2,501,664
Yew tree planting base reconstruction		276,063		256,021		284,529		280,279
Greenhouse renovation		467,259		433,338		481,589		474,396
Total farmland leasehold improvements	$	3,207,353	$	2,974,508		3,305,713		3,256,339
Less: farmland leasehold improvement, held for discontinued operations						-		-
Total farmland leasehold improvement, held for continuing operations					$	3,305,713	$	3,256,339

Land use rights are recognized at cost less accumulated amortization. According to the Chinese laws and regulations regarding land use rights, land in urban districts is owned by the state, while land in the rural areas and suburban areas, except otherwise provided for by the state, is collectively owned by individuals designated as resident farmers by the state. However, in accordance with the legal principle that land ownership is separate from the right to the use of the land, the government grants the user a “land use right” to use the land. The Company has the land use right to use the land for 50 years and amortizes the rights on a straight-line basis over the period of 50 ~~years.~~years.

	March 31, 2021			June 30, 2020			December 31, 2021		June 30, 2021

Land use rights	$	1,696,485		$	1,573,325		$	-	$	1,722,396
Less: accumulated amortization		(432,802	)		(377,382	)		-		(448,134	)
Total land use rights, net	$	1,263,683		$	1,195,943			-		1,274,262
Less: land use rights, net, held for discontinued operations								-		1,274,262
Land use rights, net, held for continuing operations							$	-	$	-

For the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020, amortization expenses from the continuing operations were both US$ nil. For the six months ended December 31, 2021 and 2020, the Company recognized amortization expenses from the discontinued operations of US$~~28,822~~nil and US$~~27,720,~~18,982, respectively.

For the three months ended ~~March~~December 31, 2021 and 2020, amortization expenses from the continuing operations were both US$ nil. For the three months ended December 31, 2021 and 2020, the Company recognized amortization expenses from the discontinued operations of US$~~9,840~~nil and US$~~9,293,~~9,682, respectively.

The Company acquired distribution rights to distribute branded products of Daiso 100-yen shops through the acquisition of Tianjin Tajite. As this distribution right is difficult to acquire and will contribute significant revenue to Tianjin Tajite, such distribution rights were identified and valued as an intangible asset in the acquisition of Tianjin Tajite. The distribution rights, which have no expiration date, have been determined to have an indefinite life. Since the distribution rights have an indefinite life, the Company will evaluate them for impairment at least annually or earlier if determined necessary. ~~As of March~~During the six months ended December 31, 2021, the management performed evaluation on the impairment of distribution rights. Due to the lower than expected revenue and profit, and unfavorable business environment, the management fully recorded an impairment loss on distribution rights ~~were evaluated at RMB7,380,000 (US$1,125,603).~~of Tianjin Tajite.

In 2013, Ankang Longevity Group entered into two equity investment agreements with Shaanxi Pharmaceutical Group Pai’ang Medicine Co. Ltd. (“Shaanxi Pharmaceutical Group”), a Chinese state-owned pharmaceutical enterprise, to invest a total of ~~RMB6.8~~RMB6.8 million (approximately US$1.0 million) for a ~~49%~~49% equity interest in a pharmacy retail company called Shaanxi Pharmaceutical Sunsimiao Drugstores Ankang Retail Chain Co., Ltd. (“Sunsimiao Drugstores”), and a ~~49%~~49% equity interest in a pharmaceutical wholesale distribution company named Shaanxi Pharmaceutical Holding Group Longevity Pharmacy Co., Ltd. (“Shaanxi Longevity Pharmacy”). These two entities were incorporated to collaborate with Shaanxi Pharmaceutical Group to expand sales to regional hospitals and clinics and to establish the presence of retail pharmacies under the brand name “Sunsimiao.” The investments were accounted for using the equity method because Ankang Longevity Group has significant influence, but no control of these two entities. The Company’s discontinued operations, Ankang Longevity Group recorded US$ nil and a loss of US$~~3,753,280 and an income of US$97,528~~1,975,729 for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020, respectively, and ~~recorded a loss of~~ US$~~1,777,551~~ nil and a loss of US$~~43,054~~1,991,016 for the three months ended ~~March~~December 31, 2021 and 2020, respectively, from the investments, which was included in ~~“Income~~“Loss from ~~equity method investments”~~discontinued operations, net of taxes” in the unaudited condensed consolidated statements of loss and comprehensive loss. (See Note ~~11.)~~14) On March 5, 2021, Ankang Longevity Group entered into two equity investment transfer agreements with a third-party company to sell all of its ~~49%~~49% equity interest in Sunsimiao Drugstores and its ~~49%~~49% equity interest in Shaanxi Longevity Pharmacy for a total consideration of ~~RMB6.86~~RMB6.86 million (approximately US$1.0 million), and the full amount had been received by March 31, 2021. Upon the transfer of these two equity investments, Ankang Longevity Group recorded a loss of US$1,748,459, which was included in the investment loss for the nine and three months ended March 31, 2021 as mentioned above.

In 2013, Ankang Longevity Group entered into a supplemental agreement with Shaanxi Pharmaceutical Group. According to the supplemental agreement, new 49% equity investment companies established by Shaanxi Pharmaceutical Group and Ankang Longevity Group are required to exclusively purchase certain raw materials and drug products from Shaanxi Pharmaceutical Group. In return, Shaanxi Pharmaceutical Group has agreed to compensate Ankang Longevity Group with a purchase rebate of 7%7% of the total purchases made from Shaanxi Pharmaceutical Group. For the ~~nine~~six and three months ended ~~March~~December 31, 2021 and 2020, no0 income was recognized by Ankang Longevity Group from this supplemental agreement in addition to its 49% share of the income from the equity investment companies.

On October 21, 2013, the Company, through its controlled subsidiaries, Zhisheng Freight and Zhisheng Agricultural, entered into an agreement with an unrelated third party, Zhejiang Zhen’Ai Network Warehousing Services Co., Ltd. (“Zhen’Ai Network”), and invested ~~RMB14.5~~RMB14.5 million (approximately US$2.2 million) into Tiancang Systematic Warehousing project (“Tiancang Project”) operated by Zhen’Ai Network. The Tiancang Project is an online platform established to provide comprehensive warehousing and logistic solutions to companies involved in E-commerce. The Company is entitled to ~~29%~~29% of Tiancang Project’s after-tax net income annually, less ~~30%~~30% statutory reserve and a ~~10%~~10 % employee welfare fund contribution. When the amount of the accumulated statutory reserve reaches ~~30%~~30% of the total investment for the Tiancang Project, no additional appropriation to the statutory reserve is required. The Company considered it unlikely to obtain any investment income in the future, and decided tothe make a full impairment on this investment during the year ended June 30, 2020.

Guangyuan entered into an equity investment agreement with Shanxi Pharmaceutical Group Yushe Pharmaceutical Development Co., Ltd. (“Yushe Pharmaceutical”), a Chinese pharmaceutical enterprise to invest a total of RMB 2.0 million (approximately US$ 0.3 million) for a 20% equity interest in Yushe Pharmaceutical. The investment is accounted for using the equity method because Guangyuan has significant influence, but no control of the entity. The Company recorded a loss of US$ 16,153 and a loss of US$ 11,967 for the six and three months ended December 31, 2021 from the investment, respectively, which was included in “Loss from equity method investments” in the unaudited condensed consolidated statements of loss and comprehensive loss. The Company considered it unlikely to obtain any investment income in the future, and decided the make a full impairment on this investment as of December 31, 2021.

On August 31, 2021, the Company entered into a capital injection agreement with the other shareholders of Shanghai Gaojing Private Fund Management (“Gaojing Private Fund”), a Chinese private fund management company, to complete the injection of a total RMB 4.8 million (approximately US$ 0.75 million) for its 32% equity interest in Gaojing Private Fund. The investment is accounted for using the equity method because the Company has significant influence, but no control of the entity. As December 31, 2021, a total of US$ 0.75 million was fully injected by the Company. The Company recorded a loss of US$ 90,835 and a loss of US$ 67,101 for the six and three months ended December 31, 2021 from the investment, respectively, which was included in “Loss from equity method investments” in the unaudited condensed consolidated statements of loss and comprehensive loss.

The Company’s investments in unconsolidated entities consist of the following:

Summarized financial information of unconsolidated entities from continued operations is as follows:

SCHEDULE OF FINANCIAL INFORMATION OF UNCONSOLIDATED ENTITIES FROM CONTINUED OPERATIONS

	March 31, 2021		June 30, 2020		December 31, 2021		June 30, 2021

Current assets	$	-	$	38,546,879	$	750,090	$	-
Noncurrent assets		-		324,725
Current liabilities		-		29,671,104		29,809		-

						2021			2020
	For the nine months ended March 31,					For the six months ended December 31,
	2021			2020		2021			2020

Net sales	$	21,199,520		$	23,490,467	$	314,121		$	-
Gross profit		1,748,858			2,236,670		(596	)		-
Income (loss) from operations		(4,065,801	)		195,147
Net income (loss)		(4,091,472	)		199,037
Income from operations							(339,024	)		-
Net income							(364,624	)		-

Summarized financial information of unconsolidated entities from discontinued operations is as follows:

SCHEDULE OF FINANCIAL INFORMATION OF UNCONSOLIDATED ENTITIES FROM DISCONTINUED OPERATIONS

Effective July 1, 2019, the Company adopted the new lease accounting standard using the optional transition method, which allowed it to continue to apply the guidance under the lease standard in effect at the time in the comparative periods presented. In addition, the Company elected the package of practical expedients, which allowed it to not reassess whether any existing contracts contain a lease, to not reassess historical lease classification as operating or finance leases, and to not reassess initial direct costs. The Company has not elected the practical expedient to use hindsight to determine the lease term for its leases at transition. The Company has also elected the practical expedient, allowing it to not separate the lease and non-lease components for all classes of underlying assets. Adoption of this standard resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities of ~~$3,587,788~~$3,587,788 and ~~$450,123,~~$450,123, respectively, as of July 1, 2019 with no impact on accumulated deficit. Financial position for reporting periods beginning on or after July 1, 2019, are presented under the new guidance, while prior-period amounts are not adjusted and continue to be reported in accordance with previous guidance.

The Company leases offices space under non-cancelable operating leases, with terms ranging from one to six years. In addition, the Zhisheng VIEs and Guangyuan entered into several farmland lease contracts with farmer cooperatives to lease farmland in order to plant and grow organic vegetables, fruit, and Chinese yew trees, fast-growing bamboo willows and scenic greening trees. The lease terms vary from ~~five~~5 years to 24 years. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of ROU assets and lease liabilities. Lease expenses for lease payment are recognized on a straight-line basis over the lease term. Leases with initial terms of 12 months or less are not recorded on the balance ~~sheet.~~sheet.

When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The table below presents the operating lease related assets and liabilities from the continuing operations recorded on the balance sheets. No operating lease related assets and liabilities from the discontinued operations.

	March 31, 2021		June 30, 2020		December 31, 2021		June 30, 2021

ROU lease assets	$	3,022,178	$	3,227,895	$	5,055,410	$	3,585,703

Operating lease liabilities – current		97,560		97,633		1,105,641		434,411
Operating lease liabilities – non-current		449,162		401,891		1,744,720		352,863
Total operating lease liabilities	$	546,722	$	499,524	$	2,850,361	$	787,274

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of ~~March~~December 31, 2021 and June 30, ~~2020:~~2021:

SCHEDULE OF WEIGHTED AVERAGE REMAINING LEASE TERMS AND DISCOUNT RATES FOR OPERATING LEASES

	March 31, 2021		June 30, 2020		December 31, 2021			June 30, 2021

Remaining lease term and discount rate:
Weighted average remaining lease term (years)		9.21		9.26		5.38			7.25
Weighted average discount rate		5.0		5.0		5.20	%		5.00	%

Rent expenses totaled US$~~337,128~~464,207 and US$~~307,503~~224,957 from the continuing operations for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020, respectively. Rent expenses totaled US$~~112,171~~233,659 and US$~~106,175~~111,842 from the continuing operations for the three months ended ~~March~~December 31, 2021 and 2020, respectively.

Rent expenses were US$ nil from the discontinued operations for the six and three months ended December 31, 2021 and 2020, respectively.

The following is a schedule, by years, of maturities of lease liabilities as of ~~March~~December 31, 2021:

Remainder of 2021	$	112,118
2022		343,437

Remainder of 2022				$	1,015,937
2023		341,200			1,093,610
2024		341,200			1,084,266
2025		341,200			578,180
2026					244,095
Thereafter		1,603,424			1,002,537
Total lease payments		3,082,579			5,018,625
Less: imputed interest		(60,398	)		(230,578	)
Less: prepayments		(2,475,459	)		(1,937,686	)
Present value of lease liabilities	$	546,722		$	2,850,361

No short-terms loan was outstanding as of December 31, 2021, as the Company disposed Ankang Group on July 5, 2021.

Lender	March 31, 2021		Maturity Date	Int. Rate/Year			June 30, 2021		Maturity Date	Int. Rate/Year
Agricultural Bank of China-a^		1,525,208	2022/2/27		5.66	%		1,548,502	2022/2/27		5.66	%
Agricultural Bank of China-b		305,041	2021/9/1		5.66	%
Agricultural Bank of China-b#								309,700	2022/9/1		5.66	%
Total short-term loans	$	1,830,249						1,858,202
Less: short-term loans, held for discontinued operations								1,858,202
Short-term loans, held for continuing operations							$	-

The loans outstanding were guaranteed by the following properties, entities or individuals:

Interest expenses from continuing operations were US$ nil for the six and three months ended December 31, 2021 and 2020, respectively.

The Company recorded interest expenses from discontinued operations of US$~~88,894~~nil and US$~~84,432~~63,267 for the ~~nine~~six months ended December 31, 2021 and 2020, respectively. The annual weighted average interest rates from discontinued operations were ~~5.36%~~nil and ~~5.03%~~5.30% for the ~~nine~~six months ended December 31, 2021 and 2020, respectively.

The Company recorded interest expenses from discontinued operations of US$~~25,627~~nil and US$~~26,166~~33,645 for the three months ended December 31, 2021 and 2020, respectively. The annual weighted average interest rates from discontinued operations were ~~5.50%~~nil and ~~4.53%~~5.30% for the three months ended December 31, 2021 and 2020, respectively.

On December 12, 2016, the Company entered into a merger and acquisition agreement with Tianjin Tajite, a professional e-commerce company distributing Luobuma fabric commodities and branded products of Daiso 100-yen shops, based in Tianjin, China, to acquire 51 % equity interests in Tianjin Tajite.

Pursuant to the agreement, the Company made a payment of ~~RMB14,000,000~~RMB14,000,000 (approximately US$2.1 million) at the end of December 2016 as the total consideration for the acquisition of Tianjin Tajite.

On October 26, 2017, the Company completed the acquisition of Tianjin Tajite. The acquisition provides a unique opportunity for the Company to enter the market of Luobuma fabric commodities and branded products of Daiso 100-yen shops.

The transaction was accounted for in accordance with the provisions of ASC 805-10, Business Combinations. The Company retained independent appraisers to advise management in the determination of the fair value of the various assets acquired and liabilities assumed. The values assigned in these financial statements represents management’s best estimate of fair values as of the acquisition date.

As required by ASC 805-20, Business Combinations—Identifiable Assets and Liabilities, and Any Noncontrolling Interest, management conducted a review to reassess whether they identified all the assets acquired and all the liabilities assumed, and followed ASC 805-20’s measurement procedures for recognition of the fair value of net assets acquired.

The excess of the purchase price over the aggregate fair value of assets acquired was allocated to goodwill which amounted to ~~RMB14,010,195~~RMB14,010,195 (approximately US$2.1 million). The results of operations of Tianjin Tajite have been included in the consolidated statements of operations from the date of acquisition.

In June 2018, the management performed evaluation on the impairment of goodwill. Due to the lower than expected revenue and profit, and unfavorable business environment, the management fully recorded an impairment loss on goodwill of Tianjin Tajite.

The fair value of distribution rights and its estimated useful lives from continuing operations are as follows:

~~(a) The~~During the six months ended December 31, 2021, the management performed evaluation on the impairment of distribution rights. Due to the lower than expected revenue and profit, and unfavorable business environment, the management fully recorded an impairment loss on distribution rights of Tianjin Tajite.

Under ASC 805-10, acquisition-related costs (i.e., advisory, legal, valuation, and other professional fees) are not included as a component of consideration transferred, but are expensed in the periods in which the costs are incurred.

On June 8, 2021, Tenet-Jove entered into a Restructuring Agreement with ~~no expiration~~various parties. Pursuant to the terms of the Restructuring Agreement, (i) the Company transferred all of its rights and interests in Ankang Longevity to Yushe County Guangyuan Forest Development Co., Ltd. (“Guangyuan”)’s Shareholders in exchange for the control of 100% of equity interests in Guangyuan, which composes of one group of similar identifiable assets; (ii) Tenet-Jove entered a Termination Agreement with Ankang Longevity and the Ankang Shareholders; (iii) as a consideration to the Restructuring Agreement and based on a valuation report on the equity interests of Guangyuan issued by an independent third party, Tenet-Jove relinquished all of its rights and interests in Ankang Longevity and transferred those rights and interests to the Guangyuan Shareholders; and (iv) Guangyuan and the Guangyuan Shareholders entered into a series of variable interest entity agreements with Tenet-Jove. After signing of the Restructuring Agreement, the Company and the shareholders of Ankang and Guangyuan actively carried out the transferring of rights and interests in Ankang and Guangyuan, and the transferring was completed subsequently on July 5, 2021. Afterwards, with the completion of all other follow-ups works, on August 16, 2021, the Company, through its subsidiary Tenet-Jove, completed the previously announced acquisition pursuant to the Restructuring Agreement dated June 8, 2021.

The management determined that July 5, 2021 was the acquisition date ~~has been determined~~of Guangyuan. The acquisition provides a unique opportunity for the Company to ~~have an indefinite life.~~enter the market of planting fast-growing bamboo willows and scenic greening trees.

The transaction was accounted for in accordance with the provisions of ASC 805-10, Business Combinations. The Company retained independent appraisers to advise management in the determination of the fair value of the various assets acquired and liabilities assumed. The values assigned in these financial statements represent management’s best estimate of fair values as of the Acquisition Date.

The following table summarizes the allocation of estimated fair values of net assets acquired and liabilities assumed:

Under ASC 805-10, acquisition-related costs (i.e., advisory, legal, valuation and other professional fees) are not included as a component of consideration transferred, but are expensed in the periods in which the costs are incurred. Acquisition-related costs were ~~$nil~~US$ nil in the ~~nine~~six and three months ended ~~March~~December 31, 2021.

The Company has included the operating results of Guangyuan in its unaudited condensed consolidated financial statements since the Acquisition Date. US$ nil in net sales and US$ 622,801 in net loss of Tianjin Guangyuan were included in the unaudited condensed consolidated financial statements for the six months ended December 31, 2021. US$ nil in net sales and US$ 302,896 in net loss of Tianjin Guangyuan were included in the unaudited condensed consolidated financial statements for the three months ended December 31, 2021.

The Company has made temporary advances to certain stockholders of the Company and to other entities that are either owned by family members of those stockholders or to other entities that the Company has investments in. Those advances are due on demand and non-interest bearing.

As of ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, the outstanding amounts due from related parties consisted of the following:

	March 31, 2021		June 30, 2020		December 31, 2021		June 30, 2021

Yang Bin	$	45,756	$	42,434	$	47,160	$	46,454
Beijing Huiyinansheng Asset Management Co., Ltd (a.)		22,878		21,217		-		23,228
Lin Baolin						110,039		-
Wang Qiwei		61,773		57,288		63,667		62,716
Shanghai Gaojing Private Fund Management (b.)						301,820		-
Zhongjian Yijia Health Technology (Qingdao) Co., Ltd. (c.)						1,759,025		-
Zhongjian (Qingdao) International Logistics Development Co., Ltd. (d.)						4,749,672		-
Total due from related parties	$	130,407	$	120,939		7,031,383		132,398
Less: due from related parties, held for discontinued operations						-		-
Due from related parties, held for continuing operations					$	7,031,383	$	132,398

As of ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, the Company had related party payables of US$~~1,131,376~~4,099,934 and US$~~1,355,919,~~1,159,407, respectively, mainly due to the principal stockholders or certain relatives of the stockholders of the Company who ~~lent~~lend funds for the Company’s operations. The payables are unsecured, non-interest bearing, and due on demand.

	March 31, 2021		June 30, 2020		December 31, 2021		June 30, 2021

Wu Yang	$	97,690	$	90,598	$	100,685	$	99,183
Wang Sai		91,293		90,629		82,142		91,433
Chen Jiping		-		3,024
Zhou Guocong		547,974		648,308		-		551,314
Li Baolin		228,781		353,619		235,797		232,275
Zhao Min		165,638		169,741		215,092		185,202
Zhou Shunfang						3,466,218		-
Total due to related parties	$	1,131,376	$	1,355,919		4,099,934		1,159,407
Less: due to related parties, held for discontinued operations						-		-
Due to related parties, held for continuing operations					$	4,099,934	$	1,159,407

For the ~~nine~~six and three months ended ~~March~~December 31, 2021 ~~the~~and 2020, no sales to related parties or balance of accounts receivables were from continuing operations. The Company recorded sales to Shaanxi Pharmaceutical Group from the discontinued operations, a related party (see Note 7)10), of US$~~1,606,448~~nil and US$~~311,249, respectively. For~~1,295,199 for the ~~nine~~six months ended December 31, 2021 and 2020, respectively, and US$ nil and US$ 535,833 for the three months ended ~~March~~December 31, ~~2020, the Company recorded sales to Shaanxi Pharmaceutical Group, a related party, of US$2,128,575~~2021 and ~~US$582,726,~~2020, respectively. As of ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, the balance of accounts receivable due from Shaanxi Pharmaceutical Group from discontinued operations was US$nil and US$~~1,567,160,~~551,237, respectively.

On June 16, 2021, the Company entered into a Securities Purchase Agreement pursuant to which the Company issued an unsecured convertible promissory note with a one-year maturity (“the Note”) to an institutional accredited investor Streeterville Capital, LLC (“Investor”). The Note has the original principal amount of US$3,170,000 and Investor gave consideration of US$3.0 million, reflecting original issue discount of US$150,000 and Investor’s legal fee of US$20,000.

On July 16, 2021, the Company entered into a Securities Purchase Agreement (the “July Agreement”) pursuant to which the Company issued two unsecured convertible promissory notes with a one-year maturity term (the “Notes”) to the same Investor. The first convertible promissory note (“Note #1”) has an original principal amount of US$3,170,000.00 and the Investor gave consideration of US$3.0 million, reflecting original issue discount of US$150,000 and Investor’s legal fee of US$20,000. The second convertible promissory note (“Note #2”) has an original principal amount of US$4,200,000.00 and Investor gave consideration of US$4.0 million, reflecting original issue discount of US$200,000.

On August 19, 2021, the Company entered into a Securities Purchase Agreement (the “Agreement”) pursuant to which the Company issued an unsecured convertible promissory note with a one-year maturity term (the “Note”) to the same Investor. The Note has an original principal amount of US$10,520,000.00 and Investor gave consideration of US$10.0 million, reflecting original issue discount of US$500,000 and Investor’s legal fee of US$20,000.

For the above-mentioned convertible promissory notes issued, interest accrues on the outstanding balance of these notes at 6% per annum. The Investor may redeem all or any part of the outstanding balance of the note, at any time after six months from the issue date upon three trading days’ notice, in cash or converting into shares of the Company’s common stock at a price equal to 80% multiplied by the lowest daily volume weighted average price (“VWAP”) during the fifteen trading days immediately preceding the applicable redemption conversion, subject to certain adjustments and ownership limitations specified in the note. Following the receipt of a redemption notice, the Company may either ratify Investor’s proposed allocation in the applicable redemption notice or elect to change the allocation by written notice to Investor within twenty-four (24) hours of its receipt of such redemption notice, so long as the sum of the cash payments and the amount of redemption conversions equal the applicable redemption amount. As the date of this report, the Company received principal in full from the Investor. The Company anticipates using the proceeds for general working capital purposes.

As of December 31, 2021, the Company received principal in full from the Investor. For the six months ended December 31, 2021, a total of $854,318 in amortization of the debt discounts was recorded on the unaudited condensed consolidated statements of loss and comprehensive loss. For the three months ended December 31, 2021, a total of $395,340 in amortization of the debt discounts was recorded on the unaudited condensed consolidated statements of loss and comprehensive loss.

As of December 31, 2021, shares of the Company’s common stock totaling 1,258,450 were issued by the Company to the Investor equaling principal and interests amounted to $6,000,000, and the Notes balance was $14,840,874, with a carrying value of $15,474,778, net of deferred financing costs of $633,904 was recorded in the accompanying unaudited condensed consolidated balance sheets.

The Company is subject to income taxes on an entity basis on income arising in or derived from the location in which each entity is domiciled.

Shineco is incorporated in the United States and has no operating activities. Tenet-Jove and its VIEs are governed by the Income Tax Laws of the PRC, and are currently subject to tax at a statutory rate of ~~25%~~25% on taxable income. Two VIEs and Xinjiang Taihe receive a full income tax exemption from the local tax authority of the PRC as agricultural enterprises as long as the favorable tax policy remains unchanged.

On December 22, 2017, The Act was enacted. The Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The change in rate has caused the Company to re-measure its income tax liability and record an estimated income tax expense of US$744,766 for the year ended June 30, 2018. In accordance with SAB 118, additional work is necessary to do a more detailed analysis of The Act as well as potential correlative adjustments. Any subsequent adjustment to these amounts will be recorded to current tax expense in fiscal 2019 when the analysis is complete. The Company elects to pay the transition tax over an eight-year period using specified percentages (eight percent per year for the first five years, 15 percent in year six, 20 percent in year seven, and 25 percent in year eight).

i)The components of the income tax expenses ~~(benefits)~~ were as follows:

	March 31, 2021		June 30, 2020			December 31, 2021		June 30, 2021

Beginning balance	$	1,185,655	$	519,671		$	1,810,023	$	1,185,655
Current year addition		884,162		680,901
Current year/period addition							150,455		512,028
Exchange difference		92,814		(14,917	)		27,444		112,340
Ending balance	$	2,162,631	$	1,185,655			1,987,922		1,810,023
Less: valuation allowance, held for discontinued operations							-		(1,362,329	)
Valuation allowance, held for continuing operations						$	1,987,922	$	447,694

The Company is subject to a VAT for selling merchandise. The applicable VAT rate was 17% before May 1, 2018 for products sold in the PRC and decreased to 16% thereafter, and after April 1, 2019, the tax rate was further reduced to 13% based on the new Chinese tax law. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under commercial practice in the PRC, the Company pays VAT based on tax invoices issued. The tax invoices may be issued subsequent to the date on which revenue is recognized, and there may be a considerable delay between the date on which the revenue is recognized and the date on which the tax invoice is issued.

In the event that the PRC tax authorities dispute the date on which revenue is recognized for tax purposes, the PRC tax office has the right to assess a penalty based on the amount of the taxes which are determined to be late or deficient, and the penalty will be expensed in the period if and when a determination is made by the tax authorities. There were no0 assessed penalties during the ~~nine~~six and three months ended ~~March~~December 31, 2021 and ~~2020.~~2020, respectively.

	March 31, 2021		June 30, 2020		December 31, 2021		June 30, 2021

Income tax payable	$	3,326,884	$	3,424,043	$	1,570,333	$	3,376,499
Value added tax payable		561,854		522,615		40,931		73,390
Business tax and other taxes payable		6,466		6,026		5,496		8,573
Total tax payable		3,895,204		3,952,684		1,616,760		3,458,462
Less: current portion		3,329,182		3,386,662
Less: tax payable, held for discontinued operations						-		(1,743,673	)
Tax payable, held for continuing operations					$	1,616,760	$	1,714,789

Income tax payable - current portion					$	1,110,319	$	2,952,021
Less: income tax payable - current portion, held for discontinued operations						-		(1,743,673	)
Income tax payable - current portion, held for continuing operations					$	1,110,319	$	1,208,348

Income tax payable - noncurrent portion	$	566,022	$	566,022	$	506,441	$	506,441
Less: income tax payable - noncurrent portion, held for discontinued operations						-		-
Income tax payable - noncurrent portion, held for continuing operations					$	506,441	$	506,441

On September 28, 2016, the Company completed its initial public offering of 190,354 shares of common stock at a price of US$40.50 per share for gross proceeds of US$7.7 million and net proceeds of approximately US$5.4 million. The Company’s common shares began trading on September 28, 2016 on the NASDAQ Capital Market under the symbol “TYHT.”

The Company is required to make appropriations to reserve funds, comprising the statutory surplus reserve and discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”).

Appropriations to the statutory surplus reserve are required to be at least ~~10%~~10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to ~~50%~~50% of the entities’ registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the board of directors. As of ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, the balance of the required statutory reserves was US$4,198,107 and US$4,198,107, respectively.

On September 3, 2019, the Company granted 184,763 restricted shares of common stock to its employees as compensation cost for awards. The fair value of the restricted shares was US$1,022,660 based on the closing stock price US$5.54 at September 3, 2019. These restricted shares vested immediately on the grant date.

On September 5, 2019, the Company entered into a securities purchase agreement with select investors whereby the Company agreed to sell, and the investors agreed to purchase, up to 310,977 shares of common stock at a purchase price of US$4.68 per Share. The Company received net proceeds of US$~~1,500,203.~~1,500,203. The offering was made pursuant to the Company’s effective registration statement on Form S-3 (Registration Statement No. 333-221711) previously filed with the Securities and Exchange Commission and a prospectus supplement thereunder.

On July 10, 2020, the Company’s stockholders approved a 1-for-9 reverse stock split of the Company’s common stock, par value ~~$0.001~~$0.001 per share, with a market effective date of August 14, 2020 (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each nine pre-split shares of common stock outstanding automatically combined and converted to one issued and outstanding share of common stock without any action on the part of stockholders. No fractional shares of common stock were issued to any stockholders in connection with the Reverse Stock Split. Each stockholder was entitled to receive one share of common stock in lieu of the fractional share that would have resulted from the Reverse Stock Split. The number of the Company’s authorized common stock remained at 100,000,000 shares, and the par value of the common stock following the Reverse Stock Split remained at ~~$0.001~~$0.001 per share. As of August 14, 2020 (immediately prior to the effective date), there were 27,333,428 shares of common stock outstanding, and the number of common stock outstanding after the Reverse Stock Split was 3,037,048, taking into account of the effect of rounding fractional shares into whole shares. As a result of the Reverse Stock Split, the Company’s shares and per share data as reflected in the unaudited condensed consolidated financial statements were retroactively restated as if the transaction occurred at the beginning of the periods presented.

On December 10, 2020, the Company entered into a securities purchase agreement with select investors whereby the Company agreed to sell, and the investors agreed to purchase, up to 604,900 shares of common stock at a purchase price of US$2.73 per share. The Company received net proceeds of US$~~1,643,087.~~1,643,087. The offering was made pursuant to the Company’s effective registration statement on Form S-3 (Registration Statement No. 333-221711) previously filed with the Securities and Exchange Commission and a prospectus supplement thereunder.

On January 27, 2021, the Company issued 364,445 shares of common stock to three investors at a price of US$3.0 per share. The Company received net proceeds of US$~~1,093,355.~~1,093,355.

On April 10, 2021, the Company issued 3,872,194 shares of common stock to selected investors at a price of US$3.2 per share. The Company received net proceeds of US$7,981,204 and US$3,024,000 was outstanding as of December 31, 2021.

On December 6, 2021, the Company entered into a securities purchase agreement with GHS Investments, LLC (“GHS”). Under the Purchase Agreement, the Company sold GHS 291,775 shares of its common stock at a per share purchase price of $6.8546 for gross proceeds of $2,000,000. After the deduction of issuance cost, the Company received net proceeds of US$1,970,000.

The Company maintains principally all bank accounts in the PRC. The cash balance held in the PRC bank accounts from the continuing operations was US$~~25,831,506~~ 16,616,363 and US$~~32,358,252~~ 16,333,102 as of ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, respectively. The cash balance held in the PRC bank accounts from the discontinued operations was US$ nil and US$12,676,416 as of December 31, 2021 and June 30, 2021, respectively.

During the ~~nine~~six and three months ended ~~March~~December 31, 2021 and 2020, almost ~~100%~~100% of the Company’s assets were located in the PRC and ~~100%~~100% of the Company’s ~~revenue was~~revenues were derived from its subsidiaries and VIEs located in the PRC.

For the ~~nine~~six months ended ~~March~~December 31, 2021, six customers accounted for approximately 85% of the Company’s total sales from the continuing operations, respectively. For the three months ended December 31, 2021, seven customers accounted for approximately 93% of the Company’s total sales from the continuing operations, respectively. At December 31, 2021, four customers accounted for approximately 17%, 15%, 14%, and 10% of the Company’s total sales, respectively. For the three months ended March 31, 2021, three customers accounted for approximately 16%, 13%, and 12% of the Company’s total sales, respectively. At March 31, 2021, five customers accounted for approximately 72%70% of the Company’s accounts ~~receivable.~~receivable from the continuing operations.

For the ~~nine~~six months ended ~~March 31, 2020, two customers accounted for approximately 14% and 11% of the Company’s total sales, respectively. For the three months ended March~~December 31, 2020, four customers accounted for approximately ~~19%, 16%, 14%, and 10%~~75% of the Company’s total sales from the continuing operations, respectively.

For the ~~nine~~three months ended ~~March~~December 31, 2020, seven customers accounted for approximately 96% of the Company’s total sales from the continuing operations, respectively. For the six months ended December 31, 2020, six customers accounted for approximately 100% of the Company’s total sales from the discontinued operations, respectively. For the three months ended December 31, 2020, six customers accounted for approximately 100% of the Company’s total sales from the discontinued operations, respectively.

For the six months ended December 31, 2021, one vendor accounted for approximately 93% of the Company’s total purchases from the continuing operations. For the three months ended December 31, 2021, two vendors accounted for approximately ~~53%~~83% and ~~11%~~17% of the Company’s total purchases from the continuing operations, respectively.

For the six months ended December 31, 2020, one vendor accounted for approximately 96% of the Company’s total purchases from the continuing operations, respectively. For the three months ended ~~March~~December 31, ~~2021, two vendors~~2020, one vendor accounted for approximately ~~48% and 10%~~94% of the Company’s total purchases ~~respectively.~~

~~For~~from the ~~nine months ended March 31, 2020, four vendors accounted for approximately 34%, 16%, 11%, and 10% of the Company’s total purchases,~~continuing operations, respectively. For the ~~three~~six months ended ~~March~~December 31, 2020, six vendors accounted for approximately ~~22%, 21%, 17%, 15%, 13%, and 12%~~100% of the Company’s total purchases from the discontinued operations, respectively. For the three months ended December 31, 2020, six vendors accounted for approximately 100% of the Company’s total purchases from the discontinued operations, respectively.

On May 16, 2017, Bonwick Capital Partners, LLC (the “Plaintiff”) commenced a lawsuit (Case No. 1:17-cv-03681-PGG) against the Company in the United States District Court for the Southern District of New York. Plaintiff alleged that the Company entered into an agreement with the Plaintiff, pursuant to which the Plaintiff was to provide the Company with financial advisory services in connection with the Company’s initial public offering in the United States. The Plaintiff alleged that the Company breached the Agreement and seek money damages up to US$6 million. In March 2021, the Company entered into a Settlement Agreement and Release with the Plaintiff, pursuant to which the Company paid the Plaintiff a total sum of US$47,500 as settlement payment, and upon acceptance of the settlement payment from the Company, the Plaintiff waived, released, and forever discharged the Company from all past and future claims.

On May 16, 2017, Mrs. Guiqin Li (the “Plaintiff”) commenced a lawsuit against the Company in the People’s Court of Chongqing Pilot Free Trade Zone of China. Plaintiff alleged that due to the misguidance given by the Company’s security trading department, the Plaintiff did not manage to complete the sales of the Company’s common stock on the day of the Company’s initial public offering in the United States. As the price of the Company’s common stock continued falling after initial public offering, the Plaintiff incurred losses and hence seek money damages against the Company. Based on the judgment of the first trail, the Company required to pay the Plaintiff a settlement payment, including the money compensation, interests and other legal fees. As of December 31, 2021, the Company accrued a total sum of US$781,700 (approximately RMB 5.0 million) for this lawsuit. The Company made the appeal to the People’s Court, and will vigorously defend itself and seek for less settlement payment in the second trail of this litigation.

On November 26, 2021, the Company filed a complaint in the Supreme Court of the State of New York, New York County against Lei Zhang and Yan Li, as defendants, and Transhare Corporation, as a nominal defendant, asserting that defendants had not paid for restricted shares of the Company stock pursuant to stock purchase agreements they executed with the Company. In December, defendants filed an answer and counterclaim against the Company, which they amended on January 27, 2022 after the Company moved to dismiss their counterclaims. They claimed that the Company made false and materially misleading statements, specifically regarding the sale of the shares and the removal of their restrictive legends. Defendants seek a declaratory judgment, indemnification, and money damages of at least $9 million, punitive damages of $10 million, plus interest, costs, and fees. The Company anticipates moving to dismiss the counterclaims in March, 2022. The outcome of this legal proceeding is uncertain at this point because of the many questions of fact and law that may arise. The Company intends to recover on its claims, and vigorously defend itself in this litigation. As of December 31, 2021, the total unpaid restricted shares issued to Lei Zhang and Yan Li by the Company was 982,500 shares, and the subscription receivable was amounted to US$3,024,000 which was recorded on the unaudited condensed consolidated balance sheet.

ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Group’s internal organizational management structure as well as information about geographical areas, business segments, and major customers in for details on the Group’s business segments.

The Company’s chief operating decision maker has been identified as the Chief Executive Officer who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of the Group. Based on management’s assessment, the Company has determined that it has ~~three~~3 operating segments according to its major products and locations as follows:

The operating companies of this segment, namely Tenet-Jove and Tenet Huatai, specialize in Luobuma growing, development and manufacturing of relevant products, as well as purchasing Luobuma raw materials processing.

~~This segment’s operations are focused in the north region of Mainland China, mostly carried out in Beijing, Tianjin, and Xinjiang.~~

The operating companies of this segment, namely AnKang Longevity Group and its subsidiaries, process more than 600 kinds of Chinese medicinal herbal products with an established domestic sales and distribution network.

~~Ankang Longevity Group is also engaged in the retail pharmacy business and the operating revenue, which is not material, is also included in this segment.~~

The operating companies of this segment, the Zhisheng VIEs, are engaged in the business of growing and distributing green and organic vegetables and fruits as well as providing logistics services for distributing agricultural products. This segment has been focusing its efforts on the growing and cultivating of Chinese yew trees (formally known as “taxus media”), a small evergreen tree whose branches can be used for the production of medications believed to be anti-cancer and the tree itself can be used as an ornamental indoor bonsai tree, which are known to have the effect of purifying air quality.

The operations of this segment are located in the East and North regions of Mainland China, mostly carried out in Shandong Province and in Beijing, where the Zhisheng VIEs have newly developed over 100 acres of modern greenhouses for cultivating yew trees and other plants.

The other operating companies of this segment, Guangyuan, is engaged in the business of landscaping, afforestation, road greening, scenic greening, garden engineering, landscaping construction, and green afforestation, especially in planting fast-growing bamboo willows and scenic greening trees. The operations of this segment are located in the North regions of Mainland China, mostly carried out in Shanxi Province, where Guangyuan has developed over 350 acres of farmland for cultivating bamboo willows and other plants.

The following table presents summarized information by segment for the ~~nine~~six months ended ~~March~~December 31, 2021:

													For the six months ended December 31, 2021
	For the nine months ended March 31, 2021												Continuing Operations									Discontinued Operations
	Luobuma			Herbal			Other agricultural						Luobuma			Other agricultural						Herbal
	products			products			products			Total			products			products			Total			products		Total
Segment revenue	$	96,477		$	6,761,663		$	2,338,961		$	9,197,101		$	34,768		$	1,327,564		$	1,362,332		$	-	$	1,362,332
Cost of revenue and related business and sales tax		287,629			5,792,488			5,870,789			11,950,906			150,305			2,503,263			2,653,568			-		2,653,568
Gross profit (loss)		(191,152	)		969,175			(3,531,828	)		(2,753,805	)
Gross profit (loss) %		(198.1	)%		14.3	%		(151.0	)%		(29.9	)%
Gross loss														(115,537	)		(1,175,699	)		(1,291,236	)		-		(1,291,236	)
Gross loss %														(332.3	)%		(88.6	)%		(94.8	)%		-		(94.8	)%

The following table presents summarized information by segment for the ~~nine~~six months ended ~~March~~December 31, 2020:

													For the six months ended December 31, 2020
	For the nine months ended March 31, 2020												Continuing Operations									Discontinued Operations
	Luobuma			Herbal			Other agricultural						Luobuma			Other agricultural						Herbal
	products			products			products			Total			products			products			Total			products			Total
Segment revenue	$	144,659		$	9,661,025		$	8,844,031		$	18,649,715		$	73,009		$	1,724,630		$	1,797,639		$	5,408,725		$	7,206,364
Cost of revenue and related business and sales tax		349,840			7,353,047			6,531,822			14,234,709			130,628			4,372,320			4,502,948			4,449,905			8,952,853
Gross profit (loss)		(205,181	)		2,307,978			2,312,209			4,415,006			(57,619	)		(2,647,690	)		(2,705,309	)		958,820			(1,746,489	)
Gross profit (loss) %		(141.8	)%		23.9	%		26.1	%		23.7	%		(78.9	)%		(153.5	)%		(150.5	)%		17.7	%		(24.2	)%

The following table presents summarized information by segment for the three months ended ~~March~~December 31, 2021:

	For the three months ended March 31, 2021												For the three months ended December 31, 2021
��	Luobuma			Herbal			Other agricultural
													Continuing Operations									Discontinued Operations
													Luobuma			Other agricultural						Herbal
	products			products			products			Total			products			products			Total			products		Total
Segment revenue	$	23,468		$	1,352,938		$	614,331		$	1,990,737		$	21,260		$	711,314		$	732,574		$	-	$	732,574
Cost of revenue and related business and sales tax		157,001			1,342,583			1,498,469			2,998,053			8,467			1,285,798			1,294,265			-		1,294,265
Gross profit (loss)		(133,533	)		10,355			(884,138	)		(1,007,316	)		12,793			(574,484	)		(561,691	)		-		(561,691	)
Gross profit (loss) %		(569.0	)%		0.8	%		(143.9	)%		(50.6	)%		60.2	%		(80.8	)%		(76.7	)%		-		(76.7	)%

The following table presents summarized information by segment for the three months ended ~~March~~December 31, 2020:

													For the three months ended December 31, 2020
	For the three months ended March 31, 2020												Continuing Operations									Discontinued Operations
	Luobuma			Herbal			Other agricultural						Luobuma			Other agricultural						Herbal
	products			products			products			Total			products			products			Total			products			Total
Segment revenue	$	5,900		$	2,821,425		$	906,997		$	3,734,322		$	48,394		$	741,268		$	789,662		$	2,273,319		$	3,062,981
Cost of revenue and related business and sales tax		80,683			2,125,927			1,117,588			3,324,198			102,166			3,658,443			3,760,609			1,957,442			5,718,051
Gross profit (loss)		(74,783	)		695,498			(210,591	)		410,124			(53,772	)		(2,917,175	)		(2,970,947	)		315,877			(2,655,070	)
Gross profit (loss) %		(1,267.5	)%		24.7	%		(23.2	)%		11.0	%		(111.1	)%		(393.5	)%		(376.2	)%		13.9	%		(86.7	)%

Total assets as of ~~March~~December 31, 2021 and June 30, ~~2020~~2021 were as follows:

	March 31, 2021		June 30, 2020		December 31, 2021		June 30, 2021

Luobuma products	$	5,348,926	$	2,836,450	$	33,836,048	$	3,849,675
Other agricultural products						40,916,562		32,766,151
Herbal products		39,467,761		43,855,815		-		24,702,773
Other agricultural products		22,774,290		32,396,346
Total assets	$	67,590,977	$	79,088,611		74,752,610		61,318,599
Less: total assets held for discontinued operations						-		(24,702,773	)
Total assets, held for continuing operations					$	74,752,610	$	36,615,826

On June 8, 2021, Tenet-Jove entered into a Restructuring Agreement (the “Restructuring Agreement”) with the following parties:

Pursuant to the terms of the Restructuring Agreement, (i) the Company transferred all of its rights and interests in Ankang Longevity to the Guangyuan Shareholders in exchange for the control of 100% of equity interests in Guangyuan, which composes of one group of similar identifiable assets; (ii) Tenet-Jove entered a Termination Agreement with Ankang Longevity and the Ankang Shareholders; (iii) as a consideration to the Restructuring Agreement and based on a valuation report on the equity interests of Guangyuan issued by an independent third party, Tenet-Jove relinquished all of its rights and interests in Ankang Longevity and transferred those rights and interests to the Guangyuan Shareholders; and (iv) Guangyuan and the Guangyuan Shareholders entered into a series of variable interest entity agreements with Tenet-Jove.

After signing of the Restructuring Agreement, the Company and the shareholders of Ankang and Guangyuan actively carried out the transferring of rights and interests in Ankang and Guangyuan, and the transferring was completed subsequently on July 5, 2021. Afterwards, with the completion of all other follow-ups works, on August 16, 2021, the Company, through its subsidiary Tenet-Jove, completed the previously announced acquisition pursuant to the Restructuring Agreement dated June 8, 2021. The management determined that July 5, 2021 was the disposal date of Ankang.

In accordance with ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the components of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale. When all of the criteria to be classified as held for sale are met, including management, having the authority to approve the action, commits to a plan to sell the entity, the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as a component of net income (loss) separate from the net income (loss) of continuing operations in accordance with ASC 205-20-45. The assets and liabilities of the entities of Ankang Longevity have been reclassified as “assets of discontinued operations” and “liabilities of discontinued operations” within current and non-current assets and liabilities, respectively, on the unaudited condensed consolidated balance sheets as of December 31, 2021 and June 30, 2021. The results of operations of Ankang Longevity have been reclassified to “net income (loss) from discontinued operations” in the unaudited condensed consolidated statements of loss and comprehensive loss for the six and three months ended December 31, 2021 and 2020.

The carrying amount of the major classes of assets and liabilities of discontinued operations as of December 31, 2021 and June 30, 2021 consist of the following:

The summarized operating result of discontinued operations included in the Company’s consolidated statements of operations consist of the following:

On January 18, 2022, the Company entered into three share transfer agreements ( the “Purchase Agreements”), respectively with Beijing Qing Chuang Technology Incubator Co., Ltd., Hangzhou Sheng Dou Shi Bio Technology Co., Ltd. and Peng He (collectively, the “Selling Shareholders”), each a shareholder of Xiang Peng You Kang (Beijing) Technology Co., Ltd. (“XPYK”), pursuant to which the Company shall acquire a total of 51% issued and outstanding equity interest of XPYK from the Selling Shareholders (the “XPYK Shares”). Under the Purchase Agreements, the Company will issue an aggregate of 700,551 shares (“Company Shares”) of its common stock valued at a per share price of $8 (subject to the terms and conditions of the Purchase Agreements) as the consideration for the XPYK Shares. The closing for the acquisition of the XPYK Shares is expected to occur within 60 days from the date of the Purchase Agreements. The board of directors of XPYK shall consist of five members upon closing of the transaction set forth therein, two of which shall be designated by the Company, two designated by the Selling Shareholders and other shareholders of XPYK and one nominated jointly by the Company and other shareholders of XPYK. Before their entry into the Purchase Agreements, no material relationship existed between the Company and any Shareholder on one hand, and the Company and XPYK on the other hand.

These unaudited condensed consolidated financial statements were approved by management and available for issuance on ~~May 14, 2021,~~February XX, 2022, and the Company has evaluated subsequent events through this date. No subsequent events required adjustments to or disclosure in these unaudited condensed consolidated financial statements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q contains “forward-looking statements.” All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws. Forward-looking statements involve risks and uncertainties, such as statements about our plans, objectives, expectations, assumptions or future events. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “should,” “will,” “could,” and similar expressions denoting uncertainty or an action that may, will or is expected to occur in the future. These statements involve estimates, assumptions, known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements.

The ultimate correctness of these forward-looking statements depends upon a number of known and unknown risks and events. We discuss our known material risks under the heading “Risk Factors” in our annual report on Form 10-K ~~and Registration Statement~~for the fiscal year ended June 30, 2021 filed with the SEC on ~~Form S-1.~~September 30, 2021 (the “Annal Report”). Many factors could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Consequently, you should not place undue reliance on these forward-looking statements.

The forward-looking statements speak only as of the date on which they are made, and, except as required by law, 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. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Nonetheless, we reserve the right to make such updates from time to time by press release, periodic report, or other method of public disclosure without the need for specific reference to this Quarterly Report. No such update shall be deemed to indicate that other statements not addressed by such update is incorrect or create an obligation to provide any other updates.

The information included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes included in this Quarterly Report, and the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual ~~Report on Form 10-K for the fiscal year ended June 30, 2020, filed with the SEC on September 28, 2020.~~Report. All monetary figures are presented in U.S. dollars, unless otherwise indicated.

Shineco, Inc. is a holding company incorporated in Delaware. As a holding company with no material operations of our own, we conduct a substantial majority of our operations through our operating entities established in the People’s Republic of China, or the PRC, primarily our variable interest entities (the “VIEs”). We do not have any equity ownership of our VIEs, instead we control and receive the economic benefits of our VIEs’ business operations through certain contractual arrangements. Our common stock that currently listed on the Nasdaq Capital Markets are ashares of our Delaware holding company that ~~uses~~maintains service agreements with the associated operating companies. The Chinese regulatory authorities could disallow our structure, which could result in a material change in our operations and the value of our securities could decline or become worthless.

We use our subsidiaries’ and ~~variable interest entities’ (“VIEs”)~~VIEs’ vertically and horizontally integrated production, distribution, and sales channels to provide health and well-being focused plant-based products. Our products are only sold domestically in China. We utilize modern engineering technologies and biotechnologies to produce, among other products, Chinese herbal medicines, organic agricultural produce, and specialized textiles. Our health and well-being focused plant-based products business is divided into three major segments:

Processing and distributing traditional Chinese herbal medicine products as well as other pharmaceutical products - This segment is conducted through our VIE, Ankang Longevity Pharmaceutical (Group) Co., Ltd. (“Ankang Longevity Group”), which operates 66 cooperative retail pharmacies throughout Ankang, a city in southern Shaanxi province, China, through which we sell directly to individual customers traditional Chinese medicinal products produced by us as well as by third parties. Ankang Longevity Group also owns a factory specializing in decoction, which is the process by which solid materials are heated or boiled in order to extract liquids, and distributes decoction products to wholesalers and pharmaceutical companies around China.

On June 8, 2021, Tenet-Jove entered into a Restructuring Agreement with various parties. Pursuant to the terms of the Restructuring Agreement, (i) the Company transferred all of its rights and interests in Ankang Longevity to Yushe County Guangyuan Forest Development Co., Ltd. (“Guangyuan”)’s Shareholders in exchange for the control of 100% of equity interests in Guangyuan, which composes of one group of similar identifiable assets; (ii) Tenet-Jove entered a Termination Agreement with Ankang Longevity and the Ankang Shareholders; (iii) as a consideration to the Restructuring Agreement and based on a valuation report on the equity interests of Guangyuan issued by an independent third party, Tenet-Jove relinquished all of its rights and interests in Ankang Longevity and transferred those rights and interests to the Guangyuan Shareholders; and (iv) Guangyuan and the Guangyuan Shareholders entered into a series of variable interest entity agreements with Tenet-Jove. After signing of the Restructuring Agreement, the Company and the shareholders of Ankang and Guangyuan actively carried out the transferring of rights and interests in Ankang and Guangyuan, and the transferring was completed subsequently on July 5, 2021. Afterwards, with the completion of all other follow-ups works, on August 16, 2021, the Company, through its subsidiary Tenet-Jove, completed the previously announced acquisition pursuant to the Restructuring Agreement dated June 8, 2021. The management determined that July 5, 2021 was the disposal date of Ankang. The assets and liabilities of the entities of Ankang Longevity have been reclassified as “assets of discontinued operations” and “liabilities of discontinued operations” within current and non-current assets and liabilities, respectively, on the unaudited condensed consolidated balance sheets as of December 31, 2021 and June 30, 2021. The results of operations of Ankang Longevity have been reclassified to “net loss from discontinued operations” in the unaudited condensed consolidated statements of loss and comprehensive loss for the six and three months ended December 31, 2021 and 2020.

Processing and distributing green and organic agricultural produce as well as growing and cultivating yew trees (taxus media) - We currently cultivate and sell yew mainly to group and corporate customers, but do not currently process yew into Chinese or Western medicines. This segment is conducted through our VIEs: Shineco Zhisheng (Beijing) Bio-Technology Co. (“Zhisheng Bio-Tech”), Yantai Zhisheng International Freight Forwarding Co., Ltd (“Zhisheng Freight”), Yantai Zhisheng International Trade Co., Ltd (“Zhisheng Trade”), and Qingdao Zhihesheng Agricultural Produce Services, Ltd (“Qingdao Zhihesheng”) (collectively, the “Zhisheng VIEs”). Meanwhile, we entered the market of planting fast-growing bamboo willows and scenic greening trees through we newly acquired VIE, Yushe County Guangyuan Forest Development Co., Ltd. (“Guangyuan”). The operations of this segment are located in the North regions of Mainland China, mostly carried out in Shanxi Province.

Developing and distributing specialized fabrics, textiles, and other byproducts derived from an indigenous Chinese plant Apocynum Venetum, grown in the Xinjiang region of China, and known in Chinese as “Luobuma” or “bluish dogbane” - Our Luobuma products are specialized textile and health supplement products designed to incorporate traditional Eastern medicines with modern scientific methods. These products are predicated on centuries-old traditions of Eastern herbal remedies derived from the Luobuma raw material. This segment is channeled through our directly-owned subsidiary, Beijing Tenet-Jove Technological Development Co., Ltd. (“Tenet-Jove”), and its 90% subsidiary Tianjin Tenet Huatai Technological Development Co., Ltd. (“Tenet Huatai”).

On January 27, 2021, the Company issued 364,445 shares of common stock to three investors, who are not “U.S. persons” as defined pursuant to Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”), at a price of US$3.0 per share. The share issuance was exempt from the registration requirements of the Securities Act pursuant to Regulation S promulgated under the Securities Act. The Company received net proceeds of US$1,093,355.

~~On April 14,~~June 16, 2021, the Company entered into ~~certain stock~~a securities purchase ~~agreements with certain investors (the “Purchasers”), who are not “U.S. persons” as defined in the stock purchase agreements~~agreement pursuant to ~~Regulation S promulgated under the Securities Act, whereby~~which the Company ~~agreed~~issued an unsecured convertible promissory note with a one-year maturity term to an institutional accredited investor, Streeterville Capital, LLC (“Investor”). The note has an original principal amount of US$3,170,000 and Investor gave consideration of US$3.0 million, reflecting original issue discount of US$150,000 and ~~sell,~~Investor’s legal fee of US$20,000. Interest accrues on the outstanding balance of the note at 6% per annum. The Company anticipates using the proceeds for general working capital purposes. The Company received principal in full from the Investor.

On July 16, 2021, the Company entered into another securities purchase agreement pursuant to which the Company issued two unsecured convertible promissory notes with a one-year maturity term to the same Investor. The first convertible promissory note has an original principal amount of US$3,170,000 and the ~~Purchasers agreed to purchase, severally~~Investor gave consideration of US$3.0 million, reflecting original issue discount of US$150,000 and ~~not jointly, an aggregate~~Investor’s legal fee of ~~3,872,194 shares~~US$20,000. The second convertible promissory note has the original principal amount of ~~common stock (the “Shares”)~~US$4,200,000 and Investor gave consideration of US$4.0 million, reflecting original issue discount of US$200,000. Interest accrues on the outstanding balance of the Notes at ~~an aggregate purchase price of $11,005,204.40 (the “Offering”).~~6% per annum. The ~~Shares to be issued~~Company received principal in ~~the Offering are exempt~~full from the ~~registration requirements~~Investor.

On August 19, 2021, the Company entered into another securities purchase agreement pursuant to which the Company issued an unsecured convertible promissory note with a one-year maturity term to the same Investor. The note has an original principal amount of US$10,520,000 and Investor gave consideration of US$10.0 million, reflecting original issue discount of US$500,000 and Investor’s legal fee of US$20,000. Interest accrues on the outstanding balance of the ~~Securities Act, pursuant to Regulation S promulgated under~~note at 6% per annum. The Company received principal in full from the ~~Securities Act. As of~~Investor. The Company anticipates using the ~~date of this Quarterly Report, the Offering is in process and not yet completed.~~proceeds for general working capital purposes.

Increasing demand for our products - The increasing demand for our agricultural products will have a positive impact on our financial position. We plan to develop new products and expand our distribution network as well as to grow our business through possible mergers and acquisitions of similar or synergetic businesses, all aimed at increasing awareness of our brand, developing customer loyalty, meeting customer demands in various markets and providing solid foundations for our continuous growth. As of the date of this ~~Quarterly~~Annual Report, however, we do not have any agreements, undertakings or understandings to acquire any such entities and there can be no guarantee that we ever will.

Maintaining effective control of our costs and expenses - Successful cost control depends upon our ability to obtain and maintain adequate material supplies as required by our operations at competitive prices. We will focus on improving our long-term cost control strategies including establishing long-term alliances with certain suppliers to ensure adequate supply is maintained. We will carry forward the economies of scale and advantages from our nationwide distribution network and diversified offerings. Moreover, we will step up our efforts in higher ~~value added~~value-added products of Luobuma by using an exclusive and patented technology, to optimize quality management, procurement processes and cost control, and give full play to the strong production capacity and trustworthy sales teams to maximize our profit and bring better long-term return for our stockholders.

Our operations are conducted primarily in the PRC and subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks with, among others, the political, economic and legal environment and foreign currency exchange. Our results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversions, remittances abroad, and rates and methods of taxation, among other things.

The COVID-19 outbreak has resulted in the implementation of significant governmental measures, including lockdowns, closures, quarantines, and travel bans, intended to control the spread of the virus. In accordance with the epidemic control measures imposed by the local governments related to ~~the~~ COVID-19, ~~outbreak,~~ our offices and retail stores remained closed or had limited business operations after the Chinese New Year holiday until early April 2020. In addition, ~~the~~ COVID-19 ~~outbreak~~ had caused severe disruptions in transportation, limited access to our facilities and limited support from workforce employed in our operations, and as a result, we experienced delays or the inability to delivery our products to customers on a timely basis. Further, some of our customers or suppliers experienced financial distress, delayed or defaults on payment, sharp diminishing of business, or suffer disruptions in their business due to the outbreak. Any decreased collectability of accounts receivable, delayed raw materials supply, bankruptcy of small and medium businesses, or early termination of agreements due to deterioration in economic conditions could negatively impact our results of operations. Wider-spread COVID-19 in China and globally could prolong the deterioration in economic conditions and could cause decreases in or delays in spending and reduce and/or negatively impact our short-term ability to grow our revenue.

Although we have used all reasonable efforts to adopt measures to overcome the adverse impact of the COVID-19 outbreak and resumed our normal business activities in early May 2020, our management believes the outbreak had a negative impact on our operation result during the nine and three months ended March 31, 2021. Our revenue for the nine months ended March 31, 2021 was approximately US$9.2 million, a decrease of approximately US$9.5 million, or 50.7%, from approximately US$18.6 million for the same period in 2020. Our revenue for the three months ended March 31, 2021 was approximately US$2.0 million, a decrease of approximately US$1.7 million, or 46.7%, from approximately US$3.7 million for the same period in 2020. As of the date of this ~~Quarterly Report,~~report, the spread of COVID-19 ~~outbreak~~ in China appears to have ~~been~~slowed down and most provinces and cities have resumed business activities under ~~relative control. While~~the guidance and support of the local government. Although we ~~expect this matter to negatively~~resumed our operations in early April 2020 and the COVID-19 impact on our ~~business,~~operating results ~~of operations,~~ and financial ~~position,~~performance for the ~~related financial impact~~six and three months ended December 31, 2021 and 2020 seems to be temporary, a COVID-19 resurgence could negatively affect the execution of our sales contract and fulfillment of customer orders and the ~~duration~~collection of the payments from customers on a timely manner. We will continue to monitor and modify the operating strategies in response to the COVID-19. The extent of the future impact of COVID-19 is still highly uncertain and cannot be ~~reasonably estimated at this time.~~predicted as of the date our consolidated financial statements are released.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements as well as the reported amounts of revenue and expenses during the reporting period. Critical accounting policies are those accounting policies that may be material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and that have a material impact on financial condition or operating performance. While we base our estimates and judgments on our experience and on various other factors that we believe to be reasonable under the circumstances, actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies used in the preparation of our unaudited condensed consolidated financial statements require significant judgments and estimates. For additional information relating to these and other accounting policies, see Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this ~~Quarterly~~ Report.

Significant estimates required to be made by management include, but are not limited to, useful lives of property, plant, and equipment, and intangible assets, the recoverability of long-lived assets and the valuation of accounts receivable, deferred taxes and inventory reserves. Actual results could differ from those estimates.

Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts, as necessary. We review the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, we consider many factors, including the age of the balance, the customers’ historical payment history, their current credit-worthiness and current economic trends. The fair value of long-term receivables is determined using a present value technique by discounting the future expected contractual cash flows using current rates at which similar instruments would be issued at the measurement date. As of ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, the allowance for doubtful accounts from the continuing operations was US$~~13,539,904~~6,396,666 and US$~~5,235,436,~~5,959,887, respectively. As of December 31, 2021 and June 30, 2021, the allowance for doubtful accounts from the discontinued operations was US$ nil and US$3,675,619, respectively. Accounts are written off against the allowance after efforts at collection prove unsuccessful.

Inventories, which are stated at the lower of cost or net realizable value, consist of raw materials, work-in-progress, and finished goods related to our products. Cost is determined using the first in first out method. Agricultural products that we farm are recorded at cost, which includes direct costs such as seed selection, fertilizer, labor cost, and contract fees that are spent in growing agricultural products on the leased farmland, and indirect costs such as amortization of prepayments of farmland leases and farmland development costs. All the costs are accumulated until the time of harvest and then allocated to the harvested crops costs when they are sold. We periodically evaluate our inventory and records an inventory reserve for certain inventories that may not be saleable or whose cost exceeds net realizable value. As of ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, the inventory reserve from the continuing operations was US$~~1,429,804~~1,330,999 and US$~~1,121,408,~~1,229,158, respectively. As of December 31, 2021 and June 30, 2021, the inventory reserve from the discontinued operations were both US$ nil.

We previously recognized revenue from sales of Luobuma products, Chinese medicinal herbal products, and agricultural products, as well as providing logistic services and other processing services to external customers. We recognized revenue when all of the following have occurred: (i) there was persuasive evidence of an arrangement with a customer; (ii) delivery had occurred or services had been rendered; (iii) the sales price was fixed or determinable; and (iv) our collection of such fees was reasonably assured. These criteria, as related to our revenue, were considered to have been met as follows:

Sales of products: We recognized revenue from the sale of products when the goods were delivered and title to the goods passed to the customer provided that there were no uncertainties regarding customer acceptance; persuasive evidence of an arrangement existed; the sales price was fixed or determinable; and collectability was deemed probable.

Revenue from provision of services: Revenue from international freight forwarding, domestic air, and overland freight forwarding services was recognized upon the performance of services as stipulated in the underlying contract or when commodities were being released from the customer’s warehouse; the service price was fixed or determinable; and collectability was deemed probable.

With the adoption of ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when all of the following five steps are met: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied. We adopted the new revenue standard beginning July 1, 2018, and adopted a modified retrospective approach upon adoption. We believe that our previous revenue recognition policies are generally consistent with the new revenue recognition standards set forth in ASC 606. Potential adjustments to input measures are not expected to be pervasive to the majority of our contracts. There is no significant impact upon adoption of the new guidance.

We follow the provisions of ASC 820, “Fair Value Measurements and Disclosures.” ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the asset or liability.

The carrying value of financial instruments included in current assets and liabilities approximate their fair values because of the short-term nature of these instruments.

Results of Operations for the ~~Nine~~Six Months Ended ~~March~~December 31, 2021 and 2020

The following table summarizes our results of operations for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020:

	Nine Months Ended March 31,						Variance						Six Months Ended December 31,						Variance
	2021			2020			Amount			%			2021			2020			Amount			%
Revenue	$	9,197,101		$	18,649,715		$	(9,452,614	)		(50.69	)%	$	1,362,332		$	1,797,639		$	(435,307	)		(24.22	)%
Cost of revenue		11,950,906			14,234,709			(2,283,803	)		(16.04	)%		2,653,568			4,502,948			(1,849,380	)		(41.07	)%
Gross profit (loss)		(2,753,805	)		4,415,006			(7,168,811	)		(162.37	)%
Gross loss														(1,291,236	)		(2,705,309	)		1,414,073			(52.27	)%
General and administrative expenses		13,625,060			9,343,435			4,281,625			45.82	%		10,506,466			4,636,520			5,869,946			126.60	%
Selling expenses		86,870			340,681			(253,811	)		(74.50	)%		18,332			22,936			(4,604	)		(20.07	)%
Impairment loss of distribution rights														1,140,551			-			1,140,551			100.00	%
Loss from operations		(16,465,735	)		(5,269,110	)		(11,196,625	)		212.50	%		(12,956,585	)		(7,364,765	)		(5,591,820	)		75.93	%
Income (loss) from equity method investments		(3,753,280	)		97,528			(3,850,808	)		(3,948.41	)%
Other income (expense), net		(2,066,268	)		39,084			(2,105,352	)		(5,386.74	)%
Interest expense, net		(30,977	)		(8,250	)		(22,727	)		275.48	%
Loss before income tax provision		(22,316,260	)		(5,140,748	)		(17,175,512	)		334.11	%
Provision for income taxes		-			274,569			(274,569	)		(100.00	)%
Impairment loss on an unconsolidated entity														(149,790	)		-			(149,790	)		100.00	%
Loss from equity method investments														(106,988	)		-			(106,988	)		100.00	%
Other income, net														1,443			85,916			(84,473	)		(98.32	)%
Amortization of debt issuance costs														(854,318	)		-			(854,318	)		100.00	%
Interest income, net														67,139			11,687			55,452			474.48	%
Loss before income tax provision from continuing operations														(13,999,099	)		(7,267,162	)		(6,731,937	)		92.64	%
Provision (benefit) for income taxes														(6,478	)		4,530			(11,008	)		(243.00	)%
Net loss from continuing operations														(13,992,621	)		(7,271,692	)		(6,720,929	)		92.43	%
Net loss from discontinued operations														(3,135,237	)		(7,264,815	)		4,129,578			(56.84	)%
Net loss	$	(22,316,260	)	$	(5,415,317	)	$	(16,900,943	)		312.10	%	$	(17,127,858	)	$	(14,536,507	)	$	(2,591,351	)		17.83	%
Comprehensive loss attributable to Shineco Inc.	$	(16,751,239	)	$	(7,782,661	)	$	(8,968,578	)		115.24	%	$	(16,317,063	)	$	(9,080,661	)	$	(7,236,402	)		79.69	%

Currently, we, through our PRC subsidiaries and VIEs, have ~~three~~two revenue streams derived from our ~~three~~two major business ~~segments: (i)~~segments from continuing operations. First, developing, manufacturing, and distributing specialized fabrics, textiles, and other by-products derived from an indigenous Chinese plant Apocynum Venetum, known in Chinese as “Luobuma” or “Bluish Dogbane,” as well as Luoboma raw materials ~~processing, which~~processing; this segment is channeled through our wholly owned subsidiary, ~~Tenet-Jove; (ii)~~Tenet-Jove. Second, planting, processing and distributing green and organic agricultural produce, growing and cultivation of yew trees, as well as planting fast-growing bamboo willows and scenic greening trees; this segment is conducted through the Zhisheng VIEs and Guangyuan. For the business segment, that processing and distributing traditional Chinese medicinal herbal products as well as other pharmaceutical ~~products, which~~products; this segment is conducted via our VIE, Ankang Longevity Group and its ~~subsidiaries;~~subsidiaries, which was disposed and ~~(iii) planting, processing, and distributing green and organic agricultural produce~~we have reclassified it as ~~well as growing and cultivation of yew trees, which segment is conducted through the Zhisheng VIEs.~~discontinued operations.

The following table sets forth the breakdown of our revenue for each of ~~our three~~the two segments from the continuing operations, for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020, respectively:

	Nine Months Ended March 31,										Variance						Six Months Ended December 31,										Variance
	2021		%			2020		%			Amount			%			2021		%			2020		%			Amount			%
Luobuma products	$	96,477		1.05	%	$	144,659		0.78	%	$	(48,182	)		(33.31	)%	$	34,768		2.55	%	$	73,009		4.06	%	$	(38,241	)		(52.38	)%
Chinese medicinal herbal products		6,761,663		73.52	%		9,661,025		51.80	%		(2,899,362	)		(30.01	)%
Other agricultural products		2,338,961		25.43	%		8,844,031		47.42	%		(6,505,070	)		(73.55	)%		1,327,564		97.45	%		1,724,630		95.94	%		(397,066	)		(23.02	)%
Total Amount	$	9,197,101		100.00	%	$	18,649,715		100.00	%	$	(9,452,614	)		(50.69	)%	$	1,362,332		100.00	%	$	1,797,639		100.00	%	$	(435,307	)		(24.22	)%

For the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020, revenue from sales of Luobuma products was US$~~96,477~~ 34,768 and US$~~144,659,~~ 73,009, respectively, which represented a decrease of US$~~48,182,~~ 38,241, or ~~33.31%~~52.38%. The decrease of revenue from this segment was mainly due to the decrease in revenue from Tenet-Jove and Tenet Huatai. We did not launch any new products ~~since last year~~ and reduced our resources and investments in our E-commerce distribution channel, now we mainly focused on clearing off our remaining old ~~stocks. Meanwhile,~~stocks, hence, we ~~reduced resources and investments~~offered more price discounts in ~~our E-commerce distribution channel, which also resulted in a decrease in our online sales volume. In addition, our sales of Luobuma products were affected by the COVID-19 outbreak.~~order to get more customer orders. As a result, our overall sales decreased during the ~~nine~~six months ended ~~March~~December 31, 2021 as compared to the same period in 2020.

For the ~~nine~~six months ended March 31, 2021 and 2020, revenue from sales of Chinese medicinal herbal products was US$6,761,663 and US$9,661,025, respectively, representing a decrease of US$2,899,362, or 30.01%. Due to the COVID-19 outbreak, people became more health conscious and started wearing masks in public area, which resulted in a reduction of the incidence of other illness. Hence, our sales of Chinese medicinal herbal products decreased during the nine months ended March 31, 2021 as compared to the same period in 2020.

~~For the nine months ended March~~December 31, 2021 and 2020, revenue from sales of other agricultural products was US$~~2,338,961~~ 1,327,564 and US$~~8,844,031,~~ 1,724,630, respectively, representing a decrease of US$~~6,505,070,~~ 397,066, or ~~73.55%~~23.02%. The decrease was mainly due to the decline of sales volume of yew trees during the ~~nine~~six months ended ~~March~~December 31, 2021 as compared to the same period in 2020. ~~Our~~As our sales of yew trees were adversely affected by the COVID-19 outbreak, ~~which resulted~~we modified our operating strategies in ~~less orders from our customers during the nine months ended March 31, 2021 as compared~~response to the ~~same period in 2020. The decrease was also due to a shift in our business strategy as our yew trees business is adversely affected by the COVID-19 outbreak.~~pandemic. Instead of selling more unmatured yew trees, we are now cultivating more matured yew trees, which can be used to extract Taxol, a more valuable chemical substance which is used experimentally as a drug in the treatment of cancer.

The following table sets forth the breakdown of the cost of revenue for each of our ~~three~~two segments from the continuing operations, for the ~~nine~~six months ended ~~March~~December 31, 2021 and ~~2020, respectively:~~2020:

	Nine Months Ended March 31,										Variance						Six Months Ended December 31,										Variance
	2021		%			2020		%			Amount			%			2021		%			2020		%			Amount			%
Luobuma products	$	287,613		2.41	%	$	349,516		2.46	%	$	(61,903	)		(17.71	)%	$	150,305		5.67	%	$	130,612		2.90	%	$	19,693			15.08	%
Chinese medicinal herbal products		5,767,915		48.26	%		7,318,018		51.41	%		(1,550,103	)		(21.18	)%
Other agricultural products		5,866,278		49.09	%		6,524,171		45.83	%		(657,893	)		(10.08	)%		2,500,006		94.21	%		4,369,323		97.03	%		(1,869,317	)		(42.78	)%
Business and sales related tax		29,100		0.24	%		43,004		0.30	%		(13,904	)		(32.33	)%		3,257		0.12	%		3,013		0.07	%		244			8.10	%
Total Amount	$	11,950,906		100.00	%	$	14,234,709		100.00	%	$	(2,283,803	)		(16.04	)%	$	2,653,568		100.00	%	$	4,502,948		100.00	%	$	(1,849,380	)		(41.07	)%

For the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020, cost of revenue from sales of our Luobuma products was US$~~287,613~~ 150,305 and US$~~349,516,~~ 130,612, respectively, representing an increase of US$ 19,693, or 15.08%. The increase was mainly due to the increased allowance we accrued for our slow-moving inventories amounted to US$ 38,599 on our remaining old stocks during the six months ended December 31, 2021.

For the six months ended December 31, 2021 and 2020, cost of revenue from sales of other agricultural products was US$ 2,500,006 and US$ 4,369,323, respectively, representing a decrease of US$~~61,903,~~ 1,869,317, or ~~17.71%~~42.78%. The decrease was ~~in line with the decrease in sales of Luobuma products. However, the percentage of decrease in cost of revenue was less than the percentage of decrease in sales,~~ mainly due to less stock written off during the six months ended December 31, 2021. Due to the continuous impact of Covid-19 in China and severe cold weather during the winter period, which resulted in the damage and death of a large number of yew trees, we wrote off a large amount of our inventory during the six months ended December 31, 2020.

The following table sets forth the breakdown of the gross loss for each of our two segments from the continuing operations, for the six months ended December 31, 2021 and 2020:

Gross loss from Luobuma product sales increased by US$ 57,918 or 100.52%, for the six months ended December 31, 2021 as compared to the same period in 2020. During the six months ended December 31, 2021, our gross loss was US$ 115,537, mainly due to the allowance we accrued for our slow-moving inventories amounting to US$ 128,773. The gross loss was also due to the reduced selling prices of our Luobuma products and we sold some of our products below their original costs, as we gave more promotion and price discounts in order to attract more customers and clear our remaining old stocks during the ~~nine~~six months ended ~~March~~December 31, 2021.

For the nine months ended March 31, 2021 and 2020, cost of revenue from sales of Chinese medicinal herbal products was US$5,767,915 and US$7,318,018, respectively, representing a decrease of US$1,550,103, or 21.18%. The decrease was mainly due to less Chinese medicinal herbal products sold during the nine months ended March 31, 2021 as compared to the same period in 2020 as mentioned above. However, the percentage of decrease in cost of revenue was less than the percentage of decrease in sales; please refer to the gross profit analysis below for more details.

~~For the nine months ended March 31, 2021 and 2020, cost of revenue~~Gross loss from sales of other agricultural products was US$5,866,278 and US$6,524,171, respectively, representing a decrease of US$657,893, or 10.08%. The decrease was mainly due to less yew trees sold during the nine months ended March 31, 2021 as compared to the same period in 2020 as mentioned above. The decrease was partially offset by an inventory write-off during the nine months ended March 31, 2021. Due to the continuous impact of the Covid-19 outbreak in China and severe cold weather during the winter period this year, which resulted in the damage and death of a large number of yew trees, we wrote off our inventory in the amount of US$3,358,716 during the nine months ended March 31, 2021.

~~The following table sets forth the breakdown of the gross profit (loss) for each of our three segments, for the nine months ended March 31, 2021 and 2020, respectively:~~

~~Gross loss from Luobuma product sales~~ decreased by US$~~14,029,~~ 1,471,991, or ~~6.84%~~55.60%, for the ~~nine~~six months ended ~~March~~December 31, 2021 as compared to the same period in 2020. During the ~~nine~~six months ended ~~March~~December 31, 2021, our gross loss was US$~~191,152, mainly due to~~ 1,175,699, the ~~allowance we accrued for slow-moving inventories~~decrease in ~~the amount of US$216,629. In addition, in order to reduce our old stock, we sold some of our products below their original costs during the nine months ended March 31, 2021. However, our~~ gross loss ~~decreased, which~~ was mainly due to less ~~allowance accrued for our slow-moving inventories in the amount of US$25,386~~stock written off during the ~~nine~~six months ended ~~March 31, 2021 as compared to the same period in 2020.~~

Gross profit from sales of Chinese medicinal herbal products decreased by US$1,338,803, or 58.01%, for the nine months ended March 31, 2021 as compared to the same period in 2020. However, the percentage of decrease in gross profit was more than the percentage of decrease in revenue. It was mainly due to reduced selling prices of our Chinese medicinal herbal products, as we gave more promotion and price discounts in order to attract more customers and clear our stocks when the demand for our products was impacted during the nine months ended March 31, 2021.

Gross loss from sales of other agricultural products decreased by US$5,844,037, or 252.75%, for the nine months ended March 31, 2021 as compared to the same period in 2020. During the nine months ended March 31, 2021, our gross loss was US$3,531,828, mainly due to less yew trees sold as well as an inventory write-off during the nine months ended MarchDecember 31, 2021 as mentioned above. The decrease was also due to reduced selling prices of our products, as we gave more price discounts in order to get more customer orders when the demand for our products was impacted during the nine months ended March 31, 2021.

The following table sets forth the breakdown of our operating expenses for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020, respectively:

	Nine Months Ended March 31,										Variance						Six Months Ended December 31,										Variance
	2021		%			2020		%			Amount			%			2021		%			2020		%			Amount			%
General and administrative expenses	$	13,625,060		99.37	%	$	9,343,435		96.48	%	$	4,281,625			45.82	%	$	10,506,466		90.06	%	$	4,636,520		99.51	%	$	5,869,946			126.60	%
Selling expenses		86,870		0.63	%		340,681		3.52	%		(253,811	)		(74.50	)%		18,332		0.16	%		22,936		0.49	%		(4,604	)		(20.07	)%
Impairment loss of distribution rights																		1,140,551		9.78	%		-		-			1,140,551			100.00	%
Total Amount	$	13,711,930		100.00	%	$	9,684,116		100.00	%	$	4,027,814			41.59	%	$	11,665,349		100.00	%	$	4,659,456		100.00	%	$	7,005,893			150.36	%

For the ~~nine~~six months ended ~~March~~December 31, 2021, our general and administrative expenses were US$~~13,625,060,~~ 10,506,466, representing an increase of US$~~4,281,625,~~ 5,869,946, or ~~45.82%~~126.60%, as compared to the same period in 2020. The increase was mainly due to an increase in bad debt expenses of US$~~5,392,704~~ 2,473,910 during the ~~nine~~six months ended ~~March~~December 31, 2021. Due to the COVID-19 outbreak in China, many of our customers’ businesses were adversely affected during this period, which resulted in slow collection of our receivables and utilization of our advances to vendors, and we recorded allowance according to our accounting policy based on our best estimates. Management will continue putting effort in ~~the~~ collection of overdue ~~accounts receivable~~receivables and utilize our advances to our vendors. Meanwhile, the increase was also due to the increased general and administrative expenses from our ~~customers.~~newly acquired VIE, Guangyuan during the six months ended December 31, 2021. The increase was ~~partially offset by a decrease~~also due to increased professional service fees in ~~staff salary~~relation to the Company’s issuance of common stock and convertible notes, increased compensation expenses in relation to the Company’s lawsuit, increased rental expenses as ~~we issued restricted shares to~~ the ~~management~~Company leased a new office in downtown area, the impairment of the Company’s right of use assets as ~~compensation of US$1,022,661~~well as the increased salary related expenses during the ~~same period in 2020.~~six months ended December 31, 2021.

For the ~~nine~~six months ended ~~March~~December 31, 2021, our ~~selling~~impairment loss of distribution right were US$ 1,140,551. We acquired distribution rights to distribute branded products of Daiso 100-yen shops through the acquisition of Tianjin Tajite. During the six months ended December 31, 2021, the management performed evaluation on the impairment of distribution rights. Due to the lower than expected revenue and profit, and unfavorable business environment, the management fully recorded an impairment loss on distribution rights of Tianjin Tajite.

For the six months ended December 31, 2021, our impairment loss on an unconsolidated entity was US$ 149,790. The management performed evaluation on the impairment of the investment make on Shanxi Pharmaceutical Group Yushe Pharmaceutical Development Co., Ltd., (“Yushe Pharmaceutical”) and considered it’s unlikely to obtain any investment income in the future, hence, the management fully recorded impairment loss on this investment.

Our newly acquired VIE, Guangyuan has a 20% equity interest in Yushe Pharmaceutical, and we recorded a loss of US$ 16,153 for the six months ended December 31, 2021 from this investment.

On August 31, 2021, we entered into a capital injection agreement with the other shareholders of Shanghai Gaojing Private Fund Management (“Gaojing Private Fund”), a Chinese private fund management company, to complete the injection of a total RMB 4.8 million (approximately US$ 0.74 million) for its 32% equity interest in Gaojing Private Fund. We recorded a loss of US$ 90,835 for the six months ended December 31, 2021 from this investment.

For the six months ended December 31, 2021, our amortization of debt issuance costs expenses were US$~~86,870,~~ 854,318, representing ~~a decrease~~an increase of ~~US$253,811, or 74.50%~~100.00%, as compared to the same period in 2020. The ~~decrease~~increase in was ~~mainly due~~attributable to the ~~decrease in promotion expenses and commission expenses for our online shops under Tenet-Jove, which was in line with the decrease in our sales~~amortization of debt issuance costs during the ~~nine~~six months ended ~~March~~December 31, ~~2021. The decrease was also due to~~2021 on the ~~decrease in salary-related expenses as a result of a reduced number of staff members during~~convertible notes issued by the ~~nine~~Company.

We were 49% owners in two companies incorporated pursuant to two equity investment agreements with Shaanxi Pharmaceutical Group Pai’ang Medicine Co. Ltd. (“Shaanxi Pharmaceutical Group”): Shaanxi Pharmaceutical Sunsimiao Drugstores Ankang Retail Chain Co., Ltd. (“Sunsimiao Drugstores”), and Shaanxi Pharmaceutical Holding Group Longevity Pharmacy Co., Ltd. (“Shaanxi Longevity Pharmacy”). We recorded a net loss of US$3,753,280 and a net income of US$97,528 from these equity investments for the nine months ended March 31, 2021 and 2020, respectively. The increase in net loss was primarily due to the net loss in Sunsimiao Drugstores and Shaanxi Longevity Pharmacy in the current period. Shaanxi Longevity Pharmacy recorded a large amount of bad debt expenses due to slow collection of its accounts receivable, as many of its customers’ businesses were adversely affected by the COVID-19 outbreak in China during this period. In addition, on March 5, 2021, Ankang Longevity Group entered into two equity investment transfer agreements with a third-party company to sell all of its 49% equity interest in Sunsimiao Drugstores and its 49% equity interest in Shaanxi Longevity Pharmacy for a total consideration of RMB6.86 million (approximately US$1.0 million), and the full amount had been received by March 31, 2021. Upon the transfer of these two equity investments, Ankang Longevity Group recorded a loss of US$1,748,459, which was included in the investment loss for the nine months ended March 31, 2021 as mentioned above.

~~For the nine months ended March~~December 31, 2021, our net ~~other expenses were~~interest income was US$~~2,066,268,~~ 67,139, representing an increase of US$~~2,105,352,~~ 55,452, or ~~5,386.74%~~474.48%, as compared to net ~~other~~interest income of US$~~39,084~~ 11,687 in the same period in 2020. The increase ~~in net other expenses~~ was ~~primarily due~~attributable to ~~a loss~~the increased interest income generated from ~~disposal of property~~loans to third parties and ~~equipment of US$2,154,151 during~~related parties, the ~~nine months ended March 31, 2021.~~

~~For~~increase was partial offset by the ~~nine months ended March 31, 2021 and 2020, our provision for income taxes decreased by US$274,569, or 100.00%, to US$nil~~interest expense incurred for the ~~nine months ended March 31, 2021 from US$274,569 for~~convertible notes issued by the nine months ended March 31, 2020. The decrease in provision for income taxes was mainly due to the decreased taxable income of Ankang Longevity Group as Ankang Longevity Group incurred loss before tax for the nine months ended March 31, 2021.Company.

Our net loss from continuing operations was US$~~22,316,260~~ 13,992,621 for ~~nine~~six months ended ~~March~~December 31, 2021, an increase of US$~~16,900,943,~~ 6,720,929, or ~~312.10%~~92.43%, from a net loss from continuing operations of US$~~5,415,317~~ 7,271,692 for ~~nine~~six months ended ~~March~~December 31, 2020. The increase in net loss was primarily a result of the ~~decrease~~increase in ~~gross profit,~~general and administrative expenses, impairment loss of distribution rights and amortization of debt issuance costs.

As mentioned above, after signing of the Restructuring Agreement on June 8, 2021, the Company and the shareholders of Ankang and Guangyuan actively carried out the transferring of rights and interests in Ankang and Guangyuan, and the transferring was completed subsequently on July 5, 2021, and the management determined that July 5, 2021 was the disposal date of Ankang. We had a total net loss from discontinued operations of US$ 3,135,237 for the six months ended December 31, 2021 as compared to a total net loss from discontinued operations of US$ 7,264,815 for the same period in 2020.

The summarized operating results of our discontinued operations included in our consolidated statement of loss and comprehensive loss is as follows:

Our net loss was US$ 17,127,858 for the six months ended December 31, 2021, an increase of US$ 2,591,351 or 17.83%, from a net loss of US$ 14,536,507 for the six months ended December 31, 2020. The increase in net loss was primarily a result of the increase in general and administrative expenses, ~~the~~impairment loss ~~from equity method investments,~~of distribution rights and ~~net other expenses.~~amortization of debt issuance costs.

The comprehensive loss was US$~~17,404,397~~ 16,313,552 for the ~~nine~~six months ended ~~March~~December 31, 2021, an increase of US$~~9,668,803~~ 6,853,539 from a comprehensive loss of US$~~7,735,594~~ 9,460,013 for the ~~nine~~six months ended ~~March~~December 31, 2020. After deduction of non-controlling interest, the comprehensive loss attributable to us was US$~~16,751,239~~ 16,317,063 for the ~~nine~~six months ended ~~March~~December 31, 2021, compared to a comprehensive loss attributable to us in the amount of US$~~7,782,661~~ 9,080,661 for the ~~nine~~six months ended ~~March~~December 31, 2020. The significant increase inof comprehensive loss was due to the increase in net loss as mentioned above, ~~which was partially offset by an increase~~as well as a decrease in the recorded income of foreign currency translation where the financial statements denominated in RMB were translated to the USD denomination.

Results of Operations for the Three Months Ended ~~March~~December 31, 2021 and 2020

The following table summarizes our results of operations for the three months ended ~~March~~December 31, 2021 and 2020:

	Three Months Ended March 31,						Variance						Three Months Ended December 31,						Variance
	2021			2020			Amount			%			2021			2020			Amount			%
Revenue	$	1,990,737		$	3,734,322		$	(1,743,585	)		(46.69	)%	$	732,574		$	789,662		$	(57,088	)		(7.23	)%
Cost of revenue		2,998,053			3,324,198			(326,145	)		(9.81	)%		1,294,265			3,760,609			(2,466,344	)		(65.58	)%
Gross profit (loss)		(1,007,316	)		410,124			(1,417,440	)		(345.61	)%
Gross loss														(561,691	)		(2,970,947	)		2,409,256			(81.09	)%
General and administrative expenses		5,016,939			3,896,478			1,120,461			28.76	%		1,932,810			3,213,210			(1,280,400	)		(39.85	)%
Selling expenses		32,525			145,526			(113,001	)		(77.65	)%		9,990			10,290			(300	)		(2.92	)%
Loss from operations		(6,056,780	)		(3,631,880	)		(2,424,900	)		66.77	%		(2,504,491	)		(6,194,447	)		3,689,956			(59.57	)%
Loss from equity method investments		(1,777,551	)		(43,054	)		(1,734,497	)		4,028.65	%
Other income (expense)		(28,076	)		627			(28,703	)		(4,577.83	)%
Interest expense, net		(452	)		(7,942	)		7,490			(94.31	)%
Loss before income tax provision		(7,862,859	)		(3,682,249	)		(4,180,610	)		113.53	%
Impairment loss on an unconsolidated entity														(149,790	)		-			(149,790	)		100.00	%
Loss from equity method investment														(79,068	)		-			(79,068	)		100.00	%
Other income, net														473			83,128			(82,655	)		(99.43	)%
Amortization of debt issuance costs														(395,340	)		-			(395,340	)		100.00	%
Interest income, net														237,338			7,462			229,876			3,080.62	%
Loss before income tax provision from continuing operations														(2,890,878	)		(6,103,857	)		3,212,979			(52.64	)%
Provision (benefit) for income taxes		(83,106	)		110,177			(193,283	)		(175.43	)%		(6,478	)		4,530			(11,008	)		(243.00	)%
Net loss from continuing operations														(2,884,400	)		(6,108,387	)		3,223,987			(52.78	)%
Net loss from discontinued operations														-			(7,375,140	)		7,375,140			(100.00	)%
Net loss	$	(7,779,753	)	$	(3,792,426	)	$	(3,987,327	)		105.14	%	$	(2,884,400	)	$	(13,483,527	)	$	10,599,127			(78.61	)%
Comprehensive loss attributable to Shineco Inc.	$	(7,670,578	)	$	(5,007,142	)	$	(2,663,436	)		53.19	%	$	(2,058,096	)	$	(10,644,170	)	$	8,586,074			(80.66	)%

Currently, we, through our PRC subsidiaries and VIEs, have ~~three~~two revenue streams derived from our ~~three~~two major business ~~segments: (i)~~segments from continuing operations. First, developing, manufacturing, and distributing specialized fabrics, textiles, and other by-products derived from an indigenous Chinese plant Apocynum Venetum, known in Chinese as “Luobuma” or “Bluish Dogbane,” as well as ~~Luobuma~~Luoboma raw materials ~~processing, which~~processing; this segment is channeled through our wholly owned subsidiary, ~~Tenet-Jove; (ii)~~Tenet-Jove. Second, planting, processing and distributing green and organic agricultural produce, growing and cultivation of yew trees, as well as planting fast-growing bamboo willows and scenic greening trees; this segment is conducted through the Zhisheng VIEs and Guangyuan. For the business segment, that processing and distributing traditional Chinese medicinal herbal products as well as other pharmaceutical ~~products, which~~products; this segment is conducted via our VIE, Ankang Longevity Group and its ~~subsidiaries;~~subsidiaries, which was disposed and ~~(iii) planting, processing, and distributing green and organic agricultural produce~~we have reclassified it as ~~well as growing and cultivation of yew trees, which segment is conducted through the Zhisheng VIEs.~~discontinued operations.

The following table sets forth the breakdown of our revenue for each of ~~our three~~the two segments from the continuing operations, for the three months ended ~~March~~December 31, 2021 and 2020, respectively:

	Three Months Ended March 31,										Variance						Three Months Ended December 31,										Variance
	2021		%			2020		%			Amount			%			2021		%			2020		%			Amount			%
Luobuma products	$	23,468		1.18	%	$	5,900		0.16	%	$	17,568			297.76	%	$	21,260		2.90	%	$	48,394		6.13	%	$	(27,134	)		(56.07	)%
Chinese medicinal herbal products		1,352,938		67.96	%		2,821,425		75.55	%		(1,468,487	)		(52.05	)%
Other agricultural products		614,331		30.86	%		906,997		24.29	%		(292,666	)		(32.27	)%		711,314		97.10	%		741,268		93.87	%		(29,954	)		(4.04	)%
Total Amount	$	1,990,737		100.00	%	$	3,734,322		100.00	%	$	(1,743,585	)		(46.69	)%	$	732,574		100.00	%	$	789,662		100.00	%	$	(57,088	)		(7.23	)%

For the three months ended ~~March~~December 31, 2021 and 2020, revenue from sales of Luobuma products was US$~~23,468~~ 21,260 and US$~~5,900,~~ 48,394, respectively, which represented ~~an increase~~a decrease of US$~~17,568,~~ 27,134, or ~~297.76%~~56.07%. The ~~increase~~decrease of revenue from this segment was mainly due to ~~increased sales volume resulting~~the decrease in revenue from ~~reduced selling prices of~~Tenet-Jove and Tenet Huatai. We did not launch any new products and mainly focused on clearing off our ~~Luobuma products, as~~remaining old stocks, hence, we ~~gave~~offered more ~~promotion and~~ price discounts ~~so that we could attract~~in order to get more ~~customers orders during the three months ended March 31, 2021.~~

~~For the three months ended March 31, 2021 and 2020, revenue from~~customer orders. As a result, our overall sales of Chinese medicinal herbal products was US$1,352,938 and US$2,821,425, respectively, representing a decrease of US$1,468,487 or 52.05%. Due to the COVID-19 outbreak, people became more health conscious and started to wear masks in public area, which resulted in a reduction of the incidence of other illness. Hence, our sales of Chinese medicinal herbal products decreased during the three months ended ~~March~~December 31, 2021 as compared to the same period in 2020.

For the three months ended ~~March~~December 31, 2021 and 2020, revenue from sales of other agricultural products was US$~~614,331~~ 711,314 and US$~~906,997,~~ 741,268, respectively, representing a slight decrease of US$~~292,666~~ 29,954, or ~~32.27%~~4.04%. The decrease was mainly due to the decline of sales volume of yew trees during the three months ended ~~March~~December 31, 2021 as compared to the same period in 2020. The decrease in sales volume was mainly due to a shift in our business strategy as our yew trees business is adversely affected by the COVID-19. Instead of selling more unmatured yew trees, we are now cultivating more matured yew trees, which can be used to extract Taxol, a more valuable chemical substance which is used experimentally as a drug in the treatment of cancer.

The following table sets forth the breakdown of the cost of revenue for each of our ~~three~~two segments from the continuing operations, for the three months ended ~~March~~December 31, 2021 and ~~2020, respectively:~~2020:

	Three Months Ended March 31,										Variance						Three Months Ended December 31,										Variance
	2021		%			2020		%			Amount			%			2021		%			2020		%			Amount			%
Luobuma products	$	157,001		5.24	%	$	80,680		2.42	%	$	76,321			94.60	%	$	8,467		0.66	%	$	102,150		2.72	%	$	(93,683	)		(91.71	)%
Chinese medicinal herbal products		1,336,937		44.59	%		2,114,211		63.60	%		(777,274	)		(36.76	)%
Other agricultural products		1,496,955		49.93	%		1,113,966		33.51	%		382,989			34.38	%		1,283,796		99.19	%		3,656,495		97.23	%		(2,372,699	)		(64.89	)%
Business and sales related tax		7,160		0.24	%		15,341		0.47	%		(8,181	)		(53.33	)%		2,002		0.15	%		1,964		0.05	%		38			1.93	%
Total Amount	$	2,998,053		100.00	%	$	3,324,198		100.00	%	$	(326,145	)		(9.81	)%	$	1,294,265		100.00	%	$	3,760,609		100.00	%	$	(2,466,344	)		(65.58	)%

For the three months ended ~~March~~December 31, 2021 and 2020, cost of revenue from sales of our Luobuma products was US$~~157,001~~ 8,467 and US$80,680, respectively, representing an increase of US$76,321, or 94.60%. The increase was mainly due to the increased allowance we accrued for slow-moving inventories as well as increase in cost of revenue as we sold more Luobuma products, which was in line with the increase in sales during the three months ended March 31, 2021.

~~For the three months ended March 31, 2021 and 2020, cost of revenue from sales of Chinese medicinal herbal products was US$1,336,937 and US$2,114,211,~~ 102,150, respectively, representing a decrease of US$~~777,274,~~ 93,683, or ~~36.76%~~91.71%. The decrease was mainly due to ~~less Chinese medicinal herbal products sold~~the reversal of allowance we accrued for our slow-moving inventories amounted to US$ 81,674 on our remaining old stocks during the three months ended ~~March~~December 31, 2021 as compared to the same period in 2020 as mentioned above. However, the percentage of decrease in cost of revenue was less than the percentage of decrease in sales; please refer to the gross profit analysis below for more details.2021.

For the three months ended ~~March~~December 31, 2021 and 2020, cost of revenue from sales of other agricultural products was US$~~1,496,955~~ 1,283,796 and US$~~1,113,966,~~ 3,656,495, respectively, representing ~~an increase~~a decrease of US$~~382,989,~~ 2,372,699, or ~~34.38%~~64.89%. The ~~increase~~decrease was mainly due to ~~an inventory write-off~~less stock written off during the three months ended ~~March~~December 31, 2021. Due to the continuous impact of ~~the~~ Covid-19 ~~outbreak~~ in China and severe cold weather during the winter period, ~~this year,~~ which resulted in the damage and death of a large number of yew trees, we wrote off ~~our inventory in the~~a large amount of ~~US$729,029~~our inventory during the three months ended ~~March~~December 31, 2021. The increase was partially offset by the decrease in cost of revenue as we sold less yew trees during the three months ended March 31, 2021 as compared to the same period in 2020 as mentioned above.2020.

The following table sets forth the breakdown of the gross profit (loss) for each of our ~~three~~two segments from the continuing operations, for the three months ended ~~March~~December 31, 2021 and ~~2020, respectively:~~2020:

	Three Months Ended March 31,												Variance						Three Months Ended December 31,												Variance
	2021			%			2020			%			Amount			%			2021			%			2020			%			Amount		%
Luobuma products	$	(133,533	)		13.26	%	$	(74,783	)		(18.23	)%	$	(58,750	)		78.56	%	$	12,793			(2.28	)%	$	(53,772	)		1.81	%	$	66,565		(123.79	)%
Chinese medicinal herbal products		10,355			(1.03	)%		695,498			169.58	%		(685,143	)		(98.51	)%
Other agricultural products		(884,138	)		87.77	%		(210,591	)		(51.35	)%		(673,547	)		319.84	%		(574,484	)		102.28	%		(2,917,175	)		98.19	%		2,342,691		(80.31	)%
Total Amount	$	(1,007,316	)		100.00	%	$	410,124			100.00	%	$	(1,417,440	)		(345.61	)%	$	(561,691	)		100.00	%	$	(2,970,947	)		100.00	%	$	2,409,256		(81.09	)%

Gross ~~loss~~profit from Luobuma product sales increased by US$~~58,750,~~ 66,565, or ~~78.56%~~123.79%, for the three months ended ~~March~~December 31, 2021 as compared to the same period in 2020. During the three months ended ~~March~~December 31, 2021, our gross ~~loss~~profit was US$~~133,533,~~ 12,793, mainly due to the reversal of allowance we accrued for our slow-moving inventories as mentioned above. The increase in gross profit was partially offset by the ~~amount~~reduced selling prices of ~~US$58,388. In addition, in order to reduce~~ our ~~old stock,~~Luobuma products and we sold some of our products below their original costs, ~~during the six months ended December 31, 2020, resulting in a gross loss during the six months ended December 31, 2020.~~

Gross profit from sales of Chinese medicinal herbal products decreased by US$685,143, or 98.51%, for the three months ended March 31, 2021 as compared to the same period in 2020. However, the percentage of decrease in gross profit was more than the percentage of decrease in revenue. It was mainly due to reduced selling prices of our Chinese medicinal herbal products, as we gave more promotion and price discounts in order to attract more customers and clear our remaining old stocks ~~when the demand for our products was impacted~~ during the three months ended ~~March~~December 31, 2021.

Gross loss from sales of other agricultural products ~~increased~~decreased by US$~~673,547,~~ 2,342,691, or ~~319.84%~~80.31%, for the three months ended ~~March~~December 31, 2021 as compared to the same period in 2020. ~~During the three months ended March 31, 2021, our gross loss~~The decrease was ~~US$884,138,~~ mainly due to ~~less yew trees sold as well as an~~the decrease inventory ~~write~~written off during the three months ended ~~March~~December 31, 2021 as mentioned above. The decrease was also due to reduced selling prices of our products, as we gave more price discounts in order to get more customer orders when the demand for our products was impacted during the three months ended March 31, 2021.

The following table sets forth the breakdown of our operating expenses for the three months ended ~~March~~December 31, 2021 and 2020, respectively:

	Three Months Ended March 31,										Variance						Three Months Ended December 31,										Variance
	2021		%			2020		%			Amount			%			2021		%			2020		%			Amount			%
General and administrative expenses	$	5,016,939		99.36	%	$	3,896,478		96.40	%	$	1,120,461			28.76	%	$	1,932,810		99.49	%	$	3,213,210		99.68	%	$	(1,280,400	)		(39.85	)%
Selling expenses		32,525		0.64	%		145,526		3.60	%		(113,001	)		(77.65	)%		9,990		0.51	%		10,290		0.32	%		(300	)		(2.92	)%
Total Amount	$	5,049,464		100.00	%	$	4,042,004		100.00	%	$	1,007,460			24.92	%	$	1,942,800		100.00	%	$	3,223,500		100.00	%	$	(1,280,700	)		(39.73	)%

For the three months ended ~~March~~December 31, 2021, our general and administrative expenses were US$~~5,016,939,~~ 1,932,810, representing ~~an increase~~a decrease of US$~~1,120,461,~~ 1,280,400, or ~~28.76%~~39.85%, as compared to the same period in 2020. The ~~increase~~decrease was mainly due to ~~an increase~~a decrease in bad debt expenses of US$~~889,605~~ 4,108,993 during the three months ended ~~March~~December 31, 2021. ~~Due~~During the three months ended December 31, 2020, due to the COVID-19 outbreak in China, many of our customers’ businesses were adversely affected during this period, which resulted in slow collection of our receivables and utilization of our advances to vendors, and we recorded allowance of US$ 2,570,499 according to our accounting policy based on our best estimates. ~~Management will continue putting~~However, the management has put effort in ~~the~~ collection of overdue accounts receivable ~~from~~and utilize our ~~customers.~~advances to our vendors, which resulted in a reversal of allowance of US$ 1,538,494 during the three months ended December 31, 2021. The decrease was partially offset by the increased professional service fees in relation to the Company’s issuance of common stock, increased compensation expenses in relation to the Company’s lawsuit, increased rental expenses as the Company leased a new office in downtown area, the impairment of the Company’s right of use assets as well as the increased salary related expenses during the three months ended December 31, 2021.

For the three months ended ~~March~~December 31, 2021, our ~~selling~~impairment loss on an unconsolidated entity was US$ 149,790. The management performed evaluation on the impairment of the investment make on Shanxi Pharmaceutical Group Yushe Pharmaceutical Development Co., Ltd., (“Yushe Pharmaceutical”) and ~~distribution~~considered it’s unlikely to obtain any investment income in the future, hence, the management fully recorded impairment loss on this investment.

Our newly acquired VIE, Guangyuan has a 20% equity interest in Yushe Pharmaceutical, and we recorded a loss of US$ 11,967 for the three months ended December 31, 2021 from this investment.

On August 31, 2021, we entered into a capital injection agreement with the other shareholders of Shanghai Gaojing Private Fund Management (“Gaojing Private Fund”), a Chinese private fund management company, to complete the injection of a total RMB 4.8 million (approximately US$ 0.74 million) for its 32% equity interest in Gaojing Private Fund. We recorded a loss of US$ 67,101 for the three months ended December 31, 2021 from this investment.

For the three months ended December 31, 2021, our amortization of debt issuance costs expenses were US$~~32,525,~~ 395,340, representing ~~a decrease~~an increase of ~~US$113,001, or 77.65%~~100.00%, as compared to the same period in 2020. The ~~decrease~~increase in was ~~mainly due~~attributable to the ~~decrease in promotion expenses and commission expenses for our online shops under Tenet-Jove, which was in line with the decrease in our sales~~amortization of debt issuance costs during the three months ended ~~March 31, 2021. The decrease was also due to a decrease in salary related expenses as a result of a reduced number of staff members during the three months ended March 31, 2021.~~

We were 49% owners in two companies incorporated pursuant to two equity investment agreements with Shaanxi Pharmaceutical Group: Sunsimiao Drugstores and Shaanxi Longevity Pharmacy. We recorded a net loss of US$1,777,551 and a net loss of US$43,054 from these equity investments for the three months ended MarchDecember 31, 2021 ~~and 2020, respectively. The increase in net loss was primarily due to~~on the net loss in Sunsimiao Drugstores and Shaanxi Longevity Pharmacy in the current period. Shaanxi Longevity Pharmacy recorded a large amount of bad debt expenses due to slow collection of its accounts receivable, as many of its customers’ businesses were adversely affectedconvertible notes issued by the COVID-19 outbreak during this period. In addition, on March 5, 2021, Ankang Longevity Group entered into two equity investment transfer agreements with a third-party company to sell all of its 49% equity interest in Sunsimiao Drugstores and its 49% equity interest in Shaanxi Longevity Pharmacy for a total consideration of RMB6.86 million (approximately US$1.0 million), and the full amount had been received by March 31, 2021. Upon the transfer of these two equity investments, Ankang Longevity Group recorded a loss of US$1,748,459, which was included in the investment loss for the three months ended March 31, 2021 as mentioned above.Company.

For the three months ended ~~March~~December 31, 2021, ~~and 2020,~~ our ~~provision for~~net interest income ~~taxes decreased by~~was US$~~193,283, or 175.43%, to~~ 237,338, representing an ~~income tax benefit~~increase of US$~~83,106~~ 229,876, or 3,080.62%, as compared to net interest income of US$ 7,462 in the same period in 2020. The increase was attributable to the increased interest income generated from loans to third parties and related parties, the increase was partial offset by the interest expense incurred for the ~~three months ended March 31, 2021 from an income tax provision of US$110,177 for~~convertible notes issued by the three months ended March 31, 2020. The decrease in provision for income taxes was mainly due to the decreased taxable income of Ankang Longevity Group as Ankang Longevity Group incurred loss before tax for the three months ended March 31, 2021.Company.

Our net loss from continuing operations was US$~~7,779,753~~ 2,884,400 for three months ended ~~March~~December 31, 2021, ~~an increase~~a decrease of US$~~3,987,327,~~ 3,223,987, or ~~105.14%~~52.78%, from net loss from continuing operations of US$~~3,792,426~~ 6,108,387 for three months ended ~~March~~December 31, 2020. The ~~increase~~decrease in net loss was primarily a result of the ~~decrease~~increase in gross profit, the ~~increase in loss from equity method investments, and the increase~~decrease in general and administrative ~~expenses.~~expenses, partially offset by the increased amortization of debt issuance costs.

~~The comprehensive~~As mentioned above, after signing of the Restructuring Agreement on June 8, 2021, the Company and the shareholders of Ankang and Guangyuan actively carried out the transferring of rights and interests in Ankang and Guangyuan, and the transferring was completed subsequently on July 5, 2021, and the management determined that July 5, 2021 was the disposal date of Ankang. We had a total net loss ~~was~~from discontinued operations of US$~~7,944,384~~ nil for the three months ended ~~March~~December 31, 2021 ~~an increase~~as compared to a total net loss from discontinued operations of US$~~2,942,522 from~~ 7,375,140 for the same period in 2020.

The summarized operating results of our discontinued operations included in our consolidated statement of loss and comprehensive loss ofis as follows:

Our net loss was US$~~5,001,862~~ 2,884,400 for the three months ended ~~March~~December 31, 2021, a decrease of US$ 10,599,127 or 78.61%, from a net loss of US$ 13,483,527 for the three months ended December 31, 2020. The decrease in net loss was primarily a result of increase in gross profit, the decrease in general and administrative expenses and net loss from discontinued operations, partially offset by the increased amortization of debt issuance costs.

The comprehensive loss was US$ 2,070,664 for the three months ended December 31, 2021, a decrease of US$ 9,004,300 from a comprehensive loss of US$ 11,074,964 for the three months ended December 31, 2020. After deduction of non-controlling interest, the comprehensive loss attributable to us was US$~~7,670,578~~ 2,058,096 for the three months ended ~~March~~December 31, 2021, compared to a comprehensive loss attributable to us in the amount of US$~~5,007,142~~ 10,644,170 for the three months ended ~~March~~December 31, 2020. The ~~increase~~significant decrease of comprehensive loss was due to the ~~increase~~decrease in net loss as mentioned above, ~~which was partially offset by~~as well as a decrease in the recorded ~~loss~~income of foreign currency translation where the financial statements denominated in RMB were translated to the USD denomination.

We have established treasury policies with the objectives of achieving effective control of treasury operations and of lowering cost of funds. Therefore, funding for all operations and foreign exchange exposure have been centrally reviewed and monitored from the top level. To manage our exposure to fluctuations in exchange rates and interest rates on specific transactions and foreign currency borrowings, currency structured instruments and other appropriate financial instruments will be used to hedge material exposure, if any.

Our policy precludes us from entering into any derivative contracts purely for speculative activities. Through our treasury policies, we aim to:

This is accomplished by loan re-financing and negotiation. We will continue to closely monitor the total loan portfolio and compare the loan margin spread under our existing agreements against the current borrowing interest rates under different currencies and new offers from banks.

In view of the current volatile currency market, we will closely monitor the foreign currency borrowings at the company level. As of December 31, ~~2020~~2021 and June 30, ~~2020,~~2021, except the above-mentioned convertible note, we did not engage in any foreign currency borrowings or loan contracts.

We currently finance our business operations primarily through ~~cash flows from operations and~~ proceeds from our initial public offering, as well as from short-term loans, convertible notes and the sale of our common stock. Our current cash primarily consists of cash on hand and cash in bank, which is unrestricted as to withdrawal and use and is deposited with banks in China.

On December 10, 2020, we entered into a securities purchase agreement with select investors whereby we sold purchase, up to 604,900 shares of common stock at a purchase price of US$2.73 per share. The net proceeds that we received was US$1.6 million.

On January 27, 2021, we issued 364,445 shares of common stock to ~~three~~two investors at a price of US$3.0 per share. The net proceeds that we received was US$1.1 million.

On April 10, 2021, we issued 3,872,194 shares of common stock to selected investors at a price of US $3.2 per share. We received net proceeds of US$ 7,981,204 and US$ 3,024,000 was outstanding as of December 31, 2021.

On June 16, 2021, we entered into a securities purchase agreement pursuant to which we issued an unsecured convertible promissory note with a one-year maturity term to an institutional accredited investor Streeterville Capital, LLC (“Investor”). The convertible promissory note has the original principal amount of US$ 3,170,000 and Investor gave consideration of US$ 3.0 million, reflecting original issue discount of US$ 150,000 and Investor’s legal fee of US$ 20,000. We received principal in full from the Investor. On July 16, 2021, we entered into a securities purchase agreement pursuant to which we issued two unsecured convertible promissory notes with a one-year maturity term to the same investor. The first convertible promissory note has an original principal amount of US$3,170,000.00 and the Investor gave consideration of US$3.0 million, reflecting original issue discount of US$150,000 and Investor’s legal fee of US$20,000. The second convertible promissory note has an original principal amount of US$4,200,000.00 and the Investor gave consideration of US$4.0 million, reflecting original issue discount of US$200,000. On August 19, 2021, we entered into a securities purchase agreement pursuant to which we issued an unsecured convertible promissory note with a one-year maturity term to the same investor. The Note has the original principal amount of US$10,520,000.00 and Investor gave consideration of US$10.0 million, reflecting original issue discount of US$500,000 and Investor’s legal fee of US$20,000. We received principal in full from the Investor and we anticipate using the proceeds for general working capital purposes. As of ~~March~~December 31, 2021, a total of 1,258,450 shares of our common stock were issued by us to the Investor equaling principal and interests amounted to $6,000,000, and the convertible note balance was$14,840,874, with a carrying value of $15,474,778, net of deferred financing costs of $633,904.

On December 6, 2021, we ~~had~~entered into a securities purchase agreement with GHS Investments, LLC (“GHS”). Under the Purchase Agreement, we sold GHS 291,775 shares of its common stock at a per share purchase price of $6.8546 for gross proceeds of $2,000,000. After the deduction of issuance cost, we received net proceeds of US$~~1,830,249 bank loans outstanding. We expect that we will be able to renew our existing bank loans upon their maturity based on past experience and our good credit history.~~1,970,000.

Management believes that our current cash, cash flows from future operations, and access to loans will be sufficient to meet our working capital needs for at least the next 12 months. We intend to continue to carefully execute our growth plans and manage market risk.

The following table provides the information about our working capital at ~~March~~December 31, 2021 and June 30, ~~2020:~~2021:

	March 31, 2021		June 30, 2020		December 31, 2021		June 30, 2021

Current Assets	$	56,020,245	$	59,519,998	$	66,641,593	$	49,278,577
Current Liabilities		14,449,966		11,347,325		30,376,977		14,795,390
Working Capital	$	41,570,279	$	48,172,673	$	36,264,616	$	34,483,187

The working capital ~~decreased~~increased slightly by US$~~6,602,394,~~ 1,781,429, or ~~13.7%~~5.2%, as of ~~March~~December 31, 2021 from June 30, ~~2020,~~2021, primarily as a result of aan increase in inventories, other current assets and due from related parties, partially offset by the decrease in ~~cash~~current assets held for discontinued operations and ~~accounts receivable,~~advances to suppliers, and an increase in other payables and accrued expenses, ~~partially offset by increased advances to suppliers~~ and ~~other current assets during the nine months ended March~~convertible note payable as of December 31, 2021.

As of March 31, 2021 and June 30, 2020, the other major component of our working capital was accounts receivable. The accounts receivable as of March 31, 2021 were US$5,087,539, a decrease of approximately 53.8% from US$11,008,485 as of June 30, 2020 as a result of increased provision for doubtful accounts. Due to the COVID-19 outbreak in China, many of our customers’ businesses were adversely affected during this period, which resulted in slow collection of our receivables, and we recorded allowance according to our accounting policy based on our best estimates. Management will continue putting effort in the collection of overdue account receivables from our customers.

Capital commitments refer to the allocation of funds for the possible purchase in the near future for fixed assets or investment. Contingency refers to a condition that arises from past transactions or events, the outcome of which will be confirmed only by the occurrence or non-occurrence of uncertain futures events.

As of ~~March~~December 31, 2021 and June 30, ~~2020,~~2021, we had no material capital commitments or contingent liabilities.

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own common stock and classified as stockholders’ equity, or that are not reflected in our consolidated financial statements.

The following table provides detailed information about our net cash flows for the ~~nine~~six months ended ~~March~~December 31, 2021 and 2020.

Net cash used in operating activities during the ~~nine~~six months ended ~~March~~December 31, 2021 was approximately US$~~11.9~~ 5.6 million, consisting of a net loss from continuing operations of US$~~22.3~~ 14.0 million, bad debt expenses of US$~~11.1~~ 5.8 million, impairment loss on distribution rights of US$ 1.1 million, and net changes in our operating assets and liabilities, which mainly included an ~~inventory write-off~~increase in other current assets of US$ 4.6 million, partially offset by the decreased in advances to suppliers and increased in other payable. Net cash used in operating activities during the six months ended December 31, 2020 was approximately US$ 11.4 million, consisting of net loss from continuing operations of US$ 7.3 million, bad debt expenses of US$ 3.3 million, stock written off due to natural ~~disasters~~disaster of US$~~3.4 million, a loss from disposal of property and equipment of US$2.2 million, a loss from equity method investments of US$3.8~~ 2.6 million, and net changes in our operating assets and liabilities, which mainly included an increase in advances to suppliers of US$~~4.3~~ 4.6 million and inventories of US$4.0 million, ~~other~~and account receivables of US$~~3.8 million, and accounts receivables of US$2.4 million, partially offset by~~ 1.7 million.

For the ~~increase in other payable of US$3.6 million. Net cash provided by operating activities during the nine~~six months ended March 31, 2020 was approximately US$4.3 million, consisting of a net loss of US$5.4 million, bad debt expenses of US$5.7 million, restricted shares issued to management of US$1.0 million, and net changes in our operating assets and liabilities, which mainly included a decrease in advances to suppliers of US$3.3 million, partially offset by the increase in other receivables of US$0.8 million.

~~For the nine months ended March~~December 31, 2021, net cash ~~provided by~~used in investing activities was US$~~1.3~~ 32.5 million, primarily due to the ~~proceeds from~~ disposal of ~~property and equipment~~Ankang of US$~~1.5~~ 12.7 million, payment made for loans to third parties of US$ 12.2 million and ~~proceeds~~repayments of loans from ~~withdrawal~~related parties of ~~investments of 1.0 million, partially offset by advances of loan to a third party of~~ US$~~1.3 million during~~ 6.6 million. For the ~~nine~~six months ended ~~March 31, 2021. For the nine months ended March~~December 31, 2020, net cash provided by investing activities was ~~approximately~~ US$~~116,294, primarily~~ 0.2 million due to the ~~proceeds~~net cash provided by investing activities from ~~disposal of property and equipment of US$79,414, as well as a repayment of loans to third parties of US$38,377 during~~discontinued operations.

~~For the nine months ended March~~December 31, 2021, net cash provided financing activities amounted to approximately US$~~1.8~~ 25.2 million, primarily due to the proceeds from issuance of common stock of US$~~2.7~~ 7.5 million, ~~and~~ proceeds from ~~short-term loans~~issuance of ~~US$0.3 million, partially offset by the repayment~~convertible note of ~~short-term loans of~~ US$~~1.0~~ 17.0 million. For the ~~nine~~six months ended ~~March~~December 31, 2020, net cash provided by financing activities amounted to approximately US$~~2.1~~ 1.0 million ~~primarily~~ due to ~~the~~ proceeds from issuance of common stock of US$~~1.5 million, and proceeds from short-term loans of US$2.4~~ 1.6 million, partially offset by the ~~repayment~~net cash used in financing activities from discontinued operations of ~~short-term loans of~~ US$~~2.4~~ 0.7 million.

As a small reporting company, we are not required to provide the information required by this item.

We maintain disclosure controls and procedures designed to provide reasonable assurance that material information required to be disclosed by us in the reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that the information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Based on our review, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of the end of the period covered by this Quarterly Report due to following material weaknesses:

In order to address the above material weaknesses, our management has taken the following steps:

We are committed to monitoring the effectiveness of these measures and making any changes that are necessary and appropriate.

There were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the fiscal quarter ended ~~March~~December 31, 2021. Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements. Further, because of changes in conditions, effectiveness of internal controls over financial reporting may vary over time. Our system contains self-monitoring mechanisms, and actions are taken to correct deficiencies as they are identified.

Other than the legal actions listed below and ordinary routine litigation (of which we are not currently involved), we know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation, and there are no proceedings in which any of our directors, officers, or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our ~~company except as set forth below:~~ company.

On May 16, 2017, ~~the Plaintiff~~Mrs. Guiqin Li (the “Plaintiff”) commenced a lawsuit ~~(Case No. 1:17-cv-03681-PGG)~~ against usthe Company in the ~~United States District~~People’s Court ~~for the Southern District~~ of ~~New York.~~Chongqing Pilot Free Trade Zone of China. Plaintiff alleged that ~~we entered into an agreement with~~due to the misguidance given by the Company’s securities trading department, the Plaintiff ~~pursuant~~did not manage to ~~which~~complete the ~~Plaintiff was to provide us with financial advisory services in connection with our~~sales of the Company’s common stock on the day of the Company’s initial public offering in the United States. ~~The Plaintiff alleged that we breached~~As the ~~Agreement and seek money damages up to US$6 million. In March 2021, we entered into a Settlement Agreement and Release with~~price of the Company’s common stock continued falling after initial public offering, the Plaintiff ~~pursuant~~incurred losses and hence is seeking monetary damages against the Company. Based on the judgment of the initial trial, the Company was required to ~~which we paid~~pay the Plaintiff a settlement payment, including the monetary compensation, interests and other legal fees. As of December 31, 2021, the Company accrued a total ~~sum~~ of US$ ~~47,500 as~~781,700 (approximately RMB 5.0 million) for this lawsuit. The Company made an appeal to such judgment in the People’s Court, and will continue vigorously defending itself and seeking for less settlement payment ~~and upon acceptance~~in the second trial of this litigation.

On November 26, 2021, the Company filed a complaint in the Supreme Court of the ~~settlement payment from us,~~State of New York, New York County against Lei Zhang and Yan Li, as defendants, and Transhare Corporation, as a nominal defendant, asserting that defendants had not paid for certain restricted shares of the ~~Plaintiff waived, released~~Company’s common stock pursuant to stock purchase agreements they executed with the Company. In December, defendants filed an answer and ~~forever discharged us from all past~~counterclaim against the Company, which they amended on January 27, 2022 after the Company moved to dismiss their counterclaims. They claimed that the Company made false and ~~future claims.~~materially misleading statements, specifically regarding the sale of such shares to Lei Zhang and Yan Li and the removal of their restrictive legends. Defendants are seeking a declaratory judgment, indemnification, and money damages of at least $9 million, punitive damages of $10 million, plus interest, costs, and fees. The Company anticipates moving to dismiss the counterclaims in March, 2022. The outcome of this legal proceeding is uncertain at this point because of the many questions of fact and law that may arise. The Company intends to recover on its claims, and vigorously defend itself in this litigation. As of December 31, 2021, the total amount of unpaid restricted shares issued to Lei Zhang and Yan Li by the Company was 982,500 shares, and the subscription receivable was amounted to US$3,024,000 which was recorded on the unaudited condensed consolidated balance sheet.

As a smaller reporting company, we are not required to provide the information otherwise required by this Item.

See “Part I—Financial Information—Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Financing Activities.”

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.

Large accelerated filer	~~[ ]~~☐	Accelerated filer	~~[ ]~~☐
Non-accelerated filer	~~[X]~~☒	Smaller reporting company	~~[X]~~☒
		Emerging growth company	~~[X]~~☐

		Page Number

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Condensed Consolidated Balance Sheets (unaudited)	1

	Condensed Consolidated Statements of Income and Comprehensive Income (unaudited)	2

	Condensed Consolidated Statements of Changes in Equity (unaudited)	3

	Condensed Consolidated Statements of Cash Flows (unaudited)	5

	Notes to the Condensed Consolidated Financial Statements (unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2840

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4459

Item 4.	Controls and Procedures	4459

PART II. OTHER INFORMATION		60

Item 1.	Legal Proceedings	4560

Item 1A.	Risk Factors	4560

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4560

Item 3.	Defaults Upon Senior Securities	4560

Item 4.	Mine Safety Disclosures	4560

Item 5.	Other Information	4560

Item 6.	Exhibits	4560

SIGNATURES		4661

	March 31,			June 30,
	2021			2020
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	25,848,597		$	32,371,372
Accounts receivable, net		5,087,539			11,008,485
Due from related parties		130,407			120,939
Inventories, net		2,363,050			1,799,876
Advances to suppliers, net		16,743,140			13,313,946
Other current assets		5,847,512			905,380
TOTAL CURRENT ASSETS		56,020,245			59,519,998

Property and equipment, net		6,058,925			9,489,484
Land use right, net of accumulated amortization		1,263,683			1,195,943
Investments		-			4,515,124
Distribution rights		1,125,603			1,043,887
Long-term deposit and other noncurrent assets		100,343			96,280
Right of use assets		3,022,178			3,227,895
TOTAL ASSETS	$	67,590,977		$	79,088,611

LIABILITIES AND EQUITY

CURRENT LIABILITIES:
Short-term loans	$	1,830,249		$	2,333,894
Accounts payable		278,633			148,209
Advances from customers		6,820			6,324
Due to related parties		1,131,376			1,355,919
Other payables and accrued expenses		7,776,146			4,018,684
Operating lease liabilities - current		97,560			97,633
Taxes payable		3,329,182			3,386,662
TOTAL CURRENT LIABILITIES		14,449,966			11,347,325

Income tax payable - noncurrent portion		566,022			566,022
Operating lease liabilities - non-current		449,162			401,891
Deferred tax liability		281,401			260,972
TOTAL LIABILITIES		15,746,551			12,576,210

Commitments and contingencies		-			-

EQUITY:
Common stock; par value $0.001, 100,000,000 shares authorized; 4,009,288 and 3,039,943 shares issued and outstanding at March 31, 2021 and June 30, 2020*		4,009			3,040
Additional paid-in capital		30,037,504			27,302,051
Statutory reserve		4,198,107			4,198,107
Retained earnings		18,522,830			40,106,518
Accumulated other comprehensive loss		(1,451,386	)		(6,283,835	)
Total Stockholders’ equity of Shineco, Inc.		51,311,064			65,325,881
Non-controlling interest		533,362			1,186,520
TOTAL EQUITY		51,844,426			66,512,401

TOTAL LIABILITIES AND EQUITY	$	67,590,977		$	79,088,611

	December 31,			June 30,
	2021			2021
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	16,620,895		$	16,342,911
Accounts receivable, net		2,425,239			2,686,671
Due from related parties		7,031,383			132,398
Inventories, net		21,013,542			1,323,391
Advances to suppliers, net		814,445			7,790,126
Other current assets		18,736,089			1,343,338
Current assets held for discontinued operations		-			19,659,742
TOTAL CURRENT ASSETS		66,641,593			49,278,577

Property and equipment, net		2,384,059			2,253,944
Investments		659,165			-
Distribution rights		-			1,142,794
Long-term deposit and other noncurrent assets		12,383			14,550
Right of use assets		5,055,410			3,585,703
Non-current assets held for discontinued operations		-			5,043,031
TOTAL ASSETS	$	74,752,610		$	61,318,599


LIABILITIES AND EQUITY

CURRENT LIABILITIES:
Accounts payable	$	1,629		$	76,584
Advances from customers		7,029			7,468
Due to related parties		4,099,934			1,159,407
Other payables and accrued expenses		9,211,551			4,109,208
Operating lease liabilities - current		1,105,641			434,411
Convertible note payable		14,840,874			2,933,030
Taxes payable		1,110,319			1,208,348
Current liabilities held for discontinued operations		-			4,866,934
TOTAL CURRENT LIABILITIES		30,376,977			14,795,390

Income tax payable - noncurrent portion		506,441			506,441
Operating lease liabilities - non-current		1,744,720			352,863
Deferred tax liability		290,030			285,699
TOTAL LIABILITIES		32,918,168			15,940,393

Commitments and contingencies		-			-

EQUITY:
Common stock; par value $0.001, 100,000,000 shares authorized; 9,431,707 and 7,881,482 shares issued and outstanding at December 31, 2021 and June 30, 2021		9,432			7,881
Additional paid-in capital		49,435,507			41,105,806
Subscription receivable		(3,024,000	)		(8,535,203	)
Statutory reserve		4,198,107			4,198,107
Retained earnings (accumulated deficit)		(8,454,972	)		8,661,071
Accumulated other comprehensive gain (loss)		67,175			(731,805	)
Total Stockholders’ equity of Shineco, Inc.		42,231,249			44,705,857
Non-controlling interest		(396,807	)		672,349
TOTAL EQUITY		41,834,442			45,378,206

TOTAL LIABILITIES AND EQUITY	$	74,752,610		$	61,318,599

												ACCUMULATED
					ADDITIONAL							OTHER			NON-
	COMMON STOCK				PAID-IN		STATUTORY		RETAINED			COMPREHENSIVE			CONTROLLING			TOTAL
	SHARES*		AMOUNT		CAPITAL		RESERVE		EARNINGS			LOSS			INTEREST			EQUITY
Balance at June 30, 2019		2,541,308	$	2,541	$	24,779,687	$	4,198,107	$	46,735,190		$	(4,184,024	)	$	1,100,613			72,632,114

Stock issuance		495,740		496		2,522,367		-		-			-			-			2,522,863
Net income (loss) for the period		-		-		-		-		(5,497,847	)		-			82,530			(5,415,317	)
Foreign currency translation loss		-		-		-		-		-			(2,284,814	)		(35,463	)		(2,320,277	)
Balance at March 31, 2020		3,037,048	$	3,037	$	27,302,054	$	4,198,107	$	41,237,343		$	(6,468,838	)	$	1,147,680		$	67,419,383

Balance at June 30, 2020		3,039,943	$	3,040	$	27,302,051	$	4,198,107	$	40,106,518		$	(6,283,835	)	$	1,186,520		$	66,512,401

Stock issuance		969,345		969		2,735,453		-		-			-			-			2,736,422
Net income loss for the period		-		-		-		-		(21,583,688	)		-			(732,572	)		(22,316,260	)
Foreign currency translation gain		-		-		-		-		-			4,832,449			79,414			4,911,863
Balance at March 31, 2021		4,009,288	$	4,009	$	30,037,504	$	4,198,107	$	18,522,830		$	(1,451,386	)	$	533,362		$	51,844,426


												RETAINED			ACCUMULATED
								ADDITIONAL				EARNINGS			OTHER			NON-
	COMMON STOCK				SUBSCRIPTION			PAID-IN		STATUTORY		(ACCUMULATED			COMPREHENSIVE			CONTROLLING			TOTAL
	SHARES*		AMOUNT		RECEIVABLE			CAPITAL		RESERVE		DEFICIT)			LOSS			INTEREST			EQUITY
Balance at June 30, 2020		3,039,943	$	3,040	$	-		$	27,302,051	$	4,198,107	$	40,106,518		$	(6,283,835	)	$	1,186,520		$	66,512,401

Stock issuance		604,900		605		-			1,642,482		-		-			-			-			1,643,087
Issuance of common shares for convertible notes redemption
Issuance of common shares for convertible notes redemption, shares
Beneficial conversion feature associated with convertible notes
Disposal of Ankang
Net loss for the period		-		-		-			-		-		(14,076,423	)		-			(460,084	)		(14,536,507	)
Foreign currency translation gain		-		-		-			-		-		-			4,995,762			80,732			5,076,494
Balance at December 31, 2020		3,644,843	$	3,645	$	-		$	28,944,533	$	4,198,107	$	26,030,095		$	(1,288,073	)	$	807,168		$	58,695,475
										��
Balance at June 30, 2021		7,881,482	$	7,881	$	(8,535,203	)	$	41,105,806	$	4,198,107	$	8,661,071		$	(731,805	)	$	672,349		$	45,378,206

Stock issuance		291,775		292		5,511,203			1,969,708		-		-			-			-			7,481,203
Issuance of common shares for convertible notes redemption		1,258,450		1,259		-			5,998,741		-		-			-			-			6,000,000
Beneficial conversion feature associated with convertible notes		-		-		-			361,252		-		-			-			-			361,252
Disposal of Ankang		-		-		-			-		-		-			-			(1,072,667	)		(1,072,667	)
Net loss for the period		-		-		-			-		-		(17,116,043	)		-			(11,815	)		(17,127,858	)
Foreign currency translation gain		-		-		-			-		-		-			798,980			15,326			814,306
Balance at December 31, 2021		9,431,707	$	9,432	$	(3,024,000	)	$	49,435,507	$	4,198,107	$	(8,454,972	)	$	67,175		$	(396,807	)	$	41,834,442

	December 31, 2021		June 30, 2021

Current assets	$	-	$	19,659,742
Plant and equipment, net		-		3,683,525
Other non-current assets		-		1,359,506
Total assets		-		24,702,773
Total liabilities		-		(4,866,934	)
Net assets	$	-	$	19,835,839

		Estimated useful lives

Buildings		~~20-50~~20-50 years
Machinery equipment		~~5-10~~5-10 years
Motor vehicles		~~5-10~~5-10 years
Office equipment		~~5-10~~5-10 years
Farmland leasehold improvements		~~12-18~~12-18 years
Leasehold improvement		Lesser of useful life and lease term

	December 31, 2021			June 30, 2021

Accounts receivable	$	8,821,905		$	15,795,234
Less: allowance for doubtful accounts		(6,396,666	)		(9,635,506	)
Accounts receivable, net		2,425,239			6,159,728
Less: accounts receivable, net, held for discontinued operations		-			3,473,057
Accounts receivable, net, held for continuing operations	$	2,425,239		$	2,686,671

12 months ending March 31:
2022	$	33,930
2023		33,930
2024		33,930
2025		33,930
2026		33,930
Thereafter		1,094,033
Total	$	1,263,683

	March 31, 2021		June 30, 2020

Shaanxi Pharmaceutical Holding Group Longevity Pharmacy Co., Ltd.	$	-	$	3,690,419
Shaanxi Pharmaceutical Sunsimiao Drugstores Ankang Chain Co., Ltd.		-		824,705
Total investment	$	-	$	4,515,124

	December 31, 2021		June 30, 2021

Gaojing Private Fund	$	659,165	$	-
Total investment		659,165		-
Less: investment, held for discontinued operations		-		-
Investment, held for continuing operations	$	659,165	$	-

a.	Guaranteed by a commercial credit guaranty company unrelated to the Company and also by Jiping Chen, a stockholder of the Company.

b.	Collateralized by the building owned by Xiaoyan Chen and Jing Chen, who are both related parties of the Company. Xiaoyan Chen is one of the shareholders of Ankang Longevity Group. Jing Chen is the sister of Xiaoyan Chen but not a shareholder of Ankang Longevity Group.

*^{^}	~~The Company repaid the loan in full on maturity date.~~

^	Upon the original maturity date of February 27, 2021, the Company signed ~~two~~a loan extension ~~agreements~~agreement with Agricultural Bank of China to extend the loan repayment date to February 27, 2022 with the same interest rate of 5.66% per annum.

#	Upon the original maturity date of September 1, 2021, the Company signed a loan extension agreement with Agricultural Bank of China to extend the loan repayment date to September 1, 2022 with the same interest rate of 5.66% per ~~annum.~~annum.


Due from related party		108,296
Inventory		19,439,711
Other current assets		224,522
Right of use assets		1,164,976
Long-term investments and other non-current assets		166,107
Other payables and other current assets		(4,534,328	)
Operating lease liabilities		(1,047,486	)
Total purchase price for acquisition, net of US$ 112,070 of cash	$	15,521,798

a.	This company is wholly owned by one of the Company’s senior ~~management.~~managements.

b.	The Company owns 32% equity interest in this company. (Note 10)

c.	On September 17, 2021, the Company entered into a loan agreement with Zhongjian Yijia Health Technology (Qingdao) Co., Ltd. to with an amount of US$1,729,179 (RMB 11.0 million) for its working capital for one year, with a maturity date of September 16, 2022. The loans bore a fixed annual interest rate of 6.0% per annum. The Company accrued interest income amounted to US$29,846 during the six months ended December 31, 2021.

d.	On October 28, 2021, the Company entered into a loan agreement with Zhongjian (Qingdao) International Logistics Development Co., Ltd. to with an amount of US$4,700,223 (RMB 29.9 million) for its working capital for one year, with a maturity date of October 27, 2022. The loans bore a fixed annual interest rate of 6.0% per annum. The Company accrued interest income amounted to US$49,449 during the six months ended December 31, 2021.

	March 31, 2021			June 30, 2020
Deferred tax assets:
Allowance for doubtful accounts	$	1,291,461		$	428,879
Inventory reserve		326,903			252,022
Net operating loss carry-forwards		544,267			504,754
Total		2,162,631			1,185,655
Valuation allowance		(2,162,631	)		(1,185,655	)
Total deferred tax assets		-			-
Deferred tax liability:
Distribution rights		(281,401	)		(260,972	)
Total deferred tax liability		(281,401	)		(260,972	)
Deferred tax liability, net	$	(281,401	)	$	(260,972

●
	The operating companies of this segment, namely Tenet-Jove and Tenet Huatai, specialize in Luobuma growing, development and manufacturing of relevant products, as well as purchasing Luobuma raw materials processing.

	This segment’s operations are focused in the north region of Mainland China, mostly carried out in Beijing, Tianjin, and Xinjiang.

●	Processing and distributing of traditional Chinese medicinal herbal products as well as other pharmaceutical products (“Herbal products”):

●
	The operating companies of this segment, namely AnKang Longevity Group and its subsidiaries, which are reclassified as discontinued operations, process more than 600 kinds of Chinese medicinal herbal products with an established domestic sales and distribution network.

	Ankang Longevity Group is also engaged in the retail pharmacy business and the operating revenue, which is not material, is also included in this segment.

●	Planting, processing, and distributing of green and organic agricultural produce as well as growing and cultivating of Chinese Yew trees (“Other agricultural products”):

	●	Ankang Longevity, a company incorporated under the laws of the People’s Republic of China (the “PRC”);

	●	Mr. Jiping Chen, who is a minority shareholder of the Company and holds 68.7% of the equity interests in Ankang Longevity, and Ms. Xiaoyan Chen, who holds 31.3% of the equity interests in Ankang Longevity (collectively, the “Ankang Shareholders”);

	●	Yushe County Guangyuan Forest Development Co., Ltd., a company incorporated under the laws of the PRC (“Guangyuan”); and

	●	Mr. Baolin Li, who is a minority shareholder of the Company and holds 90% of the equity interests in Guangyuan, and Ms. Yufeng Zhang, who holds 10% of the equity interests in Guangyuan (collectively, the “Guangyuan Shareholders”).

	December 31, 2021		June 30, 2021
Assets of discontinued operation:
Current assets:
Cash	$	-	$	12,681,483
Accounts receivables		-		3,473,057
Inventories, net		-		281,245
Advances to suppliers, net		-		700,348
Other current assets		-		2,523,609
Total current assets of discontinued operation		-		19,659,742

Property and equipment, net		-		3,683,525
Land use right, net of accumulated amortization		-		1,274,262
Investments		-		-
Long-term deposit and other noncurrent assets		-		85,244
Total assets of discontinued operation	$	-	$	24,702,773

Liabilities of discontinued operation:
Current liabilities:
Short-term loans	$	-	$	1,858,202
Accounts payable		-		46,948
Other payables and accrued expenses		-		1,218,111
Taxes payable		-		1,743,673
Total liabilities of discontinued operation	$	-	$	4,866,934


	For the Six Months Ended December 31,						For the Three Months Ended December 31,
	2021			2020			2021		2020

REVENUE	$	-		$	5,408,725		$	-	$	2,273,319

COST OF REVENUE
Cost of product and services		-			4,430,978			-		1,949,657
Business and sales related tax		-			18,927			-		7,785
Total cost of revenue		-			4,449,905			-		1,957,442

GROSS PROFIT		-			958,820			-		315,877

OPERATING EXPENSES
General and administrative expenses		-			3,971,601			-		3,574,179
Selling expenses		-			31,409			-		10,420
Total operating expenses		-			4,003,010			-		3,584,599

LOSS FROM OPERATIONS		-			(3,044,190	)		-		(3,268,722	)

OTHER EXPENSE
Loss from equity method investments		-			(1,975,729	)		-		(1,991,016	)
Other expense, net		-			(2,124,108	)		-		(2,124,108	)
Interest expense net		-			(42,212	)		-		(18,015	)
Total other expense		-			(4,142,049	)		-		(4,133,139	)

LOSS BEFORE PROVISION FOR INCOME TAXES FROM DISCONTINUED OPERATIONS		-			(7,186,239	)		-		(7,401,861	)

PROVISION (BENEFIT) FOR INCOME TAXES FROM DISCONTINUED OPERATIONS		-			78,576			-		(26,721	)

NET LOSS FROM DISCONTINUED OPERATIONS FROM ANKANG GROUP		-			(7,264,815	)		-		(7,375,140	)

LOSS ON DISPOSAL OF DISCONTINUED OPERATIONS		(3,135,237	)		-			-		-

NET LOSS FROM DISCONTINUED OPERATIONS		(3,135,237	)		(7,264,815	)		-		(7,375,140	)

Net loss attributable to non-controlling interest		-			(449,720	)		-		(460,484	)

NET LOSS FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO SHINECO, INC.	$	(3,135,237	)	$	(6,815,095	)	$	-	$	(6,914,656	)

	●	the timing of the development of future products;

	●	projections of revenue, earnings, capital structure, and other financial items;

	●	local, regional, national, and global Luobuma and herbal medicines price fluctuations;

	●	statements of our plans and objectives, including those that relate to our proposed expansions and the effect such expansions may have on our revenue;

	●	statements regarding the capabilities of our business operations;

	●	statements of expected future economic performance;

	●	the impact of the COVID-19 outbreak;

	●	statements regarding competition in our market; and

	●	assumptions underlying statements regarding us or our business.

	For the nine months ended March 31
	2021			2020

Net cash provided by (used in) operating activities	$	(11,854,241	)	$	4,297,529
Net cash provided by investing activities		1,252,056			116,294
Net cash provided by financing activities		1,764,958			2,107,600
Effect of exchange rate changes on cash		2,314,452			(1,206,310	)
Net increase (decrease) in cash		(6,522,775	)		5,315,113
Cash, beginning of period		32,371,372			35,330,676
Cash, end of period	$	25,848,597		$	40,645,789

	●	a lack of full-time U.S. GAAP personnel in the accounting department to monitor the recording of the transactions; and

	●	a lack of segregation of duties for accounting personnel who prepared and reviewed the journal entries.

	●	recruiting sufficient qualified professionals with appropriate levels of knowledge and experience to assist in reviewing and resolving accounting issues in routine or complex transactions. To mitigate the reporting risks, we engaged an outside professional consulting firm to supplement our efforts to improve our internal control over financial reporting;

	●	improving the communication between management, board of directors, and the Chief Financial Officer; and

	●	obtaining proper approval for other significant and non-routine transactions from the board of directors.

Exhibit		Incorporated by Reference (Unless Otherwise Indicated)
Number	Exhibit Title	Form	File	Exhibit	Filing Date
3.1	Certificate of Incorporation	S-1	333-202803	3.1	July 1, 2015

3.2	Amended and Restated Bylaws	S-1	333-202803	3.2	July 1, 2015

4.1	Specimen Common Stock Share Certificate	S-1	333-202803	4.1	January 27, 2016

10.1	Form of Stock Purchase Agreement by and between the Company and the Purchasers	8-K	001-37776	10.1	April 19, 2021

10.2	English Translation of Equity Transfer Agreement dated March 5, 2021 by and between Ankang Longevity Group and Ankang Huazhuo Health Management Co., Ltd.	—	—	—	Filed herewith

10.3	English Translation of Equity Transfer Agreement dated March 5, 2021 by and between Ankang Longevity Group and Ankang Huazhuo Health Management Co., Ltd.	—	—	—	Filed herewith

10.4	English Translation of Loan Extension Agreement dated February 26, 2021 by and among Ankang Longevity Group, Agricultural Bank of China, and Ankang Caixin Financing Guarantee Co., Ltd.	—	—	—	Filed herewith

10.5	English Translation of Loan Extension Agreement dated February 26, 2021 by and among Ankang Longevity Group, Agricultural Bank of China, and Jiping Chen	—	—	—	Filed herewith

10.6	Form of Stock Purchase Agreement between the Company and each investor, as currently in effect, and a schedule of all executed Stock Purchase Agreements adopting the same form	—	—	—	Filed herewith

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	Filed herewith

31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	—	—	—	Filed herewith

32.1*	Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—	—	Furnished herewith

32.2*	Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	—	—	—	Furnished herewith

101.INS	XBRL Instance Document				Filed herewith

101.SCH	XBRL Taxonomy Extension Schema Linkbase				Filed herewith

101.CAL	XBRL Taxonomy Extension Calculation Linkbase				Filed herewith

101.DEF	XBRL Taxonomy Extension Definition Linkbase				Filed herewith

101.LAB	XBRL Taxonomy Extension Label Linkbase				Filed herewith

101.PRE	XBRL Taxonomy Extension Presentation Linkbase				Filed herewith

*Exhibit Number	~~In accordance with Item 601(b)(32)(ii)~~	Description
31.1		Certification of ~~Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 herewith are deemed~~Principal Executive Officer pursuant to ~~accompany this Form 10-Q and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings~~Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act orof 1934
31.2		Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange ~~Act.~~Act of 1934
32.1		Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. § 1350, as Adopted Pursuant to § 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

	SHINECO, INC.

Dated: ~~May~~February 14, ~~2021~~2022	By:	/s/ ~~Ou Yang~~Jennifer Zhan
		~~Ou Yang~~Jennifer Zhan
		Chief Executive Officer
		(Principal Executive Officer)

Dated: ~~May~~February 14, ~~2021~~2022	By:	/s/ Sai (Sam) Wang
		Sai (Sam) Wang
		Chief Financial Officer
		(Principal Financial and Accounting Officer)