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

CONDENSED CONSOLIDATED STATEMENTS OF ~~LOSS AND COMPREHENSIVE LOSS~~CHANGES IN EQUITY

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

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

FOR THE THREE MONTHS ENDED ~~DECEMBER~~MARCH 31, ~~2021~~2022 AND ~~2020~~2021

																ACCUMULATED																							ACCUMULATED
								ADDITIONAL								OTHER			NON-													ADDITIONAL							OTHER			NON-
	COMMON STOCK				SUBSCRIPTION			PAID-IN		STATUTORY			RETAINED			COMPREHENSIVE			CONTROLLING			TOTAL			COMMON STOCK				SUBSCRIPTION			PAID-IN		STATUTORY		RETAINED			COMPREHENSIVE			CONTROLLING			TOTAL
	SHARES		AMOUNT		RECEIVABLE			CAPITAL		RESERVE			EARNINGS			LOSS			INTEREST			EQUITY			SHARES		AMOUNT		RECEIVABLE			CAPITAL		RESERVE		EARNINGS			LOSS			INTEREST			EQUITY
Balance at September 30, 2020		3,039,943	$	3,040	$	-		$	27,302,051	$	4,199,964		$	39,047,151		$	(3,662,816	)	$	1,237,962		$	68,127,352
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

Stock issuance		604,900		605		-			1,642,482		-			-			-			-			1,643,087			364,445		364		-			1,092,971		-		-			-			-			1,093,335
Net loss for the period		-		-		-			-		(1,857	)		(13,017,056	)		-			(464,614	)		(13,483,527	)		-		-		-			-		-		(7,507,265	)		-			(272,488	)		(7,779,753	)
Foreign currency translation gain		-		-		-			-		-			-			2,374,743			33,820			2,408,563
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
Foreign currency translation loss																										-		-		-			-		-		-			(163,313	)		(1,318	)		(164,631	)
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

Balance at September 30, 2021		8,856,231	$	8,856	$	(6,160,203	)	$	45,316,083	$	4,198,107		$	(5,577,261	)	$	(752,440	)	$	(384,239	)	$	36,648,903
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

Stock issuance		291,775		292		3,136,203			1,969,708		-			-			-			-			5,106,203
Issuance of common shares for convertible notes redemption		283,701		284		-			2,149,716		-			-			-			-			2,150,000			437,427		437		-			1,249,563		-		-			-			-			1,250,000
Net loss for the period		-		-		-			-		-			(2,877,711	)		-			(6,689	)		(2,884,400	)		-		-		-			-		-		(2,892,584	)		-			(13,384	)		(2,905,968	)
Net income loss for the period																										-		-		-			-		-		(2,892,584	)		-			(13,384	)		(2,905,968	)
Foreign currency translation gain (loss)		-		-		-			-		-			-			819,615			(5,879	)		813,736			-		-		-			-		-		-			149,350			(1,307	)		148,043
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
Balance at March 31, 2022																										9,869,134	$	9,869	$	(3,024,000	)	$	50,685,070	$	4,198,107	$	(11,347,556	)	$	216,525		$	(411,498	)	$	40,326,517

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

							2022			2021
	For the Six Months Ended December 31,						For the Nine Months Ended March 31,
	2021			2020			2022			2021

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(17,127,858	)	$	(14,536,507	)	$	(20,033,826	)	$	(22,316,260	)
Net loss from discontinued operations, net of tax		(3,135,237	)		(7,264,815	)		(3,135,237	)		(12,051,832	)
Net loss from continuing operations		(13,992,621	)		(7,271,692	)		(16,898,589	)		(10,264,428	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		740,533			203,801			853,287			287,478
Loss from disposal of property and equipment								8,044			-
Provision for doubtful accounts		5,815,640			3,341,730			6,399,667			4,480,699
Provision for inventory reserve		128,773			90,174			126,685			216,629
Stock written off due to natural disaster		901,581			2,629,687			1,303,312			3,358,716
Loss from equity method investments		106,988			-			156,235			-
Amortization of right of use assets		522,866			268,872			817,395			424,638
Impairment loss on distribution rights		1,140,551			-			1,140,551			-
Impairment loss on an unconsolidated entity		149,790						149,790			-
Amortization of debt issuance costs		854,318			-			1,142,215			-
Accrued interest expense for convertible notes		414,778			-			628,760			-
Accrued interest income due from third parties		(411,167	)		-			(200,063	)		-
Accrued interest income due from related parties		(78,422	)		-			(173,263	)		-

Changes in operating assets and liabilities:
Accounts receivable		(46,681	)		(1,678,707	)		(560,583	)		(2,237,927	)
Advances to suppliers		1,577,386			(4,610,908	)		2,255,904			(3,803,576	)
Inventories		(948,863	)		(3,982,225	)		(1,333,129	)		(4,554,000	)
Other current assets		(4,559,032	)		(1,436,168	)		(4,365,846	)		(2,416,229	)
Accounts payable		(75,278	)		(5,828	)		(75,613	)		124,883
Advances from customers		(546	)		(38	)		(549	)		-
Other payables		2,559,798			1,302,679			2,378,307			2,277,809
Operating lease liabilities		(299,428	)		(8,103	)		(397,850	)		(11,513	)
Taxes payable		(111,509	)		32,828			(110,129	)		41,828
Net cash used in operating activities from continuing operations		(5,610,545	)		(11,123,898	)		(6,755,462	)		(12,074,993	)
Net cash used in operating activities from discontinued operations		-			(312,586	)
Net cash provided by operating activities from discontinued operations								-			220,752
Net cash used in operating activities		(5,610,545	)		(11,436,484	)		(6,755,462	)		(11,854,241	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment		(308,637	)		-			(310,121	)		-
Proceeds from disposal of property and equipment								1,562			-
Payment made for loans to third parties		(12,200,000	)		-			(12,200,000	)		-
Repayments of loans from related parties		(6,633,811	)		-
Payment made for loans to related parties								(6,703,954	)		-
Investment in unconsolidated entity		(750,000	)		-			(750,000	)		-
Acquisition of a VIE - Guangyuan, net of cash		112,070			-			112,070			-
Disposal of a VIE - Ankang, net of cash		(12,669,913	)		-			(12,669,913	)		-
Net cash used in investing activities from continuing operations		(32,450,291	)		-			(32,520,356	)		-
Net cash provided by investing activities from discontinued operations		-			221,518			-			1,252,056
Net cash provided (used in) by investing activities		(32,450,291	)		221,518			(32,520,356	)		1,252,056

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		7,481,203			1,643,087			7,481,203			2,736,422
Proceeds from (repayments of) advances from related parties		754,308			(21,208	)		748,515			(297,510	)
Proceeds from issuance of convertible notes		17,000,000			-			17,000,000			-
Net cash provided by financing activities from continuing operations		25,235,511			1,621,879			25,229,718			2,438,912
Net cash used in financing activities from discontinued operations		-			(664,554	)		-			(673,954	)
Net cash provided by financing activities		25,235,511			957,325			25,229,718			1,764,958

EFFECT OF EXCHANGE RATE CHANGE ON CASH		421,826			2,245,261			499,127			2,314,452

NET DECREASE IN CASH		(12,403,499	)		(8,012,380	)		(13,546,973	)		(6,522,775	)

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

CASH - End of the period		16,620,895			24,358,992			15,477,421			25,848,597

Less: cash of discontinued operations - Ended of the Period		-			10,441,139			-			11,997,106

Cash of continuing operations - Ended of the Period	$	16,620,895		$	13,917,853		$	15,477,421		$	13,851,491

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

SUPPLEMENTAL NON-CASH OPERATING ACTIVITY:
Issuance of common shares for convertible notes redemption	$	7,970,876		$	-		$	7,250,000		$	-
Right-of-use assets obtained in exchange for operating lease obligations	$	1,275,378		$	-		$	1,952,449		$	-
Reduction of right-of-use assets and operating lease obligations due to early termination of lease agreement							$	1,057,311		$	-

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%~~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%~~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 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~~. Shineco invested RMB5.0~~ ~~million (US$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 million (US$1,502,650). On September 30, 2017, Tenet-Jove established Xinjiang Tianyi Runze Bioengineering Co., Ltd. (“Runze”) with registered capital of RMB10.0 million (US$1,502,650). Xinjiang Taihe and Runze became wholly-owned subsidiaries of Tenet-Jove. The Company ceased the business operation of Xinjiang Taihe and Runze in September 2020 and October 2020, respectively.

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% equity interest in Tianjin Tajite for cash consideration of 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%~~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 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 million (US$1,502,650). TNB became a wholly-owned subsidiary of Tenet-Jove.

On August 22, 2019, ~~Tenet-Jove~~the Company established Shineco ~~Zhong Hemp Group~~Life Science Research Co., Ltd. (“~~Zhong Hemp”~~Life Science”) as a wholly foreign-owned entity with registered capital of ~~RMB~~US$~~200.0~~10.0 ~~million (US$28,237,022) and owns~~ 60~~% interest of Zhong Hemp.~~

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

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, 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 (“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, 2021, which was filed on September 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:

	December 31, 2021			June 30, 2021			March 31, 2022			June 30, 2021

Current assets	$	39,411,842		$	44,631,744		$	38,921,375		$	44,631,744
Plant and equipment, net		895,268			4,698,184			829,506			4,698,184
Other non-current assets		3,920,371			4,894,445			3,313,811			4,894,445
Total assets		44,227,481			54,224,373			43,064,692			54,224,373
Total liabilities		(8,955,153	)		(7,377,886	)		(8,673,365	)		(7,377,886	)
Net assets	$	35,272,328		$	46,846,487		$	34,391,327		$	46,846,487

													2021			2020			2021			2020
	For the six months ended December 31,						For the three months ended December 31,						For the nine months ended March 31,						For the three months ended March 31,
	2021			2020			2021			2020			2022			2021			2022			2021
Net sales	$	1,327,564		$	7,133,355		$	711,314		$	3,014,587		$	1,937,137		$	9,100,624		$	609,573		$	1,967,269
Gross loss	$	(1,175,699	)	$	(1,688,870	)	$	(574,484	)	$	(2,601,298	)	$	(1,673,759	)	$	(2,562,653	)	$	(498,060	)	$	(873,783	)
Income (loss) from operations	$	(7,364,854	)	$	(9,115,036	)	$	386,809		$	(8,820,472	)
Net income (loss)	$	(7,505,654	)	$	(12,852,247	)	$	237,610		$	(12,452,170	)
Loss from operations													$	(8,392,455	)	$	(14,234,577	)	$	(1,027,601	)	$	(5,119,541	)
Net loss													$	(11,655,014	)	$	(19,443,845	)	$	(1,014,123	)	$	(6,591,598	)

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

							March 31, 2022		June 30, 2021
	December 31, 2021		June 30, 2021			March 31, 2022		June 30, 2021

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

	2021		2020			2021		2020				2021			2020			2021		2020
	For the six months ended December 31,					For the three months ended December 31,					For the nine months ended March 31,						For the three months ended March 31,
	2021		2020			2021		2020			2022			2021			2022		2021
Net sales	$	-	$	5,408,725		$	-	$	2,273,319		$	-		$	6,761,663		$	-	$	1,352,938
Gross profit	$	-	$	958,820		$	-	$	315,877		$	-		$	969,175		$	-	$	10,355
Loss from operations	$	-	$	(3,044,190	)	$	-	$	(3,268,722	)	$	-		$	(6,093,367	)	$	-	$	(3,049,177	)
Net loss	$	-	$	(6,815,095	)	$	-	$	(6,914,656	)	$	(3,135,237	)	$	(11,348,837	)	$	-	$	(4,533,742	)

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

	December 31, 2021			June 30, 2021			March 31, 2022			June 30, 2021

Current assets	$	39,411,842		$	24,972,002		$	38,921,375		$	24,972,002
Plant and equipment, net		895,268			1,014,659			829,506			1,014,659
Other non-current assets		3,920,371			3,534,939			3,313,811			3,534,939
Total assets		44,227,481			29,521,600			43,064,692			29,521,600
Total liabilities		(8,955,153	)		(2,510,952	)		(8,673,365	)		(2,510,952	)
Net assets	$	35,272,328		$	27,010,648		$	34,391,327		$	27,010,648

	2021			2020			2021			2020			2021			2020			2021			2020
	For the six months ended December 31,						For the three months ended December 31,						For the nine months ended March 31,						For the three months ended March 31,
	2021			2020			2021			2020			2022			2021			2022			2021
Net sales	$	1,327,564		$	1,724,630		$	711,314		$	741,268		$	1,937,137		$	2,338,961		$	609,573		$	614,331
Gross loss	$	(1,175,699	)	$	(2,647,690	)	$	(574,484	)	$	(2,917,175	)	$	(1,673,759	)	$	(3,531,828	)	$	(498,060	)	$	(884,138	)
Income (loss) from operations	$	(7,364,854	)	$	(6,070,846	)	$	386,809		$	(5,551,750	)
Net income (loss)	$	(7,505,654	)	$	(6,037,152	)	$	237,610		$	(5,537,514	)
Loss from operations													$	(8,392,455	)	$	(8,141,210	)	$	(1,027,601	)	$	(2,070,364	)
Net loss													$	(8,519,777	)	$	(8,095,008	)	$	(1,014,123	)	$	(2,057,856	)

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, advances to suppliers, deferred taxes, and inventory reserves. Actual results could differ from those estimates.

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: 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 ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the Company had 0 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 ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the allowance for doubtful accounts from the continuing operations was US$~~6,396,666~~7,038,542 and US$5,959,887, respectively. As of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the allowance for doubtful accounts from the discontinued operations was US$ 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 ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the inventory reserve from the continuing operations was US$~~1,330,999~~1,332,435 and US$1,229,158, respectively. As of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the inventory reserve from the discontinued operations were both US$ 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 ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the Company had an allowance for uncollectible advances to suppliers from the continuing operations of US$~~14,748,577~~14,617,066 and US$9,111,566, respectively. As of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the Company had an allowance for uncollectible advances to suppliers from the discontinued operations of US$ 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 ~~six~~nine and three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, the Company did ~~not~~0t recognize any impairment of its long-lived 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 ~~December~~March 31, ~~2021~~2022 and June 30, 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 ~~December~~March 31, ~~2021,~~2022, 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~~2019 and thereafter. As of ~~December~~March 31, ~~2021,~~2022, the tax years ended December 31, 2017 through December 31, 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% to 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. 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 ~~December~~March 31, ~~2021~~2022 and June 30, 2021 were translated at 1RMB to ~~0.1572~~ 0.1577USD and at 1RMB to 0.1549USD, respectively. The average translation rates applied to the income and cash flow statement amounts for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 were 1RMB to ~~0.1555~~0.1562 USD and 1 RMB to ~~0.1477~~0.1498 USD, respectively. The average translation rates applied to income and cash flow statement amounts for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021 were 1 RMB to ~~0.1564~~0.1576 USD and 1 RMB to ~~0.1510~~0.1542 USD, 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. 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 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% and 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 0 anti-dilutive effect for the ~~six~~nine and three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020.~~2021.

The following table presents a reconciliation of basic and diluted loss per share for the ~~six~~nine and three months ended ~~December 30, 2021~~March 31, 2022 and ~~2020:~~2021:


	For the six months ended December 31,						For the three months ended December 31,						For the nine months ended March 31,						For the three months ended March 31,
	2021			2020			2021			2020			2022			2021			2022			2021
Net loss from continuing operations attributable to Shineco	$	(13,980,806	)	$	(7,261,328	)	$	(2,877,711	)	$	(6,104,257	)	$	(16,873,390	)	$	(10,234,851	)	$	(2,892,584	)	$	(2,973,523	)
Net loss from discontinued operations attributable to Shineco		(3,135,237	)		(6,815,095	)		-			(6,914,656	)		(3,135,237	)		(11,348,837	)		-			(4,533,742	)
Net loss attributable to Shineco		(17,116,043	)		(14,076,423	)		(2,877,711	)		(13,018,913	)		(20,008,627	)		(21,583,688	)		(2,892,584	)		(7,507,265	)

Weighted average shares outstanding - basic and diluted*		8,720,539			3,112,268			9,126,082			3,184,593
Weighted average shares outstanding - basic and diluted														9,026,568			3,372,327			9,652,228			3,184,593

Net loss from continuing operations per share of common share Basic and diluted	$	(1.60	)	$	(2.33	)	$	(0.32	)	$	(1.92	)	$	(1.87	)	$	(3.03	)	$	(0.30	)	$	(0.93	)

Net loss from discontinued operations per share of common share Basic and diluted	$	(0.36	)	$	(2.19	)	$	-		$	(2.17	)	$	(0.35	)	$	(3.37	)	$	-		$	(1.42	)

Net loss per share of common share Basic and diluted	$	(1.96	)	$	(4.52	)	$	(0.32	)	$	(4.09	)	$	(2.22	)	$	(6.40	)	$	(0.30	)	$	(2.35	)

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 adopted this ASU on July 1, 2021 and the adoption of this ASU 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”~~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 consolidated financial statements.

	December 31, 2021			June 30, 2021			March 31, 2022			June 30, 2021

Accounts receivable	$	8,821,905		$	15,795,234		$	9,367,947		$	15,795,234
Less: allowance for doubtful accounts		(6,396,666	)		(9,635,506	)		(7,038,542	)		(9,635,506	)
Accounts receivable, net		2,425,239			6,159,728			2,329,405			6,159,728
Less: accounts receivable, net, held for discontinued operations		-			3,473,057			-			3,473,057
Accounts receivable, net, held for continuing operations	$	2,425,239		$	2,686,671		$	2,329,405		$	2,686,671

	December 31, 2021			June 30, 2021			March 31, 2022			June 30, 2021

Raw materials	$	77,355		$	208,253		$	75,565		$	208,253
Work-in-process		21,012,413			1,232,787			21,063,263			1,232,787
Finished goods		1,254,773			1,392,754			1,257,089			1,392,754
Less: inventory reserve		(1,330,999	)		(1,229,158	)		(1,332,435	)		(1,229,158	)
Total inventories, net		21,013,542			1,604,636			21,063,482			1,604,636
Less: inventories, net, held for discontinued operations		-			281,245			-			281,245
Inventories, net, held for continuing operations	$	21,013,542		$	1,323,391		$	21,063,482		$	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$~~901,581~~ 1,303,312and US$~~2,629,687~~ 3,358,716during the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. The Company wrote off inventory amounted to US$~~408,594~~ 401,731and US$~~2,629,687~~ 729,029during the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, 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.

	December 31, 2021			June 30, 2021			March 31, 2022			June 30, 2021

Advances to suppliers	$	15,563,022		$	19,375,738		$	14,933,184		$	19,375,738
Less: allowance for doubtful accounts		(14,748,577	)		(10,885,264	)		(14,617,066	)		(10,885,264	)
Advance to supplier, net		814,445			8,490,474			316,118			8,490,474
Less: advance to supplier, net, held for discontinued operations		-			700,348			-			700,348
Advance to supplier, net, held for continuing operations	$	814,445		$	7,790,126		$	316,118		$	7,790,126

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~~nine months ended ~~December~~March 31, ~~2021,~~2022, the Company entered into three of short-term loan agreements with the Company’s external business partners in an amount of US$12,200,000 for their working capital for one year, with a maturity date of July 25, 2022, September 18, 2022 and September 14, 2022, respectively. The loans bore a fixed annual interest rate of 6.0% and 10.0%. The Company ~~accrued~~recorded interest income amounted to US$~~411,167~~700,153 and US$288,986 during the ~~six~~nine and three months ended ~~December~~March 31, ~~2021.~~2022. 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.

	December 31, 2021		June 30, 2021		March 31, 2022			June 30, 2021

Beginning balance	$	635,502	$	452,471	$	635,502		$	452,471
Charge to expense		31,787		158,335		149,503			158,335
Less: cessation of subsidiaries and disposal of VIE		-		-		-			-
Foreign currency translation adjustments		246		24,696		(141	)		24,696
Ending balance	$	667,535	$	635,502	$	784,864		$	635,502

	December 31, 2021			June 30, 2021			March 31, 2022			June 30, 2021

Buildings	$	1,903,762		$	8,242,357		$	1,909,661		$	8,242,357
Machinery and equipment		28,797			688,979			28,886			688,979
Motor vehicles		158,644			63,090			146,883			63,090
Office equipment		185,855			243,543			186,430			243,543
Leasehold improvement		196,163			-			196,771			-
Farmland leasehold improvements		3,305,713			3,256,339			3,315,954			3,256,339
Total property and equipment, gross		5,778,934			12,494,308			5,784,585			12,494,308
Less: accumulated depreciation and amortization		(3,394,875	)		(6,556,839	)		(3,472,618	)		(6,556,839	)
Total property and equipment, net		2,384,059			5,937,469			2,311,967			5,937,469
Less: property and equipment, net, held for discontinued operations		-			3,683,525			-			3,683,525
Property and equipment, net held for continuing operations	$	2,384,059		$	2,253,944		$	2,311,967		$	2,253,944

Depreciation and amortization expense charged to the continuing operations was US$~~214,731~~284,901 and US$~~157,240~~239,121 for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. Depreciation and amortization expense charged to the discontinued operations was US$ nil and US$~~153,485~~207,115 for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

Depreciation and amortization expense charged to the continuing operations was US$~~133,258~~70,170 and US$~~80,250~~81,881 for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. Depreciation and amortization expense charged to the discontinued operations was US$ nil and US$~~78,368~~53,630 for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

	December 31, 2021		June 30, 2021		March 31, 2022		June 30, 2021

Blueberry farmland leasehold improvements	$	2,539,595	$	2,501,664	$	2,547,463	$	2,501,664
Yew tree planting base reconstruction		284,529		280,279		285,410		280,279
Greenhouse renovation		481,589		474,396		483,081		474,396
Total farmland leasehold improvements		3,305,713		3,256,339		3,315,954		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	$	3,315,954	$	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.

	December 31, 2021		June 30, 2021			March 31, 2022		June 30, 2021

Land use rights	$	-	$	1,722,396		$	-	$	1,722,396
Less: accumulated amortization		-		(448,134	)		-		(448,134	)
Total land use rights, net		-		1,274,262			-		1,274,262
Less: land use rights, net, held for discontinued operations		-		1,274,262			-		1,274,262
Land use rights, net, held for continuing operations	$	-	$	-		$	-	$	-

For the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, amortization expenses from the continuing operations were both US$ nil. For the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, the Company recognized amortization expenses from the discontinued operations of US$ nil and US$~~18,982~~28,822, respectively.

For the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, amortization expenses from the continuing operations were both US$ nil. For the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, the Company recognized amortization expenses from the discontinued operations of US$ nil and US$~~9,682~~9,840, 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. During the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, 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.

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 million (approximately US$1.0 million) for a 49% equity interest in a pharmacy retail company called Shaanxi Pharmaceutical Sunsimiao Drugstores Ankang Retail Chain Co., Ltd. (“Sunsimiao Drugstores”), and a 49% equity interest in a pharmaceutical wholesale distribution company named Shaanxi Pharmaceutical Holding Group Longevity Pharmacy Co., Ltd. (“Shaanxi Longevity Pharmacy”). These two entities were incorporated to collaborate with Shaanxi Pharmaceutical Group to expand sales to regional hospitals and clinics and to establish the presence of retail pharmacies under the brand name “Sunsimiao.” The investments were accounted for using the equity method because Ankang Longevity Group has significant influence, but no control of these two entities. The Company’s discontinued operations, Ankang Longevity Group recorded US$ nil and a loss of US$~~1,975,729~~3,753,280 for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, and US$ nil and a loss of US$~~1,991,016~~1,777,551 for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, from the investments, which was included in “Loss from discontinued operations, net of taxes” in the unaudited condensed consolidated statements of loss and comprehensive ~~loss.~~loss (See Note 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% 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.

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% of the total purchases made from Shaanxi Pharmaceutical Group. For the ~~six~~nine and three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, 0 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 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% of Tiancang Project’s after-tax net income annually, less 30% statutory reserve and a 10% employee welfare fund contribution. When the amount of the accumulated statutory reserve reaches 3030%% 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 the 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 2.0million (approximately US$0.3million) 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$16,153and a loss of US$ ~~11,967~~ nilfor the ~~six~~nine and three months ended ~~December~~March 31, ~~2021~~2022 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.~~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 4.8million (approximately US$0.75million) 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~~of March 31, ~~2021,~~2022, a total of US$0.75 million was fully injected by the Company. The Company recorded a loss of US$~~90,835~~ 140,082and a loss of US$~~67,101~~ 49,247for the ~~six~~nine and three months ended ~~December~~March 31, ~~2021~~2022 from the investment, respectively, which was included in “Loss from equity method investments” in the unaudited condensed consolidated statements of loss and comprehensive loss.

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. As the date of this report, no share has been issued and no equity interest of XPYK has been acquired by the Company.

On January 30, 2022, the Company entered into a cooperation agreement (the “Cooperation Agreement”) with Weifang Jianyi Medical Devices Co., Ltd. (“WJM”), a leading Chinese medical device company based in Shandong Province, China, pursuant to which the Company and WJM shall jointly manufacture and sell nuclear medical imaging devices (the “Joint Project”), including PET, PET-CT, and PET-MRI. Under the Cooperation Agreement, the Company will provide working capital and manufacturing facilities while WJM shall contribute patented and unpatented technologies and know-how, medical device manufacturing permits, skilled engineers and project managers to produce such nuclear medical imaging devices. The term of the Cooperation Agreement shall be three (3) years commencing from January 30, 2022. In accordance with the Cooperation Agreement, WJM shall be entitled to 30% of the net income generated by the Joint Project while the Company shall be entitled to 70% of the net income thereof and bear 100% of the net losses of the Joint Project. In addition, the Company and WJM shall manage the Joint Project jointly with WJM making the budgets and the Company approving such budgets. Furthermore, the Cooperation Agreement provides that the Company shall receive any and all of the intellectual property rights to be developed as a result of the Joint Project. As the date of this report, the Joint Project has not started, and no working capital and manufacturing facilities have been provided by the Company.

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

	December 31, 2021		June 30, 2021		March 31, 2022		June 30, 2021

Gaojing Private Fund	$	659,165	$	-	$	609,918	$	-
Total investment		659,165		-		609,918		-
Less: investment, held for discontinued operations		-		-		-		-
Investment, held for continuing operations	$	659,165	$	-	$	609,918	$	-

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

SCHEDULE OF FINANCIAL INFORMATION OF UNCONSOLIDATED ENTITIES FROM CONTINUED OPERATIONS

	December 31, 2021		June 30, 2021		March 31, 2022		June 30, 2021

Current assets	$	750,090	$	-	$	595,565	$	-
Current liabilities		29,809		-		27,176		-

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

SCHEDULE OF FINANCIAL INFORMATION OF UNCONSOLIDATED ENTITIES FROM DISCONTINUED OPERATIONS

	2021		2020			2022		2021
	For the six months ended December 31,					For the nine months ended March 31,
	2021		2020			2022		2021

Net sales	$	-	$	16,282,274		$	-	$	21,199,520
Gross profit		-		1,315,615			-		1,748,858
Income from operations		-		(4,006,758	)
Net income		-		(4,032,100	)
Loss from operations							-		(4,065,801	)
Net loss							-		(4,091,472	)

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 and $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 53 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.

	December 31, 2021		June 30, 2021		March 31, 2022		June 30, 2021

ROU lease assets	$	5,055,410	$	3,585,703	$	4,346,890	$	3,585,703

Operating lease liabilities – current		1,105,641		434,411		966,030		434,411
Operating lease liabilities – non-current		1,744,720		352,863		1,405,438		352,863
Total operating lease liabilities	$	2,850,361	$	787,274	$	2,371,468	$	787,274

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of ~~December~~March 31, ~~2021~~2022 and June 30, ~~2021:~~2021:

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

	December 31, 2021			June 30, 2021			March 31, 2022			June 30, 2021

Remaining lease term and discount rate:
Weighted average remaining lease term (years)		5.38			7.25			6.87			7.25
Weighted average discount rate		5.20	%		5.00	%		5.30	%		5.00	%

Rent expenses totaled US$~~464,207~~693,684 and US$~~224,957~~337,128 from the continuing operations for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. Rent expenses totaled US$~~233,659~~229,477 and US$~~111,842~~112,171 from the continuing operations for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

Rent expenses were US$ nil from the discontinued operations for the ~~six~~nine and three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

The following is a schedule, by years, of maturities of lease liabilities as of ~~December~~March 31, ~~2021:~~2022:


Remainder of 2022	$	1,015,937		$	675,437
2023		1,093,610			974,464
2024		1,084,266			827,059
2025		578,180			394,886
2026		244,095			227,617
Thereafter		1,002,537			1,541,996
Total lease payments		5,018,625			4,641,459
Less: imputed interest		(230,578	)		(365,741	)
Less: prepayments		(1,937,686	)		(1,904,250	)
Present value of lease liabilities	$	2,850,361		$	2,371,468

No short-terms loan was outstanding as of ~~December~~March 31, ~~2021,~~2022, as the Company disposed Ankang Group on July 5, 2021.

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

Interest expenses from continuing operations were US$ nil for the ~~six~~nine and three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

The Company recorded interest expenses from discontinued operations of US$ nil and US$~~63,267~~88,894 for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. The annual weighted average interest rates from discontinued operations were nil and ~~5.30~~5.36%% for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

The Company recorded interest expenses from discontinued operations of US$ nil and US$~~33,645~~25,627 for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. The annual weighted average interest rates from discontinued operations were nil and ~~5.30~~5.50%% for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, 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 5151% % equity interests in Tianjin Tajite.

Pursuant to the agreement, the Company made a payment of 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 (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:

During the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~ 2022, 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.

The management determined that July 5, 2021 was the acquisition date of Guangyuan. The acquisition provides a unique opportunity for the Company to 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 US$ nil in the ~~six~~nine and three months ended ~~December~~March 31, ~~2021.~~2022.

The Company has included the operating results of Guangyuan in its unaudited condensed consolidated financial statements since the Acquisition Date. US$~~nil~~22,331 in net sales and US$~~622,801~~694,051 in net loss of Tianjin Guangyuan were included in the unaudited condensed consolidated financial statements for the ~~six~~nine months ended ~~December~~March 31, ~~2021.~~2022. US$~~nil~~22,331 in net sales and US$~~302,896~~71,250 in net loss of Tianjin Guangyuan were included in the unaudited condensed consolidated financial statements for the three months ended ~~December~~March 31, ~~2021.~~2022.

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 ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the outstanding amounts due from related parties consisted of the following:

	December 31, 2021		June 30, 2021		March 31, 2022		June 30, 2021

Yang Bin	$	47,160	$	46,454	$	47,306	$	46,454
Beijing Huiyinansheng Asset Management Co., Ltd (a.)		-		23,228		-		23,228
Lin Baolin		110,039		-
Wang Qiwei		63,667		62,716		63,864		62,716
Shanghai Gaojing Private Fund Management (b.)		301,820		-		454,133		-
Zhongjian Yijia Health Technology (Qingdao) Co., Ltd. (c.)		1,759,025		-		1,790,136		-
Zhongjian (Qingdao) International Logistics Development Co., Ltd. (d.)		4,749,672		-		4,834,140		-
Total due from related parties		7,031,383		132,398		7,189,579		132,398
Less: due from related parties, held for discontinued operations		-		-		-		-
Due from related parties, held for continuing operations	$	7,031,383	$	132,398	$	7,189,579	$	132,398

As of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the Company had related party payables of US$~~4,099,934~~4,103,960 and US$1,159,407, respectively, mainly due to the principal stockholders or certain relatives of the stockholders of the Company who lend funds for the Company’s operations. The payables are unsecured, non-interest bearing, and due on demand.

	December 31, 2021		June 30, 2021		March 31, 2022		June 30, 2021

Wu Yang	$	100,685	$	99,183	$	100,997	$	99,183
Wang Sai		82,142		91,433		81		91,433
Zhou Guocong		-		551,314		-		551,314
Li Baolin		235,797		232,275		236,528		232,275
Zhao Min		215,092		185,202		289,397		185,202
Zhou Shunfang		3,466,218		-		3,476,957		-
Total due to related parties		4,099,934		1,159,407		4,103,960		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	$	4,103,960	$	1,159,407

For the ~~six and three~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, 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 10), of US$ nil and US$~~1,295,199~~1,606,448 for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, and US$ nil and US$~~535,833~~311,249 for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. As of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the balance of accounts receivable due from Shaanxi Pharmaceutical Group from discontinued operations was US$ nil and US$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~~3,170,000 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~~4,200,000 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~~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.

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.~~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~~March 31, ~~2021,~~2022, the Company received principal in full from the Investor. For the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, a total of $US$~~854,318~~1,142,215 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~~March 31, ~~2021,~~2022, a total of $US$~~395,340~~287,897 in amortization of the debt discounts was recorded on the unaudited condensed consolidated statements of loss and comprehensive loss.

As of ~~December~~March 31, ~~2021,~~2022, shares of the Company’s common stock totaling ~~1,258,450~~1,695,877 were issued by the Company to the Investor equaling principal and interests amounted to $US$~~6,000,000~~7,250,000, and the Notes balance was $US$~~14,840,874~~14,092,753, with a carrying value of $US$~~15,474,778~~14,438,760, net of deferred financing costs of $US$~~633,904~~346,007 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~~the VIEs are governed by the Income Tax Laws of the PRC, and are currently subject to tax at a statutory rate of 2525% % 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).

	December 31, 2021		June 30, 2021			March 31, 2022		June 30, 2021

Beginning balance	$	1,810,023	$	1,185,655		$	1,810,023	$	1,185,655
Current year/period addition		150,455		512,028			236,270		512,028
Exchange difference		27,444		112,340			33,137		112,340
Ending balance		1,987,922		1,810,023			2,079,430		1,810,023
Less: valuation allowance, held for discontinued operations		-		(1,362,329	)		-		(1,362,329	)
Valuation allowance, held for continuing operations	$	1,987,922	$	447,694		$	2,079,430	$	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 0 assessed penalties during the ~~six~~nine and three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

	December 31, 2021		June 30, 2021			March 31, 2022		June 30, 2021

Income tax payable	$	1,570,333	$	3,376,499		$	1,572,891	$	3,376,499
Value added tax payable		40,931		73,390			45,329		73,390
Business tax and other taxes payable		5,496		8,573			3,136		8,573
Total tax payable		1,616,760		3,458,462			1,621,356		3,458,462
Less: tax payable, held for discontinued operations		-		(1,743,673	)		-		(1,743,673	)
Tax payable, held for continuing operations	$	1,616,760	$	1,714,789		$	1,621,356	$	1,714,789

Income tax payable - current portion	$	1,110,319	$	2,952,021		$	1,114,915	$	2,952,021
Less: income tax payable - current portion, held for discontinued operations		-		(1,743,673	)		-		(1,743,673	)
Income tax payable - current portion, held for continuing operations	$	1,110,319	$	1,208,348		$	1,114,915	$	1,208,348

Income tax payable - noncurrent portion	$	506,441	$	506,441		$	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		$	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% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entities’ registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the board of directors. As of ~~December~~March 31, ~~2021~~2022 and June 30, 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. 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 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 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. 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.

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~~March 31, ~~2021.~~2022.

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$~~16,616,363~~ 15,473,414and US$16,333,102as of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, respectively. The cash balance held in the PRC bank accounts from the discontinued operations was US$ niland US$12,676,416as of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, respectively.

During the ~~six~~nine and three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, almost 100% of the Company’s assets were located in the PRC and 100% of the Company’s revenues were derived from its subsidiaries and VIEs located in the PRC.

For the ~~six~~nine months ended ~~December~~March 31, ~~2021, six~~2022, five customers accounted for approximately 8576% of the Company’s total sales from the continuing operations, respectively. For the three months ended ~~December~~March 31, ~~2021, seven~~2022, five customers accounted for approximately 9381% of the Company’s total sales from the continuing operations, respectively. At ~~December~~March 31, ~~2021,~~2022, four customers accounted for approximately 7075% of the Company’s accounts receivable from the continuing operations.

For the ~~six~~nine months ended ~~December~~March 31, ~~2020, four~~2021, three customers accounted for approximately 7562% of the Company’s total sales from the continuing ~~operations, respectively.~~operations. For the three months ended ~~December~~March 31, ~~2020, seven~~2021, five customers accounted for approximately 9681% of the Company’s total sales from the continuing ~~operations, respectively.~~operations. For the ~~six~~nine months ended ~~December~~March 31, ~~2020,~~2021, six customers accounted for approximately 100% of the Company’s total sales from the discontinued ~~operations, respectively.~~operations. For the three months ended ~~December~~March 31, ~~2020,~~2021, six customers accounted for approximately 100% of the Company’s total sales from the discontinued ~~operations, respectively.~~operations.

For the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, one vendor accounted for approximately 9392% of the Company’s total purchases from the continuing operations. For the three months ended ~~December~~March 31, ~~2021,~~2022, two vendors accounted for approximately 83% and 17% of the Company’s total purchases from the continuing operations, respectively.

For the ~~six~~nine months ended ~~December~~March 31, ~~2020,~~2021, one vendor accounted for approximately 9695% of the Company’s total purchases from the continuing operations, respectively. For the three months ended ~~December~~March 31, ~~2020, one vendor~~2021, two vendors accounted for approximately 9489% and 11% of the Company’s total purchases from the continuing operations, respectively. For the ~~six~~nine months ended ~~December~~March 31, ~~2020,~~2021, six vendors accounted for approximately 100% of the Company’s total purchases from the discontinued operations, respectively. For the three months ended ~~December~~March 31, ~~2020,~~2021, 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~~March 31, ~~2021,~~2022, the Company accrued a total sum of US$~~781,700~~784,120 (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,~~June, 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~~March 31, ~~2021,~~2022, 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 3 operating segments according to its major products and locations as follows:

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 six months ended December 31, 2021:~~

~~SCHEDULE OF INFORMATION BY SEGMENT~~

For the six months ended December 31, 2021
Continuing Operations Discontinued Operations
Luobuma Other agricultural Herbal
products products Total products Total
Segment revenue $ 34,768 $ 1,327,564 $ 1,362,332 $ - $ 1,362,332
Cost of revenue and related business and sales tax 150,305 2,503,263 2,653,568 - 2,653,568
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 ~~six~~nine months ended ~~December~~March 31, ~~2020:~~2022:

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

The following table presents summarized information by segment for the three months ended March 31, 2022:

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

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

	For the three months ended December 31, 2020															For the three months ended March 31, 2021
	Continuing Operations									Discontinued Operations						Continuing Operations									Discontinued Operations
	Luobuma			Other agricultural						Herbal						Luobuma			Other agricultural						Herbal
	products			products			Total			products			Total			products			products			Total			products			Total
Segment revenue	$	48,394		$	741,268		$	789,662		$	2,273,319		$	3,062,981		$	23,468		$	614,331		$	637,799		$	1,352,938		$	1,990,737
Cost of revenue and related business and sales tax		102,166			3,658,443			3,760,609			1,957,442			5,718,051			157,001			1,498,469			1,655,470			1,342,583			2,998,053
Gross profit (loss)		(53,772	)		(2,917,175	)		(2,970,947	)		315,877			(2,655,070	)		(133,533	)		(884,138	)		(1,017,671	)		10,355			(1,007,316	)
Gross profit (loss) %		(111.1	)%		(393.5	)%		(376.2	)%		13.9	%		(86.7	)%		(569.0	)%		(143.9	)%		(159.6	)%		0.8	%		(50.6	)%

Total assets as of ~~December~~March 31, ~~2021~~2022 and June 30, 2021 were as follows:

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%~~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),~~benefit, shall be reported as a component of net ~~income (loss)~~loss separate from the net ~~income (loss)~~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~~March 31, ~~2021~~2022 and June 30, ~~2021.~~2021. The results of operations of Ankang Longevity have been reclassified to “net ~~income (loss)~~loss from discontinued operations” in the unaudited condensed consolidated statements of loss and comprehensive loss for the ~~six~~nine and three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020.~~2021.

The carrying amount of the major classes of assets and liabilities of discontinued operations as of ~~December~~March 31, ~~2021~~2022 and June 30, 2021 consist of the following:

	December 31, 2021		June 30, 2021		March 31, 2022		June 30, 2021
Assets of discontinued operation:
Current assets:
Cash	$	-	$	12,681,483	$	-	$	12,681,483
Accounts receivables		-		3,473,057		-		3,473,057
Inventories, net		-		281,245		-		281,245
Advances to suppliers, net		-		700,348		-		700,348
Other current assets		-		2,523,609		-		2,523,609
Total current assets of discontinued operation		-		19,659,742		-		19,659,742

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

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

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

												2022			2021			2022		2021
	For the Six Months Ended December 31,						For the Three Months Ended December 31,					For the Nine Months Ended March 31,						For the Three Months Ended March 31,
	2021			2020			2021		2020			2022			2021			2022		2021

REVENUE	$	-		$	5,408,725		$	-	$	2,273,319		$	-		$	6,761,663		$	-	$	1,352,938

COST OF REVENUE
Cost of product and services		-			4,430,978			-		1,949,657			-			5,767,915			-		1,336,937
Business and sales related tax		-			18,927			-		7,785			-			24,573			-		5,646
Total cost of revenue		-			4,449,905			-		1,957,442			-			5,792,488			-		1,342,583

GROSS PROFIT		-			958,820			-		315,877			-			969,175			-		10,355

OPERATING EXPENSES
General and administrative expenses		-			3,971,601			-		3,574,179			-			7,009,778			-		3,038,177
Selling expenses		-			31,409			-		10,420			-			52,764			-		21,355
Total operating expenses		-			4,003,010			-		3,584,599			-			7,062,542			-		3,059,532

LOSS FROM OPERATIONS		-			(3,044,190	)		-		(3,268,722	)		-			(6,093,367	)		-		(3,049,177	)

OTHER EXPENSE
Loss from equity method investments		-			(1,975,729	)		-		(1,991,016	)		-			(3,753,280	)		-		(1,777,551	)
Other expense, net		-			(2,124,108	)		-		(2,124,108	)		-			(2,154,151	)		-		(30,043	)
Interest expense net		-			(42,212	)		-		(18,015	)		-			(51,034	)		-		(8,822	)
Total other expense		-			(4,142,049	)		-		(4,133,139	)		-			(5,958,465	)		-		(1,816,416	)

LOSS BEFORE PROVISION FOR INCOME TAXES FROM DISCONTINUED OPERATIONS		-			(7,186,239	)		-		(7,401,861	)		-			(12,051,832	)		-		(4,865,593	)

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

NET LOSS FROM DISCONTINUED OPERATIONS FROM ANKANG GROUP		-			(7,264,815	)		-		(7,375,140	)		-			(12,051,832	)		-		(4,787,017	)

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

NET LOSS FROM DISCONTINUED OPERATIONS		(3,135,237	)		(7,264,815	)		-		(7,375,140	)		(3,135,237	)		(12,051,832	)		-		(4,787,017	)

Net loss attributable to non-controlling interest		-			(449,720	)		-		(460,484	)		-			(702,995	)		-		(253,275	)

NET LOSS FROM DISCONTINUED OPERATIONS ATTRIBUTABLE TO SHINECO, INC.	$	(3,135,237	)	$	(6,815,095	)	$	-	$	(6,914,656	)	$	(3,135,237	)	$	(11,348,837	)	$	-	$	(4,533,742	)

On ~~January 18,~~April 11, 2022, the Company entered into ~~three share transfer agreements ( the~~a securities purchase agreement (the “Purchase ~~Agreements”~~Agreement”)~~, 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~~Jing Wang (the ~~“XPYK Shares”~~“Investor”). Under the Purchase ~~Agreements,~~Agreement, the Company will ~~issue an aggregate of~~sell to the Investor, up to ~~700,551~~973,451 shares ~~(“Company Shares”~~(the “Shares”) of its common stock ~~valued~~ at a per share purchase price of $82.26 (subject to the terms and conditions of the Purchase ~~Agreements) as the consideration~~Agreement) for ~~the XPYK Shares.~~ ~~The closing for the acquisition~~gross proceeds of ~~the XPYK Shares is expected~~up 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~~$2,200,000 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,were fully received, and the ~~Company and XPYK~~Shares were issued to the Investor on ~~the other hand~~.April 18, 2022.

These unaudited condensed consolidated financial statements were approved by management and available for issuance on ~~February XX,~~May 16, 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 for the fiscal year ended June 30, 2021 filed with the SEC on September 30, 2021 (the ~~“Annal~~“Annual 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. 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 shares of our Delaware holding company that 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’~~subsidiaries and the 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”), a Chinese company formerly under contractual control by the Company 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~~March 31, ~~2021~~2022 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~~nine and three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020.~~2021.

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 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 term to an institutional accredited investor, Streeterville Capital, LLC (“Investor”). The note ~~has~~had 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 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 has received the principal in full from the Investor. As of March 31, 2022, no share of the Company’s common stock under this agreement was issued by the Company to the Investor, and the Notes balance was US$3,267,745, with a carrying value of US$3,319,034, net of deferred financing costs of US$51,289 was recorded in the accompanying unaudited condensed consolidated balance sheets.

On July 16, 2021, the Company entered into another securities purchase agreement with the Investor, pursuant to which the Company issued the Investor two unsecured convertible promissory notes each with a one-year maturity ~~term to the same Investor.~~term. The first convertible promissory note ~~has~~had an original principal amount of US$3,170,000 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 the original principal amount of 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 6% per annum. The Company has received the principal in full from the Investor. As of March 31, 2022, shares of the Company’s common stock totaling 1,695,877 were issued by the Company to the Investor equaling principal and interests amounted to US$7,250,000, and the Notes balance was US$214,892, with a carrying value of US$219,277, net of deferred financing costs of US$4,385 was recorded in the accompanying unaudited condensed consolidated balance sheets.

On August 19, 2021, the Company entered into another securities purchase agreement with the Investor, pursuant to which the Company issued the Investor an unsecured convertible promissory note with a one-year maturity ~~term to the same Investor.~~term. 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 note at 6% per annum. The Company has received the principal in full from the Investor. The Company anticipates using the proceeds for general working capital purposes. As of March 31, 2022, no share of the Company’s common stock under this agreement was issued by the Company to the Investor, and the Notes balance was US$10,610,116, with a carrying value of US$10,900,449, net of deferred financing costs of US$290,333 was recorded in the accompanying unaudited condensed consolidated balance sheets.

On April 11, 2022, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with Jing Wang (the “Investor”). Under the Purchase Agreement, the Company will sell to the Investor, up to 973,451 shares (the “Shares”) of its common stock at a per share purchase price of $2.26 (subject to the terms and conditions of the Purchase Agreement) for gross proceeds of up to $2,200,000 which were fully received, and the Shares were issued to the Investor on April 18, 2022.

Increasing demand for our products ~~- The~~– We believe that 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 ~~Annual~~Quarterly 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 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 operating in North America ~~and~~and/or 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 COVID-19, our offices and retail stores remained closed or had limited business operations after the Chinese New Year holiday until early April 2020. In addition, COVID-19 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.

As of the date of this report, due to the ~~spread~~recent resurgence of COVID-19 cases in China, ~~appears~~our headquarter in Beijing was closed down on April 25, 2022 and is expected to ~~have slowed down and most provinces and cities have resumed~~resume its business ~~activities under the guidance and support of the local government. Although we resumed our operations~~ in early ~~April 2020~~June 2022. Meanwhile, the business of our subsidiaries and ~~the COVID-19 impact on our operating results and financial performance for the six and three months ended December 31, 2021 and 2020 seems~~VIEs was also negatively affected during this period, including but not limited to ~~be temporary, a COVID-19 resurgence could negatively affect~~ the execution of our sales contract and fulfillment of customer orders and the collection of the payments from customers onin a timely manner. WeThe resurgence of COVID-19 impact on our operating results and financial performance seems to be temporary, 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 predicted as of the date our unaudited condensed consolidated financial statements are ~~released.~~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 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, advances to suppliers, 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 ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the allowance for doubtful accounts from the continuing operations was US$~~6,396,666~~7,038,542 and US$5,959,887, respectively. As of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the allowance for doubtful accounts from the discontinued operations was US$ 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 ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the inventory reserve from the continuing operations was US$~~1,330,999~~1,332,435 and US$1,229,158, respectively. As of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, the inventory reserve from the discontinued operations were both US$ nil.

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 ~~Six~~Nine Months Ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021

The following table summarizes our results of operations for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020:~~2021:

	Six Months Ended December 31,						Variance						Nine Months Ended March 31,						Variance
	2021			2020			Amount			%			2022			2021			Amount			%
Revenue	$	1,362,332		$	1,797,639		$	(435,307	)		(24.22	)%	$	1,980,426		$	2,435,438		$	(455,012	)		(18.68	)%
Cost of revenue		2,653,568			4,502,948			(1,849,380	)		(41.07	)%		3,764,404			6,158,418			(2,394,014	)		(38.87	)%
Gross loss		(1,291,236	)		(2,705,309	)		1,414,073			(52.27	)%		(1,783,978	)		(3,722,980	)		1,939,002			(52.08	)%
General and administrative expenses		10,506,466			4,636,520			5,869,946			126.60	%		12,724,864			6,615,282			6,109,582			92.36	%
Selling expenses		18,332			22,936			(4,604	)		(20.07	)%		34,376			34,106			270			0.79	%
Impairment loss of distribution rights		1,140,551			-			1,140,551			100.00	%		1,140,551			-			1,140,551			100.00	%
Loss from operations		(12,956,585	)		(7,364,765	)		(5,591,820	)		75.93	%		(15,683,769	)		(10,372,368	)		(5,311,401	)		51.21	%
Impairment loss on an unconsolidated entity		(149,790	)		-			(149,790	)		100.00	%		(149,790	)		-			(149,790	)		100.00	%
Loss from equity method investments		(106,988	)		-			(106,988	)		100.00	%		(156,235	)		-			(156,235	)		100.00	%
Other income, net		1,443			85,916			(84,473	)		(98.32	)%
Other income (loss), net														(5,731	)		87,883			(93,614	)		(106.52	)%
Amortization of debt issuance costs		(854,318	)		-			(854,318	)		100.00	%		(1,142,215	)		-			(1,142,215	)		100.00	%
Interest income, net		67,139			11,687			55,452			474.48	%		232,644			20,057			212,587			1,059.91	%
Loss before income tax provision from continuing operations		(13,999,099	)		(7,267,162	)		(6,731,937	)		92.64	%		(16,905,096	)		(10,264,428	)		(6,640,668	)		64.70	%
Provision (benefit) for income taxes		(6,478	)		4,530			(11,008	)		(243.00	)%
Benefit for income taxes														(6,507	)		-			(6,507	)		100.00	%
Net loss from continuing operations		(13,992,621	)		(7,271,692	)		(6,720,929	)		92.43	%		(16,898,589	)		(10,264,428	)		(6,634,161	)		64.63	%
Net loss from discontinued operations		(3,135,237	)		(7,264,815	)		4,129,578			(56.84	)%		(3,135,237	)		(12,051,832	)		8,916,595			(73.99	)%
Net loss	$	(17,127,858	)	$	(14,536,507	)	$	(2,591,351	)		17.83	%	$	(20,033,826	)	$	(22,316,260	)	$	2,282,434			(10.23	)%
Comprehensive loss attributable to Shineco Inc.	$	(16,317,063	)	$	(9,080,661	)	$	(7,236,402	)		79.69	%	$	(19,060,297	)	$	(16,751,239	)	$	(2,309,058	)		13.78	%

Currently, we, through our PRC subsidiaries and VIEs, have two revenue streams derived from our two major business 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; this segment is channeled through our wholly owned subsidiary, 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; this segment is conducted via our VIE, Ankang Longevity Group and its subsidiaries, which was disposed and we have reclassified it as discontinued operations.

The following table sets forth the breakdown of our revenue for each of the two segments from the continuing operations, for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively:

	Six Months Ended December 31,										Variance						Nine Months Ended March 31,										Variance
	2021		%			2020		%			Amount			%			2022		%			2021		%			Amount			%
Luobuma products	$	34,768		2.55	%	$	73,009		4.06	%	$	(38,241	)		(52.38	)%	$	43,289		2.19	%	$	96,477		3.96	%	$	(53,188	)		(55.13	)%
Other agricultural products		1,327,564		97.45	%		1,724,630		95.94	%		(397,066	)		(23.02	)%		1,937,137		97.81	%		2,338,961		96.04	%		(401,824	)		(17.18	)%
Total Amount	$	1,362,332		100.00	%	$	1,797,639		100.00	%	$	(435,307	)		(24.22	)%	$	1,980,426		100.00	%	$	2,435,438		100.00	%	$	(455,012	)		(18.68	)%

For the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, revenue from sales of Luobuma products was US$ ~~34,768~~43,289 and US$ ~~73,009,~~96,477, respectively, which represented a decrease of US$ ~~38,241,~~53,188, or ~~52.38%~~55.13%. 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 and reduced our resources and investments in our E-commerce distribution channel, now we mainly focused on clearing off our remaining old stocks, hence, we offered more price discounts in order to get more customer orders. As a result, our overall sales decreased during the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 as compared to the same period in ~~2020.~~2021.

For the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, revenue from sales of other agricultural products was US$ ~~1,327,564~~1,937,137 and US$ ~~1,724,630,~~2,338,961, respectively, representing a decrease of US$ ~~397,066,~~401,824, or ~~23.02%~~17.18%. The decrease was mainly due to the decline of sales volume of yew trees during the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 as compared to the same period in ~~2020.~~2021. As our sales of yew trees were adversely affected by the COVID-19 outbreak, we modified our operating strategies in response to the 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 two segments from the continuing operations, for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020:~~2021:

	Six Months Ended December 31,										Variance						Nine Months Ended March 31,										Variance
	2021		%			2020		%			Amount			%			2022		%			2021		%			Amount			%
Luobuma products	$	150,305		5.67	%	$	130,612		2.90	%	$	19,693			15.08	%	$	153,507		4.08	%	$	287,613		4.67	%	$	(134,106	)		(46.63	)%
Other agricultural products		2,500,006		94.21	%		4,369,323		97.03	%		(1,869,317	)		(42.78	)%		3,606,068		95.79	%		5,866,278		95.26	%		(2,260,210	)		(38.53	)%
Business and sales related tax		3,257		0.12	%		3,013		0.07	%		244			8.10	%		4,829		0.13	%		4,527		0.07	%		302			6.67	%
Total Amount	$	2,653,568		100.00	%	$	4,502,948		100.00	%	$	(1,849,380	)		(41.07	)%	$	3,764,404		100.00	%	$	6,158,418		100.00	%	$	(2,394,014	)		(38.87	)%

For the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, cost of revenue from sales of our Luobuma products was US$ ~~150,305~~153,507 and US$ ~~130,612,~~287,613, respectively, representing ~~an increase~~a decrease of US$ ~~19,693,~~134,106, or ~~15.08%~~46.63%. The ~~increase~~decrease was mainly due to the ~~increased~~decreased allowance we accrued for our slow-moving inventories amounted to US$ ~~38,599~~89,944 on our remaining old stocks during the ~~six~~nine months ended ~~December~~March 31, ~~2021.~~2022.

For the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, cost of revenue from sales of other agricultural products was US$ ~~2,500,006~~3,606,068 and US$ ~~4,369,323,~~5,866,278, respectively, representing a decrease of US$ ~~1,869,317,~~2,260,210, or ~~42.78%~~38.53%. The decrease was mainly due to less stock written off during the ~~six~~nine months ended ~~December~~March 31, ~~2021.~~2022. 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~~nine months ended ~~December~~March 31, ~~2020.~~2021.

The following table sets forth the breakdown of the gross loss for each of our two segments from the continuing operations, for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020:~~2021:

	Six Months Ended December 31,												Variance						Nine Months Ended March 31,												Variance
	2021			%			2020			%			Amount			%			2022			%			2021			%			Amount		%
Luobuma products	$	(115,537	)		8.95	%	$	(57,619	)		2.13	%	$	(57,918	)		100.52	%	$	(110,219	)		6.18	%	$	(191,152	)		5.13	%	$	80,933		(42.34	)%
Other agricultural products		(1,175,699	)		91.05	%		(2,647,690	)		97.87	%		1,471,991			(55.60	)%		(1,673,759	)		93.82	%		(3,531,828	)		94.87	%		1,858,069		(52.61	)%
Total Amount	$	(1,291,236	)		100.00	%	$	(2,705,309	)		100.00	%	$	1,414,073			(52.27	)%	$	(1,783,978	)		100.00	%	$	(3,722,980	)		100.00	%	$	1,939,002		(52.08	)%

Gross loss from Luobuma product sales ~~increased~~decreased by US$ ~~57,918~~80,933 or ~~100.52%~~42.34%, for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 as compared to the same period in ~~2020.~~2021. The decrease was due to the decreased allowance we accrued for our slow-moving inventories during the nine months ended March 31, 2022 as mentioned above. During the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, our gross loss was US$ ~~115,537,~~110,219, mainly due to the allowance we accrued for our slow-moving inventories amounting to US$ ~~128,773.~~126,685. 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 ~~six~~nine months ended ~~December~~March 31, ~~2021.~~2022.

Gross loss from sales of other agricultural products decreased by US$ ~~1,471,991,~~1,858,069, or ~~55.60%~~52.61%, for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 as compared to the same period in ~~2020.~~2021. During the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, our gross loss was US$ ~~1,175,699,~~1,673,759, the decrease in gross loss was mainly due to less stock written off during the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 as mentioned above.

The following table sets forth the breakdown of our operating expenses for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively:

	Six Months Ended December 31,										Variance						Nine Months Ended March 31,										Variance
	2021		%			2020		%			Amount			%			2022		%			2021		%			Amount		%
General and administrative expenses	$	10,506,466		90.06	%	$	4,636,520		99.51	%	$	5,869,946			126.60	%	$	12,724,864		91.54	%	$	6,615,282		99.49	%	$	6,109,582		92.36	%
Selling expenses		18,332		0.16	%		22,936		0.49	%		(4,604	)		(20.07	)%		34,376		0.25	%		34,106		0.51	%		270		0.79	%
Impairment loss of distribution rights		1,140,551		9.78	%		-		-			1,140,551			100.00	%		1,140,551		8.21	%		-		-			1,140,551		100.00	%
Total Amount	$	11,665,349		100.00	%	$	4,659,456		100.00	%	$	7,005,893			150.36	%	$	13,899,791		100.00	%	$	6,649,388		100.00	%	$	7,250,403		109.04	%

For the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, our general and administrative expenses were US$ ~~10,506,466,~~12,724,864, representing an increase of US$ ~~5,869,946,~~6,109,582, or ~~126.60%~~92.36%, as compared to the same period in ~~2020.~~2021. The increase was mainly due to an increase in bad debt expenses of US$ ~~2,473,910~~1,918,968 during the ~~six~~nine months ended ~~December~~March 31, ~~2021.~~2022. 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 collection of overdue receivables and utilize our advances to our vendors. Meanwhile, the increase was also due to the increased general and administrative expenses from our newly acquired VIE, Guangyuan during the ~~six~~nine months ended ~~December~~March 31, ~~2021.~~2022. The increase was also due to increased professional service fees in 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 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 ~~six~~nine months ended ~~December~~March 31, ~~2021.~~2022.

For the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, our impairment loss of distribution right ~~were~~was 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~~nine months ended ~~December~~March 31, ~~2021,~~2022, 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~~nine months ended ~~December~~March 31, ~~2021,~~2022, 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~~nine months ended ~~December~~March 31, ~~2021~~2022 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~~140,082 for the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 from this investment.

For the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, our amortization of debt issuance costs expenses ~~were~~was US$ ~~854,318,~~1,142,215, representing an increase of 100.00%, as compared to the same period in ~~2020.~~2021. The increase in was attributable to the amortization of debt issuance costs during the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 on the convertible notes issued by ~~the Company.~~us.

For the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, our net interest income was US$ ~~67,139,~~232,644, representing an increase of US$ ~~55,452,~~212,587, or ~~474.48%~~1,059.91%, as compared to net interest income of US$ ~~11,687~~20,057 in the same period in ~~2020.~~2021. 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 convertible notes issued by ~~the Company.~~us.

Our net loss from continuing operations was US$ ~~13,992,621~~16,898,589 for ~~six~~the nine months ended ~~December~~March 31, ~~2021,~~2022, an increase of US$ ~~6,720,929,~~6,634,161, or ~~92.43%~~64.63%, from net loss from continuing operations of US$ ~~7,271,692~~10,264,428 for ~~six~~the nine months ended ~~December~~March 31, ~~2020.~~2021. The increase in net loss was primarily a result of the increase in 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~~we 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~~nine months ended ~~December~~March 31, ~~2021~~2022 as compared to a total net loss from discontinued operations of US$ ~~7,264,815~~12,051,832 for the same period in ~~2020.~~2021.

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

	Six Months Ended December 31,						Nine Months Ended March 31,
	2021			2020			2022			2021
Revenues	$	-		$	5,408,725		$	-		$	6,761,663
Cost of revenues		-			4,449,905			-			5,792,488
Gross profit		-			958,820			-			969,175
Operating expenses		-			4,003,010			-			7,062,542
Other expenses, net		-			(4,142,049	)		-			(5,958,465	)
Loss before income tax		-			(7,186,239	)		-			(12,051,832	)
Provision for income tax expense		-			78,576			-			-
Net loss from discontinued operations		-			(7,264,815	)		-			(12,051,832	)
Loss from disposal		(3,135,237	)		-			(3,135,237	)		-
Total net loss from discontinued operations	$	(3,135,237	)	$	(7,264,815	)	$	(3,135,237	)	$	(12,051,832	)

Our net loss was US$ ~~17,127,858~~20,033,826 for the ~~six~~nine months ended ~~December~~March 31, ~~2021, an increase~~2022, a decrease of US$ ~~2,591,351~~2,282,434 or ~~17.83%~~10.23%, from a net loss of US$ ~~14,536,507~~22,316,260 for the ~~six months ended December 31, 2020.~~same period in 2021. The ~~increase~~decrease in net loss was primarily a result of the decreased net loss from discontinued operations, which partially offset by the increase ~~in general and administrative expenses, impairment~~net loss ~~of distribution rights and amortization of debt issuance costs.~~from continuing operations as mentioned above.

The comprehensive loss was US$ ~~16,313,552~~19,071,477 for the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, an increase of US$ ~~6,853,539~~1,667,080 from a comprehensive loss of US$ ~~9,460,013~~17,404,397 for the ~~six months ended December 31, 2020.~~same period in 2021. After deduction of non-controlling interest, the comprehensive loss attributable to us was US$ ~~16,317,063~~19,060,297 for the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, compared to a comprehensive loss attributable to us in the amount of US$ ~~9,080,661~~16,751,239 for the ~~six~~nine months ended ~~December~~March 31, ~~2020.~~2021. The ~~significant~~ increase of comprehensive loss was due to the ~~increase in net loss as mentioned above, 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.~~denomination, which partially offset by the decrease in net loss as mentioned above.

Results of Operations for the Three Months Ended ~~December~~March 31, ~~2021~~2022 and ~~2020~~2021

The following table summarizes our results of operations for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020:~~2021:

	Three Months Ended December 31,						Variance						Three Months Ended March 31,						Variance
	2021			2020			Amount			%			2022			2021			Amount			%
Revenue	$	732,574		$	789,662		$	(57,088	)		(7.23	)%	$	618,094		$	637,799		$	(19,705	)		(3.09	)%
Cost of revenue		1,294,265			3,760,609			(2,466,344	)		(65.58	)%		1,110,836			1,655,470			(544,634	)		(32.90	)%
Gross loss		(561,691	)		(2,970,947	)		2,409,256			(81.09	)%		(492,742	)		(1,017,671	)		524,929			(51.58	)%
General and administrative expenses		1,932,810			3,213,210			(1,280,400	)		(39.85	)%		2,218,398			1,978,762			239,636			12.11	%
Selling expenses		9,990			10,290			(300	)		(2.92	)%		16,044			11,170			4,874			43.63	%
Loss from operations		(2,504,491	)		(6,194,447	)		3,689,956			(59.57	)%		(2,727,184	)		(3,007,603	)		280,419			(9.32	)%
Impairment loss on an unconsolidated entity		(149,790	)		-			(149,790	)		100.00	%
Loss from equity method investment		(79,068	)		-			(79,068	)		100.00	%		(49,247	)		-			(49,247	)		100.00	%
Other income, net		473			83,128			(82,655	)		(99.43	)%
Other income (expenses), net														(7,174	)		1,967			(9,141	)		(464.72	)%
Amortization of debt issuance costs		(395,340	)		-			(395,340	)		100.00	%		(287,897	)		-			(287,897	)		100.00	%
Interest income, net		237,338			7,462			229,876			3,080.62	%		165,505			8,370			157,135			1,877.36	%
Loss before income tax provision from continuing operations		(2,890,878	)		(6,103,857	)		3,212,979			(52.64	)%		(2,905,997	)		(2,997,266	)		91,269			(3.05	)%
Provision (benefit) for income taxes		(6,478	)		4,530			(11,008	)		(243.00	)%
Benefit for income taxes														(29	)		(4,530	)		4,501			(99.36	)%
Net loss from continuing operations		(2,884,400	)		(6,108,387	)		3,223,987			(52.78	)%		(2,905,968	)		(2,992,736	)		86,768			(2.90	)%
Net loss from discontinued operations		-			(7,375,140	)		7,375,140			(100.00	)%		-			(4,787,017	)		4,787,017			(100.00	)%
Net loss	$	(2,884,400	)	$	(13,483,527	)	$	10,599,127			(78.61	)%	$	(2,905,968	)	$	(7,779,753	)	$	4,873,785			(62.65	)%
Comprehensive loss attributable to Shineco Inc.	$	(2,058,096	)	$	(10,644,170	)	$	8,586,074			(80.66	)%	$	(2,743,234	)	$	(7,670,578	)	$	4,927,344			(64.24	)%

The following table sets forth the breakdown of our revenue for each of the two segments from the continuing operations, for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively:

	Three Months Ended December 31,										Variance						Three Months Ended March 31,										Variance
	2021		%			2020		%			Amount			%			2022		%			2021		%			Amount			%
Luobuma products	$	21,260		2.90	%	$	48,394		6.13	%	$	(27,134	)		(56.07	)%	$	8,521		1.38	%	$	23,468		3.68	%	$	(14,947	)		(63.69	)%
Other agricultural products		711,314		97.10	%		741,268		93.87	%		(29,954	)		(4.04	)%		609,573		98.62	%		614,331		96.32	%		(4,758	)		(0.77	)%
Total Amount	$	732,574		100.00	%	$	789,662		100.00	%	$	(57,088	)		(7.23	)%	$	618,094		100.00	%	$	637,799		100.00	%	$	(19,705	)		(3.09	)%

For the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, revenue from sales of Luobuma products was US$ ~~21,260~~8,521 and US$ ~~48,394,~~23,468, respectively, which represented a decrease of US$ ~~27,134,~~14,947, or ~~56.07%~~63.69%. 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 and mainly focused on clearing off our remaining old stocks, hence, we offered more price discounts in order to get more customer orders. As a result, our overall sales decreased during the three months ended ~~December~~March 31, ~~2021~~2022 as compared to the same period in ~~2020.~~2021.

For the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, revenue from sales of other agricultural products was US$ ~~711,314~~609,573 and US$ ~~741,268,~~614,331, respectively, ~~representing~~which remained relatively stable with a slight decrease of US$ ~~29,954,~~4,758, or ~~4.04%~~0.77%. ~~The decrease was mainly due to the decline of sales volume of yew trees during the three months ended December 31, 2021 as compared to the same period in 2020.~~

The following table sets forth the breakdown of the cost of revenue for each of our two segments from the continuing operations, for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020:~~2021:

	Three Months Ended December 31,										Variance						Three Months Ended March 31,										Variance
	2021		%			2020		%			Amount			%			2022		%			2021		%			Amount			%
Luobuma products	$	8,467		0.66	%	$	102,150		2.72	%	$	(93,683	)		(91.71	)%	$	3,202		0.29	%	$	157,001		9.49	%	$	(153,799	)		(97.96	)%
Other agricultural products		1,283,796		99.19	%		3,656,495		97.23	%		(2,372,699	)		(64.89	)%		1,106,062		99.57	%		1,496,955		90.42	%		(390,893	)		(26.11	)%
Business and sales related tax		2,002		0.15	%		1,964		0.05	%		38			1.93	%		1,572		0.14	%		1,514		0.09	%		58			3.83	%
Total Amount	$	1,294,265		100.00	%	$	3,760,609		100.00	%	$	(2,466,344	)		(65.58	)%	$	1,110,836		100.00	%	$	1,655,470		100.00	%	$	(544,634	)		(32.90	)%

For the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, cost of revenue from sales of our Luobuma products was US$ ~~8,467~~3,202 and US$ ~~102,150,~~157,001, respectively, representing a decrease of US$ ~~93,683,~~153,799, or ~~91.71%~~97.96%. The decrease was mainly due to the ~~reversal of~~decreased allowance we accrued for our slow-moving inventories amounted to US$ ~~81,674~~128,543 on our remaining old stocks during the three months ended ~~December~~March 31, ~~2021.~~2022.

For the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, cost of revenue from sales of other agricultural products was US$ ~~1,283,796~~1,106,062 and US$ ~~3,656,495,~~1,496,955, respectively, representing a decrease of US$ ~~2,372,699,~~390,893, or ~~64.89%~~26.11%. The decrease was mainly due to less stock written off during the three months ended ~~December~~March 31, ~~2021.~~2022. 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 three months ended ~~December~~March 31, ~~2020.~~2021.

The following table sets forth the breakdown of the gross profit (loss) for each of our two segments from the continuing operations, for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020:~~2021:

	Three Months Ended December 31,												Variance					Three Months Ended March 31,												Variance
	2021			%			2020			%			Amount		%			2022			%			2021			%			Amount		%
Luobuma products	$	12,793			(2.28	)%	$	(53,772	)		1.81	%	$	66,565		(123.79	)%	$	5,318			(1.08	)%	$	(133,533	)		13.12	%	$	138,851		(103.98	)%
Other agricultural products		(574,484	)		102.28	%		(2,917,175	)		98.19	%		2,342,691		(80.31	)%		(498,060	)		101.08	%		(884,138	)		86.88	%		386,078		(43.67	)%
Total Amount	$	(561,691	)		100.00	%	$	(2,970,947	)		100.00	%	$	2,409,256		(81.09	)%	$	(492,742	)		100.00	%	$	(1,017,671	)		100.00	%	$	524,929		(51.58	)%

Gross profit from Luobuma product sales increased by US$ ~~66,565,~~138,851, or ~~123.79%~~103.98%, for the three months ended ~~December~~March 31, ~~2021~~2022 as compared to the same period in ~~2020.~~2021. During the three months ended ~~December~~March 31, ~~2021,~~2022, our gross profit was US$ ~~12,793,~~5,318, mainly due to the ~~reversal of~~decreased allowance we accrued for our slow-moving inventories during the three months ended March 31, 2022 as mentioned above. The increase in gross profit was partially offset by 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 three months ended ~~December~~March 31, ~~2021.~~2022.

Gross loss from sales of other agricultural products decreased by US$ ~~2,342,691,~~386,078, or ~~80.31%~~43.67%, for the three months ended ~~December~~March 31, ~~2021~~2022 as compared to the same period in ~~2020.~~2021. The decrease was mainly due to the decrease inventory written off during the three months ended ~~December~~March 31, ~~2021~~2022 as mentioned above.

The following table sets forth the breakdown of our operating expenses for the three months ended ~~December~~March 31, ~~2021~~2022 and ~~2020,~~2021, respectively:

	Three Months Ended December 31,										Variance						Three Months Ended March 31,										Variance
	2021		%			2020		%			Amount			%			2022		%			2021		%			Amount		%
General and administrative expenses	$	1,932,810		99.49	%	$	3,213,210		99.68	%	$	(1,280,400	)		(39.85	)%	$	2,218,398		99.28	%	$	1,978,762		99.44	%	$	239,636		12.11	%
Selling expenses		9,990		0.51	%		10,290		0.32	%		(300	)		(2.92	)%		16,044		0.72	%		11,170		0.56	%		4,874		43.63	%
Total Amount	$	1,942,800		100.00	%	$	3,223,500		100.00	%	$	(1,280,700	)		(39.73	)%	$	2,234,442		100.00	%	$	1,989,932		100.00	%	$	244,510		12.29	%

For the three months ended ~~December~~March 31, ~~2021,~~2022, our general and administrative expenses were US$ ~~1,932,810,~~2,218,398, representing ~~a decrease~~an increase of US$ ~~1,280,400,~~239,636, or ~~39.85%~~12.11%, as compared to the same period in ~~2020.~~2021. The ~~decrease~~increase was mainly due to a decrease in bad debt expenses of US$ 4,108,993 during the three months ended December 31, 2021. 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. However, the management has put effort in collection of overdue accounts receivable and utilize our 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~~we 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, which was partially offset by a decrease in bad debt expenses during the three months ended ~~December~~March 31, ~~2021.~~2022.

For the three 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$ 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~~49,247 for the three months ended ~~December~~March 31, ~~2021~~2022 from this investment.

For the three months ended ~~December~~March 31, ~~2021,~~2022, our amortization of debt issuance costs expenses ~~were~~was US$ ~~395,340,~~287,897, representing an increase of 100.00%, as compared to the same period in ~~2020.~~2021. The increase in was attributable to the amortization of debt issuance costs during the three months ended ~~December~~March 31, ~~2021~~2022 on the convertible notes issued by ~~the Company.~~us.

For the three months ended ~~December~~March 31, ~~2021,~~2022, our net interest income was US$ ~~237,338,~~165,505, representing an increase of US$ ~~229,876,~~157,135, or ~~3,080.62%~~1,877.36%, as compared to net interest income of US$ ~~7,462~~8,370 in the same period in ~~2020.~~2021. 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 convertible notes issued by ~~the Company.~~us.

Our net loss from continuing operations was US$ ~~2,884,400~~2,905,968 for three months ended ~~December~~March 31, ~~2021,~~2022, a slight decrease of US$ ~~3,223,987,~~86,768, or ~~52.78%~~2.90%, from net loss from continuing operations of US$ ~~6,108,387~~2,992,736 for three months ended ~~December~~March 31, ~~2020.~~2021. The decrease in net loss was primarily a result of the ~~increase~~decrease in gross ~~profit,~~loss, partially offset by the ~~decrease in~~increased general and administrative expenses, ~~partially offset by the increased~~and amortization of debt issuance costs.

As mentioned above, after signing of the Restructuring Agreement on June 8, 2021, ~~the Company~~we 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$ nil for the three months ended ~~December~~March 31, ~~2021~~2022 as compared to a total net loss from discontinued operations of US$ ~~7,375,140~~4,787,017 for the same period in ~~2020.~~2021.

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

	Six Months Ended December 31,					Three Months Ended March 31,
	2021		2020			2022		2021
Revenues	$	-	$	2,273,319		$	-	$	1,352,938
Cost of revenues		-		1,957,442			-		1,342,583
Gross profit		-		315,877			-		10,355
Operating expenses		-		3,584,599			-		3,059,532
Other expenses, net		-		(4,133,139	)		-		(1,816,416	)
Loss before income tax		-		(7,401,861	)		-		(4,865,593	)
Benefit for income tax expense		-		(26,721	)		-		(78,576	)
Net loss from discontinued operations		-		(7,375,140	)		-		(4,787,017	)
Loss from disposal		-		-			-		-
Total net loss from discontinued operations	$	-	$	(7,375,140	)	$	-	$	(4,787,017	)

Our net loss was US$ ~~2,884,400~~2,905,968 for the three months ended ~~December~~March 31, ~~2021,~~2022, a decrease of US$ ~~10,599,127~~4,873,785 or ~~78.61%~~62.65%, from a net loss of US$ ~~13,483,527~~7,779,753 for the ~~three months ended December 31, 2020.~~same period in 2021. The decrease in net loss was primarily a result of ~~increase in gross profit,~~ the ~~decrease in general and administrative expenses and~~decreased net loss from discontinued operations ~~partially offset by the increased amortization of debt issuance costs.~~as mentioned above.

The comprehensive loss was US$ ~~2,070,664~~2,757,925 for the three months ended ~~December~~March 31, ~~2021,~~2022, a decrease of US$ ~~9,004,300~~5,186,459 from a comprehensive loss of US$ ~~11,074,964~~7,944,384 for the ~~three months ended December 31, 2020.~~same period in 2021. After deduction of non-controlling interest, the comprehensive loss attributable to us was US$ ~~2,058,096~~2,743,234 for the three months ended ~~December~~March 31, ~~2021,~~2022, compared to a comprehensive loss attributable to us in the amount of US$ ~~10,644,170~~7,670,578 for the ~~three months ended December 31, 2020.~~same period in 2021. The ~~significant~~ decrease of comprehensive loss was due to the decrease in net loss as mentioned above, as well as ~~a decrease~~an increase in the recorded 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~~March 31, ~~2021~~2022 and June 30, 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 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 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~~March 31, ~~2021.~~2022.

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~~3,170,000 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~~4,200,000 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~~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. We received principal in full from the Investor and we anticipate using the proceeds for general working capital purposes. As of ~~December~~March 31, ~~2021, a total of 1,258,450~~2022, shares of ~~our~~the Company’s common stock totaling 1,695,877 were issued by usthe Company to the Investor equaling principal and interests amounted to ~~$6,000,000,~~US$7,250,000, and the ~~convertible note~~Notes balance ~~was$14,840,874,~~was US$14,092,753, with a carrying value of ~~$15,474,778,~~US$14,438,760, net of deferred financing costs of ~~$633,904.~~US$346,007 was recorded in the accompanying unaudited condensed consolidated balance sheets.

On December 6, 2021, we 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$1,970,000.

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 ~~December~~March 31, ~~2021~~2022 and June 30, 2021:

	December 31, 2021		June 30, 2021		March 31, 2022		June 30, 2021

Current Assets	$	66,641,593	$	49,278,577	$	64,594,468	$	49,278,577
Current Liabilities		30,376,977		14,795,390		29,345,143		14,795,390
Working Capital	$	36,264,616	$	34,483,187	$	35,249,325	$	34,483,187

The working capital increased slightly by US$ ~~1,781,429,~~766,138, or ~~5.2%~~2.2%, as of ~~December~~March 31, ~~2021~~2022 from June 30, 2021, primarily as a result of an increase in inventories, other current assets and due from related parties, partially offset by the decrease in current assets held for discontinued operations and advances to suppliers, and an increase in other payables and accrued expenses, and convertible note payable as of ~~December~~March 31, ~~2021.~~2022.

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.

On May 16, 2017, Mrs. Guiqin Li (the “Plaintiff”) commenced a lawsuit against us in the People’s Court of Chongqing Pilot Free Trade Zone of China. Plaintiff alleged that due to the misguidance given by our security trading department, the Plaintiff did not manage to complete the sales of our common stock on the day of our initial public offering in the United States. As the price of our common stock continued falling after initial public offering, the Plaintiff incurred losses and hence seek money damages against us. Based on the judgment of the first trail, we required to pay the Plaintiff a settlement payment, including the money compensation, interests and other legal fees. As of March 31, 2022, we accrued a total sum of US$ 784,120 (approximately RMB 5.0 million) for this lawsuit. We 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, we 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 our stock pursuant to stock purchase agreements they executed with us. In December, defendants filed an answer and counterclaim against us, which they amended on January 27, 2022 after we moved to dismiss their counterclaims. They claimed that we 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 US$ 9 million, punitive damages of US$ 10 million, plus interest, costs, and fees. We anticipate moving to dismiss the counterclaims in June, 2022. The outcome of this legal proceeding is uncertain at this point because of the many questions of fact and law that may arise. We intend to recover on its claims, and vigorously defend itself in this litigation. As of March 31, 2022, the total unpaid restricted shares issued to Lei Zhang and Yan Li by us 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 of ~~December~~March 31, ~~2021~~2022 and June 30, 2021, we had no other 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 ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 and ~~2020.~~2021.

	Six Months Ended December 31,						Nine Months Ended March 31,
	2021			2020			2022			2021

Net cash used in operating activities	$	(5,610,545	)	$	(11,436,484	)	$	(6,755,462	)	$	(11,854,241	)
Net cash provided by (used in) investing activities		(32,450,291	)		221,518			(32,520,356	)		1,252,056
Net cash provided by financing activities		25,235,511			957,325			25,229,718			1,764,958
Effect of exchange rate changes on cash		421,826			2,245,261			499,127			2,314,452
Net decrease in cash		(12,403,499	)		(8,012,380	)		(13,546,973	)		(6,522,775	)
Cash, beginning of the period		29,024,394			32,371,372			29,024,394			32,371,372
Cash, end of the period	$	16,620,895		$	24,358,992		$	15,477,421		$	25,848,597
Less: cash of discontinued operations - ended of the period		-			10,441,139			-			11,997,106
Cash of continuing operations - ended of the period		16,620,895			13,917,853			15,477,421			13,851,491

Net cash used in operating activities during the ~~six~~nine months ended ~~December~~March 31, ~~2021~~2022 was approximately US$ ~~5.6~~6.8 million, consisting of net loss from continuing operations of US$ ~~14.0~~16.9 million, bad debt expenses of US$ ~~5.8~~6.4 million, stock written off due to natural disaster of US$ 1.3 million, impairment loss on distribution rights of US$ 1.1 million, and net changes in our operating assets and liabilities, which mainly included an increase in other current assets of US$ ~~4.6~~4.4 million, partially offset by the ~~decreased~~decrease in advances to suppliers and ~~increased~~increase in other payable. Net cash used in operating activities during the ~~six~~nine months ended ~~December~~March 31, ~~2020~~2021 was approximately US$ ~~11.4~~11.9 million, consisting of net loss from continuing operations of US$ ~~7.3~~10.3 million, bad debt expenses of US$ ~~3.3~~4.5 million, stock written off due to natural disaster of US$ ~~2.6~~3.4 million, and net changes in our operating assets and liabilities, which mainly included an increase in inventories of US$ 4.6 million, advances to suppliers of US$ ~~4.6~~3.8 million, other current assets of US$ 2.4 million, and ~~inventories~~accounts receivable of US$ ~~4.0~~2.2 million, ~~and account receivables of US$ 1.7 million.~~partially offset by the increase in other payable.

For the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, net cash used in investing activities was US$ 32.5 million, primarily due to the disposal of Ankang of US$ 12.7 million, payment made for loans to third parties of US$ 12.2 million and ~~repayments of~~payment made for loans ~~from~~to related parties of US$ ~~6.6~~6.7 million. For the ~~six~~nine months ended ~~December~~March 31, ~~2020,~~2021, net cash provided by investing activities was US$ ~~0.2~~1.3 million due to the net cash provided by investing activities from discontinued operations.

For the ~~six~~nine months ended ~~December~~March 31, ~~2021,~~2022, net cash provided by financing activities amounted to approximately US$ 25.2 million, primarily due to ~~the~~proceeds from issuance of convertible note of US$ 17.0 million and proceeds from issuance of common stock of US$ 7.5 ~~million, proceeds from issuance of convertible note of US$ 17.0~~ million. For the ~~six~~nine months ended ~~December~~March 31, ~~2020,~~2021, net cash provided by financing activities amounted to approximately US$ ~~1.0~~1.8 million due to proceeds from issuance of common stock of US$ ~~1.6~~2.7 million, partially offset by the net cash used in financing activities from discontinued operations of US$ 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 ~~December~~March 31, ~~2021.~~2022. 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.

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 securities 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 is seeking monetary damages against the Company. Based on the judgment of the initial trial, the Company was required to 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 of US$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 in the second trial 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 certain restricted shares of the Company’s common 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~~brought claims for, among others, breach of contract, breach of the covenant of good faith and fair dealing, and fraud, asserting that the Company made false and 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~~moved to dismiss the counterclaims, and its motion was fully-submitted in ~~March,~~April, 2022. Also in April 2022, the Court granted the Company’s motion for a preliminary injunction to restrain the Company’s transfer agent from removing the restrictive legends on the shares, provided that the Company posts a bond in the amount of $1.5 million by May 20, 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~~March 31, ~~2021,~~2022, 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.”~~Not applicable.

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	☒	Smaller reporting company	☒
		Emerging growth company	☐

		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 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	4042

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5961

Item 4.	Controls and Procedures	5961

PART II. OTHER INFORMATION		6062

Item 1.	Legal Proceedings	6062

Item 1A.	Risk Factors	6062

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6062

Item 3.	Defaults Upon Senior Securities	6062

Item 4.	Mine Safety Disclosures	6062

Item 5.	Other Information	6062

Item 6.	Exhibits	6062

SIGNATURES		6163

	March 31,			June 30,
	2022			2021
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	15,477,421		$	16,342,911
Accounts receivable, net		2,329,405			2,686,671
Due from related parties		7,189,579			132,398
Inventories, net		21,063,482			1,323,391
Advances to suppliers, net		316,118			7,790,126
Other current assets		18,218,463			1,343,338
Current assets held for discontinued operations		-			19,659,742
TOTAL CURRENT ASSETS		64,594,468			49,278,577

Property and equipment, net		2,311,967			2,253,944
Investments		609,918			-
Distribution rights		-			1,142,794
Long-term deposit and other noncurrent assets		11,225			14,550
Right of use assets		4,346,890			3,585,703
Non-current assets held for discontinued operations		-			5,043,031
TOTAL ASSETS	$	71,874,468		$	61,318,599

LIABILITIES AND EQUITY

CURRENT LIABILITIES:
Accounts payable	$	1,634		$	76,584
Advances from customers		7,050			7,468
Due to related parties		4,103,960			1,159,407
Other payables and accrued expenses		9,058,801			4,109,208
Operating lease liabilities - current		966,030			434,411
Convertible note payable		14,092,753			2,933,030
Taxes payable		1,114,915			1,208,348
Current liabilities held for discontinued operations		-			4,866,934
TOTAL CURRENT LIABILITIES		29,345,143			14,795,390

Income tax payable - noncurrent portion		506,441			506,441
Operating lease liabilities - non-current		1,405,438			352,863
Deferred tax liability		290,929			285,699
TOTAL LIABILITIES		31,547,951			15,940,393

Commitments and contingencies		-			-

EQUITY:
Common stock; par value $0.001, 100,000,000 shares authorized; 9,869,134 and 7,881,482 shares issued and outstanding at March 31, 2022 and June 30, 2021		9,869			7,881
Additional paid-in capital		50,685,070			41,105,806
Subscription receivable		(3,024,000	)		(8,535,203	)
Statutory reserve		4,198,107			4,198,107
Retained earnings (accumulated deficit)		(11,347,556	)		8,661,071
Accumulated other comprehensive gain (loss)		216,525			(731,805	)
Total Stockholders’ equity of Shineco, Inc.		40,738,015			44,705,857
Non-controlling interest		(411,498	)		672,349
TOTAL EQUITY		40,326,517			45,378,206

TOTAL LIABILITIES AND EQUITY	$	71,874,468		$	61,318,599

	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

		Estimated useful lives

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

	SHARES*		AMOUNT		RECEIVABLE			CAPITAL		RESERVE		DEFICIT)			LOSS			INTEREST			EQUITY
								ADDITIONAL				RETAINED EARNINGS			ACCUMULATED 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		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

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		1,695,877		1,696		-			7,248,304		-		-			-			-			7,250,000
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		-		-		-			-		-		(20,008,627	)		-			(25,199	)		(20,033,826	)
Foreign currency translation gain		-		-		-			-		-		-			948,330			14,019			962,349
Balance at March 31, 2022		9,869,134	$	9,869	$	(3,024,000	)	$	50,685,070	$	4,198,107	$	(11,347,556	)	$	216,525		$	(411,498	)	$	40,326,517

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

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.

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

b.	The Company owns 3232%% 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$~~1,729,179~~1,734,536 (RMB 11.0 million) for its working capital for one year, with a maturity date of September 16, 2022. The loans bore a fixed annual interest rate of ~~6.0~~6.0%% per annum. The Company ~~accrued~~recorded interest ~~income~~receivable amounted to US$~~29,846~~55,600 ~~during~~as of March 31, 2022. Interest income were US$55,062 and US$25,544 for the ~~six~~nine and three months ended ~~December~~March 31, ~~2021.~~2022 and 2021, respectively.

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$4,~~4,700,223~~714,785 (RMB 29.9 million) for its working capital for one year, with a maturity date of October 27, 2022. The loans bore a fixed annual interest rate of ~~6.0~~6.0%% per annum. The Company ~~accrued~~recorded interest ~~income~~receivable amounted to US$~~49,449~~119,355 ~~during~~as of March 31, 2022. Interest income were US$118,201 and US$69,297 for the ~~six~~nine and three months ended ~~December~~March 31, ~~2021.~~2022 and 2021, respectively.


	For the nine months ended March 31,					For the three months ended March 31,
	2022			2021		2022			2021
Current income tax benefit	$	(6,507	)	$	-	$	(29	)	$	(83,106	)
Deferred income tax provision		-			-		-			-
Total income tax benefit	$	(6,507	)	$	-	$	(29	)	$	(83,106	)
Less: income tax benefit, held for discontinued operations		-			-		-			(78,576	)
Income tax benefit, held for continuing operations	$	(6,507	)	$	-	$	(29	)	$	(4,530	)

	December 31, 2021			June 30, 2021
Deferred tax assets:
Allowance for doubtful accounts	$	1,095,211		$	951,136
Inventory reserve		331,753			306,308
Net operating loss carry-forwards		560,958			552,579
Total		1,987,922			1,810,023
Valuation allowance		(1,987,922	)		(1,810,023	)
Total deferred tax assets		-			-
Deferred tax liability:
Distribution rights		(290,030	)		(285,699	)
Total deferred tax liability		(290,030	)		(285,699	)
Deferred tax liability, net		(290,030	)		(285,699	)
Less: deferred tax liability, net, held for discontinued operations		-			-
Deferred tax liability, net, held for continuing operations	$	(290,030	)	$	(285,699	)

●	Developing, manufacturing, and distributing of specialized fabrics, textile products, and other by-products derived from an indigenous Chinese plant called Apocynum Venetum, commonly known as “Bluish Dogbane” or known in Chinese as “Luobuma” (referred to herein as Luobuma):

	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”):

	For the nine months ended March 31, 2022
	Continuing Operations									Discontinued Operations
	Luobuma			Other agricultural						Herbal
	products			products			Total			products		Total
Segment revenue	$	43,289		$	1,937,137		$	1,980,426		$	-	$	1,980,426
Cost of revenue and related business and sales tax		153,508			3,610,896			3,764,404			-		3,764,404
Gross loss		(110,219	)		(1,673,759	)		(1,783,978	)		-		(1,783,978	)
Gross loss %		(254.6	)%		(86.4	)%		(90.1	)%		-		(90.1	)%

	For the nine months ended March 31, 2021
	Continuing Operations									Discontinued Operations
	Luobuma			Other agricultural						Herbal
	products			products			Total			products			Total
Segment revenue	$	96,477		$	2,338,961		$	2,435,438		$	6,761,663		$	9,197,101
Cost of revenue and related business and sales tax		287,629			5,870,789			6,158,418			5,792,488			11,950,906
Gross profit (loss)		(191,152	)		(3,531,828	)		(3,722,980	)		969,175			(2,753,805	)
Gross profit (loss) %		(198.1	)%		(151.0	)%		(152.9	)%		14.3	%		(29.9	)%

	●	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”).

	●	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.

	●	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 Number		Description
~~31.1~~10.1		Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on April 14, 2022)
10.2		Form of Share Transfer Agreement dated January 18, 2022 (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on January 19, 2022)
31.1		Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934
31.2		Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934
32.1 32.2		Certification of Principal Executive Officer ~~and~~pursuant to 18 U.S.C. § 1350, as Adopted Pursuant to § 906 of the Sarbanes-Oxley Act of 2002 Certification of 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: ~~February 14,~~May 16, 2022	By:	/s/ Jennifer Zhan
		Jennifer Zhan
		Chief Executive Officer
		(Principal Executive Officer)

Dated: ~~February 14,~~May 16, 2022	By:	/s/ Sai (Sam) Wang
		Sai (Sam) Wang
		Chief Financial Officer
		(Principal Financial and Accounting Officer)