Revenue and Sales Performance - For the six months ended December 31, 2023, total fertilizer sales decreased to approximately 52,426 metric tons, down 18.5% from 64,350 metric tons in the same period of 2022[124]. - Jinong's revenue for the three months ended December 31, 2023, was $6,811,640, a decrease of 30.8% compared to $9,842,749 in the same period of 2022[131]. - Gufeng's revenue for the three months ended December 31, 2023, was $8,209,157, down 30.7% from $11,849,719 in the same period of 2022[131]. - Total net sales for the three months ended December 31, 2023 were $17,800,114, a decrease of $6,739,093 or 27.5% from $24,539,207 for the same period in 2022[133]. - Jinong's net sales decreased by $3,031,109 or 30.8% to $6,811,640, with a sales volume of approximately 6,694 metric tons, down 9.5% from 7,400 metric tons in the previous year[133]. - Gufeng's net sales were $8,209,157, a decrease of $3,640,562 or 30.7%, with sales volume dropping to approximately 16,869 metric tons, down 27.9% from 23,394 metric tons[134]. - Total net sales for the six months ended December 31, 2023 were $40,197,976, a decrease of $11,938,556 or 22.9% from $52,136,532 for the same period in 2022[150]. - Jinong's net sales decreased by $5,890,353 or 26.8% to $16,100,398, with a sales volume of 14,748 tons compared to 16,785 tons in the previous year[150]. - Gufeng's net sales were $18,630,431, a decrease of $5,798,110 or 23.7%, with a sales volume of 37,678 tons compared to 47,565 tons in the previous year[151]. Profitability and Loss - The gross profit for the three months ended December 31, 2023, was $3,328,487, a decrease of 26.3% from $4,514,417 in the same period of 2022[131]. - The net loss for the three months ended December 31, 2023, was $5,370,003, an increase of 49.3% compared to a net loss of $3,596,545 in the same period of 2022[131]. - Total gross profit for the six months ended December 31, 2023 decreased by $1,720,885 or 17.7% to $7,978,341, with a gross profit margin of 19.8%[153]. - Net loss for the six months ended December 31, 2023 was $(7,154,196), an increase of loss by $3,029,536 or 73.4% compared to $(4,124,660) in the previous year[161]. - Comprehensive loss for the three months ended December 31, 2023 was $(3,285,173), a decrease of $5,672,756 or 63.3% from $(8,957,929) in the same period of 2022[148]. Expenses - Selling expenses were $1,770,860, or 9.9% of net sales, an increase from $1,658,654 or 6.8% of net sales in the previous year[140]. - General and administrative expenses were $6,947,810, or 39% of net sales, an increase of $412,409 or 6.3% from $6,535,402 or 26.6% of net sales in the same period of 2022[141]. - General and administrative expenses increased to $11,504,417 or 28.6% of net sales, up from $9,820,517 or 18.8% in the previous year[156]. - Jinong's general and administrative expenses decreased by $1,286,878 or 45.6% to $1,533,184 compared to $2,820,062 in the previous year[158]. Cash Flow and Financial Position - Cash and cash equivalents as of December 31, 2023 were $70,402,736, a decrease of $739,452 or 1.0% from $71,142,188 as of June 30, 2023[166]. - Net cash used in operating activities was $(2,066,674), a decrease of $737,173 or 26.3% from $(2,803,847) in the previous year[171]. - Net cash used in investing activities for the six months ended December 31, 2023 was $(1,607,163), a decrease of $2,196,885 compared to cash provided by investing activities of $589,722 for the same period in 2022[172]. - Net cash used in financing activities for the six months ended December 31, 2023 was $1,382,404, a decrease of 93.0% compared to $19,872,445 net cash provided by financing activities for the same period in 2022[173]. Accounts and Inventory Management - Accounts receivable increased by $4,533,103, or 27.5%, reaching $20,988,837 as of December 31, 2023, compared to $16,455,734 as of June 30, 2023[175]. - Allowance for doubtful accounts decreased by $4,601,409, or 8.4%, to $50,107,077 as of December 31, 2023, with the allowance as a percentage of accounts receivable at 70.5%[175]. - Inventories decreased by $6,900,644, or 14.9%, to $39,554,487 as of December 31, 2023, primarily due to a decrease in Gufeng's inventory[177]. - Advances to suppliers increased by $2,633,644, or 18.4%, to $16,966,359 as of December 31, 2023, compared to $14,332,715 as of June 30, 2023[178]. - Accounts payable decreased by $516,794, or 24.6%, to $1,583,655 as of December 31, 2023, compared to $2,100,449 as of June 30, 2023[179]. - Customer deposits decreased by $82,301, or 1.5%, to $5,407,480 as of December 31, 2023, with Jinong's unearned revenue increasing by $91,085, or 7.9%[179]. Other Financial Information - The company launched one new fertilizer product during the three months ended December 31, 2023, while eliminating 72 unqualified distributors[129]. - The company incurred no income tax expenses for Jinong and Gufeng for the three months ended December 31, 2023[146]. - As of December 31, 2023, total short-term loans payable was $7,653,040, an increase from $5,346,640 as of June 30, 2023[174]. - The accumulated other comprehensive loss was $23 million as of December 31, 2023, reflecting exposure to foreign exchange risk due to fluctuations in the RMB against the U.S. dollar[191].

Sales Performance - For the three months ended September 30, 2023, total net sales were $22,397,862, a decrease of $5,199,463 or 18.8% from $27,597,325 for the same period in 2022[135]. - Jinong's net sales decreased by $2,859,244 or 23.5% to $9,288,758, with sales volume dropping to approximately 8,036 metric tons, a decrease of 1,349 tons or 14.4% compared to the previous year[135]. - Gufeng's net sales were $10,421,274, a decrease of $2,157,548 or 17.2%, with sales volume at approximately 20,809 metric tons, down 3,362 tons or 13.9% from the prior year[136]. - Yuxing's net sales were $2,342,716, a decrease of $527,785 or 18.4%, attributed to reduced market demand[136]. Revenue Composition - The fertilizer business generated approximately 88.0% and 89.6% of total revenues for the three months ended September 30, 2023 and 2022, respectively[122]. - Approximately 61.9% of fertilizer revenue for the three months ended September 30, 2023, came from five provinces in China, with Hebei contributing 26.2%[128]. Product Development - As of September 30, 2023, the company had developed a total of 409 different fertilizer products, with 73 produced by Jinong and 336 by Gufeng[123]. - The company launched 3 new fertilizer products during the three months ended September 30, 2023, while eliminating 105 unqualified distributors[131]. Cost and Profitability - The total cost of goods sold for the three months ended September 30, 2023, was $17,748,008, a decrease of $4,664,508 or 20.8% from the previous year[134]. - Total gross profit for Q3 2023 decreased by $534,955, or 10.3%, to $4,649,854, compared to $5,184,809 in Q3 2022, with a gross profit margin of 20.8%[140]. - Jinong's gross profit decreased by $705,688, or 20.8%, to $2,682,144 in Q3 2023, with a gross profit margin of approximately 28.9%[140]. - Gufeng's gross profit increased by $102,008, or 7.7%, to $1,425,953 in Q3 2023, with a gross profit margin of approximately 13.7%[141]. Expenses and Losses - General and administrative expenses for Q3 2023 were $4,556,606, an increase of $1,271,491, or 38.7%, from $3,285,115 in Q3 2022[144]. - The net loss for the three months ended September 30, 2023, was $1,784,193, compared to a net loss of $528,114 for the same period in 2022, representing an increase of 237.8%[134]. - Net loss for Q3 2023 was $(1,784,193), an increase in loss of $1,256,078, or 237.8%, compared to $(528,114) in Q3 2022[146]. Cash Flow and Financial Position - Cash and cash equivalents as of September 30, 2023, were $67,285,823, a decrease of $3,856,365, or 5.4%, from $71,142,188 as of June 30, 2023[150]. - Net cash used in operating activities was $626,510 for Q3 2023, a decrease of $2,369,000, or 79.1%, from $2,995,510 in Q3 2022[153]. - Accounts receivable increased by $3,452,398, or 21.0%, to $19,908,132 as of September 30, 2023, compared to $16,455,734 as of June 30, 2023[156]. - The allowance for doubtful accounts decreased by $3,794,917, or 6.9%, to $50,913,569 as of September 30, 2023[156]. - As of September 30, 2023, total short-term loans payable decreased to $3,756,540 from $5,346,640 as of June 30, 2023, a reduction of 29.6%[158]. - Inventories decreased by $3,859,578, or 8.3%, to $42,595,553 as of September 30, 2023, primarily due to a significant reduction in Gufeng's inventory, which fell by 18.3%[159]. - Advances to suppliers increased by $352,370, or 2.5%, to $14,685,085 as of September 30, 2023, indicating a potential increase in production activity[160]. - Accounts payable decreased by $120,955, or 5.8%, to $1,979,494 as of September 30, 2023, reflecting improved cash flow management[161]. - Customer deposits (unearned revenue) increased by $179,290, or 3.3%, to $5,669,071 as of September 30, 2023, driven by seasonal fluctuations in demand[161]. Other Financial Metrics - The company reported an accumulated other comprehensive loss of $28 million as of September 30, 2023, due to foreign exchange fluctuations[174]. - Short-term debt outstanding decreased from $5.3 million to $3.8 million between June 30, 2023, and September 30, 2023, indicating a reduction in leverage[175]. - The company has not entered any hedging transactions to mitigate foreign exchange or interest rate risks, exposing it to potential volatility[174][176]. - The impact of COVID-19 has led to increased credit risk, with higher overdue accounts receivable compared to pre-pandemic levels[177]. - Inflationary pressures have adversely affected operating results, with increased costs impacting gross margins and administrative expenses[178].

Financial Performance - For the fiscal year ended June 30, 2023, the company sold approximately 175,519 metric tons of fertilizer products, a decrease of 38.9% from 287,160 metric tons in the previous year[250]. - Jinong's revenue for the fiscal year ended June 30, 2023, was $40,247,303, down 25.9% from $54,339,228 in 2022[259]. - Gufeng's revenue for the fiscal year ended June 30, 2023, was $74,028,542, a decline of 28.0% from $102,755,286 in 2022[259]. - The company's net sales for the fiscal year ended June 30, 2023, totaled $124,140,355, representing a decrease of 26.3% from $168,450,904 in 2022[259]. - Gross profit for the fiscal year ended June 30, 2023, was $21,918,293, down 25.0% from $29,206,282 in 2022[259]. - The company reported a net loss of $13,281,985 for the fiscal year ended June 30, 2023, compared to a net loss of $98,364,332 in 2022, reflecting an improvement of 86.5%[259]. - Total net sales for the fiscal year ended June 30, 2023 were $124,140,355, a decrease of $44,310,549 or 26.3% from $168,450,904 for the fiscal year ended June 30, 2022[262]. - Jinong's net sales decreased by $14,091,925, or 25.9%, to $40,247,303 from $54,339,228 for the fiscal year ended June 30, 2022, with a sales volume of 31,637 tons, a decrease of 28,170 tons or 47.1% compared to 59,807 tons for fiscal year 2022[262]. - Gufeng's net sales were $74,028,542, a decrease of $28,726,744, or 28.0% from $102,755,286 for the fiscal year ended June 30, 2022, with a sales volume of 143,882 tons, a decrease of 83,471 tons or 36.7% compared to 227,353 tons for fiscal year 2022[263]. - Total gross profit for the fiscal year ended June 30, 2023 decreased by $7,287,989 to $21,918,293, with a gross profit margin of 17.7% compared to 17.3% for the fiscal year ended June 30, 2022[265]. Expenses and Losses - General and administrative expenses were $27,197,200, or 21.9% of net sales for the fiscal year ended June 30, 2023, a decrease of $74,612,033, or 73.3% from $101,809,233, or 60.4% of net sales for the fiscal year ended June 30, 2022[269]. - Net loss for the fiscal year ended June 30, 2023 was $(13,281,985), a decrease of loss by $85,082,347, or 86.5%, compared to $(98,364,332) for the fiscal year ended June 30, 2022[271]. Cash Flow and Financial Position - Cash and cash equivalents as of June 30, 2023 were $71,142,188, an increase of $13,371,885, or 23.1%, from $57,770,303 as of June 30, 2022[278]. - Net cash used in operating activities was $990,122 for the fiscal year ended June 30, 2023, a decrease of $18,958,094, or 95.0% from cash used in operating activities of $19,948,216 for the fiscal year ended June 30, 2022[277]. - Net cash provided by financing activities decreased by 63.7% to $19,771,581 for the fiscal year ended June 30, 2023, compared to $54,454,275 in 2022[281]. Accounts and Inventory - Accounts receivable decreased by 42.8% to $16,455,734 as of June 30, 2023, down from $28,792,891 in 2022, primarily due to a 49.6% decrease in Jinong's accounts receivable[283]. - Inventories increased by 10.1% to $46,455,131 as of June 30, 2023, compared to $42,198,186 in 2022, driven by an 11.4% increase in Gufeng's inventory[287]. - Advances to suppliers decreased by 30.8% to $14,332,715 as of June 30, 2023, down from $20,711,891 in 2022[289]. - Accounts payable increased by 25.7% to $2,100,449 as of June 30, 2023, compared to $1,670,655 in 2022, primarily due to Antaeus's accounts payable[290]. - Unearned revenue decreased by 31.3% to $5,489,781 as of June 30, 2023, down from $7,994,669 in 2022, mainly due to a 67.4% decrease in Jinong's unearned revenue[290]. - Total loans payable increased to $6,283,680 as of June 30, 2023, compared to $4,031,100 in 2022, with short-term loans rising to $5,346,640[282]. - Allowance for doubtful accounts decreased by 5.7% to $54,708,486 as of June 30, 2023, from $58,000,266 in 2022, while the allowance as a percentage of accounts receivable increased to 76.9%[283]. Product Development and Market Focus - As of June 30, 2023, the company had developed and sold a total of 406 different fertilizer products, with 70 from Jinong and 336 from Gufeng[252]. - The company eliminated 15 obsolete products and added 1 new distributor for Jinong during the three months ended June 30, 2023[257]. - The provinces of Hebei, Liaoning, Inner Mongolia, Heilongjiang, and Jilin accounted for approximately 66.0% of the company's manufactured fertilizer revenue for the year ended June 30, 2023[254]. - The company intends to use net proceeds from securities offerings to acquire new businesses and upgrade production lines, indicating a focus on growth and expansion[276]. Digital Asset Activities - The company expanded its digital asset activities by establishing Antaeus Tech Inc. in Texas for bitcoin mining in March 2023[256]. Other Considerations - The company reported an accumulated other comprehensive loss of $27.0 million as of June 30, 2023, with the RMB depreciating by 7.6% against the U.S. dollar during the fiscal year[300]. - The company has not entered any hedging transactions to reduce exposure to foreign exchange or interest rate risks[301][302]. - The Company is actively monitoring the COVID-19 pandemic situation and its potential impact on operational and financial performance, which remains uncertain[306]. - Future impacts may include adverse effects on demand for the Company's products and services, supply chain disruptions, and challenges in executing strategic plans[307]. - The pandemic could heighten existing risks related to profitability and cost structure[307].

Sales Performance - For the nine months ended March 31, 2023, the company sold approximately 135,467 metric tons of fertilizer products, a decrease of 43.0% compared to 237,493 metric tons for the same period in 2022[164]. - Jinong's fertilizer sales for the nine months ended March 31, 2023, were approximately 23,684 metric tons, down 52.1% from 49,487 metric tons in the prior year[164]. - Gufeng's fertilizer sales for the nine months ended March 31, 2023, were approximately 111,783 metric tons, a decrease of 40.5% from 188,006 metric tons in the same period of 2022[164]. - Sales of fertilizer products to customers in five provinces within China accounted for approximately 83.8% of fertilizer revenue for the three months ended March 31, 2023[165]. - Jinong's top five distributors accounted for 19.4% of its fertilizer revenues for the three months ended March 31, 2023, while Gufeng's top five distributors accounted for 82.8% of its revenues[165]. Financial Performance - Total net sales for Q1 2023 were $45,261,960, a decrease of $15,876,912 or 26.0% from $61,138,872 in Q1 2022[184]. - Jinong's net sales decreased by $3,778,845 or 28.2% to $9,606,177 in Q1 2023, with sales volume dropping by 63.7% to approximately 6,899 metric tons[184]. - Gufeng's net sales were $33,457,644, a decrease of $11,747,823 or 26.0%, with sales volume down by 28.8% to approximately 64,218 metric tons[185]. - Total net sales for the nine months ended March 31, 2023 were $97,398,492, a decrease of $35,938,404 or 27.0% from $133,336,896 for the same period in 2022[200]. - Jinong's net sales decreased by $11,916,355 or 27.4% to $31,596,928 for the nine months ended March 31, 2023, primarily due to lower sales volume[200]. - Gufeng's net sales for the nine months ended March 31, 2023 were $57,886,185, a decrease of $23,680,948 or 29.0% from $81,567,133 for the same period in 2022[201]. Profitability - Gross profit for Q1 2023 decreased by $2,361,935 or 24.3% to $7,375,956, with a gross profit margin of 16.3%[188]. - Jinong's gross profit decreased by $900,757 or 24.6% to $2,754,689, with a gross profit margin of approximately 28.7%[188]. - For the three months ended March 31, 2023, Gufeng's gross profit was $4,188,982, a decrease of $1,493,602 or 26.3% from $5,682,584 for the same period in 2022[189]. - Gross profit for the nine months ended March 31, 2023 decreased by $6,011,968 or 26.0% to $17,075,182 compared to $23,087,150 for the same period in 2022[205]. - Net income for Q1 2023 was $189,605, compared to a net loss of $38,078,827 in Q1 2022[182]. - For the nine months ended March 31, 2023, the net loss decreased to $(3,935,055), a reduction of $81,203,916, or 95.4%, compared to $(85,138,971) for the same period in 2022[211]. - Jinong's net loss decreased by $9,240,024, or 80.7%, to $(2,209,588) for the nine months ended March 31, 2023, from $(11,449,612) for the same period in 2022[216]. - Gufeng's net income increased by $57,017,779, or 100.2%, to $113,257 for the nine months ended March 31, 2023, from a net loss of $(56,904,522) for the same period in 2022[216]. Expenses - General and administrative expenses for Q1 2023 were $5,234,123, a significant decrease of $34,129,009 or 86.7% from $39,363,132 in Q1 2022[182]. - Selling expenses for the nine months ended March 31, 2023 were $6,054,463, a decrease of $2,690,010 or 30.8% from $8,744,473 for the same period in 2022[207]. - Total cost of goods sold for Q1 2023 was $37,886,004, a decrease of $13,514,977 or 26.3% from $51,400,981 in Q1 2022[186]. Strategic Initiatives - The company launched 5 new fertilizer products during the three months ended March 31, 2023, through Jinong, while Gufeng did not launch any new products[168]. - The company is developing an online platform to connect its physical distribution network, indicating a strategic move towards e-commerce in the agricultural sector[177]. - The company intends to use net proceeds from securities offerings to acquire new businesses and upgrade production lines, indicating a focus on growth and expansion[218]. - The company entered into strategic acquisition agreements with various agricultural companies, with total cash payments for acquisitions amounting to RMB 37 million and principal of notes for acquisitions totaling RMB 51 million[169]. Cash Flow and Financial Position - Cash and cash equivalents increased to $71,760,603 as of March 31, 2023, an increase of $13,990,300, or 24.2%, from $57,770,303 as of June 30, 2022[217]. - Net cash used in operating activities was $(5,471,529) for the nine months ended March 31, 2023, a decrease of $40,298,073, or 88.0%, from cash provided by operating activities of $45,769,602 for the same period in 2022[222]. - Accounts receivable increased to $32,934,268 as of March 31, 2023, compared to $28,792,891 as of June 30, 2022, an increase of $4,141,377, or 14.4%[226]. - Inventories increased to $44,052,715 as of March 31, 2023, compared to $42,198,186 as of June 30, 2022, an increase of $1,854,529, or 4.4%[228]. - Advances to suppliers decreased to $8,045,641 as of March 31, 2023, from $20,711,891 as of June 30, 2022, representing a decrease of $12,666,250, or 61.2%[230]. - Customer deposits decreased to $7,111,862 as of March 31, 2023, from $7,994,669 as of June 30, 2022, a decrease of $882,807, or 11.0%[231]. Market and Economic Conditions - Inflationary pressures have increased operating costs, adversely affecting gross margins and administrative expenses[248]. - The COVID-19 pandemic has created significant economic uncertainty, impacting demand for the company's products and services[250]. - The company continues to monitor the COVID-19 situation and its potential effects on operations and financial performance[251]. - The company has not experienced significant credit risk, as most customers have strong payment records[247]. Foreign Exchange and Debt - As of March 31, 2023, the company's accumulated other comprehensive loss was $17 million due to foreign exchange fluctuations[244]. - Between July 1, 2022, and March 31, 2023, the RMB depreciated by a cumulative 2.5% against the U.S. dollar, affecting trade dynamics[244]. - The short-term debt outstanding as of March 31, 2023, was $5.7 million, compared to $4.0 million as of June 30, 2022[245]. - The company is exposed to interest rate risk primarily related to short-term bank loans, which are subject to renewal[245]. - The average remaining life of short-term loans is approximately four months, with original loan terms averaging one year[245]. - The company has not entered any hedging transactions to mitigate foreign exchange or interest rate risks[244][246].

Sales Performance - For the six months ended December 31, 2022, the company sold approximately 64,350 metric tons of fertilizer products, a decrease of 49.8% compared to 128,276 metric tons for the same period in 2021[166]. - Jinong sold approximately 16,785 metric tons of fertilizer products for the six months ended December 31, 2022, down 45% from 30,498 metric tons in the same period of 2021[166]. - Gufeng's sales for the same period were approximately 47,565 metric tons, a decrease of 51.4% from 97,778 metric tons in the prior year[166]. - For the three months ended December 31, 2022, the company sold approximately 30,794 tons of fertilizer products, compared to 74,278 metric tons for the same period in 2021, representing a decline of 58.5%[165]. Revenue and Profitability - The company's fertilizer business generated approximately 89.0% and 92.1% of total revenues for the six months ended December 31, 2022 and 2021, respectively[160]. - For the three months ended December 31, 2022, total net sales decreased by $14,819,929 or 37.7% to $24,539,207 compared to $39,359,136 for the same period in 2021[186]. - Jinong's net sales decreased by $5,123,770 or 34.2% to $9,842,749, with a sales volume drop of 51.5% to approximately 7,400 metric tons[186][187]. - Gufeng's net sales decreased by $9,723,695 or 45.1% to $11,849,719, with a sales volume drop of 60.4% to approximately 23,394 metric tons[187]. - Total gross profit for the six months ended December 31, 2022 decreased by $3,650,033 or 27.3% to $9,699,226 compared to $13,349,259 in the same period of 2021[204]. Expenses and Losses - Total operating expenses decreased by $21,779,404 or 72.7% to $8,194,056 for the three months ended December 31, 2022[186]. - General and administrative expenses for the three months ended December 31, 2022 were $6,535,402, a decrease of $20,471,197 or 75.8% from $27,006,599 in the same period of 2021[194]. - Net loss for the three months ended December 31, 2022 was $(3,596,545), a decrease in loss of $28,386,391 or 88.8% compared to $(31,982,936) for the same period in 2021[198]. - Net loss for the six months ended December 31, 2022, was $(4,124,660), a decrease of $42,935,484, or 91.2%, compared to $(47,060,144) in 2021[211]. Cash Flow and Financial Position - Net cash used in operating activities was $(2,803,848) for the six months ended December 31, 2022, an increase of $4,444,383, or 270.9%, from cash provided by operating activities of $1,640,536 in 2021[221]. - Cash and cash equivalents increased by $16,348,846, or 28.3%, to $74,119,148 as of December 31, 2022, from $57,770,303 as of June 30, 2022[217]. - Net cash provided by financing activities was $19,872,445 for the six months ended December 31, 2022, a 100% increase compared to $0 in 2021, primarily due to proceeds from common stock sales[223]. Market and Economic Conditions - The COVID-19 pandemic has created significant economic uncertainty, potentially impacting demand for the company's products and services[249]. - Inflationary pressures have increased operating costs, adversely affecting gross margins and administrative expenses[248]. - The company continues to monitor the COVID-19 situation and its potential impacts on operations and financial performance[250]. Strategic Developments - The company entered into strategic acquisition agreements with various agricultural companies, with total cash payments for acquisitions amounting to RMB 37 million and principal of notes for acquisitions totaling RMB 51 million[171]. - The company is developing an online platform to connect its physical distribution network, indicating a strategic move towards e-commerce in the agricultural sector[179].

Sales Performance - For the three months ended September 30, 2022, the company sold approximately 33,556 tons of fertilizer products, a decrease of 37.9% compared to 53,995 tons for the same period in 2021[158]. - Jinong's fertilizer sales were approximately 9,385 metric tons, down 38.4% from 15,224 metric tons in the same period last year, while Gufeng sold 24,171 metric tons, down 37.7% from 38,771 metric tons[162]. - The fertilizer business generated approximately 89.6% of total revenues for the three months ended September 30, 2022[158]. - The company's fertilizer revenue from five provinces in China accounted for approximately 60.7% of total fertilizer revenue, with Hebei contributing 27.3%[163]. - Total net sales for the three months ended September 30, 2022, were $27,597,325, a decrease of $5,241,563 or 16.0% from $32,838,888 for the same period in 2021[184]. Distributor and Market Presence - As of September 30, 2022, the company had a total of 1,318 distributors across 22 provinces, with Jinong having 974 distributors and Gufeng having 344 distributors[163]. - The company’s top five distributors accounted for 12.6% of Jinong's fertilizer revenues, while Gufeng's top five distributors accounted for 78.4% of its revenues for the three months ended September 30, 2022[163]. Financial Performance - Jinong's net sales decreased by $3,013,740 or 19.9% to $12,148,002, with a sales volume of approximately 9,385 metric tons, down 5,839 tons or 38.4% compared to 15,224 metric tons in 2021[184][185]. - Gufeng's net sales were $12,578,822, a decrease of $2,209,430 or 14.9%, with a sales volume of approximately 24,171 metric tons, down 14,600 tons or 37.7% from 38,771 metric tons in 2021[185]. - Total cost of goods sold for the three months ended September 30, 2022, was $22,412,516, a decrease of $3,926,524 or 14.9% from $26,339,040 in 2021[186]. - Total gross profit for the three months ended September 30, 2022, decreased by $1,315,039 or 20.2% to $5,184,809, with a gross profit margin of 18.8% compared to 19.8% in 2021[187]. - Selling expenses were $2,437,354, or 8.8% of net sales, a decrease of $992,089 or 28.9% from $3,429,443, or 10.4% of net sales in 2021[189]. - General and administrative expenses decreased by $13,030,735 or 79.9% to $3,285,115 from $16,315,850 in 2021[182]. Net Loss and Improvements - Net loss from continuing operations was $528,114, a significant improvement of $12,817,331 or 96.0% compared to a loss of $13,345,446 in 2021[182]. - Comprehensive loss for the three months ended September 30, 2022, was $11,448,272, a decrease of $3,172,361 or 21.7% from $14,620,634 in 2021[182]. - Net loss for the three months ended September 30, 2022, was $(528,114), a decrease in loss of $14,549,093, or 96.5%, compared to $(15,077,208) for the same period in 2021[194]. - Jinong's net income increased by $4,803,267, or 125.8%, to $984,350 for the three months ended September 30, 2022, from a net loss of $(3,818,917) for the same period in 2021[198]. - Gufeng's net loss decreased by $8,417,071, or 91.9%, to $(746,500) for the three months ended September 30, 2022, from $(9,163,571) for the same period in 2021[199]. Cash Flow and Assets - Cash and cash equivalents increased by $12,062,232, or 20.9%, to $69,832,535 as of September 30, 2022, compared to $57,770,303 as of June 30, 2022[200]. - Net cash used in operating activities was $(2,995,510) for the three months ended September 30, 2022, an increase of $4,510,466, or 297.7%, from $1,514,956 for the same period in 2021[204]. - Net cash provided by financing activities was $18,025,034 for the three months ended September 30, 2022, an increase of 100.0% compared to $0 for the same period in 2021[206]. - Accounts receivable decreased by $1,421,554, or 4.9%, to $27,371,337 as of September 30, 2022, compared to $28,792,891 as of June 30, 2022[208]. - Inventories increased by $3,147,114, or 7.5%, to $45,345,300 as of September 30, 2022, compared to $42,198,186 as of June 30, 2022[210]. - Advances to suppliers decreased by $13,548,396, or 65.4%, to $7,163,495 as of September 30, 2022, compared to $20,711,891 as of June 30, 2022[211]. Strategic Developments - The company is developing an online platform to connect its physical distribution network, indicating a strategic move towards e-commerce in the agricultural sector[176]. - The company is organized into three main business segments: Jinong (fertilizer production), Gufeng (fertilizer production), and Yuxing (agricultural products production) as of September 30, 2022[221]. Foreign Exchange and Economic Factors - The company reported an accumulated other comprehensive loss of $24 million as of September 30, 2022, due to foreign exchange risk from RMB depreciation[225]. - Between July 1, 2022, and September 30, 2022, the RMB decreased by a cumulative 6.0% against the U.S. dollar, affecting trade dynamics[225]. - The short-term debt outstanding was $3.8 million as of September 30, 2022, compared to $4.0 million as of June 30, 2022[226]. - The company has not entered any hedging transactions to mitigate exposure to foreign exchange or interest rate risks[227]. - Inflationary pressures have increased operating costs, adversely affecting gross margins and administrative expenses[230]. - The COVID-19 pandemic has created significant economic uncertainty, potentially impacting demand for the company's products and services[231]. - The company continues to monitor the COVID-19 situation and its potential effects on operations and financial performance[232].

PART I [Business Overview](index=4&type=section&id=Item%201%20Business) CGA specializes in PRC fertilizer and agricultural product sales, with fertilizers comprising **88.4% of FY2022 revenue** [Company Overview and Operations](index=4&type=section&id=1.1%20Company%20Overview%20and%20Operations) CGA operates in the PRC, focusing on fertilizer and agricultural product development, production, and sales through its subsidiaries and VIEs - CGA primarily researches, develops, produces, and sells fertilizers and agricultural products in the PRC through subsidiaries Jinong and Gufeng, and VIE Yuxing[8](index=8&type=chunk) - The primary business is fertilizer products, including humic acid-based, compound, blended, organic, slow-release, and water-soluble fertilizers, with Yuxing also producing agricultural products like fruits, vegetables, and flowers[8](index=8&type=chunk) Fertilizer Revenue Contribution | Fiscal Year Ended June 30 | Revenue from Fertilizer Products | % of Total Revenues | | :------------------------ | :------------------------------- | :------------------ | | 2022 | $160,657,513 | 88.4% | | 2021 | $200,245,680 | 83.5% | | 2020 | $200,185,739 | 80.3% | [Recent Developments](index=5&type=section&id=1.2%20Recent%20Developments) The company has discontinued strategic acquisition agreements with several VIEs, reducing their number to zero as of June 30, 2022 - As of June 30, 2022, the Company, through Jinong, discontinued strategic acquisition agreements with eight VIE companies, reducing the number of VIEs to zero[9](index=9&type=chunk) - On November 30, 2017, the Company discontinued agreements with Zhenbai, resulting in the forfeiture of convertible notes and accrued interest[14](index=14&type=chunk) - On March 31, 2022, the Company discontinued agreements with Jinyangguang and Wangtian, receiving RMB11,700,000 (approximately **$1,746,810**) in cash[16](index=16&type=chunk) [Company History and Structure](index=12&type=section&id=1.3%20Company%20History%20and%20Structure) The company was incorporated in 1987, reincorporated in Nevada in 2007, and listed on the NYSE in 2009 - The Company was incorporated in Kansas in 1987, reincorporated in Nevada in October 2007, and changed its name to China Green Agriculture, Inc. in February 2008[38](index=38&type=chunk)[39](index=39&type=chunk) - The Company's common stock was listed on the NYSE MKT in March 2009, then transferred to the New York Stock Exchange in December 2009 under the ticker "CGA"[39](index=39&type=chunk) - On July 2, 2010, the Company, through Jinong, acquired Gufeng and its subsidiary Tianjuyuan, making them indirect wholly-owned subsidiaries[40](index=40&type=chunk) [Industry Analysis](index=15&type=section&id=1.4%20Industry%20Analysis) China's fertilizer market is in a downturn due to sluggish demand, volatile raw material prices, and compressed profits, but organic fertilizers are an emerging segment - China's fertilizer market is in a downturn due to limited output growth, large inventories, volatile raw material prices, and depressed international markets, leading to compressed profits and increased enterprise losses[47](index=47&type=chunk) - Government support for agriculture and initiatives promoting organic produce are expected to boost the organic fertilizer segment in the coming years[50](index=50&type=chunk) - The "Green Food" industry in the PRC, with a market reaching **$5 billion in 2015** and growing **20% year-over-year**, drives demand for organic fertilizers[56](index=56&type=chunk) [Growth Strategy](index=17&type=section&id=1.5%20Growth%20Strategy) The company's growth strategy focuses on expanding production capacity, diversifying product offerings, and leveraging R&D efforts - The company plans to expand its current annual fertilizer production capacity of **555,000 metric tons**, diversify its **416 products**, and acquire complementary PRC fertilizer manufacturers[60](index=60&type=chunk) - R&D efforts, including 98 sunlight greenhouses and six "intelligent" greenhouses at Yuxing, aim to shorten the fertilizer market cycle by providing advanced testing for new products[61](index=61&type=chunk) - The company is developing new advanced highly efficient fertilizers, such as slow controlled-release and microbial fertilizers, with Gufeng developing the "Tianjuyuan" controlled-release fertilizer[62](index=62&type=chunk) [Products and Manufacturing](index=18&type=section&id=1.6%20Products%20and%20Manufacturing) The company's core business is fertilizer manufacturing, producing 416 types of liquid, granular, and powdered fertilizers to increase crop yields - The principal products are 416 types of liquid, granular, and powdered fertilizers, including various compound fertilizers designed to increase crop yields[63](index=63&type=chunk) - Fertilizer manufacturing is the core business, accounting for approximately **88.4% of total revenues**, with self-manufactured fertilizers produced and sold through Jinong and Gufeng[64](index=64&type=chunk) Fertilizer Revenue Contribution | Fiscal Year Ended June 30 | Revenue from Fertilizer Products | % of Total Revenues | | :------------------------ | :------------------------------- | :------------------ | | 2022 | $160,657,513 | 88.4% | | 2021 | $200,245,680 | 83.5% | | 2020 | $200,185,739 | 80.3% | [Raw Materials and Inventory](index=20&type=section&id=1.7%20Raw%20Materials%20and%20Inventory) The company sources weathered coal for humic acid and over 50 raw materials for other fertilizers, maintaining efficient inventory levels - Weathered coal is a key raw material for humic acid, sourced from Shaanxi, Shanxi, and Inner Mongolia due to its abundance and cost-effectiveness[74](index=74&type=chunk) - Gufeng and Tianjuyuan use over 50 raw materials, including coal, sulfuric acid, and NPK compounds, primarily sourced from neighboring provinces for economical transportation[75](index=75&type=chunk) - Efficient production methods allow for appropriate inventory levels, keeping costs reasonable, with raw materials and packaging purchased based on demand and forecasts[77](index=77&type=chunk) [Seasonality](index=20&type=section&id=1.8%20Seasonality) Fertilizer sales peak from January to June, while agricultural product sales peak from October to March due to holiday demand - The peak season for fertilizer sales is from January through June, though Jinong experienced no significant seasonal variation in FY2022, with **44.8% of annual sales** in Q3 and Q4[78](index=78&type=chunk) - Gufeng's compound fertilizer sales show significant seasonal variation, with **65.0% of annual sales** occurring in the third and fourth fiscal quarters of FY2022[78](index=78&type=chunk) - Agricultural product sales peak from October to March (Q2 and Q3) due to strong demand for high-end fruits and decorative flowers during holiday seasons[79](index=79&type=chunk) [Marketing, Distribution and Customers](index=21&type=section&id=1.9%20Marketing,%20Distribution%20and%20Customers) The company markets its fertilizer products through a nationwide network of 1,398 distributors across 22 provinces, with top five distributors accounting for 49.9% of revenues - The company markets its fertilizer products to private wholesalers and retailers in 22 provinces, 4 autonomous regions, and 4 central government-controlled municipalities in China[80](index=80&type=chunk) - In FY2022, five PRC provinces (Hebei, Heilongjiang, Inner Mongolia, Liaoning, and Shaanxi) collectively accounted for **70.2% of fertilizer manufacturing revenue**[80](index=80&type=chunk) - As of June 30, 2022, the company sold products through a network of approximately **1,398 distributors** across 22 provinces, 4 autonomous regions, and 4 central government-controlled municipalities[89](index=89&type=chunk) - Sales to the top five distributors of self-manufactured products accounted for approximately **49.9% of total revenues** for the fiscal year ended June 30, 2022[90](index=90&type=chunk) [Research and Development](index=23&type=section&id=1.10%20Research%20and%20Development) The company conducts most R&D through Yuxing, utilizing advanced greenhouse facilities to test new fertilizers and accelerate product development - The bulk of R&D activities are conducted through Yuxing, which cultivates and sells high-quality flowers, green vegetables, and fruits to end-users like airlines, hotels, and restaurants[93](index=93&type=chunk) - Yuxing's advanced R&D facilities provide a testing and data collection base for new Jinong fertilizers, shortening product development cycles and increasing market share[93](index=93&type=chunk) Yuxing R&D Capital Expenditure | Category | FY 2022 (USD) | FY 2021 (USD) | FY 2020 (USD) | | :------------------------ | :------------ | :------------ | :------------ | | Machines, Buildings and Equipment | $6,926,023 | $8,198,256 | $8,355,336 | | Construction in Progress | $10,600 | $97,516 | $59,575 | | **Total** | **$6,988,882**| **$8,295,772**| **$8,414,911**| [Intellectual Property](index=23&type=section&id=1.11%20Intellectual%20Property) The

Sales Performance - For the six months ended December 31, 2021, the company sold approximately 128,276 metric tons of fertilizer products, a decrease of 13.8% compared to 148,788 metric tons for the same period in 2020[160]. - Jinong sold approximately 30,498 metric tons of fertilizer products for the six months ended December 31, 2021, representing a decrease of 17.8% from 37,099 metric tons in the same period of 2020[160]. - Gufeng sold approximately 97,778 metric tons of fertilizer products for the six months ended December 31, 2021, a decrease of 12.5% from 111,689 metric tons in the same period of 2020[160]. - Total net sales for the three months ended December 31, 2021 were $42,826,589, a decrease of $912,382 or 2.1% from $43,738,971 for the same period in 2020[180]. - Jinong's net sales increased by $64,644, or 0.4%, to $14,966,519, primarily due to higher sales prices, with revenue per ton rising to $997, an increase of $307 or 44.6% compared to the previous year[180]. - Gufeng's net sales decreased by $862,980 or 3.8% to $21,573,414, attributed to a lower sales volume of approximately 59,007 metric tons, down 11.8% from 66,865 metric tons in the prior year[181]. - Yuxing's net sales increased by $137,008 or 5.1% to $2,819,203, driven by increased market demand[181]. - Total net sales for the six months ended December 31, 2021 were $77,266,037, a decrease of 4.6% from $81,004,048 for the same period in 2020[199]. - Jinong's net sales decreased by 2.4% to $30,128,261 for the six months ended December 31, 2021, with revenue per ton increasing by 19.2% to $989[199]. - Gufeng's net sales for the six months ended December 31, 2021 were $36,361,666, a decrease of 5.0% from $38,264,597 in the previous year[200]. Revenue Generation - The fertilizer business conducted by Jinong and Gufeng generated approximately 85.3% and 85.4% of total revenues for the six months ended December 31, 2021 and 2020, respectively[154]. - Sales of fertilizer products to customers in five provinces within China accounted for approximately 69.3% of fertilizer revenue for the three months ended December 31, 2021[161]. - The company’s agricultural products revenue for the three months ended December 31, 2021, was primarily generated from Shaanxi (83.5%), Shanghai (6.3%), and Beijing (3.7%) provinces[163]. Product Development - The company launched 3 new fertilizer products during the three months ended December 31, 2021, while Gufeng did not launch any new products during the same period[163]. Financial Performance - Total gross profit for the six months ended December 31, 2021 decreased by 3.6% to $14,067,795, with a gross profit margin of 18.2%[203]. - Jinong's gross profit increased by 2.8% to $8,045,334 for the six months ended December 31, 2021, maintaining a gross profit margin of approximately 26.7%[203]. - Gross profit for the three months ended December 31, 2021 decreased by $276,314 or 3.7% to $7,276,085, with a gross profit margin of 17.0% compared to 17.3% in the previous year[186]. - For the three months ended December 31, 2021, Gufeng's gross profit was $2,428,526, a decrease of 6.2% from $2,589,971 for the same period in 2020[187]. - Yuxing's gross profit for the three months ended December 31, 2021 was $444,982, down 17.8% from $541,339 in the previous year, with a gross profit margin decrease from 20.2% to 15.8%[187]. Expenses and Losses - Operating expenses decreased by $10,491,338 or 22.8% to $35,603,272, primarily due to a significant reduction in general and administrative expenses[186]. - Net loss from continuing operations was $(28,417,291), an improvement of $11,656,081 or 29.1% compared to the net loss of $(40,073,372) in the prior year[180]. - Comprehensive loss for the three months ended December 31, 2021 was $(28,720,323), a slight increase of $611,351 or 2.2% compared to $(28,108,972) in the same period of 2020[186]. - Net loss for the three months ended December 31, 2021 was $(31,982,936), a decrease in loss of 20.1% compared to $(40,036,664) for the same period in 2020[195]. - Net loss for the six months ended December 31, 2021, was $(47,060,144), a decrease of 33.7% from $(70,989,577) in the same period of 2020[209]. Cash Flow and Assets - Cash and cash equivalents increased by 27.0% to $23,607,170 as of December 31, 2021, from $18,593,944 as of June 30, 2021[215]. - Net cash provided by operating activities was $1,640,536 for the six months ended December 31, 2021, an increase of 126.3% from cash used in operating activities of $(6,237,210) in the same period of 2020[218]. - Accounts receivable decreased by 27.2% to $74,786,136 as of December 31, 2021, from $102,783,004 as of June 30, 2021[224]. - Inventories decreased by 39.7% to $38,766,953 as of December 31, 2021, from $64,315,903 as of June 30, 2021[226]. - As of December 31, 2021, customer deposits increased to $6,434,068 from $6,257,215 as of June 30, 2021, representing a growth of $176,853 or 2.8%[229]. Financial Structure and Risks - The company has no off-balance sheet arrangements, indicating a straightforward financial structure[230]. - The company’s short-term debt remained stable at $4.2 million as of both December 31, 2021, and June 30, 2021[241]. - The accumulated other comprehensive loss was $1 million as of December 31, 2021, reflecting foreign exchange risks associated with RMB fluctuations[240]. - The company has not experienced significant credit risk, as most customers are long-term with strong payment records[244]. - The company is exposed to foreign exchange risk due to revenues and expenses being primarily denominated in RMB while reporting in U.S. dollars[239]. - The company has not entered any hedging transactions to mitigate interest rate or foreign exchange risks[243]. Strategic Initiatives - The company entered into strategic acquisition agreements with various targets, with a total cash payment for acquisition amounting to RMB 37 million and principal of notes for acquisition totaling RMB 51 million[166]. - Deferred assets, which represent amounts advanced to distributors for marketing and store development, were fully amortized as of December 31, 2021[235]. Market Conditions - The ongoing COVID-19 pandemic has introduced significant economic uncertainty, potentially impacting demand, supply chains, and overall financial performance[246].

Cover Page Information [Form 10-Q Filing Details](index=1&type=section&id=Form%2010-Q%20Filing%20Details) This section details the filing type, registrant information, and compliance status for the quarterly period ended September 30, 2021, identifying China Green Agriculture, Inc. as a smaller reporting company and a non-accelerated filer - The filing is a Quarterly Report (Form 10-Q) for the period ended September 30, 2021[1](index=1&type=chunk) - The registrant, China Green Agriculture, Inc., is a Nevada corporation with its principal executive offices in Xi'an, Shaanxi province, PRC[1](index=1&type=chunk)[2](index=2&type=chunk) - The company is classified as a **'Smaller reporting company'** and a **'Non-accelerated filer'**[3](index=3&type=chunk) Form 10-Q Filing Status | Indicator | Status | | :------------------------------------------------------------------------------------------------------------------------------------- | :----- | | Filed all required reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months | Yes | | Subject to such filing requirements for the past 90 days | Yes | | Submitted electronically and posted on corporate Web site every Interactive Data File required by Rule 405 of Regulation S-T | Yes | | Is a shell company (as defined in Rule 12b-2 of the Exchange Act) | No | [Securities Information](index=1&type=section&id=Securities%20Information) The company's common stock is listed on the NYSE under the trading symbol CGA, with 8,487,629 shares outstanding as of November 15, 2021 Common Stock Listing Details | Title of each class | Trading Symbol(s) registered | | :------------------ | :--------------------------- | | Common Stock | CGA NYSE | - As of November 15, 2021, there were **8,487,629 shares** of common stock, $0.001 par value, outstanding[4](index=4&type=chunk) Information Relating to Forward-Looking Statements [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section provides a cautionary statement regarding forward-looking statements, indicating that they reflect current views and are subject to risks and uncertainties, advising investors not to place undue reliance on these statements as actual future results may differ materially from expectations, and noting the company assumes no obligation to update these statements unless required by law - Forward-looking statements are identified by terms such as 'anticipates,' 'believes,' 'could,' 'estimates,' 'expects,' 'intends,' 'may,' 'plans,' 'potential,' 'predicts,' 'projects,' 'should,' 'would' and similar expressions[6](index=6&type=chunk) - Expectations regarding market for products and services, industry growth, and product competitiveness[6](index=6&type=chunk) - Expectations regarding expansion of manufacturing capacity, revenue growth, and profitability[6](index=6&type=chunk) - Future business development, results of operations, and financial condition[6](index=6&type=chunk) - Competition, loss of management, ability to integrate acquired subsidiaries, market conditions, and acquisition strategy[6](index=6&type=chunk) - Changes in general economic conditions, accounting rules, and compliance with NYSE listing requirements[6](index=6&type=chunk) - Failure to identify and remediate material weaknesses in internal control and disclosure control over financial reporting[6](index=6&type=chunk) - The company assumes no obligation to publicly update any forward-looking statements or the reasons actual results could differ materially, even if new information becomes available, except as required by law[7](index=7&type=chunk) PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for China Green Agriculture, Inc. and its subsidiaries, including the balance sheets, statements of operations and comprehensive income (loss), statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining the company's organization, accounting policies, and specific financial line items [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (as of September 30, 2021 vs. June 30, 2021) | ASSETS | September 30, 2021 | June 30, 2021 | | :------------------------------------ | :----------------- | :------------ | | Cash and cash equivalents | $22,022,563 | $18,593,944 | | Accounts receivable, net | $99,143,737 | $102,783,004 | | Inventories, net | $52,463,033 | $64,315,903 | | Total Current Assets | $203,104,092 | $217,714,188 | | Plant, property and equipment, net | $21,654,369 | $22,221,016 | | Intangible assets, net | $16,303,367 | $16,407,651 | | Total Assets | $250,913,464 | $266,728,738 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Accounts payable | $13,580,483 | $16,868,942 | | Customer deposits | $7,841,368 | $6,257,215 | | Taxes payable | $32,556,587 | $32,542,494 | | Short term loans | $4,187,700 | $4,179,600 | | Total Current Liabilities | $78,023,244 | $79,217,885 | | Total Liabilities | $78,023,244 | $79,217,885 | | Total Stockholders' Equity | $172,890,220 | $187,510,853 | | Total Liabilities and Stockholders' Equity | $250,913,464 | $266,728,738 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Three Months Ended September 30, 2021 vs. 2020) | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | | :----------------------------------------- | :------------------------------------ | :------------------------------------ | | Net sales | $37,381,030 | $42,140,710 | | Cost of goods sold | $30,127,985 | $34,266,517 | | Gross profit | $7,253,045 | $7,874,193 | | Total operating expenses | $22,188,612 | $35,961,940 | | (Loss) from operations | $(14,935,567) | $(28,087,747) | | Total other (expense) | $(29,618) | $(39,542) | | (Loss) from continuing operations before income taxes | $(14,965,185) | $(28,127,289) | | Provision for income taxes | $112,023 | $1,569,003 | | (Loss) from continuing operations | $(15,077,208) | $(29,696,292) | | Net (loss) from discontinued operations, net of taxes | - | $(1,256,622) | | Net (loss) | $(15,077,208) | $(30,952,914) | | Foreign currency translation gain | $456,574 | $13,467,844 | | Comprehensive (loss) | $(14,620,634) | $(17,485,070) | | Basic net (loss) per share | $(1.78) | $(4.87) | | Diluted net (loss) per share | $(1.78) | $(4.87) | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Condensed Consolidated Statements of Stockholders' Equity (Three Months Ended September 30, 2021 vs. 2020) | Item | September 30, 2021 | June 30, 2021 | | :------------------------------------ | :----------------- | :------------ | | Common Stock | $8,488 | $8,488 | | Additional Paid In Capital | $170,223,195 | $170,223,195 | | Statutory Reserve | $27,307,547 | $27,673,245 | | Retained Earnings | $(20,524,043) | $(5,812,533) | | Accumulated Other Comprehensive Income (Loss) | $(4,124,967) | $(4,581,541) | | Total Stockholders' Equity | $172,890,220 | $187,510,853 | | Item | September 30, 2020 | June 30, 2020 | | :------------------------------------ | :----------------- | :------------ | | Common Stock | $6,350 | $6,350 | | Additional Paid In Capital | $155,455,332 | $155,455,332 | | Statutory Reserve | $29,909,486 | $29,743,991 | | Retained Earnings | $80,745,930 | $111,864,338 | | Accumulated Other Comprehensive Income (Loss) | $(20,796,245) | $(34,264,089) | | Total Stockholders' Equity | $245,320,853 | $262,805,922 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Three Months Ended September 30, 2021 vs. 2020) | Cash Flow Category | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | | :---------------------------------------------------- | :------------------------------------ | :------------------------------------ | | Net cash provided by (used in) operating activities | $1,514,956 | $(1,653,512) | | Net cash provided by (used in) investing activities | $1,793,168 | $(29,967) | | Net cash provided by financing activities | - | $294,400 | | Effect of exchange rate change on cash and cash equivalents | $120,495 | $2,286,224 | | Net increase in cash and cash equivalents | $3,428,619 | $897,144 | | Cash and cash equivalents, beginning balance | $18,593,944 | $11,934,778 | | Cash and cash equivalents, ending balance | $22,022,563 | $12,831,922 | - Net cash provided by operating activities increased significantly from a usage of **$1,653,512** in 2020 to a provision of **$1,514,956** in 2021[17](index=17&type=chunk) - Net cash provided by investing activities saw a substantial increase from a usage of **$29,967** in 2020 to a provision of **$1,793,168** in 2021, primarily due to sales of discontinued operations[17](index=17&type=chunk) - Net cash provided by financing activities decreased from **$294,400** in 2020 to **$0** in 2021[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1 – Organization and Description of Business](index=9&type=section&id=NOTE%201%20%E2%80%93%20Organization%20and%20Description%20of%20Business) - China Green Agriculture, Inc. (Green Nevada) is engaged in the research, development, production, distribution, and sale of various humic acid-based compound fertilizers and agricultural products through its subsidiaries[20](index=20&type=chunk) - Key subsidiaries include Green Agriculture Holding Corporation (Green New Jersey), Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (Jinong), Xi'an Hu County Yuxing Agriculture Technology Development Co., Ltd. (Yuxing, a VIE), Beijing Gufeng Chemical Products Co., Ltd. (Gufeng), and Beijing Tianjuyuan Fertilizer Co., Ltd. (Tianjuyuan)[21](index=21&type=chunk)[22](index=22&type=chunk) - The company also controls several Variable Interest Entities (VIEs) for sales, including Lishijie, Jinyangguang, Wangtian, and Fengnong[21](index=21&type=chunk)[22](index=22&type=chunk) - Strategic acquisition agreements and contractual agreements with Zhenbai were discontinued on November 30, 2017[23](index=23&type=chunk) - Strategic acquisition agreements and contractual agreements with Xindeguo, Xinyulei, and Xiangrong were discontinued on June 2, 2021[23](index=23&type=chunk) [NOTE 2 – Basis of Presentation and Summary of Significant Accounting Policies](index=11&type=section&id=NOTE%202%20%E2%80%93%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) - The consolidated financial statements include the Company and its wholly-owned subsidiaries (Green New Jersey, Jinong, Gufeng, Tianjuyuan) and its VIE Companies, with all significant inter-company accounts and transactions eliminated[29](index=29&type=chunk) - Former VIEs Xindeguo, Xinyulei, and Xiangrong are presented as discontinued operations[29](index=29&type=chunk) - The Company uses qualitative and, if necessary, quantitative analysis to determine if an entity is a Variable Interest Entity (VIE) and identifies the primary beneficiary for consolidation[31](index=31&type=chunk) - Management makes estimates and assumptions in preparing financial statements, which are subject to risks and uncertainties, including the impact of COVID-19[32](index=32&type=chunk) - Cash and cash equivalents: Includes cash on hand, in banks, and highly-liquid investments with maturities of three months or less. Large sums are held in Chinese banks without insurance[35](index=35&type=chunk) - Accounts receivable: Net of allowance for doubtful accounts, which was **$28,893,232** as of September 30, 2021 (up from **$23,738,987** on June 30, 2021). Bad debt expense was **$6 million** for the three months ended September 30, 2021, due to COVID-19 impact on distributors[36](index=36&type=chunk) - Inventories: Valued at the lower of cost (weighted average) or market. Inventories impairment loss was **$11 million** for the three months ended September 30, 2021[37](index=37&type=chunk) - Intangible Assets: Recorded at fair value and amortized over useful life for definitive-life assets. No impairment recorded as of September 30, 2021[38](index=38&type=chunk) - Customer deposits: Payments received before revenue recognition criteria are met, recognized as revenue when criteria are satisfied. Deposits were **$7,841,368** as of September 30, 2021[39](index=39&type=chunk) - Earnings per share: Basic EPS based on weighted average common shares outstanding; diluted EPS includes dilutive potential common shares[40](index=40&type=chunk) Basic and Diluted Net (Loss) Per Share (Three Months Ended September 30, 2021 vs. 2020) | Metric | Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | | :------------------------------------------------------------------ | :------------------------------------ | :------------------------------------ | | (Loss) from continuing operations for Basic Earnings Per Share | $(15,077,208) | $(29,696,292) | | (Loss) from discontinued operations for Basic Earnings Per Share | - | $(1,256,622) | | (Loss) for Basic Earnings Per Share | $(15,077,208) | $(30,952,914) | | Basic Weighted Average Number of Shares | 8,487,629 | 6,350,129 | | Net (Loss) Per Share – Basic | $(1.78) | $(4.87) | | (Loss) from continuing operations for Diluted Earnings Per Share | $(15,077,208) | $(29,696,292) | | (Loss) Income from discontinued operations for Diluted Earnings Per Share | - | $(1,256,622) | | (Loss) for Diluted Earnings Per Share | $(15,077,208) | $(30,952,914) | | Diluted Weighted Average Number of Shares | 8,487,629 | 6,350,129 | | Net (Loss) Per Share – Diluted | $(1.78) | $(4.87) | [NOTE 3 – Going Concern](index=13&type=section&id=NOTE%203%20%E2%80%93%20Going%20Concern) - The Company's financial statements are prepared assuming it will continue as a going concern, despite incurring operating losses and negative operating cash flows for the three months ended September 30, 2021, which raise substantial doubt about its ability to continue[46](index=46&type=chunk) - To address working capital needs and fund growth, the Company may seek additional funds through equity issuance or bank loans, with its ability to continue dependent on successfully executing its new business strategy and achieving profitability[46](index=46&type=chunk) [NOTE 4 – Inventories](index=14&type=section&id=NOTE%204%20%E2%80%93%20Inventories) Inventories Composition (as of September 30, 2021 vs. June 30, 2021) | Inventory Type | September 30, 2021 | June 30, 2021 | | :--------------------------- | :----------------- | :------------ | | Raw materials | $11,341,591 | $18,023,063 | | Supplies and packing materials | $514,957 | $431,076 | | Work in progress | $238,377 | $252,873 | | Finished goods | $40,368,108 | $45,608,891 | | Total | $52,463,033 | $64,315,903 | - The company confirmed inventory losses of **$11 million** for the three months ended September 30, 2021, and **$13 million** for the same period in 2020[49](index=49&type=chunk) [NOTE 5 – Property, Plant and Equipment](index=14&type=section&id=NOTE%205%20%E2%80%93%20Property,%20Plant%20and%20Equipment) Property, Plant and Equipment (as of September 30, 2021 vs. June 30, 2021) | Asset Category | September 30, 2021 | June 30, 2021 | | :------------------------------ | :----------------- | :------------ | | Building and improvements | $41,542,347 | $41,429,653 | | Auto | $3,465,900 | $3,472,838 | | Machinery and equipment | $19,432,054 | $19,369,913 | | Total property, plant and equipment | $64,440,302 | $64,272,403 | | Less: accumulated depreciation | $(42,785,933) | $(42,051,387) | | Total | $21,654,369 | $22,221,016 | [NOTE 6 – Intangible Assets](index=14&type=section&id=NOTE%206%20%E2%80%93%20Intangible%20Assets) Intangible Assets (as of September 30, 2021 vs. June 30, 2021) | Intangible Asset | September 30, 2021 | June 30, 2021 | | :---------------------- | :----------------- | :------------ | | Land use rights, net | $9,285,886 | $9,330,109 | | Technology patent, net | - | - | | Customer relationships, net | $592,432 | $656,625 | | Non-compete agreement | $8,310 | $16,589 | | Trademarks | $6,416,740 | $6,404,328 | | Total | $16,303,367 | $16,407,651 | - Land use rights are amortized over 50-year grant periods, with a net value of **$9,285,886** as of September 30, 2021[53](index=53&type=chunk)[54](index=54&type=chunk) - Technology patents acquired by Jinong and Gufeng are fully amortized as of September 30, 2021[55](index=55&type=chunk) - Customer relationships acquired from Gufeng and sales VIE Companies are amortized over 7-10 years, with a net value of **$592,432**[56](index=56&type=chunk)[57](index=57&type=chunk) - Non-compete agreements are amortized over five years, with a net value of **$8,310**[58](index=58&type=chunk)[59](index=59&type=chunk) - Trademarks acquired from Gufeng are valued at **$6,416,740** and are subject to annual impairment tests[60](index=60&type=chunk)[61](index=61&type=chunk) - Estimated amortization expenses for intangible assets are projected to be **$519,399** for the twelve months ending September 30, 2022[62](index=62&type=chunk)[65](index=65&type=chunk) [NOTE 7 – Other Non-Current Assets](index=17&type=section&id=NOTE%207%20%E2%80%93%20Other%20Non-Current%20Assets) - Other non-current assets primarily consist of advance payments for leasing agricultural land in Shiquan County, totaling **$9,385,712** as of September 30, 2021[66](index=66&type=chunk) - The Company amortized **$0.5 million** as expenses for the three months ended September 30, 2021 and 2020, respectively, related to these lease advances[66](index=66&type=chunk) Estimated Amortization Expenses of Lease Advance Payments | Twelve months ending September 30, | Expense ($) | | :--------------------------------- | :---------- | | 2023 | 2,082,218 | | 2024 | 2,082,218 | | 2025 | 2,082,218 | | 2026 and thereafter | 3,139,059 | [NOTE 8 – Accrued Expenses and Other Payables](index=17&type=section&id=NOTE%208%20%E2%80%93%20Accrued%20Expenses%20and%20Other%20Payables) Accrued Expenses and Other Payables (as of September 30, 2021 vs. June 30, 2021) | Category | September 30, 2021 | June 30, 2021 | | :------------------------ | :----------------- | :------------ | | Payroll and welfare payable | $185,269 | $184,910 | | Accrued expenses | $8,273,360 | $7,957,290 | | Other payables | $5,249,887 | $5,326,796 | | Other levy payable | $130,077 | $129,825 | | Total | $13,838,593 | $13,598,821 | [NOTE 9 – Amount Due to Related Parties](index=17&type=section&id=NOTE%209%20%E2%80%93%20Amount%20Due%20to%20Related%20Parties) - As of September 30, 2021, the total amount due to related parties was **$5,222,850**, an increase from **$4,976,689** as of June 30, 2021[72](index=72&type=chunk) - This includes **$1,085,700** borrowed by Gufeng from Xi'an Techteam Science& Technology Industry (Group) Co. Ltd., controlled by the CEO, Mr. Zhuoyu Li. These are unsecured, non-interest-bearing, and due on demand[71](index=71&type=chunk)[72](index=72&type=chunk) - Advances from Mr. Zhuoyu Li, Chairman and CEO, totaled **$4,105,449**, which are unsecured and non-interest-bearing[71](index=71&type=chunk)[72](index=72&type=chunk) - Jinong owed 900LH.com (an affiliate) **$12,895** as of September 30, 2021[71](index=71&type=chunk)[72](index=72&type=chunk) - Yuxing sold **$55,092** in products to 900LH.com for the three months ended September 30, 2021, with no amount due from 900LH.com as of that date[71](index=71&type=chunk)[72](index=72&type=chunk) - Jinong leases office space from Kingtone Information Technology Co., Ltd., also chaired by Mr. Zhuoyu Li, for approximately **$3,797** per month[73](index=73&type=chunk) [NOTE 10 – Loan Payables](index=19&type=section&id=NOTE%2010%20%E2%80%93%20Loan%20Payables) Short-Term Loan Payables (as of September 30, 2021) | Payee | Loan period per agreement | Interest Rate | September 30, 2021 | | :-------------------------------------- | :-------------------------- | :------------ | :----------------- | | Postal Saving Bank of China - Pinggu Branch | May 27, 2021-May 26, 2022 | 5.66% | $2,326,500 | | Beijing Bank - Pinggu Branch | May 27, 2021-May 26, 2022 | 5.66% | $310,200 | | Postal Saving Bank of China - Pinggu Branch | May 25, 2021-May 21, 2022 | 5.22% | $1,551,000 | | Total | | | $4,187,700 | - All short-term loans are collateralized by Tianjuyuan's land use right and building ownership right[75](index=75&type=chunk) - Interest expense from short-term loans was **$72,011** for the three months ended September 30, 2021, up from **$56,768** in the prior year period[76](index=76&type=chunk) [NOTE 11 – Convertible Notes Payable](index=19&type=section&id=NOTE%2011%20%E2%80%93%20Convertible%20Notes%20Payable) - Jinong issued convertible notes payable totaling RMB 51,000,000 (**$7,910,100**) to VIE Companies shareholders, with a three-year term and **3%** annual interest[77](index=77&type=chunk) - Notes take priority over preferred and common stock in liquidation[78](index=78&type=chunk) - Noteholders can request conversion into common stock after the third anniversary of issuance, at the higher of **$5.00 per share** or **75%** of the closing price on conversion notice date[79](index=79&type=chunk) - **995,000 shares** were issued on November 15, 2019, and **377,650 shares** on February 14, 2020, to settle convertible notes and accrued interest[80](index=80&type=chunk) - The fair value of convertible notes payable was determined to be **$0** as of September 30, 2021 and June 30, 2021[80](index=80&type=chunk) - Accumulated amortization of the discount into accretion expenses was **$1,375,499** as of September 30, 2021[80](index=80&type=chunk) [NOTE 12 – Taxes Payable](index=20&type=section&id=NOTE%2012%20%E2%80%93%20Taxes%20Payable) - Jinong is subject to a **15%** Enterprise Income Tax (EIT) rate as a high-tech company in the PRC, while Gufeng is subject to **25%**, and Yuxing is exempt[82](index=82&type=chunk)[178](index=178&type=chunk) - PRC Value-Added Tax (VAT) on fertilizer products has seen several reductions: from **13%** to **11%** (July 1, 2017), to **10%** (May 1, 2018), and to **9%** (April 1, 2019)[84](index=84&type=chunk) - Jinong's income tax expenses decreased from **$1,569,003** in Q3 2020 to **$112,023** in Q3 2021[85](index=85&type=chunk) - The effective tax rate was approximately **-0.7%** for the three months ended September 30, 2021, compared to **-5.6%** for the same period in 2020[82](index=82&type=chunk)[89](index=89&type=chunk) Income Taxes and Related Payables (as of September 30, 2021 vs. June 30, 2021) | Category | September 30, 2021 | June 30, 2021 | | :------------------- | :----------------- | :------------ | | VAT provision | $(330,509) | $(284,940) | | Income tax payable | $1,179,680 | $1,136,929 | | Other levies | $2,696,881 | $2,679,970 | | Repatriation tax | $29,010,535 | $29,010,535 | | Total | $32,556,587 | $32,542,494 | Provision for Income Taxes (Three Months Ended September 30, 2021 vs. 2020) | Category | September 30, 2021 | September 30, 2020 | | :---------------- | :----------------- | :----------------- | | Current tax - foreign | $112,023 | $1,569,003 | | Deferred tax | - | - | | Total | $112,023 | $1,569,003 | [NOTE 13 – Stockholders' Equity](index=22&type=section&id=NOTE%2013%20%E2%80%93%20Stockholders'%20Equity) - No shares of common stock were issued during the three months ended September 30, 2021 and 2020[91](index=91&type=chunk) - As of September 30, 2021, and June 30, 2021, there were **8,487,629 shares** of common stock issued and outstanding[91](index=91&type=chunk) - The Company has **20,000,000 shares** of preferred stock authorized, with a par value of **$.001 per share**, but no shares are issued or outstanding as of September 30, 2021[93](index=93&type=chunk) [NOTE 14 – Concentrations and Litigation](index=23&type=section&id=NOTE%2014%20%E2%80%93%20Concentrations%20and%20Litigation) - All revenue-generating operations are conducted in the PRC, exposing the Company to political, economic, and legal risks specific to China[94](index=94&type=chunk) - No single vendor accounted for over **10%** of raw material purchases for the three months ended September 30, 2021[95](index=95&type=chunk) - In contrast, five vendors accounted for **65.8%** of raw material purchases for the three months ended September 30, 2020[95](index=95&type=chunk) - No customer accounted for over **10%** of the Company's sales for the three months ended September 30, 2021 and 2020[95](index=95&type=chunk) - A pro se lawsuit alleging Securities Exchange Act violations was dismissed by the Southern District of New York federal court on September 30, 2021, but the plaintiff amended the complaint on October 29, 2021, which the Company intends to move to dismiss[96](index=96&type=chunk)[97](index=97&type=chunk) [NOTE 15 – Segment Reporting](index=23&type=section&id=NOTE%2015%20%E2%80%93%20Segment%20Reporting) - The Company is organized into four main business segments: Jinong (fertilizer production), Gufeng (fertilizer production), Yuxing (agricultural products production), and the sales VIEs[97](index=97&type=chunk) - The chief operating decision maker (CODM) uses net income (loss) by segment as the principal measure of segment profitability or loss[97](index=97&type=chunk) Segment Revenues and Operating Income (Expense) (Three Months Ended September 30, 2021 vs. 2020) | Segment | Revenues (2021) | Revenues (2020) | Operating Income (Expense) (2021) | Operating Income (Expense) (2020) | | :------------------ | :-------------- | :-------------- | :-------------------------------- | :-------------------------------- | | Jinong | $15,161,742 | $14,529,312 | $(3,862,612) | $1,758,677 | | Gufeng | $14,788,252 | $15,828,203 | $(9,090,997) | $(31,136,234) | | Yuxing | $2,888,894 | $2,423,488 | $162,601 | $137,213 | | Sales VIEs | $4,542,143 | $9,359,707 | $(1,690,124) | $1,608,473 | | Consolidated Total | $37,381,031 | $42,140,710 | $(14,935,568) | $(28,087,747) | Segment Net Income (Loss) (Three Months Ended September 30, 2021 vs. 2020) | Segment | Net Income (Loss) (2021) | Net Income (Loss) (2020) | | :------------------ | :----------------------- | :----------------------- | | Jinong | $(3,818,917) | $1,518,043 | | Gufeng | $(9,163,571) | $(31,193,670) | | Yuxing | $161,939 | $136,909 | | Sales VIEs | $(1,731,762) | $1,225,349 | | Consolidated Total | $(15,077,208) | $(29,696,292) | [NOTE 16 – Commitments and Contingencies](index=26&type=section&id=NOTE%2016%20%E2%80%93%20Commitments%20and%20Contingencies) - Jinong leases office space from Kingtone Information Technology Co., Ltd. (related party) for approximately **$3,797** monthly[100](index=100&type=chunk) - Tianjuyuan has a fifty-year lease with village committees for approximately **$459** monthly[100](index=100&type=chunk) - Jinyangguang signed a one-year commercial space lease for approximately **$1,939** monthly, effective August 1, 2021[101](index=101&type=chunk) - Fengnong signed a two-year warehouse lease for approximately **$5,429** monthly, effective January 1, 2020[101](index=101&type=chunk) - Aggregate rent expenses from these leases were **$34,869** for the three months ended September 30, 2021, compared to **$11,897** for the same period in 2020[101](index=101&type=chunk) Contingent Rent Expenses for Next Five Years | Years ending September 30, | Expense ($) | | :------------------------- | :---------- | | 2022 | 139,475 | | 2023 | 139,475 | | 2024 | 139,475 | | 2025 | 139,475 | | 2026 | 139,475 | [NOTE 17 – Variable Interest Entities](index=26&type=section&id=NOTE%2017%20%E2%80%93%20Variable%20Interest%20Entities) - The Company, through its subsidiary Jinong, controls Yuxing and the sales VIE Companies (Lishijie, Jinyangguang, Wangtian, Fengnong) through a series of contractual agreements, enabling consolidation for financial reporting[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - VIE agreements with Zhenbai were exited on November 30, 2017[105](index=105&type=chunk) - VIE agreements with Xindeguo, Xinyulei, and Xiangrong were exited on June 2, 2021[105](index=105&type=chunk) VIEs' Financial Statement Amounts (as of September 30, 2021 vs. June 30, 2021) | Item | September 30, 2021 | June 30, 2021 | | :---------------------------------- | :----------------- | :------------ | | Total Current Assets | $38,525,022 | $43,050,718 | | Total Assets | $39,257,865 | $43,862,593 | | Total Current Liabilities | $21,160,565 | $24,066,213 | | Total Liabilities | $21,160,565 | $24,066,213 | | Stockholders' equity | $18,097,300 | $19,796,380 | | Total Liabilities and Stockholders' Equity | $39,257,865 | $43,862,593 | | Item | Three Months September 2021 | Ended 30, 2020 | | :---------------------------------- | :-------------------------- | :------------- | | Revenue | $4,542,143 | $9,359,707 | | Expenses | $6,273,905 | $8,134,358 | | Net income (loss) | $(1,731,762) | $1,225,349 | [NOTE 18 – Business Combinations](index=28&type=section&id=NOTE%2018%20%E2%80%93%20Business%20Combinations) - Jinong entered into strategic acquisition agreements and VIE contractual agreements with shareholders of several sales VIE Companies on June 30, 2016, and January 1, 2017, to gain control over product distribution and comply with PRC regulatory requirements[107](index=107&type=chunk)[156](index=156&type=chunk) - Key agreements include Entrusted Management Agreements, Exclusive Technology Supply Agreements, Shareholder's Voting Proxy Agreements, Exclusive Option Agreements, and Equity Pledge Agreements[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)[157](index=157&type=chunk)[159](index=159&type=chunk) - These agreements grant Jinong full control over operations, assets, personnel, cash flows, and the right to acquire equity interests and/or assets of the VIEs[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)[157](index=157&type=chunk)[159](index=159&type=chunk) - Non-Compete Agreements prevent VIE shareholders from competing with Jinong for five years post-termination of services[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)[157](index=157&type=chunk)[159](index=159&type=chunk) - The VIE arrangement is crucial for operating in heavily regulated e-commerce and agriculture industries in China, where foreign investment is limited[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)[157](index=157&type=chunk)[159](index=159&type=chunk) - The Company discontinued agreements with Zhenbai on November 30, 2017, resulting in a net loss of **$331,995**, and with Xindeguo, Xinyulei, and Xiangrong on June 2, 2021, receiving cash payments of **$286,935** and **$3,789,093** respectively, and realizing a net gain of **$511,123** from Xiangrong's discontinuation[119](index=119&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) [NOTE 19 – Other Events (COVID-19)](index=31&type=section&id=NOTE%2019%20%E2%80%93%20Other%20Events) - The COVID-19 pandemic has adversely affected the Company's operations and financial results, particularly in Xi'an City, where its headquarters are located[127](index=127&type=chunk)[128](index=128&type=chunk)[130](index=130&type=chunk) - Impacts include temporary office closures, travel restrictions, supply chain disruptions, reduced demand, and potential credit losses from customers[130](index=130&type=chunk) - The financial impact for fiscal years 2020 and 2021 has been adverse, and future impacts remain uncertain, depending on the pandemic's duration and severity[131](index=131&type=chunk) - The Company is implementing cost reduction and conservation measures to improve liquidity and mitigate impacts[132](index=132&type=chunk) [NOTE 20 – Subsequent Events](index=32&type=section&id=NOTE%2020%20%E2%80%93%20Subsequent%20Events) - The Company has analyzed its operations after September 30, 2021, up to the issuance date of the financial statements and found no significant subsequent events requiring recognition or disclosure[133](index=133&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations for the three months ended September 30, 2021, compared to the same period in 2020, covering net sales, cost of goods sold, gross profit, operating expenses, other income/expenses, net income/loss, segment profitability, liquidity, capital resources, and critical accounting policies, highlighting key changes and their drivers [Overview](index=33&type=section&id=Overview) - The Company is primarily engaged in the research, development, production, and sale of fertilizers (Jinong and Gufeng) and agricultural products (Yuxing) in the PRC[139](index=139&type=chunk) - Fertilizer products (Jinong and Gufeng) generated approximately **80.1%** of total revenues for the three months ended September 30, 2021 (**72.0%** in 2020)[140](index=140&type=chunk) - Sales VIEs contributed **12.2%** of revenues in 2021 (**22.2%** in 2020)[140](index=140&type=chunk) - Yuxing serves as an R&D base for fertilizer products and produces high-quality agricultural products[141](index=141&type=chunk) - As of September 30, 2021, the Company had **656** different fertilizer products, with **69** from Jinong, **336** from Gufeng, and **251** from VIE Companies[141](index=141&type=chunk) Fertilizer Sales Volume (Metric Tons) and Revenue Per Ton (Three Months Ended September 30, 2021 vs. 2020) | Segment | 2021 (metric tons) | 2020 (metric tons) | Change (metric tons) | Change % | | :------ | :----------------- | :----------------- | :------------------- | :------- | | Jinong | 15,224 | 15,871 | (647) | -4.1% | | Gufeng | 38,771 | 44,824 | (6,053) | -13.5% | | Total | 53,995 | 60,695 | (6,700) | -11.0% | | Segment | 2021 (revenue per ton) | 2020 (revenue per ton) | | :------ | :--------------------- | :--------------------- | | Jinong | $997 | $930 | | Gufeng | $378 | $345 | - Sales of fertilizer products to five provinces (Hebei, Heilongjiang, Inner Mongolia, Liaoning, Shaanxi) accounted for **57.7%** of fertilizer revenue in Q3 2021[145](index=145&type=chunk) - The Company had **1,803** distributors across **22** provinces, **4** autonomous regions, and **4** municipalities in China as of September 30, 2021[146](index=146&type=chunk) - Gufeng's top five distributors accounted for **82.3%** of its revenues in Q3 2021, indicating high customer concentration for this segment[146](index=146&type=chunk) - Shaanxi (**82.2%**), Shanghai (**5.7%**), and Sichuan (**3.7%**) accounted for **91.5%** of agricultural product revenue in Q3 2021[146](index=146&type=chunk) [Recent Developments](index=35&type=section&id=Recent%20Developments) - During Q3 2021, Jinong launched no new fertilizer products but added **44** new distributors[148](index=148&type=chunk) - Gufeng did not launch new fertilizer products but added **3** new distributors in Q3 2021[149](index=149&type=chunk) - The Company entered Strategic Acquisition Agreements (SAA) and Agreements for Convertible Notes (ACN) with shareholders of sales VIE Companies on June 30, 2016, and January 1, 2017, to expand distribution and comply with PRC regulations[150](index=150&type=chunk)[152](index=152&type=chunk) - Discontinuation of agreements with Zhenbai (Nov 30, 2017) and Xindeguo, Xinyulei, and Xiangrong (June 2, 2021) involved tendering back payment considerations and cash payments to the Company[154](index=154&type=chunk) - The VIE arrangement is critical for the Company to operate in the heavily regulated e-commerce and agriculture industries in China, which limit foreign investment, providing a feasible structure for business development and regulatory compliance[157](index=157&type=chunk)[159](index=159&type=chunk) - The validity and enforceability of VIE arrangements are subject to uncertainties in the interpretation and application of PRC laws, as well as judicial discretion[161](index=161&type=chunk) [Three Months ended September 30, 2021 Compared to the Three Months ended September 30, 2020.](index=39&type=section&id=Three%20Months%20ended%20September%2030,%202021%20Compared%20to%20the%20Three%20Months%20ended%20September%2030,%202020.) Consolidated Results of Operations (Three Months Ended September 30, 2021 vs. 2020) | Metric | 2021 | 2020 | Change $ | Change % | | :----------------------------------------- | :------------- | :------------- | :------------- | :------- | | Net sales | $37,381,030 | $42,140,710 | $(4,759,680) | -11.3% | | Cost of goods sold | $30,127,985 | $34,266,517 | $(4,138,532) | -12.1% | | Gross profit | $7,253,045 | $7,874,193 | $(621,148) | -7.9% | | Selling expenses | $3,714,213 | $4,687,423 | $(973,210) | -20.8% | | General and administrative expenses | $18,474,399 | $31,274,517 | $(12,800,118) | -40.9% | | Total operating expenses | $22,188,612 | $35,961,940 | $(13,773,328) | -38.3% | | Income (loss) from operations | $(14,935,567) | $(28,087,747) | $13,152,180 | -46.8% | | Total other income (expense) | $(29,618) | $(39,542) | $9,924 | -25.1% | | (Loss) before income taxes | $(14,965,185) | $(28,127,289) | $13,162,104 | -46.8% | | Provision for income taxes | $112,023 | $1,569,003 | $(1,456,980) | -92.9% | | Net (loss) from continuing operations | $(15,077,208) | $(29,696,292) | $14,619,084 | -49.2% | | Net (loss) from discontinued operations | - | $(1,256,622) | $1,256,622 | -100.0% | | Net (Loss) | $(15,077,208) | $(30,952,914) | $15,875,706 | -51.3% | | Foreign currency translation gain (loss) | $456,574 | $13,467,844 | $(13,011,270) | -96.6% | | Comprehensive (loss) | $(14,620,634) | $(17,485,070) | $2,864,436 | -16.4% | - Net sales decreased by **11.3%** to **$37.38 million**, primarily due to a **51.5%** decrease in VIEs' net sales[165](index=165&type=chunk) - Jinong's net sales increased by **4.4%** due to higher unit sales price (**$997/ton** in 2021 vs. **$930/ton** in 2020)[166](index=166&type=chunk) - Gufeng's net sales decreased by **6.6%** due to lower sales volume (**38,771 metric tons** in 2021 vs. **44,824 metric tons** in 2020)[167](index=167&type=chunk) - Yuxing's net sales increased by **19.2%** due to increased market demand[168](index=168&type=chunk) - Cost of goods sold decreased by **12.1%**, mainly driven by a **49.9%** decrease in VIEs' cost of goods sold[169](index=169&type=chunk) - Gross profit decreased by **7.9%** to **$7.25 million**, with the gross profit margin increasing from **18.7%** to **19.4%**[170](index=170&type=chunk) - Selling expenses decreased by **20.8%** due to reduced marketing activities[171](index=171&type=chunk) - General and administrative expenses decreased significantly by **40.9%** to **$18.47 million**, primarily due to a **66.8%** decrease in Gufeng's G&A expenses[172](index=172&type=chunk)[173](index=173&type=chunk) - Net loss improved by **51.3%** to **$(15.08) million**, mainly due to lower general and administrative expenses[174](index=174&type=chunk)[175](index=175&type=chunk) - Net loss from discontinued operations was **$0** in 2021, compared to **$(1.26) million** in 2020[177](index=177&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk) [Discussion of Segment Profitability Measures](index=42&type=section&id=Discussion%20of%20Segment%20Profitability%20Measures) - Net income (loss) by segment is the primary metric used by the Chief Operating Decision Maker (CODM) to assess performance and allocate resources[181](index=181&type=chunk) - Jinong's net income decreased by **351.6%** to a net loss of **$(3,818,917)**, primarily due to higher general and administrative expenses[181](index=181&type=chunk) - Gufeng's net loss decreased by **70.6%** to **$(9,163,571)**, mainly due to a decrease in general and administrative expenses[182](index=182&type=chunk) - Yuxing's net income increased by **18.3%** to **$161,939**, driven by higher sales[182](index=182&type=chunk) - Sales VIEs' net loss was **$(1,731,762)**, a decrease of **243.1%** from a net income of **$1,225,349**, mainly due to increased general and administrative expenses[183](index=183&type=chunk) - Net loss from discontinued operations was **$0** in 2021, compared to **$(1,256,622)** in 2020[183](index=183&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) - Principal sources of liquidity include cash from operations, borrowings from local commercial banks, and net proceeds from securities offerings[183](index=183&type=chunk) - Cash and cash equivalents increased by **18.4%** to **$22,022,563** as of September 30, 2021, from **$18,593,944** as of June 30, 2021[183](index=183&type=chunk)[187](index=187&type=chunk) - Net cash provided by operating activities was **$1,514,956** for Q3 2021, a significant increase from cash used in operating activities of **$1,653,512** in Q3 2020, mainly due to a decrease in accounts receivable[188](index=188&type=chunk)[189](index=189&type=chunk) - Net cash provided by investing activities was **$1,793,168** for Q3 2021, up from cash used of **$29,967** in Q3 2020, primarily due to sales of discontinued operations[190](index=190&type=chunk) - Net cash provided by financing activities was **$0** for Q3 2021, compared to **$294,400** in Q3 2020[191](index=191&type=chunk) - Short-term loans payable remained stable at **$4,187,700** as of September 30, 2021[192](index=192&type=chunk) - Accounts receivable decreased by **3.5%** to **$99,143,737**, with the allowance for doubtful accounts increasing by **21.7%** to **$28,893,232**[194](index=194&type=chunk)[195](index=195&type=chunk) - Inventories decreased by **18.4%** to **$52,463,033**, mainly due to a **35.5%** decrease in Gufeng's inventory[196](index=196&type=chunk) - Customer deposits increased by **25.3%** to **$7,841,368**, primarily due to advance deposits from Jinong's clients for seasonal product delivery[197](index=197&type=chunk) - The Company believes it has sufficient cash and projected cash flow for the next twelve months, but may seek additional financing for expansion or if operating plans are not met[184](index=184&type=chunk) [Critical Accounting Policies and Estimates](index=45&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - Use of estimates: Management makes significant estimates and assumptions, particularly affected by uncertainties like COVID-19[199](index=199&type=chunk) - Revenue recognition: Sales revenue is recognized upon shipment, fixed price, completed delivery, no significant obligations, and assured collectability. Payments received early are recorded as unearned revenue[200](index=200&type=chunk) - Cash and cash equivalents: Includes cash on hand, in banks, and highly-liquid investments with maturities of three months or less[201](index=201&type=chunk) - Accounts receivable: Reserves are maintained for potential credit losses, based on historical bad debts, customer creditworthiness, and economic trends. Specific policies for Jinong/Gufeng (180 days) and Yuxing (90 days) for bad debt allowance[202](index=202&type=chunk)[203](index=203&type=chunk) - Deferred assets: Represent amounts advanced to distributors for marketing and store development, expensed over three years. Fully amortized as of September 30, 2021[204](index=204&type=chunk) - Segment reporting: Uses the 'management approach' based on how management organizes segments for operating decisions and performance assessment. The Company has four main business segments: Jinong, Gufeng, Yuxing, and the sales VIEs[205](index=205&type=chunk)[206](index=206&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the Company's exposure to various market risks, including currency fluctuations, interest rate changes, credit risk, inflation risk, and the ongoing impact of epidemics like COVID-19, detailing how these risks could affect financial performance and the Company's current approach to managing them - The Company is exposed to market risk from changes in interest rates and equity prices but does not use financial instruments for trading purposes[208](index=208&type=chunk) - Currency Fluctuations and Foreign Currency Risk: Substantially all revenues and expenses are in RMB, but reporting is in USD. RMB depreciation against USD would adversely affect USD-denominated net assets and income. Accumulated other comprehensive loss was **$4 million** as of September 30, 2021. The Company has not entered into hedging transactions[209](index=209&type=chunk)[210](index=210&type=chunk) - Interest Rate Risk: Primarily exposed to short-term bank loans with fixed rates subject to change upon renewal. Short-term debt was **$4.2 million** as of September 30, 2021. No material change in interest rates for renewed loans in Q3 2021. No hedging transactions are used[211](index=211&type=chunk)[212](index=212&type=chunk) - Credit Risk: Not experienced significant credit risk due to long-term customers with superior payment records. Receivables are regularly monitored[213](index=213&type=chunk) - Inflation Risk: Inflationary factors could adversely affect operating results if selling prices do not keep pace with increased costs[215](index=215&type=chunk) - Epidemics, pandemics or other outbreaks Risk: COVID-19 has adversely affected operations due to closures, supply chain disruptions, reduced demand, and potential credit losses. The full extent of future impact is uncertain, but the Company is monitoring and taking mitigation measures[216](index=216&type=chunk)[217](index=217&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of the Company's disclosure controls and procedures as of September 30, 2021, concluding they were effective, with no material changes in internal control over financial reporting identified during the quarter - As of September 30, 2021, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective and adequately designed[218](index=218&type=chunk) - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting during the quarter ended September 30, 2021[219](index=219&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) There are no pending or threatened legal actions, suits, proceedings, inquiries, or investigations that could have a material adverse effect on the Company or its subsidiaries - There are no other actions, suits, proceedings, inquiries or investigations before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries' officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect[221](index=221&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of the Company's equity securities during the three months ended September 30, 2021, that were not previously disclosed - There were no unregistered sales of the Company's equity securities during the three months ended September 30, 2021, that were not otherwise disclosed in a Current Report on Form 8-K[222](index=222&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults in the payment of principal, interest, or any other material default with respect to its indebtedness - There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of the Company[223](index=223&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Not applicable[223](index=223&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) No additional information required to be disclosed under this item was not previously disclosed - There is no other information required to be disclosed under this item which was not previously disclosed[224](index=224&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including subsidiary lists, certifications from the CEO and CFO, and XBRL-related documents Exhibit Index | No. | Description | | :------ | :------------------------------------------------------------------------------------------------------ | | 21.1* | List of Subsidiaries of the Company | | 31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | 31.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | 32.1+ | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | 32.2+ | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | 101.INS*| 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). | SIGNATURES [Report Signatures](index=50&type=section&id=Report%20Signatures) The Form 10-Q report was duly signed on November 15, 2021, by Zhuoyu Li, Chief Executive Officer, and Yongcheng Yang, Chief Financial Officer, in their respective capacities Report Signatures | Date | By: | Name: | Title: | | :------------------ | :-------------- | :------------ | :---------------------------------------- | | November 15, 2021 | /s/ Zhuoyu Li | Zhuoyu Li | Chief Executive Officer (principal executive officer) | | November 15, 2021 | /s/ Yongcheng Yang | Yongcheng Yang | Chief Financial Officer (principal financial officer and principal accounting officer) |