Financial Performance - For the fiscal year ended March 31, 2022, the company generated revenue of $89,488,658, an increase of $18,003,955 compared to $71,484,703 in the previous fiscal year[329]. - The net loss for the fiscal year ended March 31, 2022, was $54,020,081, a decrease of $54,712,037 from a net income of $691,956 in the fiscal year ended March 31, 2021[329]. - The company generated $89,488,658 in revenues for the fiscal year ended March 31, 2022, representing an increase of $18,003,955 or 25.19% compared to $71,484,703 for the fiscal year ended March 31, 2021[358]. - Revenue from healthcare products dropped significantly to $30,323,831 in fiscal year 2022, primarily due to the adverse impact of the COVID-19 pandemic[358]. - Revenue from the online store increased to $28,014,109 in fiscal year 2022, up from $13,473,626 in fiscal year 2021, driven by the development of the online business model[359]. - Information service revenue reached $10,538,943 in fiscal year 2022, representing an increase of $1,293,924 or 14% compared to $9,245,019 in fiscal year 2021[360]. - Automobile sales revenue surged to $20,611,775 in fiscal year 2022, an increase of $17,235,419 or 510.47% from $3,376,356 in fiscal year 2021[361]. - The operating loss for the fiscal year ended March 31, 2022 was $57,885,796, a significant decline from operating income of $1,525,716 in the prior year, marking an increase in loss of $44,778,859[369]. - Net loss for the fiscal year ended March 31, 2022 was $54,020,081, a decrease of $53,328,125 compared to net income of $691,956 for the fiscal year ended March 31, 2021[374]. Revenue Recognition and Accounting - The company recognizes revenue from healthcare products, automobiles, and online store sales upon the transfer of control to customers[336][339][340]. - The company operates under U.S. GAAP, with critical accounting policies affecting the reported amounts of assets and liabilities[321]. - The company has established a provision for doubtful accounts based on individual account analysis and historical collection trends[332]. Cost and Expenses - Total cost of revenues was $85,777,192 for the fiscal year ended March 31, 2022, representing an increase of $32,468,090 or 60.91% compared to $53,309,102 for the fiscal year ended March 31, 2021[363]. - The gross margin ratio for the company was 4.2% for the fiscal year ended March 31, 2022, a decrease of 21.2% compared to 25.4% for the fiscal year ended March 31, 2021[363]. - The gross margin ratio for healthcare products was negative 0.7% for the fiscal year ended March 31, 2022, a decrease of 38.6% compared to 37.9% for the fiscal year ended March 31, 2021[363]. - Selling and marketing expenses surged to $40,476,616 for the fiscal year ended March 31, 2022, reflecting a 306.44% increase compared to $9,958,886 for the fiscal year ended March 31, 2021[365]. - General and administrative expenses rose to $9,126,812 for the fiscal year ended March 31, 2022, an increase of 81.4% from $5,030,899 in the prior year[366]. - Research and development expenses slightly increased to $1,684,089 for the fiscal year ended March 31, 2022, representing a 1.45% rise compared to $1,660,100 for the fiscal year ended March 31, 2021[367]. - Goodwill impairment amounted to $10,309,745 for the fiscal year ended March 31, 2022, compared to nil in the previous year, largely due to the impact of the COVID-19 pandemic[368]. Cash Flow and Investments - Net cash used in operating activities was $(28,134,783) for the fiscal year ended March 31, 2022, compared to $2,904,466 provided in the previous year[394]. - As of March 31, 2022, the company had cash and cash equivalents of $19.73 million, a decrease from $36.56 million in 2021 and $33.65 million in 2020[395]. - Net cash used in investing activities was $8.5 million for the year ended March 31, 2022, mainly due to a new business acquisition of approximately $6.1 million[399]. - Net cash provided by financing activities was approximately $18.8 million for the year ended March 31, 2022, primarily from capital contributions of net proceeds of $18.9 million from the issuance of new ordinary shares[401]. - Capital expenditures amounted to $2.41 million for the year ended March 31, 2022, compared to $3.83 million in 2021 and $1.16 million in 2020[402]. Business Operations and Strategy - The company has over 100 distributors and 10 experience stores across 20 provinces in China for its nutraceutical and dietary supplements[325]. - The online store "Happy Buy" was launched in September 2020, focusing on e-commerce services for small and medium-sized enterprises, with steady growth attributed to the live streaming e-commerce trend[325]. - The automobile sales platform "Happy Auto," upgraded to "Taochejun," focuses on small cities in China and new energy vehicle sales[328]. - The company categorizes its products into four groups: Healthcare products, e-commerce products, automobile sales, and Internet information advertising services[325]. - The company has made significant investments in quality control and self-manufacturing to ensure high-quality products[323]. - The company plans to continue investing in the online store and automobile business to drive future growth[359][361]. - The company closed 7 experience stores during the year ended March 31, 2022, due to poor performance to avoid further losses[358]. Internal Control and Risk Management - The company plans to address internal control weaknesses by recruiting qualified professionals and investing in technology infrastructure[579]. - The company has not entered into any hedging transactions to reduce exposure to foreign exchange risk, despite being exposed to fluctuations in the exchange rate between the U.S. dollar and RMB[574]. - The company experienced a significant decrease in current assets, from approximately $95.1 million in 2021 to $56.6 million in 2022[395].

Financial Performance - For the fiscal year ended March 31, 2021, the company generated revenue of $71,484,703, representing an increase of 9.9% compared to $65,061,953 for the fiscal year ended March 31, 2020[280]. - The net income for the fiscal year ended March 31, 2021, was $691,956, a significant decrease of 94.5% from $12,688,035 in the previous fiscal year[280]. - Revenues for the fiscal year ended March 31, 2021 were $71,484,703, an increase of $6,422,750 or 9.9% compared to $65,061,953 for the fiscal year ended March 31, 2020[297]. - Sales from healthcare products dropped significantly from $65,061,953 in fiscal year 2020 to $45,389,702 in fiscal year 2021 due to COVID-19 impacts[298]. - Operating income decreased by $13,873,001 or approximately 90.1% to $1,525,716 for the fiscal year ended March 31, 2021[306]. - Net income for the fiscal year ended March 31, 2021 was $691,956, a decrease of $11,996,079 or 94.5% compared to $12,688,035 for the fiscal year ended March 31, 2020[312]. Sales and Distribution - The company has over 100 distributors and 17 experience stores across 18 provinces in China, enhancing its market presence[278]. - Online sales have been a growing distribution channel since the launch of the "Happy Buy" platform in September 2020, capitalizing on the rapid expansion of live streaming e-commerce in China[278]. - The automobile sales platform "Taochejun" was launched in November 2020, focusing on small cities and new energy vehicles, leveraging a network of car dealers[279]. - Online store sales generated $13,473,626 in revenue for the fiscal year ended March 31, 2021, marking a successful entry into e-commerce[299]. Cost and Expenses - Total cost of revenues increased by $18,666,453 or 53.9% to $53,309,102 for the fiscal year ended March 31, 2021, resulting in a gross margin ratio of 25.4%[301]. - Selling and marketing expenses increased by $779,726 or 8.5% to $9,958,886 for the fiscal year ended March 31, 2021[303]. - General and administrative expenses rose by $1,548,440 or 44.5% to $5,030,899 for the fiscal year ended March 31, 2021[304]. - Research and development expenses decreased by $698,868 or 29.6% to $1,660,100 for the fiscal year ended March 31, 2021[305]. - The gross margin ratio of online sales was 5.3% for the fiscal year ended March 31, 2021, reflecting the industry's typical low margin[302]. Cash Flow and Investments - Net cash provided by operating activities decreased to approximately $2.9 million for the year ended March 31, 2021, down from approximately $10.8 million for the year ended March 31, 2020[330]. - Net cash used in investing activities was $13,222,847 for the year ended March 31, 2021, compared to $1,159,355 for the previous year[334]. - Capital expenditures amounted to $3,834,578 for the year ended March 31, 2021, compared to $1,159,355 for the year ended March 31, 2020[337]. - As of March 31, 2021, cash and cash equivalents were $36,558,752, an increase from $33,654,765 as of March 31, 2020[329]. Internal Control and Compliance - As of March 31, 2021, the company's internal control over financial reporting was deemed ineffective due to insufficient knowledge of U.S. GAAP and SEC reporting requirements[485]. - Material weaknesses identified include inadequate procedures for identifying related party transactions[485]. - The company plans to recruit qualified professionals to address accounting issues in complex transactions[486]. - Investment in technology infrastructure is planned to enhance the financial reporting function[486]. - Improved communication between management, the board of directors, and the chief financial officer is a priority[486]. - No changes in internal control over financial reporting occurred during the reporting period that materially affected internal controls[487].

Financial Performance - For the fiscal year ended March 31, 2020, the company generated revenue of $65,061,953, representing an increase of 1.8% compared to $63,936,185 for the fiscal year ended March 31, 2019[253]. - The net income for the fiscal year ended March 31, 2020, was $12,688,035, which is a decrease of 32.2% from $18,721,979 in the previous fiscal year[253]. - Total revenues for the fiscal year ended March 31, 2020, were $65,061,953, an increase of $1,125,768 or 1.8% compared to $63,936,185 for the fiscal year ended March 31, 2019[273]. - Revenue from Lucidum spore powder products increased by $8,346,748 or 42.0%, accounting for 43.4% of total revenue for the fiscal year ended March 31, 2020[274]. - Revenue from Cordyceps mycelia products decreased by $2,028,581 or 3.4%, accounting for 13.6% of total revenue for the fiscal year ended March 31, 2020[275]. - Revenue from experience stores accounted for 41.2% of total revenue for the fiscal year ended March 31, 2020, an increase of 2.9% compared to the previous year[277]. - The gross margin ratio decreased to 46.8% for the fiscal year ended March 31, 2020, down from 50.4% for the fiscal year ended March 31, 2019[280]. - The gross margin ratio for Lucidum spore powder products was 51.9% for the fiscal year ended March 31, 2020, a decrease of 8.7% compared to 60.6% for the fiscal year ended March 31, 2019[281]. - Operating income decreased by $6,444,155 or approximately 29.5% to $15,398,717 for the fiscal year ended March 31, 2020, compared to $21,842,873 for the fiscal year ended March 31, 2019[285]. - Net income fell by $6,033,944 or 32.2% to $12,688,035 for the fiscal year ended March 31, 2020, compared to $18,721,979 for the fiscal year ended March 31, 2019[288]. - Other income increased by $71,145 or 114.3%, totaling $133,405 for the fiscal year ended March 31, 2020[272]. Expenses and Costs - Total cost of revenues was $34,642,649 for the fiscal year ended March 31, 2020, representing an increase of $2,953,532 or 9.3% compared to $31,689,117 for the fiscal year ended March 31, 2019[280]. - Selling and marketing expenses increased by $2,887,932 or 45.9% to $9,179,160 for the fiscal year ended March 31, 2020, primarily due to higher advertising costs and support for experience store operators[282]. - General and administrative expenses increased by $1,531,200 or 78.5% to $3,482,459 for the fiscal year ended March 31, 2020, compared to $1,951,259 for the fiscal year ended March 31, 2019[283]. - Research and development expenses rose by $197,260 or 9.1% to $2,358,968 for the fiscal year ended March 31, 2020, compared to $2,161,708 for the fiscal year ended March 31, 2019[284]. Cash Flow and Financial Position - Net cash provided by operating activities increased by approximately $4,232,964 or 64.7% to $10,777,843 for the fiscal year ended March 31, 2020, compared to $6,544,879 for the fiscal year ended March 31, 2019[290]. - Net cash used in investing activities increased to $1,159,355 for the fiscal year ended March 31, 2020, compared to $277,158 for the fiscal year ended March 31, 2019[295]. - Net cash used in financing activities was approximately $10,404,718 for the fiscal year ended March 31, 2020, compared to $271,105 for the fiscal year ended March 31, 2019[297]. - As of March 31, 2020, cash and cash equivalents were $33,654,765, up from $14,800,772 as of March 31, 2019[298]. - As of March 31, 2020, the company's PRC subsidiaries had aggregate retained earnings of approximately RMB 454.5 million (US$67.6 million) under PRC GAAP[312]. - The company does not have any long-term debt outstanding and monitors banks' prime rates for cash management[459]. Business Operations and Strategy - The company marketed and sold approximately 32 kinds of nutraceutical and dietary supplements, with Lucidum spore powder, Cordyceps mycelia, and Ejiao solution products accounting for approximately 66.6% and 63.1% of gross sales for the years ended March 31, 2020, and 2019, respectively[251]. - The company has established a new experience store model since 2017 to boost market share, alongside traditional distribution channels[250]. - The company has a significant focus on quality control and self-manufacturing, producing most products in-house without outsourcing[249]. - The company has approximately 100 distributors across 20 provinces and operates 26 experience stores in China[251]. - The company plans to expand its business in the water supply market and strengthen its market position, requiring additional capital through equity financing[302]. Governance and Management - The company has established an audit committee, a compensation committee, and a nominating and governance committee to oversee various functions[331][334][335]. - The Audit Committee consists of Wanhe Zhang, Rui Qiang, and John Levy, with John Levy serving as the chairman[331]. - The Compensation Committee was established in October 2019, with Rui Qiang as the chairman[334]. - The Nominating and Governance Committee includes Wanhe Zhang, John Levy, and Rui Qiang, with Wanhe Zhang as the chairman[335]. - The company has not entered into any agreements to provide benefits upon termination of employment for its executives[330]. - The employment agreements for both the CEO and CFO are for a term of five years, automatically renewing for additional one-year terms[325][327]. - John Levy is recognized as an "audit committee financial expert" as defined by SEC regulations[333]. - The company has not granted any plan-based awards to its executives[324]. - Xuezhu Wang, the CEO, received an annual compensation of $25,587 for the fiscal year ended March 31, 2020[323]. - Jiong Bian, the CFO, received an annual compensation of $37,339 for the same fiscal year[323]. - As of March 31, 2020, the company has a total of 151 full-time employees, with 70 in operations and logistics, 39 in sales and marketing, and 23 in research and development[339]. - The company has opted not to comply with Nasdaq's independence requirements for its board of directors[338]. Risks and Challenges - The company reported a comprehensive loss of $4.15 million due to a 3.5% average depreciation of the RMB against the U.S. dollar[460]. - The company has not entered into any hedging transactions to mitigate foreign exchange risk, which may affect revenues and results of operations[460]. - The board of directors has identified material weaknesses in internal control over financial reporting, including insufficient knowledge of U.S. GAAP and SEC reporting requirements[464]. - The company plans to address identified weaknesses by recruiting qualified professionals and investing in technology infrastructure[465]. - The company has not experienced significant seasonal fluctuations in employee numbers[339].

Financial Performance - Revenues for the year ended March 31, 2019, were $63,936,185, representing an increase of 3.97% from $61,495,527 in 2018[21]. - Gross profit increased to $32,247,068, up from $29,352,200, reflecting a gross margin improvement[21]. - Operating income rose to $21,842,873, compared to $20,240,785 in the previous year, indicating a growth of 7.93%[21]. - Net income for the year was $18,721,979, an increase of 7.05% from $17,489,940 in 2018[21]. - Basic and diluted earnings per share increased to $0.81 from $0.76, marking a 6.58% rise[21]. - The company's comprehensive income for the year ended March 31, 2019, was $15,736,393, down from $20,664,197 in 2018, a decrease of approximately 23.5%[136]. Assets and Liabilities - As of March 31, 2019, total assets of Happiness Biotech Group Limited were $65,679,048, an increase from $53,396,326 in 2018, representing a growth of approximately 22.6%[18]. - Total current assets rose to $54,840,259 in 2019, up from $43,758,268 in 2018, marking an increase of approximately 25.4%[18]. - The company reported total liabilities of $4,763,401 in 2019, down from $8,844,700 in 2018, representing a decrease of about 46.3%[18]. - Total short-term bank borrowings decreased to $1,039,578 as of March 31, 2019, from $1,494,887 in 2018, a reduction of 30.5%[102]. - The company recognized a current income tax provision of $3,183,154 for the year ended March 31, 2019, an increase of 10.9% from $2,871,693 in 2018[121]. Shareholder Equity - Shareholders' equity increased significantly to $60,915,647 in 2019 from $44,551,626 in 2018, indicating a growth of around 36.6%[18]. - The company's retained earnings rose to $53,935,169 as of March 31, 2019, compared to $35,269,267 in 2018, indicating a significant increase of approximately 53.1%[135]. - Total equity as of March 31, 2019, was $60,915,647, compared to $44,551,626 in 2018, reflecting a growth of 36.5%[23]. Cash Flow - Cash and cash equivalents increased to $14,800,772 in 2019 from $8,884,829 in 2018, reflecting a growth of about 66.5%[18]. - Net cash provided by operating activities was $6,544,879, a decrease from $12,933,949 in 2018[26]. - Cash and cash equivalents at the end of the year were $14,800,772, up from $8,884,829, representing a 66.5% increase[26]. Expenses - Research and development expenses increased to $2,161,708 from $1,857,818, indicating a focus on innovation and product development[21]. - Advertising costs increased from $2,048,026 in 2018 to $3,217,096 in 2019[58]. - Shipping and handling costs were $1,841,312 and $2,296,687 for the years ended March 31, 2019 and 2018, respectively[57]. Inventory and Receivables - Accounts receivable remained relatively stable at $32,011,536 in 2019, slightly down from $32,564,827 in 2018[18]. - As of March 31, 2019, accounts receivable amounted to $32,011,536, a decrease from $32,564,827 in 2018, with no allowance for doubtful accounts recorded[88]. - Total inventories as of March 31, 2019, were $1,970,735, down from $2,269,182 in 2018, with raw materials at $1,696,353[90]. Regulatory and Compliance - Happiness Biotech Group Limited is classified as an emerging growth company and prepares its financial statements in accordance with U.S. GAAP[7]. - The company has not been required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months[5]. - The company adopted ASC Topic 606 for revenue recognition effective April 1, 2019, which requires revenue to be recognized upon transfer of control of goods[52]. Other Financial Information - The company did not declare any dividends for the years ended March 31, 2019, and 2018[115]. - The company has no write-downs recognized for inventories for the years ended March 31, 2019 and 2018[41]. - The company has no material purchase commitments or significant leases as of March 31, 2019[124].