The following discussion should be read in conjunction with the information contained in the preceding unaudited condensed consolidated financial statements and footnotes and our 2019 Annual Report on Form 10-K for fiscal year ended April 30, 2019.

OVERVIEW



We sell stevioside, a natural sweetener. Stevioside is a natural zero calorie
sweetener extracted from the leaf of the stevia plants. Substantially all of our
operations are located in the PRC. We have built an integrated company with the
production and distribution capabilities designed to meet the needs of our
customers.

Our operations were organized in two operating segments related to our product lines:



  -   Stevioside, and
  -   Corporate and other.



Going Concern

The accompanying unaudited condensed consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. The Company
has a significant accumulated deficit and incurred recurring losses. The
Company's cash balance and revenues generated are not currently sufficient and
cannot be projected to cover operating expenses for the next twelve months from
the date of this report. These factors raise doubt as to the ability of the
Company to continue as a going concern. Management's plans include attempting to
improve its business profitability, its ability to generate sufficient cash flow
from its operations to meet its operating needs on a timely basis, obtain
additional working capital funds through debt and equity financings, and
restructure on-going operations to eliminate inefficiencies to raise cash
balance in order to meet its anticipated cash requirements for the next twelve
months from the date of this report. Management intends to make every effort to
improve its current sales forecast to further develop and expand the
international markets for its new products as well as continuing with the
current sources of funds to meet working capitals needs on as needed
basis. There can be no assurance that these plans and arrangements will be
successful.

The ability of the Company to continue as a going concern is dependent upon its
ability to achieve profitable operations and raise additional capital. The
accompanying unaudited condensed consolidated financial statements do not
include any adjustments related to the recoverability or classification of
asset-carrying amount or the amounts and classification of liabilities that may
result should the Company be unable to continue as a going concern.

Recent Developments



Sunwin has approximately 1,200 metric tons of manufacturing capacity per year to
produce high-grade stevia extract. With these manufacturing facilities, Sunwin
is able to deliver stevia products containing Rebaudioside A in a range of 50%
to 99% with a format of powder, granular, or tablet. We are planning to start
building a new facility with annual capacity of 500 metric tons in order to meet
substantially increased demand for our high-grade stevia products.

Since fiscal year 2018, we invested in a new production line for Metformin as
one of the new product markets we intend to branch into. Metformin is the raw
material of Metformin hydrochloride tablets. Metformin is the first-line
medication for the treatment of type 2 diabetes, particularly in people who are
not satisfied with simple diet control, especially those with obesity and
hyperinsulinemia. This drug not only has hypoglycemic effect, but also may have
the effect of reducing body weight and hyperinsulinemia. It can be effective in
patients with poor efficacy of certain sulfonylureas, such as sulfonylureas,
intestinal glycosidase inhibitors or thiazolidinedione hypoglycemic agents. It
can also be used in patients with insulin therapy to reduce insulin consumption.

While we were able to market and sale our Metformin products, with our current
overhead and associated expenses, its profit margin has not been as lucrative as
we had projected, and our Metformin production line has been operating at a net
loss in fiscal 2019. On July 10, 2019, we entered into a management agreement
with Ru Yuan, an unaffiliated individual, to contract out the Metformin
production line for 30 years. On July 31, 2019, we entered into an addendum to
this agreement to include a renewal period of every 5 years. Under the terms of
this agreement, Ms. Yuan will operate the Metformin production line
independently from Sunwin assuming all of its profits and liabilities, including
employee payroll, benefits, utilities etc., and will pay to Qufu Shengren an
annual contract fee of RMB3,000,000 (approximately $436,047).
                                       19
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On July 30, 2019, Qufu Natural Green entered into an Asset Transfer Agreement
with Na Li, an unaffiliated individual (the "Buyer") for the sale of 100% equity
ownership of Qufu Shengwang. Pursuant to the Asset Transfer Agreement, the Buyer
shall pay to Qufu Natural Green a total cash consideration of RMB8,000,000
(approximately $1,162,790) based on the estimated net book value as of July 30,
2019, payable in two installments of RMB5,000,000 (approximately $726,744) on
July 30, 2019 and RMB3,000,000 (approximately $436,046) on September 30, 2019.
The Buyer assumed all assets and liabilities of Qufu Shengwang including the
amount of Qufu Shengwang's debt to Qufu Natural Green of approximately
RMB26,000,000 (approximately $3,779,070), and Qufu Natural Green shall assist in
completing all documents required for the equity transfer after confirming
receipt of the first payment. The Company received the first installment of
RMB5,000,000 on July 30, 2019, and received the second installment of
RMB3,000,000 on August 20, 2019.

On October 9, 2019, Qufu Shengren invested RMB2,000,000 (Approximately $288,322)
in a new entity, Qufu Shengren Import and Export Co., Ltd., ("Qufu Shengren
Import and Export"), a Chinese limited liability company, a 100% owned
subsidiary of Qufu Shengren. Qufu Shengren Import and Export focuses on the
export of our Stevia products, and the import and export of technology and other
relevant products, we expect to increase operation in this subsidiary in the
near future.

Stevioside Segment

Stevioside and rebaudioside are all natural low calorie sweeteners extracted
from the leaves of the stevia rebaudiana plant. Stevioside is a safe and natural
alternative to sugar for people needing low sugar or low calorie
diets. Stevioside can be used to replace sugar in beverages and foods, including
those that require baking or cooking where synthetic chemical based sweetener
replacements are not suitable.

Steviosin is a natural low calorie stevioside extract for medicinal use, containing rebaudioside A at 90% with the total steviol glycosides meeting or exceeding 95% on a dry weight basis. Steviosin is used as an alternative sweetener in the pharmaceutical production in China.



OnlySweet is an all natural, zero calorie, dietary supplement comprised of three
natural ingredients, including stevioside. Based on our strategy to develop new
products that contain our stevia products, we are evaluating our strategy for
the sale and distribution of OnlySweet.

In an effort to meet the international food safety standards mandated by larger
consumer product companies that we expect to target as customers in the future,
we have made capital investments to enhance our manufacturing facilities,
equipment and documentation systems, changed certain manufacturing processes and
carried out additional personnel training in order to meet these
standards. These investments allowed us to meet the HACCP System Certification,
ISO 9001:2015 Certification and ISO 22000:2005 Food Safety Certification. We
obtained these certifications in October 2015.

OUR PERFORMANCE



 Our revenues totaled approximately $5,203,000 during the three months ended
January 31, 2020, a decrease of 7.9%, as compared with the same period in 2019,
and our gross margin decreased to 9.9% from 13.6%. Our total operating expenses
in the three months ended January 31, 2020 decreased by approximately $104,000,
or 6.6% compared to the same period in 2019, primarily due to a decrease of
approximately $162,000, or 25.2% in general and administrative expense, and a
decrease of approximately $257,000, or 41.7% in selling expense, offset by  an
increase of approximately $316,000, or 99.3% in research and development
expenses. Our net loss from continuing operations for the three months ended
January 31, 2020 was approximately $960,000, compared to net loss of $810,000 in
the same period in 2019. Our operating performance for the three months ended
January 31, 2020 was primarily driven by a decrease of 84.2% in sales revenue of
Metformin product, and a 15.8% decrease in sales revenue of stevia products to
third parties.

Our revenues totaled approximately $19,255,000 during the nine months ended
January 31, 2020, an increase of 24.0%, as compared with the same period in
2019, and our gross margin increased to 16.2% from 11.0%. Our total operating
expenses in the nine months ended January 31, 2020 decreased by approximately
$622,000, or 14.5% compared to the same period in 2019 primarily due to a
decrease of approximately $316,000, or 20.3% in selling expense and a decrease
of approximately $887,000, or 43.2% in general and administrative expense,
offset by an increase of approximately $580,000, or 82.9% in research and
development expenses. Our net loss from continuing operations for the nine
months ended January 31, 2020 was approximately $572,000, compared to net loss
of $2,591,000 in the same period in 2019. Our operating performance for the nine
months ended January 31, 2020 was primarily driven by an increase of 37.6% in
sales revenue of from stevia products, including a 23.0% increase in sales to
third parties, and an increase in sales to related party customers of
approximately 84.1%.
                                       20
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While we have broadened our stevia product offerings to include a number of
higher quality stevia grades needed in new product formulations we are
developing to introduce to the U.S. and European food and beverage industry, the
demand for higher grade stevia products has yet to materialize to the degree we
had anticipated, and we hope that our sales volume in higher grade stevia
products will increase in fiscal 2020 as the demands increase. Stevia has become
more widely accepted by the food industry and many new stevia manufacturers have
entered this industry in the past few years; recently we have introduced a new
product line. We are now focusing on new types of stevia products, including
tablets, liquid, High A products, and others. We expect to consistently increase
our sales of our new products; however, we cannot quantify this increase and its
effects on future periods.

Our Outlook

We believe that there are significant opportunities for worldwide growth in our
Stevioside segment, primarily in the U.S. and EU. For fiscal 2020 and beyond, we
will continue to focus on our core business of producing and selling stevioside
series products.

Some of the recent favorable observations related to the stevia markets in fiscal 2020 include:

- Chinese domestic food and beverages, particularly herbal tea


           manufacturers and the pharmaceutical industry, have increased

the use


           of steviosides, and new health awareness trends have also

resulted in


           some new governing laws supporting the growth of this industry;

- Southeast and South Asia have renewed and increased their interest in


           stevia, particularly high grade stevia;

- Comparing 2019 to 2011, the usages of stevia in food products shows a


           25.6% growth, and in beverage products shows a 34.6% growth; and

- Stevia has been growing in popularity in the last 10 years throughout


           all the global markets.



Meanwhile, we are also facing challenges in competitive pricing and raw
materials for fiscal 2020. During fiscal 2019, the market prices of stevioside
products were impacted by strong price competition among Chinese manufacturers.
We expect the pressure from pricing competition to continue in fiscal 2020. We
anticipate the price of stevia leaves, the raw material used to produce our
stevioside series products, to increase in fiscal 2020.

RESULTS OF OPERATIONS



The following table summarizes our results from operations for the three month
periods ended January 31, 2020 and 2019. The percentages represent each line
item as a percent of revenues:

                                   For the Three Months ended January 31, 2020
                                Stevioside                 Corporate and Other                Consolidated
Revenues                $  5,104,858         100.0 %    $    98,571          100.0 %   $  5,203,429         100.0 %
Cost of goods sold         4,688,555          91.8 %             48            0.0 %      4,688,603          90.1 %
Gross profit                 416,303           8.2 %         98,523          100.0 %        514,826           9.9 %
Selling expenses             360,440           7.1 %              -              -          360,440           6.9 %
General and
administrative
expenses                     474,548           9.3 %          6,539            6.6 %        481,087           9.2 %
Research and
development expenses         633,668          12.4 %              -              -          633,668          12.2 %
(Loss) income from
operations                (1,052,351 )       (20.6 )%        91,982           93.4 %       (960,369 )       (18.5 )%
Other expenses              (221,503 )        (4.3 )%             -              -         (221,503 )        (4.3 )%
(Loss) income from
continuing operation
before income taxes     $ (1,273,854 )         (25 )%   $    91,982           93.4 %   $ (1,181,872 )       (22.7 )%



                                       21

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                                   For the Three Months ended January 31, 2019
                                Stevioside                 Corporate and Other                Consolidated
Revenues                $  5,026,276         100.0 %    $    622,412         100.0 %   $  5,648,688         100.0 %
Cost of goods sold         4,406,239          87.7 %         472,877          76.0 %      4,879,116          86.4 %
Gross profit                 620,037          12.3 %         149,535          24.0 %        769,572          13.6 %
Selling expenses             547,774          10.9 %          70,028          11.3 %        617,802          10.9 %
General and
administrative
expenses                     630,048          12.5 %          13,538           2.2 %        643,586          11.4 %
Research and
development expenses         295,400           5.9 %          22,476           3.6 %        317,876           5.6 %

Loss from operations (853,185 ) (17.0 )% 43,493 

    7.0 %       (809,692 )       (14.3 )%
Other expenses              (203,159 )        (4.0 )%              -             -         (203,159 )        (3.6 )%
(Loss) income from
continuing operation
before income taxes     $ (1,056,344 )       (21.0 )%   $     43,493

7.0 % $ (1,012,851 ) (17.9 )%

The following table summarizes our results from operations for the nine month periods ended January 31, 2020 and 2019.



                                    For the Nine Months ended January 31, 2020
                                Stevioside                 Corporate and Other                 Consolidated
Revenues                $ 18,499,696         100.0 %    $    755,389         100.0 %    $ 19,255,085         100.0 %
Cost of goods sold        15,727,024          85.0 %         417,589          55.3 %      16,144,613          83.8 %
Gross profit               2,772,672          15.0 %         337,800          44.7 %       3,110,472          16.2 %
Selling expenses           1,215,596           6.6 %          22,049           2.9 %       1,237,645           6.4 %
General and
administrative
expenses                   1,009,492           5.5 %         155,690          20.6 %       1,165,182           6.1 %
Research and
development expenses       1,277,972           6.9 %           1,648           0.2 %       1,279,620           6.6 %
(Loss) income from
operations                  (730,388 )        (3.9 )%        158,413          21.0 %        (571,975 )        (3.0 )%
Other expenses              (504,871 )        (2.7 )%        (42,939 )        (5.7 )%       (547,810 )        (2.8 )%
(Loss) income from
continuing operation
before income taxes     $ (1,235,259 )        (6.7 )%   $    115,474          15.3 %    $ (1,119,785 )        (5.8 )%



                                    For the Nine Months ended January 31, 2019
                                Stevioside                 Corporate and Other                 Consolidated
Revenues                $ 13,449,143         100.0 %    $  2,082,405         100.0 %    $ 15,531,548         100.0 %
Cost of goods sold        12,090,275          89.9 %       1,727,936          83.0 %      13,818,211          89.0 %
Gross profit               1,358,868          10.1 %         354,469          17.0 %       1,713,337          11.0 %
Selling expenses           1,360,878          10.1 %         192,371           9.2 %       1,553,249          10.0 %
General and
administrative
expenses                   1,321,072           9.8 %         730,920          35.1 %      2,0151,992          13.2 %
Research and
development expenses         634,989           4.7 %        (633,366 )       (30.4 )%        699,533           4.5 %

Loss from operations (1,958,071 ) (14.6 )% (633,366 ) 


 (30.4 )%     (2,591,437 )       (16.7 )%
Other expenses              (600,287 )        (4.5 )%              -             -          (600,287 )        (3.9 )%
Loss from continuing
operation before
income taxes            $ (2,558,358 )       (19.0 )%   $   (633,366 )       (30.4 )%   $ (3,191,724 )       (20.5 )%



Revenues

Total revenues in the three months ended January 31, 2020 decreased by
approximately 7.9%, as compared to the same period in 2019. Stevioside revenues,
which accounts for 98.1% and 89.0% of our total revenues in the three months
ended January 31, 2020 and 2019, respectively, increased by approximately 1.6%,
while Metformin revenues decreased by approximately $524,000 or 84.2%.
                                       22
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Within our Stevioside segment, revenues from sales to third parties decreased by
15.8%, while sales to the related party increased by 65.0% in the three months
ended January 31, 2020, as compared to the same period in 2019, primarily due
to an increasing demand from the overseas market and the results of our effort
to develop sales in the international market. Since we do not have the
authorization to export products from China, we outsourced all of our exporting
business to a related party, Qufu Shengwang Import and Export, which has
authorizations to export. While the adoption rate for stevia in the food and
beverage sector has been slower than expected, we sold 168 metric tons and 151
metric tons of stevioside for the three months ended January 31, 2020 and 2019,
respectively. Our low grade stevia products, Stevioside, A3-80 and A3-97, each
respectively accounted for approximately 19.9%, 18.5% and 26.3% of our total
Stevioside segment revenue in the three months ended January 31, 2020.

Total revenues in the nine months ended January 31, 2020 increased by 24.0% as
compared to the same period in 2019. Stevioside revenues, accounts for 96.1% and
86.6% of our total revenues in the nine months ended January 31, 2020 and 2019,
respectively. During the nine months ended January 31, 2020, within our
Stevioside segment, we increased our sales volume by approximately 183 metric
tons, a 47.0% increase. Stevioside revenues from sales to third parties
increased by 23.0% and sales to the related parties increased by 84.1% in the
nine months ended January 31, 2020, as compared to the same period in 2019. We
generated approximately $3,887,000 and $1,425,000 in revenue from producing over
120 metric tons and 38 metric tons of the customized orders for restructuring by
enzyme based on our Stevioside products in the nine months ended January 31,
2020 and 2019, respectively, increased by 172.7%, as compared to the same period
in 2019. A3-99 and restructuring by enzyme based on our Stevioside products
accounted for approximately 25.5% and 21.1% of our total Stevioside segment
revenues, respectively, in the nine months ended January 31, 2020 and 2019.
Additionally, we also continue to generate lease revenue from our lease of the
Metformin product line that was developed in the prior year.

Our unit sale price fluctuated from month to month in the three and nine months
ended January 31, 2020, which was mainly affected by the market environment; the
average unit sale price decreased by approximately 3.7% and 6.1% compared to the
same period in 2019, respectively. We face challenges due to competitive pricing
and difficulties sourcing raw materials for in the nine months ended January 31,
2020, the market prices of stevioside products were impacted by strong price
competition among Chinese manufacturers. We also anticipate the price of stevia
leaves, the raw material used to produce our stevioside series products, to
increase in the near future. With the restructuring of our product line, we also
continue to increase the sales of our low grade stevia products. Our low grade
stevia A3-80 and A3-97 products generated more than 64.7% and 50.1% of total
revenue of our Stevioside segment for the three and nine months ended January
31, 2020, respectively.

Cost of Revenues and Gross Margin



Cost of revenues in the three months ended January 31, 2020 decreased by 3.9%,
compared to the same period in 2019. Cost of revenues as a percentage of
revenues increased from 86.4% to 90.1% during the three months ended 2020
compared to the same period in 2019. Gross margin in the Stevioside segment
decreased from 12.3% to 8.2% for the three months ended by January 31, 2020,
compared to the same period in 2019, which was primarily due to the higher
overhead costs.

Cost of revenues in the nine months ended January 31, 2020 increased by 16.8%,
compared to the same period in 2019. Cost of revenues as a percentage of
revenues decreased from 89.0% to 83.8% during the nine months ended 2020
compared to the same period in 2019. Gross margin in the Stevioside segment
increased from 10.1% to 15.0%  for the nine months ended by January 31, 2020,
compared to the same period in 2019,  which was primarily due to the
improvements in efficiency of our production line to offset the higher raw
material costs. Since we purchase our raw materials on the spot market, we are
unable to predict, with any degree of certainty, our raw material costs and
their impact on our gross margin in future periods. Our consolidated gross
margin for the three and nine months ended by January 31, 2020 was 9.9% and
16.2%, as compared to 13.6% and 11.0% in the same period in 2019.

Selling Expenses



For the three months ended January 31, 2020, we had a decrease of approximately
$257,000, or 41.7% in selling expenses, as compared to the same period in 2019.
The decrease was primarily due to the approximately $92,000 decrease in
promotion and marketing expense, $131,000 decrease in advertising expenses,
$22,000 decrease in commission, $14,000 decrease in wage expense, $23,000
decrease in shipping and freight, and $62,000 decrease in warehousing expense,
offset by approximately $20,000 increase in office expense, $62,000 increase in
selling expense on Metformin production line and $5,000 increase in
miscellaneous expense in the three months ended January 31, 2020.

For the nine months ended January 31, 2020, we had a decrease of approximately
$316,000, or 20.3% in selling expenses, as compared to the same period in 2019.
The decrease was primarily due to the approximately $182,000 decrease in
promotion and marketing expense, $50,000 decrease in office expense, $80,000
decrease in shipping and freight, $15,000 decrease in commission, $62,000
decrease in warehousing expense, $18,000 decrease in wage expenses and $10,000
increase in miscellaneous expense, offset by approximately $63,000 increase in
advertising expenses, $16,000 increase in local taxes, and $22,000 increase in
selling expense on Metformin production line  in the nine months ended January
31, 2020.
                                       23
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General and Administrative Expenses



Our general and administrative expenses for the three months ended January 31,
2020 decreased by approximately $162,000, or 25.2% from the same period in 2019.
The decrease was primarily due to a decrease of approximately $102,000 in stock
based compensation to employees, $41,000 decrease in marketing expense, $20,000
decrease in meals and entertainment expenses, $7,000 decrease in travel expense,
$13,000 decrease in wage expense, $13,000 decrease in auto  expense and $119,000
decrease in miscellaneous expense, offset by $113,000 increase in insurance
expenses and $40,000 increase in office expense.

Our general and administrative expenses for the nine months ended January 31,
2020 decreased by approximately $887,000, or 43.2% from the same period in 2019.
The decrease was primarily due to a decrease of approximately $716,000 in stock
based compensation to employees, $154,000 decrease in marketing expense, $7,000
decrease in office expense, $41,000 decrease in other tax expense, $33,000
decrease in meals and entertainment expenses, $19,000 decrease in travel
expense, $13,000 decrease in service and consulting fee, and $76,000 decrease in
miscellaneous expense, offset by $42,000 increase in salary and wage expenses
and $130,000 increase in repair and maintenance expenses.

Research and Development Expense



For the three months ended January 31, 2020, our research and development
expenses amounted to approximately $634,000, as compared to $318,000 for the
same period in 2019. For the nine months ended January 31, 2020, our research
and development expenses amounted to approximately $1,280,000, as compared to
$700,000 for the same period in 2019. The increase of $316,000 and $580,000 was
primarily due to the increase in spending for third party technical consulting
fees in the three and nine months ended January 31, 2020.

Other Income (Expenses)



For the three months ended January 31, 2020, other expense, net of other income,
amounted to approximately $222,000, an increase of $18,000 as compared to the
other expense, net of other income, which amounted to approximately $203,000 for
the three months ended January 31, 2019. The increase of other expenses was
primarily attributable to an increase of interest expense of $37,000, an
increase of other expense of $3,000, offset by an increase of grant income of
$18,000 and a decrease of interest expense- related party of $4,000.

For the nine months ended January 31, 2020, other expense, net of other income,
amounted to approximately $548,000, a decrease of $52,000 as compared to the
other expense, net of other income, which amounted to approximately $600,000 for
the nine months ended January 31, 2019. The decrease of other expenses was
primarily attributable to a decrease of interest expense of $42,000, a decrease
of interest expense- related party of $5,000, an increase of grant income of
$32,000, and offset by an increase in other expenses of $27,000.

Loss from Continuing Operations



As a result of the foregoing, our loss from continuing operations was
$1,182,000, or $(0.01) per share (basic and diluted), for the three months ended
January 31, 2020, as compared with loss from continuing operations of
$1,013,000, or $(0.01) per share (basic and diluted), for the three months ended
January 31, 2019, a change of $169,000, or 16.7%. Our loss from continuing
operations was $1,120,000, or $(0.01) per share (basic and diluted), for the
nine months ended January 31, 2020, as compared with loss from continuing
operations of 3,192,000, or $(0.02) per share (basic and diluted), for the nine
months ended January 31, 2019, a change of $2,072,000 or 64.9%.

Loss from Discontinued Operation



Our loss from discontinued operations amounted to $0 and $6,000 for the three
months ended January 31, 2020 and 2019, and $20,000 and $123,000 for the nine
months ended January 31, 2020 and 2019. In addition, the Company recorded a loss
from disposal of discontinued operations of approximately $233,000 at January
31, 2020. Our total loss from discontinued operations amounted to $0 or $0.00
per share (basic and diluted) for the three months ended January 31, 2020, as
compared with loss from discontinued operations of $6,000, or $(0.00) per share
(basic and diluted), at the same period in 2019, a change of $6,000 or 100%.
Our total loss from discontinued operations amounted to $253,000 or $0.00 per
share (basic and diluted) for the nine months ended January 31, 2020, as
compared with loss from discontinued operations of $123,000, or $(0.00) per
share (basic and diluted), at the same period in 2019, a change of $131,000 or
106.6%.
                                       24
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The summarized operating result of discontinued operations included in our consolidated statements of operations is as follows:



                                     Three Months Ended January 31,            Nine Months Ended January 31,
                                       2020                  2019               2020                  2019

Revenues                           $           -         $     719,322     $      733,441       $       2,031,396
Cost of revenues                               -               539,455            572,357               1,618,822
Gross profit                                   -               179,867            161,084                 412,574
Operating expenses                             -               186,448            172,142                 538,159
Other income (expenses), net                   -                   702             (8,958 )                 2,899
Loss before income taxes                       -                 5,879             20,016                 122,686
Income tax expense                             -                     -                  -                       -
Loss from discontinued
operations                                     -                 5,879             20,016                 122,686
Loss from disposal, net of taxes               -                     -                960                       -
Loss on sales of subsidiary                    -                     -            232,455                       -
Total loss from discontinued
operations                         $           -         $       5,879     $      253,431       $         122,686



Net Loss

Net loss in the three months ended January 31, 2020 was approximately
$1,182,000, compared to a net loss of $1,019,000 in the three months ended
January 31, 2019. Net loss in the nine months ended January 31, 2020 was
approximately $1,373,000, compared to a net loss of $3,314,000 in the nine
months ended January 31, 2019. The decrease loss was primarily due to higher
revenue with higher gross profit and a decrease in operating expenses and other
expenses in the nine months ended January 31, 2020.

Foreign Currency Translation Gain or (Loss)



The functional currency of our subsidiaries and variable interest entities
operating in the PRC is the Chinese Yuan or Renminbi ("RMB"). The financial
statements of our subsidiaries are translated to U.S. dollars using period end
rates of exchange for assets and liabilities, and average rates of exchange (for
the period) for revenues, costs, and expenses. Net gains and losses resulting
from foreign exchange translations are included in the Comprehensive income on
the consolidated statements of operations. As a result of foreign currency
translations, which are a non-cash adjustment, we reported a foreign currency
translation gain of $62,000 for the three months ended January 31, 2020, as
compared to a foreign currency translation gain of $261,000 for the three months
ended January 31, 2019. We also reported a foreign currency translation gain of
$225,000 for the nine months ended January 31, 2020, as compared to a foreign
currency translation loss of $528,000 for the nine months ended January 31,
2019.  This non-cash loss had the effect of increasing our reported
comprehensive loss.

                        LIQUIDITY AND CAPITAL RESOURCES

Liquidity is the ability of a company to generate sufficient cash to meet its operational cash requirements.



At January 31, 2020, we had working capital deficit of approximately $5,243,000,
including cash of approximately $157,000, as compared to working capital of
approximately $2,411,000, including cash of approximately $294,000 at April 30,
2019. The approximate $138,000 decrease in our cash at January 31, 2020 from
April 30, 2019 is primarily attributable to net cash used in financing
activities for repayment of related party's advances and net cash used in
investing activities for the purchase of property and equipment to improve our
productivity offset by net cash provided by operating activities from collection
of accounts receivables. The Company's cash balance and revenues generated are
not currently sufficient and cannot be projected to cover operating expenses for
the next twelve months from the date of this report. These factors raise doubt
as to the ability of the Company to continue as a going concern. Management's
plans include attempting to improve its business profitability, its ability to
generate sufficient cash flow from its operations to meet its operating needs on
a timely basis, obtain additional working capital funds through debt and equity
financings, and restructure on-going operations to eliminate inefficiencies to
raise cash balance in order to meet its anticipated cash requirements for the
next twelve months from the date of this report. Management intends to make
every effort to improve its current sales force so as to further develop and
expand the international markets for its new products as well as continuing with
the current sources of funds to meet working capital needs on as needed
basis. There can be no assurance that these plans and arrangements will be
successful.

Accounts receivable, net of allowance for doubtful accounts decreased by
approximately $1,537,000 during the nine months ended January 31, 2020, as a
result of the decrease in accounts receivable from the third parties as of
January 31, 2020. The days for sales outstanding in accounts receivable
decreased to 23 days as of January 31, 2020, as compared to 24 days as of April
30, 2019. The days for sales outstanding in accounts receivable for third party
sales decreased to 15 days as of January 31, 2020, as compared to 17 days as of
April 30, 2019. We will reevaluate and categorize accounts receivable for sales
and will target to improve our collection effort in accounts receivable for
related party sales and accounts receivable for third party sales in fiscal
2020.
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Inventories at January 31, 2020, net of reserve for obsolescence, totaled
approximately $12,815,000, as compared to $11,992,000 as of April 30, 2019. The
increase is primarily due to our increase in procurements of raw materials in
order to meet our anticipated higher sales volume during the next quarters in
the fiscal year ended April 30, 2020. The current inventory level will prepare
us for our anticipated upcoming increase in demands.

Our accounts payable and accrued expenses were approximately $7,847,000 at
January 31, 2020, an increase of approximately $167,000 from April 30, 2019. The
increase is primarily due to our increase in procurements of raw material as a
result of the raising sales of such materials during the nine months ended
January 31, 2020.

Loans payable at January 31, 2020 and April 30, 2019 totaled approximately
$12,431,000 and $15,926,000, respectively. These loans payable consisted of
short-term loans and long-term loans from multiple non-related individuals,
which bear annual interest rates of 4% - 10%. The maturity dates of the loans
payable at January 31, 2020 range from March 6, 2019 to March 8, 2021. During
the nine months ended January 31, 2020, the Company borrowed another new loan in
amount of approximately $429,000 and the loan amount of approximately $3,566,000
was assumed by the buyer of discontinued operation, Qufu Shengwang.

Due to related parties at January 31, 2020 and April 30, 2019 totaled
approximately $4,994,000 and $6,409,000, respectively. The decrease was
primarily due to our partial repayment to Pharmaceutical Corporation during the
nine months ended January 31, 2020. As of January 31, 2020, the balance we owed
Pharmaceutical Corporation, Qufu Shengwang Import and Export and Mr. Weidong
Chai, a management member of Qufu Shengren Pharmaceutical Co., Ltd., amounted to
$4,447,574, $357,891 and $188,159, respectively. On April 30, 2019, the balances
we owed to Pharmaceutical Corporation, Qufu Shengwang Import and Export and Mr.
Weidong Chai amounted to $5,669,776, $557,976 and $180,769, respectively.

Cash Flows Analysis

NET CASH FLOW PROVIDED BY (USED IN) OPERATING ACTIVITIES:



Net cash provided by operating activities from continuing operations was
approximately $1,246,000 (total net cash provided by operating activities of
$906,000 including net cash used in discontinued operations of $341,000) for the
nine months ended January 31, 2020, primarily due to a net loss of approximately
$1,120,000 adjusted by loss from discontinued operations of $253,000 and offset
by non-cash working capital that primarily included depreciation expense of
$902,000 and a loss on disposition of property and equipment of $49,000. The
increase in net cash from operating activities was also primarily due to a
decrease of approximately $1,558,000 in accounts receivable and note receivable
from a third party, a decrease of approximately $99,000 in prepaid expenses and
other current assets, an  increase in accounts payable and accrued expenses of
approximately $1,113,000, an increase of approximately $48,000 in taxes payable,
and offset by an increase of approximately $238,000 in accounts receivable -
related party and an increase of approximately $1,165,000 in inventories.

Net cash used in operating activities from continuing operation was
approximately $6,547,000 (total of $6,690,000 including net cash used in
discontinued operations of $143,000) during the nine months ended January 31,
2019,  primarily due to a net loss of approximately $3,192,000 adjusted by loss
from discontinued operations of $123,000 and offset by non-cash items such as
depreciation and amortization expenses of approximately $824,000, and stock
issued for employees' compensation of $716,000. The decrease in net cash from
operating activities was also primarily due to an increase of approximately
$1,326,000 in inventories, a decrease of approximately $1,275,000 in prepaid
expense and other current assets, a decrease of approximately $2,681,000 in
accounts payable and accrued expenses and a decrease of approximately $79,000 in
taxes payable, offset by a decrease of approximately $317,000 in accounts
receivable and notes receivable, and a $148,000 decrease in accounts
receivable-related party.

NET CASH FLOW USED IN INVESTING ACTIVITIES:



Net cash used in investing activities from continuing operations amounted to
$214,000 in investment activities, including the proceeds received from disposal
of discontinued subsidiary of approximately $1,145,000 and a proceed received
from disposal of equipment of $30,000, offset by approximately $1,389,000 in
purchases of property and equipment in the nine months ended January 31, 2020.

Net cash used in investing activities from continuing operations amounted to approximately $693,000 during the nine months ended January 31, 2019 due to capital expenditures for property and equipment. Net cash used in investing activities from discontinued operations amounted to $0 and $24,000 in nine months ended January 31, 2020 and 2019, respectively.


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NET CASH FLOW (USED IN) PROVIDED BY FINANCING ACTIVITIES:



Net cash used in financing activities from continuing operations amounted to
approximately $806,000 in the nine months ended January 31, 2020, primarily due
to the repayment of related party advances of approximately $6,215,000 and
offset by proceeds from short-term loan of $429,000 and advances received from
related parties of approximately $4,980,000. Net cash used in financing
activities from discontinued operations amounted to $0 in the nine months ended
January 31, 2020.

Net cash provided by financing activities from continuing operations amounted to
approximately $8,282,000 in the nine months ended January 31, 2019, primarily
consisted of proceeds from multiple non-related individual short-term and
long-term loans of $5,788,000 and advances received from related parties of
approximately $3,589,000, offset by repayment of short-term loans of $429,000
and repayment of related party advances of approximately $666,000. Net cash used
in financing activities from discontinued operations amounted to $1,899,000 in
the nine months ended January 31, 2019.

CASH ALLOCATION BY COUNTRIES



The functional currency of our Chinese subsidiaries is the Chinese RMB.
Substantially all of our cash is held in the form of RMB at financial
institutions located in the PRC, where there is no equivalent of federal deposit
insurance as in the United States. As a result, cash accounts at financial
institutions in the PRC are not insured. We have not experienced any losses in
such accounts as of January 31, 2020.

In 1996, the Chinese government introduced regulations which relaxed
restrictions on the conversion of the RMB; however, restrictions still remain,
including but not limited to restrictions on foreign invested entities. Foreign
invested entities may only buy, sell or remit foreign currencies after providing
valid commercial documents at only those banks authorized to conduct foreign
exchanges. Furthermore, the conversion of RMB for capital account items,
including direct investments and loans, is subject to PRC government approval.
Chinese entities are required to establish and maintain separate foreign
exchange accounts for capital account items. We cannot be certain Chinese
regulatory authorities will not impose more stringent restrictions on the
convertibility of the RMB, especially with respect to foreign exchange
transactions. Accordingly, cash on deposit in banks in the PRC is not readily
deployable by us for purposes outside of the PRC. Our cash position by
geographic area is as follow:

Country:                             January 31, 2020            April 30, 2019
United States                     $  83,551         53.4 %   $  88,506         30.1 %
China                                72,958         46.6 %     205,693         69.9 %
Total cash and cash equivalents   $ 156,509       100.00 %   $ 294,199

100.00 %

Off Balance Sheet Arrangements



Under SEC regulations, we are required to disclose our off-balance sheet
arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, such as changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources that are material to investors. An off-balance sheet
arrangement means a transaction, agreement or contractual arrangement to which
any entity that is not consolidated with us as a party, under which we have:

  -    Any obligation under certain guarantee contracts,
  -    Any retained or contingent interest in assets transferred to an
       unconsolidated entity or similar arrangement that serves as credit,
       liquidity or market risk support to that entity for such assets,

- Any obligation under a contract that would be accounted for as a derivative

instrument, except that it is both indexed to our stock and classified in

stockholder's equity in our statement of financial position, and

- Any obligation arising out of a material variable interest held by us in an

unconsolidated entity that provides financing, liquidity, market risk or

credit risk support to us, or engages in leasing, hedging or research and

development services with us.





We do not have any off-balance sheet arrangements that we are required to
disclose pursuant to these regulations. In the ordinary course of business, we
enter into operating lease commitments, purchase commitments and other
contractual obligations. These transactions are recognized in our financial
statements in accordance with accepted accounting principles generally accepted
in the U.S. ("U.S. GAAP").

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CRITICAL ACCOUNTING POLICIES



The preparation of financial statements in conformity with U.S. GAAP requires
estimates and assumptions that affect the reported amounts of assets and
liabilities, revenues and expenses, and related disclosures of contingent assets
and liabilities in the consolidated financial statements and accompanying notes.
The SEC has defined a company's critical accounting policies as the ones that
are most important to the portrayal of the company's financial condition and
results of operations, and which require the company to make its most difficult
and subjective judgments, often as a result of the need to make estimates of
matters that are inherently uncertain. Based on this definition, we have
identified the critical accounting policies and judgments addressed below. We
also have other key accounting policies, which involve the use of estimates,
judgments and assumptions that are significant to understanding our results,
which are described in Note 2 to our unaudited condensed consolidated financial
statements. Although we believe that our estimates, assumptions and judgments
are reasonable, they are based upon information presently available. Actual
results may differ significantly from these estimates under different
assumptions, judgments or conditions.

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