UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

 (Mark One)

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

For the quarterly period ended JulyJanuary 31, 20212022

or

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

For the transition period from __________ to ___________

Commission file number: 000-53595

SUNWIN STEVIA INTERNATIONAL, INC.

(Exact name of registrant as specified in charter)

(86) 537-4424999

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant has been submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided  pursuant  to Section 7(a)(2)(B) of the Securities Act.  ☐ 

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

Indicate the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date: As of September 14, 2021,April 22, 2022, there were 199,632,803 shares of the registrant's common stock issued and outstanding.

SUNWIN STEVIA INTERNATIONAL, INC. AND SUBSIDIARIES

FORM 10-Q

 QUARTERLY PERIOD ENDED JULYJANUARY 31, 20212022

INDEX

i

FORWARD LOOKING STATEMENTS

This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward-looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking statements. 

Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the headings "Risks Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our annual report on Form 10-K, in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-Q and information contained in other reports that we file with the SEC. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. 

We file reports with the SEC. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us. You can also read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. 

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

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INDEX OF CERTAIN DEFINED TERMS USED IN THIS REPORT

We are on a fiscal year ending April 30, as such the year ending April 30, 2022 is referred to as "fiscal 2022" and the year ended April 30, 2021 is referred to as "fiscal 2021".  Also, the three month period ended JulyJanuary 31, 20212022 is our firstthird quarter and is referred to as the "first"third quarter of fiscal 2022". Likewise, the three month period ended JulyJanuary 31, 20202021 is referred to as the "first"third quarter of fiscal 2021".

 The information which appears on our website at www.sunwininternational.com is not part of this report.

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ITEM I - FINANCIAL STATEMENTS

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SUNWIN STEVIA INTERNATIONAL, INC. AND SUBSIDIARIES

 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JULYJANUARY 31, 20212022

NOTE 1 - ORGANIZATION AND OPERATIONS

DESCRIPTION OF BUSINESS

Sunwin Stevia International, Inc. ("Sunwin Stevia International"), a Nevada corporation, and its subsidiaries are referred to in this report as "we", "us", "our", "Sunwin" or the "Company".

We sell stevioside, a natural sweetener, and other pharmaceutical productions, such as Metformin. Substantially all of our operations are located in the People's Republic of China (the "PRC"). We have built an integrated company with the sourcing and production capabilities designed to meet the needs of our customers. Our operations are organized into two operating segments related to our product lines:

For the threenine months ended JulyJanuary 31, 20212022 and fiscal year 2022, our subsidiaries included in continuing operations and discontinued operations consisted of the following:

-   Sunwin Stevia International;

-   Qufu Natural Green Engineering Co., Ltd. ("Qufu Natural Green"), wholly owned by Sunwin Stevia International;

-   Qufu Shengren Pharmaceutical Co., Ltd. ("Qufu Shengren"), 61% owned by Qufu Natural;

-   Qufu Shengwang Stevia Biology and Science Co., Ltd. ("Qufu Shengwang"), wholly owned by Qufu Natural Green;

-   Sunwin USA, LLC ("Sunwin USA"), wholly owned by Sunwin Stevia International; and

-  Qufu Shengren Import and Export Co., Ltd. (“Qufu Shengren Import and Export”), wholly owned subsidiary of Qufu Shengren.

Qufu Shengren

In fiscal 2009, Qufu Natural Green acquired Qufu Shengren for $3,097,242. The purchase price was equal to the value of the assets of Qufu Shengren as determined by an independent asset appraisal in accordance with asset appraisal principles in the PRC. Prior to being acquired by us, Qufu Shengren was engaged in the production and distribution of bulk drugs and pharmaceuticals.  Subsequent to the acquisition, Qufu Shengren produces and distributes steviosides with a full range of grades from rebaudioside-A 10 to 99.

Since fiscal 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. On July 10, 2019, the Company entered into the Metformin Production Line Operation Management Agreement with an unaffiliated individual to operate the Metformin production line (see Note 7)9).

Qufu Shengren Import and Export

On October 9, 2019, Qufu Shengren invested RMB2,000,000 (approximately $288,000) 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 operations in this subsidiary in the near future.

Sunwin USA

In fiscal year 2009, we entered into a distribution agreement with WILD Flavors to assist our 55% owned subsidiary, Sunwin USA, in the marketing and worldwide distribution of our stevioside-based sweetener products and issued WILD Flavors a 45% interest in Sunwin USA.  In August 2012, the Company entered into an Exchange Agreement with WILD Flavors pursuant to which it purchased its 45% membership interest in Sunwin USA for an aggregate consideration of $1,625,874, which includes the issuance of 7,666,666 shares of our common stock valued at $1,533,333 and a cash payment of $92,541. The purchase included the product development and supply chain for OnlySweet.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements include the accounts of Sunwin and all our wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim financial reporting. The accompanying unaudited condensed consolidated financial statements for the interim periods presented are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the periods presented. Certain financial statement amounts relating to prior periods have been reclassified to conform to the current period presentation. All intercompany accounts and transactions have been eliminated in consolidation.

These unaudited condensed consolidated interim financial statements should be read in conjunction with the financial statements and footnotes for the year ended April 30, 2021 included in our Form 10-K as filed with the SEC. The results of operations and cash flows for the threenine months ended JulyJanuary 31, 20212022 are not necessarily indicative of the results of operations or cash flows which may be reported for future periods or the full fiscal year.

The condensed consolidated balance sheet as of April 30, 2021 contained herein has been derived from the audited consolidated financial statements as of April 30, 2021, but do not include all disclosures required by the U.S. GAAP.

Our unaudited condensed consolidated financial statements include the accounts of Sunwin and all our wholly-owned subsidiaries included in continuing operations and discontinued operations. All intercompany accounts and transactions have been eliminated in consolidation. Qufu Shengwang is the subsidiary with discontinued operations and ourOur subsidiaries for continuing operations include the following:

-     Qufu Natural Green;

-     Qufu Shengren;

-     Sunwin USA; and

-     Qufu Shengren Import and Export

USE OF ESTIMATES

The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the allowance for doubtful accounts, the allowance for obsolete inventory, the useful life of property and equipment and intangible assets, assumptions used in assessing impairment of long-term assets and valuation of deferred tax assets, and the value of stock-based compensation.  Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

We consider all highly liquid investments with maturities of three months or less at the time of purchase to be cash and equivalents. As of JulyJanuary 31, 2021,2022, we held $489,079$1,045,774 of our cash and cash equivalents with commercial banking institutions in the PRC, and $181,353$97,271 with banks in the United States. As of April 30, 2021, we held $1,403,969 of our cash and cash equivalents with commercial banking institutioninstitutions in PRC, and $161,860 in the United States. PRC banks protect consumers against loss if their bank or thrift institution fails, and each of our PRC bank account is insured up to RMB500,000 (approximately $77,000), As a result, cash held in PRC financial institutions of $256,746 and $1,224,263 is not insured as of July 31, 2021 and April 30, 2021, respectively. We have not experienced any losses in such bank accounts through July 31, 2021.

ACCOUNTS RECEIVABLE

Accounts receivable and other receivable are reported at net realizable value. We have established an allowance for doubtful accounts based upon factors pertaining to the credit risk of specific customers, historical trends, and other information. Delinquent accounts are written off when it is determined that the amounts are uncollectible after exhaustive efforts on collection. We had none ofno allowance for doubtful accounts as of JulyJanuary 31, 20212022 and April 30, 2021.

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INVENTORIES

Inventories, consisting of raw materials, work in process, and finished goods related to our products, are stated at the lower of cost or estimated net realizable value that can be estimated utilizing the weighted moving average method. A reserve is established when management determines that certain slow-moving inventories may be sold at below book value. These reserves are recorded based on estimates.  As of JulyJanuary 31, 2021,2022, the Company did not record a reserve for slow-moving inventories. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record a write down of inventories for the difference between the lower of cost or estimated net realizable value. As of JulyJanuary 31, 20212022 and April 30, 2021, the Company wrote down inventories of $187,704$854,866 and $1,276,893, respectively. 

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation and amortization are provided using the straight line method over the estimated economic lives of the assets, which range from two to thirty years. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. In accordance with paragraph 360-10-35-17 of the Financial Accounting Standards Board (FASB) Accounting Standards Codification ("ASC"), we examine the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.

The residual value rate and useful life of property and equipment are summarized as follows:

Included in property and equipment is construction-in-progress which consisted of factory improvements and machinery pending installation and included the costs of construction, machinery and equipment, and or any interest charges arising from borrowings used to finance these assets during the period of construction or installation of the assets if applicable. No provision for depreciation is made on construction-in-progress until such time as the relevant assets are completed and ready for their intended use.

LONG-LIVED ASSETS

In accordance with ASC 360, we review and evaluate our long-lived assets, including property and equipment intangible assets, and land use rights, for impairment or when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets, including goodwill, if any. An impairment loss is measured and recorded based on discounted estimated future cash flows. In estimating future cash flows, assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of future cash flows from other asset groups. Our estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates. Based on our evaluation, we have determined certain long-lived assets that are no longer useful for our operations, and we recorded a loss on disposition of property and equipment of $394,967$388,228 and $nil on JulyJanuary 31, 20212022 and April 30, 2021, respectively.

LAND USE RIGHTS

According to the law of PRC, the government owns all the land in the PRC. Companies or individuals are authorized to possess and use the land only through land use rights granted by the Chinese government for a specified period of time. Land use rights are being amortized using the straight-line method over the periods the rights are granted.

FAIR VALUE OF FINANCIAL INSTRUMENTS

We adopted ASC Section 820-10-35-37 to measure the fair value of our financial instruments. ASC Section 820-10-35-37 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. The adoption of ASC Section 820-10-35-37 did not have an impact on our financial position or operating results, but did expand certain disclosures.

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ASC Section 820-10-35-37 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC Section 820-10-35-37 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

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The carrying amounts of our financial assets and liabilities, such as cash, accounts receivable, notes receivable, prepayments and other current assets, accounts payable, taxes payable and accrued expenses, approximate their fair values because of the short maturity of these instruments.  

TAXES PAYABLE

We are required to charge for and to collect value added taxes (VAT) on our sales on behalf of the PRC tax authority. We record VAT that we billed our customers as VAT payable. In addition, we are required to pay value added taxes on our primary purchases. We record VAT that is charged by our vendors as VAT receivable. We are required to file VAT return on a monthly basis with the PRC tax authority, in which we are entitled to claim the VAT that we are charged by vendors as VAT credit and these credits can be applied to our VAT payable that we billed our customers. Accordingly, these VAT payable and receivable are presented as net amounts for financial statement purposes. Taxes payable as of JulyJanuary 31, 20212022 and April 30, 2021 amounted to $330,318$785,020 and $330,738, respectively, consisted primarily of VAT taxes.

REVENUE RECOGNITION

Pursuant to the guidance of ASC 606, we record revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The adoption of this guidance did not have a material impact on our unaudited condensed consolidated financial statements. 

In accordance with ASC 606, we recognize revenues from the sale of stevia and other productions upon shipment and transfer of title based on the trade terms. All product sales with customer specific acceptance provisions are recognized upon customer acceptance and the delivery of the products. We report revenues net of applicable sales taxes and related surcharges. The Company determines revenue recognition through the following steps:

The Company is also a lessor, which is an entity that is leaseleases underlying assetassets to thea third party, The Company’s lease revenue is recognized under ASC Topic 842, Leases, (“ASC 842”), which was adopted on May 1, 2019. In general, the Company commences rental revenue recognition when the tenant takes possession of the leased space and the leased space is substantially ready for its intended use. The Company’s lease has been accounted for asan operating lease. Rental revenue is recognized on a straight-line basis over the terms of the lease of five years. Actual amounts billed in accordance with the lease during any given period may have been higher or lower than the amount of rental revenue recognized for the period. The difference by which straight-line rental revenue exceeded rents billed in accordance with lease agreements is recorded as “accounts receivable”. The difference by which rents billed in accordance with lease agreements exceeded straight-line rental revenue is recorded as “advances from customer”. The Company does not offset lease income and lease expense.

RELATED PARTY TRANSACTIONS

A related party is generally defined as (i) any person and or their immediate family holding 10% or more of the company’s securities (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary course of business. Related parties may be individuals or corporate entities.

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Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to their related party nature.

RECLASSIFICATION

Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on the net earnings and financial position.

GRANT INCOME

Grants received from PRC government agencies are recognized as deferred grant income and recognized in the unaudited condensed consolidated statements of operations and comprehensive loss as and when they are earned for the specific research and development projects for which these grants are designated for.

INCOME TAXES

The Company has adopted Accounting Standards Codification subtopic 740-10, Income Taxes ("ASC 740-10") which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns.  Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  Valuation allowances are recorded to reduce the deferred tax assets to an amount that it is more likely than not be realized.

We file federal and state income tax returns in the United States for our corporate operations pursuant to the U.S. Internal Revenue Code of 1986, as amended, and file separate foreign tax returns for our Chinese subsidiaries pursuant to the China's Unified Corporate Income Tax Law.

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We apply the provisions of ASC 740-10-50, "Accounting for Uncertainty in Income Taxes", which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our consolidated financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company's liability for income taxes. Any such adjustment could be material to the Company's results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of JulyJanuary 31, 2021,2022, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.

BASIC AND DILUTED EARNINGS PER SHARE

Pursuant to ASC Section 260-10-45, basic loss per common share is computed by dividing loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of ours, subject to anti-dilution limitations. The following table presents a reconciliation of basic and diluted net incomeloss per common share:

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FOREIGN CURRENCY TRANSLATION

Transactions and balances originally denominated in U.S. dollars are presented at their original amounts. Transactions and balances in other currencies are converted into U.S. dollars in accordance with ASC Section 830-20-35 and are included in determining net income or loss.

The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company's operating subsidiaries is the Chinese Renminbi ("RMB").  In accordance with ASC 830-20-35, the consolidated financial statements were translated into United States dollars using balance sheet date rates of exchange for assets and liabilities, and average rates of exchange for the period for the income statements and cash flows. Equity accounts were stated at their historical rate. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements of operations.  Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in other comprehensive income or loss.

RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People's Bank of China (the "PBOC") or other institutions authorized to buy and sell foreign exchange. The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand. Translation of amounts from RMB into United States dollars ("$") was made at the following exchange rates for the respective periods:

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COMPREHENSIVE LOSS

   Comprehensive loss is comprised of net loss and all changes to the statements of stockholders' equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive loss for the three and nine months ended JulyJanuary 31, 20212022 and 20202021 included net loss and unrealized gains from foreign currency translation adjustments. 

RESEARCH AND DEVELOPMENT

Research and development costs are expensed as incurred and are included in general and administrative expenses in the accompanying statements of operations. Research and development costs are incurred on a project specific basis. Research and development costs were $355,713$840,814 and $361,438$541,733 for the three months ended JulyJanuary 31, 2022 and 2021, and 2020,$1,988,894 and $974,300 for the nine months ended January 31, 2022 and 2021, respectively.

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SHIPPING COSTS

Shipping costs are included in selling expenses and totaled $20,161$27,286 and $16,516$28,135 for the three months ended JulyJanuary 31, 2022 and 2021, and 2020,$77,374 and $64,113 for the nine months ended January 31, 2022 and 2021, respectively.

ADVERTISING

Advertising is expensed as incurred and is included in selling expenses and totaled $0 and $14,433the Company has no expense on advertising for the three and nine months ended JulyJanuary 31, 20212022, but the Company recorded $nil and 2020,$51,081 for the three and nine months ended January 31, 2021, respectively.

SEGMENT REPORTING

The Company uses the "management approach" in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company's chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company's reportable segments. The Company's chief operating decision maker has been identified as the chief executive officer of the Company who reviews financial information of separate operating segments based on U.S. GAAP. The chief operating decision maker now reviews results analyzed by customer. This analysis is only presented at the revenue level with no allocation of direct or indirect costs. Consequently, the Company has determined that it has only one operating segment.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2019, the FASB issued ASU 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU provides an exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. This update also (1) requires an entity to recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (2) requires an entity to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which goodwill was originally recognized for accounting purposes and when it should be considered a separate transaction, and (3) requires that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The standard is effective for the Company for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019, excluding entities eligible to be smaller reporting company. For all other entities, the requirements are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASU 2016-13 has been amended by ASU 2019-04, ASU 2019-05, and ASU 2019-11. For entities that have not yet adopted ASU No. 2016-13, the effective dates and transition methodology for ASU 2019-04, ASU 2019-05, and ASU 2019-11 are the same as the effective dates and transition methodology in ASU 2016-13. The Company did not adopt this standard yet due to the status of smaller reporting company. We plan to adopt this standard for the year beginning May 1, 2023. We do not expect the adoption of this standard will have material impact on our consolidated financial statements.

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A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, we have not determined whether implementation of such proposed standards would be material to our consolidated financial statements.

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GOING CONCERN

Our unaudited condensed consolidated financial statements have been prepared assuming we will continue as a going concern.  The Company has incurred recurring losses with a net loss of approximately $750,000$1,560,000 and $4,203,000 for the three and nine months ended JulyJanuary 31, 20212022 and has a significant accumulated deficit of $43.8$45.9 million as of JulyJanuary 31, 2021.2022. 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 identify and develop sources of funds.  The outcome of these matters cannot be predicted at this time.  There can be no assurance that any additional financings will be available to the Company on satisfactory terms and conditions, if at all.

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.

NOTE 3 - NONCONTROLLING INTEREST

Noncontrolling interest on the consolidated balance sheets resulted from the consolidation of Shengren, a 61.3% owned subsidiary starting from April 30, 2021. An individual investor and Shandong Yulong Mining Group Co., Ltd. (“Yulong”) hold 38.4% and 0.3% of the equity interest in Shengren effective at the end of date, April 30, 2021, respectively, pursuant to a series of debt transfer and conversion agreements entered into on April 30, 2020 between seven individual creditors and three suppliers, an individual investor with Yulong and Qufu Shengren. Noncontrolling interest amounted to a deficit of $1,925,988$3,214,871 and $1,639,756 as of JulyJanuary 31, 20212022 and April 30, 2021.

NOTE 4 - INVENTORIES

As of JulyJanuary 31, 20212022 and April 30, 2021, inventories consisted of the following:

In the three months ended JulyJanuary 31, 20212022 and 2020,2021, the Company wrote down the obsolete inventories of $187,704$389,065 and $nil,$664,772, respectively. In the nine months ended January 31, 2022 and 2021, the Company wrote down the obsolete inventories of $854,866 and $664,772, respectively.

NOTE 5 - PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets as of JulyJanuary 31, 20212022 and April 30, 2021 totaled $2,089,381$5,310,661 and $661,882, respectively. As of JulyJanuary 31, 2021,2022, prepaid expenses and other current assets includes $1,804,579$4,722,834 prepayments to suppliers for merchandise that had not been shipped to us and services that had not been provided to us, and $284,802$577,027 for business related employees' advances. As of April 30, 2021, prepaid expenses and other current assets includes $435,006 prepayments to suppliers for merchandise that had not been shipped to us and services that had not been provided to us and $226,876 for business related employees' advances.

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NOTE 6 - PROPERTY AND EQUIPMENT

As of JulyJanuary 31, 20212022 and April 30, 2021, property and equipment consisted of the following:

For the three months ended JulyJanuary 31, 20212022 and 2020,2021, depreciation expense totaled $368,436$368,663 and $304,440,$349,535, of which $313,733$317,272 and $282,725$301,655 were included in cost of revenues, respectively, and remainder was included in operating expenses. For the nine months ended January 31, 2022 and 2021, depreciation expense totaled $1,073,856 and $976,095, of which $916,444 and $882,668 were included in cost of revenues, respectively, and remainder was included in operating expenses. Depreciation is not taken during the period of construction or equipment installation. Upon completion of the installation of manufacturing equipment or any construction in progress, construction in progress balances will be classified to their respective property and equipment category.

NOTE 7 – LAND USE RIGHTS

The Company acquired the land use rights for Qufu Shengren factory in cash. Qufu Shengren owns and operates a stevia facility with an annual production capable of 500 metric tons per year on 44,486 square meters (478,843 square feet) of land located in Qufu city, Shandong. The Company occupies this land pursuant to an asset acquisition agreement entered into with Shangdong Shengwang Pharmaceutical Corporation, a related party,Co., Ltd. ("Pharmaceutical Corporation") to acquire the land use rights for this facility. The land use right was transferred from Pharmaceutical Corporation to Qufu Shengren, and the Company received Real Property Certificate issued by local government on May 18, 2021. The land use right expires in March 2054. The initial cost of this land use rights is RMB13,256,420 (approximately $2,052,000). We use the straight-line method for amortization over a period 33 years. During the first quarter of fiscalthree and nine months ended January 31, 2022, amortization expense amounted to $15,825.$16,004 and $47,634. Land use right with net book value of $2,035,819$2,035,922 as of JulyJanuary 31, 2021.2022.  

NOTE 8 - RELATED PARTY TRANSACTIONS

Accounts receivable - related party and revenue - related party

As of JulyJanuary 31, 20212022 and April 30, 2021, $6,954,986$nil and $5,999,791 in accounts receivable - related party, respectively, were related to sales of products to Qufu Shengwang Import and Export Co., Ltd. ("Qufu Shengwang Import and Export"), a Chinese entity owned by our Chairman, Mr. Laiwang Zhang.Export. For the three and nine months ended JulyJanuary 31, 20212022 we did not have revenue and 2020,cost of revenue from related party, but we recorded revenue - related party and cost of revenue – related party of $2,386,628and $151,823,$2,756,224 and $2,617,569$3,431,319, and $1,609,508,$5,010,742 and $5,587,081, the three and nine months ended January 31, 2021, respectively, from Qufu Shengwang Import and Export.

Due to (from) related parties

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The Company mainly finances its operations through proceeds borrowed from related parties. As of January 31, 2022 and April 30, 2021, due to related parties consisted the following:

From time to time, we receive advances from related parties and advance funds to related parties for working capital purposes. In the threenine months ended JulyJanuary 31, 2022, the Company borrowed multiple one-year loans in aggregated amount of RMB9,820,000 (approximately $1,529,000) from Jianjun Yan, bearing an annual interest rate of 12%. The Company also borrowed two loans in amount of RMB10,717,600 (approximately $1,685,000) and RMB5,217,000 (approximately $812,000), respectively, bearing an annual interest rate of 10% and 4% from Jianjun Yan in the past years. On October 7, 2021 and 2020, we received advances from related partiesApril 1, 2021, these loans were extended for working capital that totaled $5,265,725another one year, respectively, under the same terms and $3,055,118, respectively,conditions and wereclassified unpaid interest payable to the principal of these loans. The company repaid to related partiesJianjun Yan in a total amount of $3,476,199 and $5,268,237, respectively.

In the three months ended July 31, 2021 and 2020, interest expense related to due to related parties amounted to $5,254 and $16,807, respectively, which were included in interest expenseRMB2,750,000 (approximately $428,000) for part of his loans in the accompanying condensed consolidated statementsthird quarter of operations and comprehensive loss, and in connection with the advances of RMB5,000,000 (approximately $774,000) from Shangdong Shengwang Pharmaceutical Co., Ltd. ("Pharmaceutical Corporation"), a Chinese entity owned by our Chairman, Mr. Laiwang Zhang. This advance bears interest at the rate of 7.0% per annum. On July 27, 2020, we repaid in full amount of the above advance of RMB5,000,000 with accrued interest.fiscal 2022.

On September 23, 2019, the Company borrowed a one-year loan of RMB1,221,000 (approximately $189,000)$192,000) from Weidong Cai, a management member of Qufu Shengren, bearing an annual interest rate of 10%. On September 23, 2021 and 2020, the parties extended the loan for another year, under the same terms and conditions, reclassified unpaid interest payable to the principal of this loan, resulting in an increase of principal from RMB1,221,000 (approximately $189,000)$192,000) to RMB1,343,100RMB1,477,410 (approximately $208,000)$232,000).

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As of JulyFor the three and nine months ended January 31, 2022 and 2021, the balance we owed Pharmaceutical Corporation, Qufu Shengwang Import and Export and Mr. Weidong Chaiinterest expense – related parties related to short-term loans amounted to $4,724,432, $6,686,795$101,176 and $230,118,$5,391, and $255,767 and $27,065, respectively. On April 30, 2021, the balance we owed to Pharmaceutical Corporation, Qufu Shengwang Import and Export and Mr. Weidong Chai amounted to $3,484,266, $6,140,404, and $218,966, respectively.

As of July 31, 2021 and April 30, 2021, balance due to (from) related party activities consisted of the following: 

NOTE 9 - OPERATING LEASE

On July 10, 2019, we entered into the Metformin Production Line Operation Management Agreement (the “Agreement”) with Ru Yuan, an unaffiliated individual, to contract out the Metformin production line which was built by the Company. Under the terms of this agreement, Ru Yuan's (“lessee”) lease includes the fixed assets of Metformin production line including buildings, manufacturing equipment and construction in process. The lessee will pay to Qufu Shengren an annual contract fee of RMB3,000,000 (approximately $436,000) in July every year. On August 1, 2019, the Company (“lessor”) signed an addendum for Agreement with lessee to clarify the term of lease for five years, with conditional renewal options and the Company has the right to monitor operating and provide maintenance service for the underlying assets of the Metformin production line. The Company also has the right to terminate the Agreement if lessee fails to make payment timely. Under our analysis with the new lease standard, this lease agreement is classified as a cancellable operating lease. The Company received two year release payment in a total amount of RMB6,000,000RMB9,000,000 in the past three years and the lease deposit of RMB1,000,000 as guarantee.guarantee as of January 31, 2022. The Company recorded a revenuerevenues of $106,782$107,991 and $97,392$104,866 from this operating lease forin the first quarter of fiscalthree months ended January 31, 2022 and 2021, respectively.and the Company recorded revenues of $321,420 and $303,067 from this operating lease in the nine months ended January 31, 2022 and 2021.

NOTE 10 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses included the following as of JulyJanuary 31, 20212022 and April 30, 2021:

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* Advanced from third parties for working capital, bearing interest free and due on demands.

** As of on JulyJanuary 31, 2021,2022, other payables consists of general liability, worker's compensation, and medical insurance payable of $396,419,$440,679, consulting fee payable of $257,359,$213,368, union and education fees payable of $137,239,$139,407, interest payables for short-term loans of $214,443,$90,238, safety production fund payable of $307,980,$642,660, advances from the employees of $209,928,$229,207, security deposit for sub-contractor of $154,763$157,208, and other miscellaneous payables of $926,738.$5,626. As of April 30, 2021, other payables consists of general liability, worker's compensation, and medical insurance payable of $412,328, consulting and service fee payable of $209,871, union and education fees payable of $137,123, interest payables for short-term loans of $147,433, safety production fund payable of $262,449, advances from the employees of $159,909, deposit for operating lease of $154,631 and other miscellaneous payables of $872,318.

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NOTE 11 -LOAN PAYABLE

Short-term loan payable

Short-term loans are obtained from various individual lenders that are due within one year for working capital purpose. These loans are unsecured and can be renewed with 10 days or one month advance notice prior to maturity date. As of JulyJanuary 31, 20212022 and April 30, 2021, short-term loans consisted of the following:

For the three and nine months ended JulyJanuary 31, 20212022 and 2020,2021, interest expense related to short-term loans amounted to $67,069$43,230 and $62,531,$56,506, and $81,386 and $166,450, respectively, which were included in interest expense in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.

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NOTE 12 - SEGMENT INFORMATION

The following information is presented in accordance with ASC Topic 280, "Segment Reporting", for the three and nine months ended JulyJanuary 31, 20212022 and 2020;2021; we accounted for two reportable business segments - (1) natural sweetener (stevioside), and (2) corporate and other pharmaceutical. Our reportable segments are strategic business units that offer different products and are managed separately based on the fundamental differences in their operations. Condensed financial information with respect to these reportable business segments for the three and nine months ended JulyJanuary 31, 20212022 and 20202021 is as follows: 

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NOTE 13 - CONCENTRATIONS AND CREDIT RISK

(i)    Customer Concentrations

For the three and nine months ended JulyJanuary 31, 20212022 and 2020,2021, customers accounting for 10% or more of the Company's revenue were as follows:

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(1)    Qufu Shengwang Import and Export Co., Ltd is a related party. party in fiscal 2021.

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Less than 10%.

(ii)    Vendor Concentrations

For the three and nine months ended JulyJanuary 31, 20212022 and 2020,2021, suppliers accounting for 10% or more of the Company's purchase were as follows:

-     Less than 10%.

(iii)    Credit Risk

Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and trade accounts receivable. We place our cash with high credit quality financial institutions in the United States and the PRC. As of JulyJanuary 31, 20212022 and April 30, 2021, we had $820,149$1,045,774 and $1,054,090$1,403,969 of cash balance held in PRC banks, respectively. PRC banks protect consumers against loss if their bank or thrift institution fails, and each of our PRC bank account is insured up to RMB500,000 (approximately $71,000). As a result, cash held in PRC financial institutions of $721,996$853,057 and $946,274$1,224,263 are not insured as of JulyJanuary 31, 20212022 and April 30, 2021. We have not experienced any losses in such accounts through JulyJanuary 31, 2021.2022. Our cash position by geographic area was as follows: 

Almost all of our sales are credit sales which are primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas; however, we believe that the concentration of credit risk with respect to trade accounts receivable is limited due to generally short payment terms. We also perform ongoing credit evaluations of our customers to help further reduce potential credit risk.

NOTE 14 - SUBSEQUENT EVENTS

September 7, 2021, Mr. Laiwang ZhangThe Company has evaluated subsequent events through the date the financial statements were issued and Ms. Dongdong Lin resigned their position as Directors of the Company due to health and personal reasons. Mr. Zhang's and Ms. Lin’s resignation is not due to any disagreementfiled with the CompanySecurities and Exchange Commission. Based on any matter relatedour evaluation, no other event has occurred requiring adjustment or disclosure in the notes to operations, policies, or practices. After careful consideration and discussion with the Company’s management, the Board of Directors appoints Mr. Jianjun Yan, effective September 7, 2021, and Mr. Yuyi Liu Lai as a Director of the Company, Mr. Yan’s and Mr. Liu’s responsibility and compensation shall be reasonable and in accordance with their employment agreement.consolidated financial statements.

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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the information contained in the preceding unaudited condensed consolidated financial statements and footnotes and our 2021 Annual Report on Form 10-K for fiscal year ended April 30, 2021.

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:

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 DevelopmentsThe COVID-19 Pandemic

Consequently, the COVID-19 pandemic may adversely affect the Company’s business operations, financial condition and operating results for 2021, and 2022, including but not limited to material negative impact to the Company’s total revenues, production capability, ability to conduct marketing and sales, and slower collection of accounts receivables. We are able to maintain certain income from previous existing orders and finished products, however, we believe the effect of the COVID-19 pandemic will be most significant in our raw material purchasing and our sales. Due to the effect of the global COVID-19 pandemic, we expect the sourcing and availability of stevia raw material will have increased difficulties and costs for fiscal 2022.

We are monitoringexperienced difficulty in the delivery of our products, the ability to ship through ground transportation was very limited, if any, across provinces in China and in air shipments internationally was also very limited, if any, this caused us to be unable to timely deliver our products even if sales were made. In 2020 and 2021, China slowly resumed normal, however, as the global outbreaksituation worsen, many of our international clients are pausing their operations and spreadno longer making new orders. We expect this low demand and difficulty in transportation situation to remain in fiscal 2022. 

Reduction of COVID-19Carbon Emission

China issued plans to reduce the carbon intensity of its economy 60%-65% per unit of GDP by 2030, compared with 2005 levels. In order to reach this goal by 2030, China will need to strengthen regulations already in place, introduce and taking stepsstrictly enforce laws and penalties, and hasten sweeping changes to how it produces and consumes energy, goods and raw materials. China will take additional action to reduce waste, promote renewables and unconventional fuel, and reform its electricity network as part of its plan to significantly reduce carbon emissions before 2030.

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In the past two months, we had been asked to lower capacity and cut production in an efforthalf due to identifygovernment’s carbon emission reduction requirements. Also, we will be facing government’s guidelines regarding air pollution in the overall attempt to create a better environment for the Beijing Winter Olympic Game in addition to the carbon emission reduction requirements for the coming years. Those are all unpredictable facts that will significantly impair our ability to maintain optimal production and mitigatewill negatively impact our overall ability to generate revenue.

Recent Developments

On September 7, 2021, Mr. Laiwang Zhang and Ms. Dongdong Lin resigned their position as Directors of the adverse impactsCompany due to health and personal reasons. After careful consideration and discussion with the Company’s management, the Board of Directors appoints Mr. Jianjun Yan, effective September 7, 2021, and Mr. Yuyi Liu, effective September 7, 2021 as a Director of the Company, Mr. Yan’s and Mr. Liu’s responsibility and compensation shall be reasonable and in accordance with their employment agreements.

On September 30, 2021, Ms. Dongdong Lin resigned her position as Chief Executive Officer (“CEO”) of the Company due to personal reasons. On September 30, 2021, the Company appointed Mr. Jianjun Yan as CEO of the Company and as General Manager of Qufu Natural Green Engineering Co., Ltd (“Qufu Natural Green”), a wholly owned subsidiary of the Company.

On March 11, 2022, Mr. Yuqiang Lai resigned his position as Director of the Company due to personal reasons. As of the same date, Mr. Jianjun Yan resigned as Director and CEO of the Company due to personal reasons.

The resignations of Mr. Zhang, Ms. Lin, Mr. Lai and Mr. Yan are not due to any disagreement with the Company on any matter related to operations, policies, or practices.  

On March 11, 2022, the Company appointed Mr. Chunchun Wang as a Director and risksCEO of the Company. Mr. Wang has been working in the pharmaceutical industry since his graduation from Qufu Yuandong Professional Technical College in 2005 and has been working with the Company since March 2006 in various positions in our technology and web-based sales departments and is currently serving as the General Manager of web-based operations. We believe Mr. Wang’s expertise and experience in the industry as well as his experience with us will be greatly beneficial to the future growth of the Company. Mr. Wang is not a party of any related party transactions with the Company.

On March 11, 2022, the Company appointed Ms. Fanjun Wu as a Director of the Company. Ms. Wu has been our Chief Financial Officer since April 30, 2004. Since 1997, she has been employed by Qufu Natural Green, serving as Director of Finance from 1997 to 1998 and thereafter as Chief Financial Officer. From 1992 to 1996, Ms. Wu was a Director of Finance for our subsidiary Shengya Veterinary Medicine, which was owned by Shandong Group prior to our business posed by its spreadacquisition in 2004. Ms. Wu graduated from Qufu Industrial College in 1995 with a Bachelor's Degree in Accounting. We believe Ms. Wu’s expertise and the governmental and community reactions thereto. We continue to assess and update our business continuity plansexperience in the context of this pandemic, including taking steps in an effort to help keep our workforces healthy and safe. We are also workingindustry as well as her experience with our suppliers to understand the existing and future negative impacts, and to take actions in an effort to mitigate such impacts. Dueus will be greatly beneficial to the speedfuture growth of the Company. Ms. Wu is not a party of any related party transactions with which the COVID-19 pandemic is developing, the global breadth of its spread and the range of governmental and community reactions thereto, there is uncertainty around its duration and ultimate impact; therefore, any negative impact on our overall financial and operating results (including without limitation our liquidity) cannot be reasonably estimated at this time, but the pandemic could lead to extended disruption of economic activity and the impact on our financial and operating results.

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Company.

OUR PERFORMANCE

 Our revenues totaled approximately $6,268,000$10,998,000 during the three months ended JulyJanuary 31, 2021, a decrease2022, an increase of 11.0%57.4%, as compared with the same period in 2020,2021, and our gross margin increased to 14.1%7.1% from 2.4%(4.5)%. Our total operating expenses in the three months ended JulyJanuary 31, 2021 decreased2022 increased by approximately $6,000,$716,000, or 0.6%49.0% compared to the same period in 20202021 primarily due to a decreasean increase of approximately $59,000,$147,000, or 12.4%30.6% in selling expense, an increase of approximately $270,000, or 61.3% in general and administrative expense and a decreasean increase of approximately $6,000,$299,000, or 1.6%55.2% in research and development expenses, offset by an increase of approximately $58,000, or 18.6% in selling expense.expenses. Our net loss for the three months ended JulyJanuary 31, 20212022 was approximately $750,000,$1,560,000, compared to a net loss $1,056,000$1,761,000 in the same period in fiscal 2021.

Our revenues totaled approximately $27,375,000 during the nine months ended January 31, 2022, an increase of 48.3%, as compared with the same period in 2021, and our gross margin increased to 5.8% from (1.4)%. Our total operating expenses in the nine months ended January 31, 2022 increased by approximately $1,909,000, or 61.4% compared to the same period in 2021 primarily due to an increase of approximately $328,000, or 31.3% in selling expense, an increase of approximately $566,000, or 52.1% in general and administrative expense, and an increase of approximately $1,015,000, or 104.1% in research and development expenses. Our net loss for the nine months ended January 31, 2022 was approximately $4,203,000, compared to a net loss of $3,475,000 in nine months ended January 31, 2021.

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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 20222023 as demand resumes and increases after the effects of the global pandemic. 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, not only in the U.S. and EU markets but also in our domestic market. For the fiscal year ended April 30, 2021 and beyond, we will continue to focus on our core business of producing and selling stevioside series products.

Currently there is a world-wide movement of lowering sugar intake, and more and more consumers are becoming aware of the health benefits associated with reduction of sugar intake. According to research data, 40% of Chinese consumers stated that they "will not mind paying more for food and beverages with more natural ingredients" and 80% of the interview consumers express a goal of "having a healthier diet". We believe that, in this search of a more natural and healthy diet and lifestyle, natural sweeteners such as stevia will become the mainstream sweetener in the food and beverage markets.

Some of the recent favorable observations related to the stevia markets in fiscal 20202022 include:

Meanwhile, we are also facing challenges in competitive pricing and raw materials for the fiscal years ended April 30, 20212022 and 2020,2021, as well as negative impact from the global COVID-19 pandemic. During the fiscal years ended April 30, 2021,2022, the market prices of stevioside products continue to be impacted by strong price competition among Chinese manufacturers. With this being a product gaining large market shares in China, in the recent years we have seen many competitors entering the market. These new competitors use lower pricing as their effort to gain market share as they initially entering the market, thus driving down the average prices for stevia products. We expect the pressure from pricing competition to continue in fiscal 2022.2023. We anticipate the price of stevia leaves, the raw material used to produce our stevioside series products, will also continue to increase in fiscal 20222023 since the demand for raw material may increase as the market grows, while the production of the raw material experiences negative impact due to the global pandemic.

We intend to make adjustments internally in order to better operate in this market; our goal is to increase sales and develop new client bases through our marketing effort, decrease our production expenses while maintaining the stability and quality of our products, and decrease our overall expenditures. We believe while there are challenges and risks in this market, our high quality high grade product and the formulations developed by our internal research and development team differentiates us from other competitors and our efforts will lead to sustainable growth in the future.

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RESULTS OF OPERATIONS

The following table summarizes our results from operations for the three month periods ended JulyJanuary 31, 20212022 and 2020.2021. The percentages represent each line item as a percent of revenues: 

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The following table summarizes our results from operations for the nine month periods ended January 31, 2022 and 2021.