We are on a fiscal year ending April 30, as such the year ending April 30, 20182023 is referred to as "fiscal 2018"2023" and the year ended April 30, 20172022 is referred to as "fiscal 2017"2022".  Also, the three month period ended JanuaryJuly 31, 20182022 is our thirdfirst quarter and is referred to as the "third"first quarter of fiscal 2018"2023". Likewise, the three month period ended JanuaryJuly 31, 20172021 is referred to as the "third"first quarter of fiscal 2017"2022".

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

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 well as herbs used in traditional Chinese medicines and veterinary products.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.

For the three months ended July 31, 2022 and Chinese Medicine product lines andfiscal year 2023, 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"), a subsidiary wholly owned by Sunwin Stevia International;

-   Qufu Shengren Pharmaceutical Co., Ltd. ("Qufu Shengren"), a subsidiary wholly61% owned by Qufu Natural Green;

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

-   Sunwin Tech Group, Inc.USA, LLC ("Sunwin Tech"USA"), a subsidiary wholly owned by Sunwin Stevia International; and

-  Sunwin USA, LLC. ("Sunwin USA"Qufu Shengren Import and Export Co., Ltd. (“Qufu Shengren Import and Export”), a subsidiary wholly owned by Sunwin Stevia International.

Qufu Shengwang manufactures and sells stevia - based fertilizers and feed additives.

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.

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.  

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, 20172022 included in our Form 10-K as filed with the SEC. The results of operations and cash flows for the ninethree months ended JanuaryJuly 31, 20182022 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, 20172022 contained herein has been derived from the audited consolidated financial statements as of April 30, 2017,2022, 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.subsidiaries included in continuing operations and discontinued operations. All intercompany accounts and transactions have been eliminated in consolidation. OurQufu Shengwang is the subsidiary with discontinued operations and our subsidiaries for continuing operations include the following:

-     Qufu Natural Green;

-     Qufu Shengren;

-     Sunwin USA; and

-     Qufu Shengwang;

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 includes cash on hand and cash in time deposits, certificates of deposit and all highly liquid investmentsinstruments with original maturities of three months or less at the time of purchase to be cash and equivalents. As of January 31, 2018, we held $150,344 of our cash and cash equivalents with commercial banking institutions in the PRC, and $785 with banks in the United States. As of April 30, 2017, we held $30,781 of our cash and cash equivalents with commercial banking institution in PRC, and $20,335 in the United States. In China, there is no equivalent federal deposit insurance as in the United States, so the amounts held in banks in China are not insured. We have not experienced any losses in such bank accounts through January 31, 2018.

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. At JanuaryWe had no bad debt expense for allowance of doubtful accounts during the three months ended July 31, 20182022 and 2021. The balances for allowance of doubtful accounts were $78,122 and $79,886 on July 31, 2022 and April 30, 2017, the allowance for doubtful accounts was $1,111,599 and $1,182,632,2022, respectively. We had recovery of bad debt for $216,910 and recognized bad debt expenses of $55,145 for the nine months ended January 31, 2018 and 2017, respectively.

Inventories, consisting of raw materials, work in process, and finished goods related to our products, are stated at the lower of cost or market (estimatedestimated net realizable value)value that can be estimated utilizing the weighted moving average method. An allowance is established when management determines that certain inventories may not be saleable.Adjustments are recorded to write down the carrying amount of any obsolete and excess inventory to its estimated net realizable value. We continually evaluate the recoverability based on assumptions about future customer demand and market conditions. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record reservesa write down of inventories for the difference between the lower of cost or estimated net realizable value. In the three months ended July 31, 2022 and the market value. These reserves are recorded based on estimates. At January 31, 2018 and April 30, 2017,2021, the Company recorded a reserve for obsolete or slow-movingwrote down inventories of $178,776$78,280 and $163,048,$187,704, respectively.

Property and equipment are stated at cost. Depreciation and amortization are provided using the straight linestraight-line method over the estimated economic lives of the assets, which range from threetwo to twentythirty 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.

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 $285,150$4,636 and $122,285 at January$394,967 on July 31, 20182022 and April 30, 2017,2021, respectively. We received $1,505

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 $0 in cash proceeds from disposaluse the land only through land use rights granted by the Chinese government for a specified period of equipment fortime. Land use rights are being amortized using the nine months ended January 31, 2018 and 2017, respectively.

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:

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.  

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 on Januaryas of July 31, 20182022 and April 30, 20172022 amounted to $92,568$1,050,827 and $121,127,$812,545, respectively, consisted primarily of VAT taxes.

Pursuant to the guidance of ASC Topic 605,606, 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.

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 received.

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.

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 JanuaryJuly 31, 2018,2022, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.

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 income per common share:

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.

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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:

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 costcosts were $284,351$435,568 and $283,815$355,713 for the three months ended JanuaryJuly 31, 20182022 and 2017, and $650,654 and $393,143 for the nine months ended January 31, 2018 and 2017,2021, respectively.

Shipping costs are included in selling expenses and totaled $82,237$24,252 and $91,522$20,161 for the three months ended JanuaryJuly 31, 20182022 and 2017,2021, respectively.

SEGMENT REPORTING

The Company uses the "management approach" in determining reportable operating segments. The management approach considers the internal organization and $244,488reporting used by the Company's chief operating decision maker for making operating decisions and $342,913assessing 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 nine months ended January 31, 2018year. 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 2017, respectively.

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.

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 $873,000 and $3,822,000$194,000 for the three and nine months ended JanuaryJuly 31, 2018, respectively,2022 and has a significant accumulated deficit of $33.0$46.4 million at Januaryas of July 31, 2018.2022. 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 improve its current sales force as to furtheridentify and 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.funds.  The outcome of these matters cannot be predicted at this time.  There can be no assurance that these plans and arrangementsany additional financings 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.

Noncontrolling interest on the consolidated balance sheets resulted from the consolidation of Shengren, a 61.3% owned subsidiary starting from April 30, 2020. 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, 2020, 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 $3,450,220 and $3,340,248 as of July 31, 20182022 and April 30, 2017,2022.

NOTE 4 - INVENTORIES

As of July 31, 2022 and April 30, 2022, inventories consisted of the following:

In the three months ended JanuaryJuly 31, 20182022 and 2017, depreciation expense totaled $320,8782021, the Company wrote down inventories of $78,280 and $332,714,$187,704, respectively. As a result, the Company had no reserve of which $274,270obsolete inventories as of July 31, 2022 and $261,775 were included in cost of revenues, respectively, and of which $46,608 and $70,939 were included in general and administrative expenses,April 30, 2022, respectively. For the nine months ended January 31, 2018 and 2017, depreciation expense totaled $1,054,856 and $992,590, of which $897,938 and $763,806 was included in cost of revenues, respectively, and of which $156,918 and $228,784 were included in general and administrative expenses, respectively. 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.

Prepaid expenses and other current assets as of July 31, 2022 and April 30, 2022 totaled $2,214,165 and $2,765,819, respectively. As of July 31, 2022, prepaid expenses and other current assets includes $686,020 prepayments to suppliers for merchandise that had not been shipped to us and services that had not been provided to us, and $1,528,145 for business related employees' advances and advances to the following:

Revenue - related party

For the three months ended JanuaryJuly 31, 20182022 we did not have revenue and 2017,cost of revenue from related party, but we hadrecorded revenue - related party of$1,591,329 and $2,129,371, respectively. For the nine months ended January 31, 2018 and 2017, we hadcost of revenue -– related party of $1,858,709$2,386,628 and $5,591,740,$2,617,569 the three months ended July 31, 2021, respectively, from Qufu Shengwang Import and Export.

The Company mainly finances its operations through proceeds borrowed from related parties for working capital totaled $5,068,601parties. As of July 31, 2022 and $2,595,313, respectively, and we repaid to related parties a total of $3,251,990 and $2,768,284, respectively. During the three and nine months ended January 31, 2018 and 2017, interest expense related toApril 30, 2022, due to related parties amounted to $25,945 and $38,207, and $71,135 and $96,320, respectively, which were included inconsisted the following:

On September 23, 2019, the Company borrowed a one-year loan of RMB1,221,000 (approximately $189,000) from Weidong Cai, bearing an annual interest expense in the accompanying consolidated statements of operations and comprehensive loss, and in connection with the advances of $743,196 (RMB5,000,000) and $1,189,114 (RMB8,000,000) from Shangdong Shengwang Pharmaceutical Co., Ltd. ("Pharmaceutical Corporation"), a Chinese entity owned by our Chairman, Mr. Laiwang Zhang. These advances bear interest at the rate of 7.87% per annum10%. On September 23, 2021 and we have repaid one2020, the parties extended the loan for another year, under the same terms and conditions, reclassified unpaid interest payable to the principal of the loansthis loan, resulting in an increase of RMB5,000,000 with its accrued interests on April 1, 2017. principal from RMB1,221,000 (approximately $189,000) to RMB1,477,410 (approximately $224,000).

NOTE 9 - OPERATING LEASE

The other advances bear no interestCompany leased Metformin production line including buildings, manufacturing equipment and are payable on demand. On January 31, 2018, the balance we owedconstruction in process to Pharmaceutical Corporation, Qufu Shengwang Import and Export, Mr. Weidong Chai, a management member of Qufu Shengren Pharmaceutical Co., Ltd., and Mr. Laiwang Zhang is $1,336,203, $126,676, $161,621 and $397,532, respectively. On April 30, 2017, the balance we owed to Qufu Shengwang Import and Export and Mr. Weidong Chai totaled $21,878 and $134,002, respectively, the balance due from Pharmaceutical Corporation was $30,568, which was repaid on July 28, 2017. On January 31, 2018 and April 30, 2017, the balance of due to (from) related parties consisted of the following:  

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

** As of on July 31, 2018,2022, other payables consists of commission payable of $201,310, general liability, worker's compensation, and medical insurance payable of $575,687,$412,103, consulting fee payable of $209,905,$239,578, union and education fees payable of $297,754,$131,477, interest payables for short-term loans of $521,012, advanced$341,922, safety production fund payable of $656,437, advances from the employees of $602,037$125,584, security deposit for sub-contractor of $148,432 and other miscellaneous payables of $203,551. On$10,202. As of April 30, 2017,2022, other payables consists of commission payable of $133,712, general liability, worker's compensation, and medical insurance payable of $465,505,$428,773, consulting and service fee payable of $266,852,$206,007, union and education fees payable of $280,404,$134,598, interest payables for short-term loans of $213,153, advanced$366,249, safety production fund payable of $627,138, advances from the employees of $172,435$106,253, deposit for operating lease of $151,784 and other miscellaneous payables of $2,959.

Short-term loans are loans 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 advance notice prior to maturity date. At Januarydate and accrued interest converted into debt principal. As of July 31, 20182022 and April 30, 2017,2022, short-term loans consisted of the following:

For the three and nine months ended JanuaryJuly 31, 20182022 and 2017,2021, interest expense related to short-term loans and long-term loans amounted to $126,138$127,857 and $62,169, and $316,578 and $174,414,$67,069, respectively, which were included in interest expense in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.

The following information is presented in accordance with ASC Topic 280, "Segment Reporting", for the three months ended JanuaryJuly 31, 20182022 and 2017;2021; we operated in threeaccounted for two reportable business segments - (1) natural sweetener (stevioside), (2) traditional Chinese medicines and (3)(2) corporate and other.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 JanuaryJuly 31, 20182022 and 20172021 is as follows: