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

OVERVIEW



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

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



  -   Stevioside, and
  -   Corporate and other.



Going Concern

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

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

Recent Developments

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

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

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

Stevioside Segment



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

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



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

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

OUR PERFORMANCE



 Our revenues totaled approximately $7,162,000 during the three months ended
October 31, 2019, an increase of 46.6%, as compared with the same period in
2018, and our gross margin increased to 20.6% from 7.8%. Our total operating
expenses in the three months ended October 31, 2019 decreased by approximately
$120,000, or 9.7% compared to the same period in 2018, primarily due to a
decrease of approximately $365,000, or 56.4% in general and administrative
expense, offset by  an increase of approximately $55,000, or 12.3% in selling
expense and an increase of approximately $190,000, or 126.4% in research and
development expenses. Our net income from continuing operations for the three
months ended October 31, 2019 was approximately $192,000, compared to net loss
of $1,076,000 in the same period in 2018. Our operating performance for the
three months ended October 31, 2019 was primarily driven by an increase of 68.0%
in sales revenue of from stevia products, including a 36.2% increase in sales to
third parties, and an increase in sales to related party customers of
approximately 224.1%.

Our revenues totaled approximately $14,052,000 during the six months ended
October 31, 2019, an increase of 42.2%, as compared with the same period in
2018, and our gross margin increased to 18.5% from 9.5%. Our total operating
expenses in the six months ended October 31, 2019 decreased by approximately
$518,000, or 19.0% compared to the same period in 2018 primarily due to a
decrease of approximately $58,000, or 6.2% in selling expense and a decrease of
approximately $724,000, or 51.4% in general and administrative expense, offset
by an increase of approximately $264,000, or 69.2% in research and development
expenses. Our net income from continuing operations for the six months ended
October 31, 2019 was approximately $62,000, compared to net loss of $2,179,000
in the same period in 2018. Our operating performance for the six months ended
October 31, 2019 was primarily driven by an increase of 59.0% in sales revenue
of from stevia products, including a 47.3% increase in sales to third parties,
and an increase in sales to related party customers of approximately 93.9%.

While we have broadened our stevia product offerings to include a number of
higher quality stevia grades needed in new product formulations we are
developing to introduce to the U.S. and European food and beverage industry, the
demand for higher grade stevia products has yet to materialize to the degree we
had anticipated, and we hope that our sales volume in higher grade stevia
products will increase in fiscal 2020 as the demands increase. Stevia has become
more widely accepted by the food industry and many new stevia manufacturers have
entered this industry in the past few years; recently we have introduced a new
product line. We are now focusing on new types of stevia products, including
tablets, liquid, High A products, and others. We expect to consistently increase
our sales of our new products; however, we cannot quantify this increase and its
effects on future periods.
                                     - 21 -
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Our Outlook



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

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

- Chinese domestic food and beverages, particularly herbal tea


           manufacturers and the pharmaceutical industry, have increased

the use


           of steviosides, and new health awareness trends have also

resulted in


           some new governing laws supporting the growth of this industry;

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


           stevia, particularly high grade stevia;

- Comparing 2018 to 2011, the usages of stevia in food products shows a


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

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


           all the global markets.



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

RESULTS OF OPERATIONS



The following table summarizes our results from operations for the three month
periods ended October 31, 2019 and 2018. The percentages represent each line
item as a percent of revenues:

                                  For the Three Months ended October 31, 2019
                               Stevioside                 Corporate and Other                Consolidated
Revenues                $ 7,083,279         100.0 %    $     78,302         100.0 %    $ 7,161,581         100.0 %
Cost of goods sold        5,648,003          79.7 %          39,139          50.0 %      5,687,142          79.4 %
Gross profit              1,435,276          20.3 %          39,163          50.0 %      1,474,439          20.6 %
Selling expenses            502,773           7.1 %               -             -          502,773           7.0 %
General and
administrative
expenses                    273,733           3.9 %           8,000          10.2 %        281,733           3.9 %
Research and
development expenses        339,401           4.8 %               -             -          339,401           4.7 %
Income from
operations                  319,369           5.5 %          31,163          39.8 %        350,532           4.9 %
Other expenses             (115,701 )        (1.6 )%        (42,940 )       (54.8 )%      (158,641 )        (2.2 )%
Income (loss) from
continuing operation
before income taxes     $   203,668           2.9 %    $    (11,777 )       (15.0 )%   $   191,891           2.7 %



                                   For the Three Months ended October 31, 2018
                               Stevioside                 Corporate and Other                 Consolidated
Revenues                $ 4,215,935         100.0 %    $    669,765         100.0 %    $  4,885,700         100.0 %
Cost of goods sold        3,985,882          94.5 %         520,504          77.7 %       4,506,386          92.2 %
Gross profit                230,053           5.5 %         149,261          22.3 %         379,314           7.8 %
Selling expenses            382,311           9.1 %          65,481           9.8 %         447,792           9.2 %
General and
administrative
expenses                    315,046           7.5 %         331,528          49.5 %         646,574          13.2 %
Research and
development expenses        130,418           3.1 %          19,473           2.9 %         149,891           3.1 %

Loss from operations (597,725 ) (14.2 )% (267,221 ) (39.9 )% (864,943 ) (17.7 )% Other expenses

             (211,385 )        (5.0 )%              -             -          (211,388 )        (4.3 )%
Loss from continuing
operation before
income taxes            $  (809,110 )       (19.2 )%   $   (267,221 )       (39.9 )%   $ (1,076,331 )       (22.0 )%



                                     - 22 -

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The following table summarizes our results from operations for the six month periods ended October 31, 2019 and 2018.



                                    For the Six Months ended October 31, 2019
                                Stevioside                 Corporate and Other                 Consolidated
Revenues                $ 13,394,838         100.0 %    $    656,818         100.0 %    $ 14,051,656         100.0 %
Cost of goods sold        11,038,469          82.4 %         417,541          63.6 %      11,456,010          81.5 %
Gross profit               2,356,369          17.6 %         239,277          36.4 %       2,595,646          18.5 %
Selling expenses             855,157           6.4 %          22,048           3.4 %         877,205           6.2 %
General and
administrative
expenses                     534,945           4.0 %         149,150          22.7 %         684,095           4.6 %
Research and
development expenses         644,304           4.8 %           1,648           0.3 %         645,952           4.6 %
Income from
operations                   321,963           2.4 %          66,431          10.1 %         388,394           2.8 %
Other expenses              (283,367 )        (2.1 )%        (42,940 )        (6.5 )%       (326,307 )        (2.3 )%
Income from
continuing operation
before income taxes     $     38,596           0.3 %    $     23,491          10.1 %    $     62,087           0.4 %



                                    For the Six Months ended October 31, 2018
                                Stevioside                 Corporate and Other                 Consolidated
Revenues                $  8,422,865         100.0 %    $  1,459,995         100.0 %    $  9,882,860         100.0 %
Cost of goods sold         7,684,035          91.2 %       1,255,060          86.0 %       8,939,095          90.5 %
Gross profit                 738,830           8.8 %         204,935          14.0 %         943,765           9.5 %
Selling expenses             813,104           9.7 %         122,343           8.4 %         935,447           9.5 %
General and
administrative
expenses                     691,024           8.2 %         717,382          49.1 %       1,408,406          14.3 %
Research and
development expenses         339,588           4.0 %          42,069           2.9 %         381,657           3.9 %

Loss from operations (1,104,884 ) (13.1 )% (676,861 ) 


 (46.4 )%     (1,781,745 )       (18.0 )%
Other expenses              (397,128 )        (4.7 )%              -             -          (397,128 )        (4.0 )%
Loss from continuing
operation before
income taxes            $ (1,502,102 )       (17.8 )%   $   (676,861 )       (46.4 )%   $ (2,178,873 )       (22.0 )%



Revenues

Total revenues in the three months ended October 31, 2019 increased by
approximately 46.6%, as compared to the same period in 2018. Stevioside
revenues, which accounts for 98.9% and 86.3% of our total revenues in the three
months ended October 31, 2019 and 2018, respectively, increased by approximately
68.0%, while Metformin revenues decreased by approximately $591,000 or 88.3%.

Within our Stevioside segment, revenues from sales to third parties increased by
36.2% and sales to the related party increased by 224.1% in the three months
ended October 31, 2019, as compared to the same period in 2018, primarily due
to an increasing demand from the domestic market and the results of our effort
to develop sales in the domestic market. We have been trying to develop our
domestic and international market in the past fiscal year. Since we do not have
the authorization to export products from China, we outsourced all of our
exporting business to a related party, Qufu Shengwang Import and Export, which
has authorizations to export. We started to outsource our exporting business to
Yi-Da Tong, which is a third party export agent since March 2016. While the
adoption rate for stevia in the food and beverage sector has been slower than
expected, we sold 225 metric tons and 269 metric tons of stevioside for the
three months ended October 31, 2019 and 2018, respectively. We generated
approximately $388,000 and $701,000 in revenue from producing over 7.7 metric
tons and 11.5 metric tons of A3-99 in the three months ended October 31, 2019
and 2018, respectively. We also generated approximately $1,995,000 and $409,000
in revenue from producing over 55.8 metric tons and 13.0 metric tons of the
customized orders for restructuring by enzyme based on our Stevioside products.
A3-99 and restructuring by enzyme based on our Stevioside products accounted for
approximately 33.6% and 22.7% in the three months ended October 31, 2019 and
2018, respectively, of our total Stevioside segment revenues. Additionally, we
also continue to generate lease revenue from our lease of  the Metformin product
line that was developed in the prior year.
                                     - 23 -
--------------------------------------------------------------------------------

Total revenues in the six months ended October 31, 2019 increased by 42.2% as
compared to the same period in 2018. Stevioside revenues, which accounts for
95.3% and 85.2% of our total revenues in the six months ended October 31, 2019
and 2018, respectively. During the six months ended October 31, 2019, within our
Stevioside segment, we decreased our sales volume by approximately 405 metric
tons, a 29% decrease. Stevioside revenues from sales to third parties increased
by 47.3% and sales to the related parties increased by 93.9% in the six months
ended October 31, 2019, as compared to the same period in 2018.

Our unit sale price fluctuated from month to month in the three months ended
October 31, 2019, which was mainly affected by the market environment; the
average unit sale price increased by approximately 88.9% compared to the same
period in 2018. We face challenges due to competitive pricing and difficulties
sourcing raw materials for in the six months ended October 31, 2019, the market
prices of stevioside products were impacted by strong price competition among
Chinese manufacturers. We also anticipate the price of stevia leaves, the raw
material used to produce our stevioside series products, to increase in the near
future. With the restructuring of our product line, we also continue to increase
the sales of our low grade stevia products. Our low grade stevia and A3-97
products generated more than 25.2% and 30.5% of total revenue of our Stevioside
segment for three and six months ended October 31, 2019, respectively.

Cost of Revenues and Gross Margin



Cost of revenues in the three months ended October 31, 2019 increased by 26.2%,
compared to the same period in 2018. Cost of revenues as a percentage of
revenues decreased from 92.2% to 79.4% during the three months ended 2019
compared to the same period in 2018. Cost of revenues in the six months ended
October 31, 2019 increased by 28.2%, compared to the same period in 2018. Cost
of revenues as a percentage of revenues decreased from 90.5% to 81.5% during the
six months ended 2019 compared to the same period in 2018. Gross margin in
Stevioside segment increased from 5.5% to 20.3%, from 8.8% to 17.6%  for the
three and six months ended by October 31, 2019, compared to the same period in
2018, respectively, which was primarily due to the improvements in efficiency of
our production line to offset the higher raw material costs. Since we purchase
our raw materials on the spot market, we are unable to predict, with any degree
of certainty, our raw material costs and their impact on our gross margin in
future periods. Our consolidated gross margin for the three and six months ended
by October 31, 2019 was 19.6% and 18.0%, as compared to 7.8% and 9.5% in the
same period in 2018.

Selling Expenses

For the three months ended October 31, 2019, we had an increase of approximately
$55,000, or 12.3% in selling expenses, as compared to the same period in 2018.
The increase was primarily due to the approximately $72,000 increase in
promotion and marketing expense, $101,000 increase in advertising expenses,
$4,000 increase in commission and $6,000 increase in travel expense, offset by
approximately $11,000 decrease in office expense, $43,000 decrease in shipping
and freight, $8,000 decrease in salary, $63,000 decrease in selling expense on
Metformin production line and $3,000 increase in miscellaneous expense in the
three months ended October 31, 2019.

For the six months ended October 31, 2019, we had a decrease of approximately
$58,000, or 6.2% in selling expenses, as compared to the same period in 2018.
The decrease was primarily due to the approximately $89,000 decrease in
promotion and marketing expense, $70,000 decrease in office expense, $57,000
decrease in shipping and freight, and $41,000 decrease in selling expense on
Metformin production line, offset by approximately $194,000 increase in
advertising expenses, $7,000 increase in commission, $8,000 increase in local
taxes and $10,000 increase in miscellaneous expense in the six months ended
October 31, 2019.

General and Administrative Expenses



Our general and administrative expenses for the three months ended October 31,
2019 decreased by approximately $365,000, or 56.4% from the same period in 2018.
The decrease was primarily due to a decrease of approximately $307,000 in stock
based compensation to employees, $38,000 decrease in marketing expense, $14,000
decrease in office expense, $45,000 decrease in service and consulting fee,
$10,000 decrease in other tax expense, $32,000 decrease in insurance expenses,
and $3,000 decrease in miscellaneous expense offset by $84,000 increase in
repair and maintenance expenses.

Our general and administrative expenses for the six months ended October 31,
2019 decreased by approximately $724,000, or 51.4% from the same period in 2018.
The decrease was primarily due to a decrease of approximately $613,000 in stock
based compensation to employees, $113,000 decrease in marketing expense, $47,000
decrease in office expense, $32,000 decrease in other tax expense, $13,000
decrease in meals and entertainment expenses, $12,000 decrease in travel
expense, $14,000 decrease in service and consulting fee, and $12,000 decrease in
miscellaneous expense, offset by $55,000 increase in salary and wage expenses
and $77,000 increase in repair and maintenance expenses.

                                     - 24 -
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Research and Development Expense



For the three months ended October 31, 2019, our research and development
expenses amounted to approximately $339,000, as compared to $150,000 for the
same period in 2018. For the six months ended October 31, 2019, our research and
development expenses amounted to approximately $646,000, as compared to $382,000
for the same period in 2018. The increase of $189,000 and $264,000 was primarily
due to the increase in spending for third party technical consulting fees in the
three and six months ended October 31, 2019.

Other Income (Expenses)



For the three months ended October 31, 2019, other expense, net of other income,
amounted to approximately $159,000, a decrease of $52,000 as compared to the
other expense, net of other income, which amounted to approximately $211,000 for
the three months ended October 31, 2018. The decrease of other expenses was
primarily attributable to a decrease of interest expense of $75,000, a decrease
of interest expense- related party of $1,000, and offset by an increase of other
expense of $24,000.

For the six months ended October 31, 2019, other expense, net of other income,
amounted to approximately $326,000, a decrease of $71,000 as compared to the
other expense, net of other income, which amounted to approximately $397,000 for
the six months ended October 31, 2018. The decrease of other expenses was
primarily attributable to a decrease of interest expense of $80,000, a decrease
of interest expense- related party of $2,000, an increase of grant income of
$14,000, and offset by an increase in other expenses of $25,000.

Income (Loss) from Continuing Operations



As a result of the foregoing, our income from continuing operations was
$192,000, or $0.00 per share (basic and diluted), for the three months ended
October 31, 2019, as compared with loss from continuing operations of
$1,076,000, or $(0.01) per share (basic and diluted), for the three months ended
October 31, 2018, a change of $1,268,000, or 117.8%. Our income from continuing
operations was $62,000, or $0.00 per share (basic and diluted), for the six
months ended October 31, 2019, as compared with loss from continuing operations
of $2,179,000, or $(0.01) per share (basic and diluted), for the three months
ended October 31, 2018, a change of $2,241,000 or 102.8%.

Loss from Discontinued Operation



Our loss from discontinued operations amounted to $0 and $29,000 for the three
months ended October 31, 2019 and 2018, and $20,000 and $117,000 for the six
months ended October 31, 2019 and 2018. In addition, the Company recorded a loss
from disposal of discontinued operations of approximately $233,000 at October
31, 2019. Our total loss from discontinued operations amounted to $0 or $0.00
per share (basic and diluted) for the three months ended October 2019, as
compared with loss from discontinued operations of $29,000, or $(0.00) per share
(basic and diluted), at the same period in 2018, a change of $29,000 or 100%.
Our total loss from discontinued operations amounted to $253,000 or $0.00 per
share (basic and diluted) for the six months ended October 2019, as compared
with loss from discontinued operations of $117,000, or $(0.00) per share (basic
and diluted), at the same period in 2018, a change of $137,000 or 117.0%.

The summarized operating result of discontinued operations included in our consolidated statements of operations is as follows:



                                     Three Months Ended October 31,            Six Months Ended October 31,
                                       2019                  2018              2019                  2018

Revenues                           $           -         $     475,908     $     733,441       $      1,312,074
Cost of revenues                               -               347,370           572,357              1,079,367
Gross profit                                   -               128,538           161,084                232,707
Operating expenses                             -               159,227           172,142                351,711
Other income, net                              -                 1,677             8,958                  2,197
Loss before income taxes                       -                29,012            20,016                116,807
Income tax expense                             -                     -                 -                      -
Loss from discontinued
operations                                     -                29,012            20,016                116,807
Loss from disposal, net of taxes               -                     -               960                      -
Loss on sales of subsidiary                    -                     -           232,455                      -
Total loss from discontinued
operations                         $           -         $      29,012
$     253,431       $        116,807



                                     - 25 -

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Net Income (Loss)



Net income in the three months ended October 31, 2019 was approximately
$192,000, compared to a net loss of $1,105,000 in the three months ended October
31, 2018. Net loss in the six months ended October 31, 2019 was approximately
$62,000, compared to a net loss of $2,296,000 in the six months ended October
31, 2018. The increase in come was primarily due to higher revenue with higher
gross profit and a decrease in operating expenses and other expenses in the
three and six months ended October 31, 2019.

Foreign Currency Translation (Loss) or Gain



The functional currency of our subsidiaries and variable interest entities
operating in the PRC is the Chinese Yuan or Renminbi ("RMB"). The financial
statements of our subsidiaries are translated to U.S. dollars using period end
rates of exchange for assets and liabilities, and average rates of exchange (for
the period) for revenues, costs, and expenses. Net gains and losses resulting
from foreign exchange translations are included in the Comprehensive income on
the consolidated statements of operations. As a result of foreign currency
translations, which are a non-cash adjustment, we reported a foreign currency
translation loss of $106,000 for the three months ended October 31, 2019, as
compared to a foreign currency translation loss of $151,000 for the three months
ended October 31, 2018. We also reported a foreign currency translation gain of
$162,000 for the six months ended October 31, 2019, as compared to a foreign
currency translation loss of $789,000 for the six months ended October 31,
2018.  This non-cash loss had the effect of increasing our reported
comprehensive loss.

                        LIQUIDITY AND CAPITAL RESOURCES

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



At October 31, 2019, we had working capital deficit of approximately $2,970,000,
including cash of approximately $311,000, as compared to working capital of
approximately $2,411,000, including cash of approximately $294,000 at April 30,
2019. The approximate $17,000 increase in our cash at October 31, 2019 from
April 30, 2019 is primarily attributable to net cash used in operating
activities and net cash used in investing activities for the purchase of
property and equipment to improve our productivity offset by net cash provided
by financing activities from loans. The Company's cash balance and revenues
generated are not currently sufficient and cannot be projected to cover
operating expenses for the next twelve months from the date of this report.
These factors raise doubt as to the ability of the Company to continue as a
going concern. Management's plans include attempting to improve its business
profitability, its ability to generate sufficient cash flow from its operations
to meet its operating needs on a timely basis, obtain additional working capital
funds through debt and equity financings, and restructure on-going operations to
eliminate inefficiencies to raise cash balance in order to meet its anticipated
cash requirements for the next twelve months from the date of this report.
Management intends to make every effort to improve its current sales force so as
to further develop and expand the international markets for its new products as
well as continuing with the current sources of funds to meet working capital
needs on as needed basis. There can be no assurance that these plans and
arrangements will be successful.

Accounts receivable, net of allowance for doubtful accounts, including accounts
receivable from related parties, decreased by approximately $655,000 during the
six months ended October 31, 2019, as a result of the decrease in accounts
receivable from the third parties as of October 31, 2019. The days for sales
outstanding in accounts receivable increased to 33 days as of October 31, 2019,
as compared to 24 days as of April 30, 2019. The days for sales outstanding in
accounts receivable for third party sales increased to 23 days as of October 31,
2019, as compared to 17 days as of April 30, 2019. We will reevaluate and
categorize accounts receivable for sales and will target to improve our
collection effort in accounts receivable for related party sales and accounts
receivable for third party sales in fiscal 2020.

Inventories at October 31, 2019, net of reserve for obsolescence, totaled
approximately $13,270,000, as compared to $11,992,000 as of April 30, 2019. The
increase is primarily due to our increase in procurements of raw materials in
order to meet our anticipated higher sales volume during the next quarters in
the fiscal year ended April 30, 2020. The current inventory level will prepare
us for our anticipated upcoming increase in demands.

Our accounts payable and accrued expenses were approximately $9,395,092 at
October 31, 2019, an increase of approximately $1,715,043 from April 30, 2019.
The increase is primarily due to our increase in procurements of raw material as
a result of the raising sales of such materials during the six months ended
October 31, 2019.

Loans payable at October 31, 2019 and April 30, 2019 totaled approximately
$12,244,000 and $15,926,000, respectively. These loans payable consisted of
short-term loans and long-term loans from multiple non-related individuals,
which bear annual interest rates of 4% - 10%. The maturity dates of the loans
payable at October 31, 2019 range from November 28, 2019 to March 8,
2021. During the six months ended October 31, 2019, the Company borrowed another
new loan in amount of approximately $429,000 and the loan amount of
approximately $3,621,000 was assumed by the buyer of discontinued operation,
Qufu Shengwang.
                                     - 26 -
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Due to related parties at October 31, 2019 and April 30, 2019 totaled
approximately $6,171,000 and $6,409,000, respectively. The decrease was
primarily due to our partial repayment to Pharmaceutical Corporation during the
six months ended October 31, 2019. As of October 31, 2019, the balance we owed
Pharmaceutical Corporation, Qufu Shengwang Import and Export and Mr. Weidong
Chai, a management member of Qufu Shengren Pharmaceutical Co., Ltd., amounted to
$5,473,401, $551,845 and $146,185, respectively. On April 30, 2019, the balances
we owed to Pharmaceutical Corporation, Qufu Shengwang Import and Export and Mr.
Weidong Chai amounted to $5,669,776, $557,976 and $180,769, respectively.

Cash Flows Analysis

NET CASH FLOW USED IN OPERATING ACTIVITIES:



Net cash used in operating activities from continuing operations was
approximately $213,000 (total net cash used in operating activities of $552,000
including net cash used in discontinued operations of $340,000) for the six
months ended October 31, 2019, primarily due to a net loss of approximately
$191,000 adjusted by loss from discontinued operations of $253,000 and offset by
non-cash working capital that primarily included depreciation expense of
$568,000 and a loss on disposition of property and equipment of $20,000. The
increase in net cash from operating activities was also primarily due to an
increase of approximately $511,000 in accounts receivable - related party, an
increase of approximately $1,816,000 in inventories, an increase of
approximately $1,947,000 in prepaid expenses and other current assets and offset
by an  increase in accounts payable and accrued expenses of approximately
$2,564,000, a  decrease of approximately $740,000 in accounts receivable and
note receivable from a third party and an increase of approximately $107,000 in
taxes payable.

Net cash used in operating activities from continuing operation was
approximately $6,399,000 (total of $6,392,000 including net cash provided by
discontinued operations of $7,000) during the six months ended October 31,
2018,  primarily due to a net loss of approximately $2,296,000 adjusted by loss
from discontinued operations of $117,000 and offset by non-cash items such as
depreciation and amortization expenses of approximately $534,000, and stock
issued for employees' compensation of $613,000. The decrease in net cash from
operating activities was also primarily due to an increase of approximately
$329,000 in accounts receivable and notes receivable, an increase of
approximately $455,000 in inventories, an increase of approximately $2,767,000
in prepaid expense and other current assets, a decrease of approximately
$2,822,000 in accounts payable and accrued expenses and a decrease of
approximately $68,000 decrease in taxes payable, offset by $1,073,000 decrease
in accounts receivable-related party.

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



Net cash provided by investing activities from continuing operations amounted to
$148,000 in investment activities, including the proceeds received from disposal
of discontinued subsidiary of approximately $1,145,000 and a proceed received
from disposal of equipment of $30,000, offset by approximately $1,028,000 in
purchases of property and equipment in the six months ended October 31, 2019.

Net cash used in investing activities from continuing operations amounted to
approximately $628,000 during the six months ended October 31, 2018 due to
capital expenditures for property and equipment. Net cash used in investing
activities from discontinued operations amounted to $0 and $47,000 in six months
ended October 31, 2019 and 2018, respectively.

NET CASH FLOW PROVIDED BY FINANCING ACTIVITIES:



Net cash provided by financing activities from continuing operations amounted to
approximately $447,000 in the six months ended October 31, 2019, primarily due
to proceeds from short-term loan of $429,000 advances received from related
parties of approximately $3,814,000 and offset by repayment of related party
advances of approximately $3,795,000. Net cash used in financing activities from
discontinued operations amounted to $0 in the six months ended October 31, 2019.

Net cash provided by financing activities from continuing operations amounted to
approximately $7,547,000 in the six months ended October 31, 2018, primarily
consisted of proceeds from multiple non-related individual short-term and
long-term loans of $5,418,000 and advances received from related parties of
approximately $3,233,000, offset by repayment of short-term loans of $433,000
and repayment of related party advances of approximately $672,000. Net cash used
in financing activities from discontinued operations amounted to $1,368,000 in
in the six months ended October 31, 2018.

                                     - 27 -
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CASH ALLOCATION BY COUNTRIES



The functional currency of our Chinese subsidiaries is the Chinese RMB.
Substantially all of our cash is held in the form of RMB at financial
institutions located in the PRC, where there is no equivalent of federal deposit
insurance as in the United States. As a result, cash accounts at financial
institutions in the PRC are not insured. We have not experienced any losses in
such accounts as of October 31, 2019.

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

Country:                             October 31, 2019            April 30, 2019
United States                     $ 151,276         48.7 %   $  88,506         30.1 %
China                               159,554         51.3 %     205,693         69.9 %
Total cash and cash equivalents   $ 310,830       100.00 %   $ 294,199

100.00 %

Off Balance Sheet Arrangements



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

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

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

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

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

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

unconsolidated entity that provides financing, liquidity, market risk or

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

development services with us.





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

CRITICAL ACCOUNTING POLICIES



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

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