SUNWIN STEVIA INTERNATIONAL, INC. - Quarter Report: 2020 January (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended January 31, 2020

[ ] 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)

NEVADA	56-2416925
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6 SHENGWANG AVE., QUFU, SHANDONG, CHINA	273100
(Address of principal executive offices)	(Zip Code)

(86) 537-4424999

(Registrant's telephone number, including area code)

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

Title of each class	Trading Symbol (s)	Name of each exchange on which registered
None	SUWN	Not applicable

Indicate by check mark whether the registrant (1) has filed all reports 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.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]
Emerging growth company [ ]

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 [ ] 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 March 13, 2020, 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 JANUARY 31, 2020

INDEX

	Page
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements	1

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3. Quantitative and Qualitative Disclosures About Market Risk	28

Item 4. Controls and Procedures	28

PART II-OTHER INFORMATION
Item 1. Legal Proceedings	29

Item 1A. Risk Factors	29

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3. Defaults Upon Senior Securities	29

Item 4. Mine Safety Disclosures	29

Item 5. Other Information	29

Item 6. Exhibits	29

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.

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, 2020 is referred to as "fiscal 2020" and the year ended April 30, 2019 is referred to as "fiscal 2019". Also, the three month period ended January 31, 2020 is our third quarter and is referred to as the "third quarter of fiscal 2020". Likewise, the three month period ended January 31, 2019 is referred to as the "third quarter of fiscal 2019".

When used in this report, the terms:
	-	"Sunwin", "we", "us" and the "Company" refers to Sunwin Stevia International, Inc., a Nevada corporation formerly known as Sunwin Neutraceuticals International, Inc., and our subsidiaries;
	-	"Sunwin Tech" refers to our wholly owned subsidiary Sunwin Tech Group, Inc., a Florida corporation, which was closed on April 30, 2018 and all of its assets and liabilities were transferred to the Company;
	-	"Qufu Natural Green" refers to our wholly owned subsidiary Qufu Natural Green Engineering Co., Ltd., a Chinese limited liability company;
	-	"Sunwin USA" refers to Sunwin USA, LLC, a Delaware limited liability company, a 100% owned subsidiary of Sunwin. Sunwin USA was previously Sunwin Stevia International Corp., a Florida corporation, it was converted to Sunwin USA in May 2009;
	-	"Qufu Shengwang" refers to Qufu Shengwang Stevia Biology and Science Co., Ltd., a Chinese limited liability company. Qufu Natural Green owns a 100% interest in Qufu Shengwang. On July 30, 2019, Qufu Natural Green sold its 100% interest of Qufu Shengwang to a third party;
	-	"Qufu Shengren" refers to Qufu Shengren Pharmaceutical Co., Ltd., a Chinese limited liability company, and a wholly owned subsidiary of Qufu Natural Green; and
	-	“Qufu Shengren Import and Export" refers to Qufu Shengren Import and Export Co., Ltd., a Chinese limited liability company, a 100% owned subsidiary of Qufu Shengren.

We also use the following terms when referring to certain related parties:
	-	Mr. Laiwang Zhang, Chairman and a principal shareholder of our company;
	-	"Pharmaceutical Corporation" refers to Shandong Shengwang Pharmaceutical Co., Ltd., a Chinese limited liability company which is controlled by Mr. Laiwang Zhang;
	-	"Qufu Shengwang Import and Export" refers to Qufu Shengwang Import and Export Co., Ltd., a Chinese limited liability company, controlled by Mr. Zhang; and
	-	Mr. Weidong Chai, a management member of Qufu Shengren Pharmaceutical Co., Ltd.

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

iii

PART I - FINANCIAL INFORMATION

SUNWIN STEVIA INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
	January 31, 2020			April 30, 2019
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	156,509		$	294,199
Accounts receivable, net of allowance for doubtful accounts of $75,874 and $78,159, respectively		1,448,007			2,985,166
Accounts receivable - related party		2,644,820			2,477,659
Inventories, net		12,814,973			11,991,956
Prepaid expenses and other current assets		1,408,253			1,676,347
Current assets held for sale		-			4,143,059
Total Current Assets		18,472,562			23,568,386

Property and equipment, net		9,188,469			8,993,397
Non-current assets held for sale		-			2,925,706
Total Assets	$	27,661,031		$	35,487,489

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	7,847,490		$	7,680,049
Short-term loans		10,874,551			6,079,983
Due to related parties		4,993,624			6,408,521
Current liabilities held for sale		-			988,748
Total Current Liabilities		23,715,665			21,157,301

Long-term loans		1,556,936			9,845,706
Liabilities held for sale, non-current		-			947,445
Total Liabilities		25,272,601			31,950,452

Commitments and Contingencies

STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value; 1,000,000 shares authorized; no shares issued and outstanding		-			-
Common stock, $0.001 par value, 200,000,000 shares authorized; 199,632,803 and 199,632,803 shares issued and outstanding as of January 31, 2020 and April 30, 2019, respectively		199,633			199,633
Additional paid-in capital		37,681,279			37,681,279
Accumulated deficit		(39,876,472	)		(38,503,256	)
Accumulated other comprehensive income		4,383,990			4,159,381
Total Stockholders' Equity		2,388,430			3,537,037
Total Liabilities and Stockholders' Equity	$	27,661,031		$	35,487,489

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

SUNWIN STEVIA INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
	For the Three Months Ended January 31,						For the Nine Months Ended January 31,
	2020			2019			2020			2019

Revenues	$	3,419,294		$	4,567,309		$	13,372,391		$	12,336,433
Revenues - related parties		1,784,135			1,081,379			5,882,694			3,195,115
Total revenues		5,203,429			5,648,688			19,255,085			15,531,548

Cost of revenues		2,733,284			3,754,979			10,472,794			10,795,923
Cost of revenues - related parties		1,955,319			1,124,137			5,671,819			3,022,288
Total cost of revenues		4,688,603			4,879,116			16,144,613			13,818,211

Gross profit		514,826			769,572			3,110,472			1,713,337

Operating expenses:
Selling expenses		360,440			617,802			1,237,645			1,553,249
General and administrative expenses		481,087			643,586			1,165,182			2,051,992
Research and development expenses		633,668			317,876			1,279,620			699,533
Total operating expenses, net		1,475,195			1,579,264			3,682,447			4,304,774

Loss from operations		(960,369	)		(809,692	)		(571,975	)		(2,591,437	)

Other (expenses) income		-
Other income		1,624			4,315			(37,818	)		(10,318	)
Grant income		17,557			-			31,870			-
Interest income		281			86			549			218
Interest expense - related party		(32,023	)		(35,855	)		(96,123	)		(101,546	)
Interest expense		(208,942	)		(171,705	)		(446,288	)		(488,641	)

Total other expense		(221,503	)		(203,159	)		(547,810	)		(600,287	)

Loss from continuing operations before income taxes		(1,181,872	)		(1,012,851	)		(1,119,785	)		(3,191,724	)
Provision for income taxes		-			-			-			-
Net loss from continuing operations	$	(1,181,872	)	$	(1,012,851	)	$	(1,119,785	)	$	(3,191,724	)

Discontinued operations
Loss from discontinued operations, net of income tax		-			(5,879	)		(20,016	)		(122,686	)
Loss from disposal of discontinued operations		-			-			(960	)		-
Loss from sales of discontinued operations		-			-			(232,455	)		-
Loss from discontinued operations, net of income tax		-			(5,879	)		(253,431	)		(122,686	)

Net loss	$	(1,181,872	)	$	(1,018,730	)	$	(1,373,216	)	$	(3,314,410	)

Comprehensive loss:
Net loss	$	(1,181,872	)	$	(1,018,730	)	$	(1,373,216	)	$	(3,314,410	)
Foreign currency translation adjustment		62,438			261,035			224,609			(527,653	)

Total comprehensive loss	$	(1,119,434	)	$	(757,695	)	$	(1,148,607	)	$	(3,842,063	)

Earnings per common share:
Continuing operations - basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Discontinued operations - basic and diluted		0.00			(0.00	)		(0.00	)		(0.00	)
Net loss per common share - basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.02	)

Weighted average common shares outstanding - basic and diluted		199,632,803			199,632,803			199,632,803			199,632,803

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

SUNWIN STEVIA INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
	For the Nine Months Ended January 31,
	2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,373,216	)	$	(3,314,410	)
Loss from discontinued operations		(253,431	)		(122,686	)
Net loss from continuing operations		(1,119,785	)		(3,191,724	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation expense		901,684			824,360
Loss on disposition of property and equipment		49,476			-
Stock issued for employees' compensation		-			715,553
Changes in operating assets and liabilities:
Accounts receivable and notes receivable		1,558,140			317,184
Accounts receivable - related party		(237,913	)		148,367
Inventories		(1,165,364	)		(1,325,510	)
Prepaid expenses and other current assets		99,101			(1,275,165	)
Accounts payable and accrued expenses		1,113,308			(2,680,623	)
Taxes payable		47,704			(79,249	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS		1,246,351			(6,546,807	)
NET CASH (USED IN) DISCONTINUED OPERATING ACTIVITIES FROM DISCONTINUED OPERATIOIN		(340,629	)		(143,019	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		905,722			(6,689,826	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceed from disposal of discontinued operations		1,145,180			-
Purchases of property and equipment		(1,389,304	)		(692,593	)
Proceed from disposal of equipment		30,474			-
NET CASH (USED IN) INVESTING ACTIVITIES FROM CONTINUING OPERATIONS		(213,650	)		(692,593	)
NET CASH (USED IN) INVESTING ACTIVITIES FROM DISCONTINUED OPERATIOIN		-			(23,595	)
NET CASH (USED IN) INVESTING ACTIVITIES		(213,650	)		(716,188	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loans		429,443			5,788,134
Repayment of short term loans		-			(429,299	)
Advance from related parties		4,980,422			3,589,014
Repayment of related party advances		(6,215,431	)		(666,121	)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES FROM CONTINUING OPERATIONS		(805,566	)		8,281,728
NET CASH (USED IN) FINANCING ACTIVITIES FROM DISCONTINUED OPERATIOIN		-			(1,899,418	)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(805,566	)		6,382,310

EFFECT OF EXCHANGE RATE ON CASH		(24,196	)		57,639
NET (DECREASE) IN CASH		(137,690	)		(966,065	)

Cash at the beginning of period		294,199			75,917
Cash in discontinued operations at the beginning of year		-			1,024,831
Cash at the end of period		156,509			134,683

SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	79,193		$	80,675

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment acquired on credit as payable	$	62,767		$	1,587,468
Accrued interest converted into debt	$	127,330		$	144,761
Accrued interest payable to related party	$	16,930		$	39,776
Liabilities assumed in connection with sale of discontinued operations	$	3,565,805		$	-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

SUNWIN STEVIA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2020

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. 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:

	-		Stevioside; and
	-		Corporate and other.

For the nine months ended January 31, 2020 and fiscal year 2019, 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"), wholly owned by Qufu Natural Green;

- 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. This drug not only has a 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, which are more effective than single use. It can also be used in patients with insulin therapy to reduce insulin consumption. 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 8).

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.

Qufu Shengwang

In fiscal 2009, Qufu Natural Green acquired a 60% interest in Qufu Shengwang from its shareholder, Shandong Group, for $4,026,851. The purchase price represented 60% of the value of the net tangible assets of Qufu Shengwang as of April 30, 2008. Shandong Group is owned by Laiwang Zhang, our President and Chairman of the Board of Directors. Qufu Shengwang manufactures and sells stevia - based fertilizers and feed additives.

On September 30, 2011, Qufu Shengwang purchased the 40% equity interest in Qufu Shengwang owned by our Korean partner, Korea Stevia Company, Limited, for $626,125 in cash, and as a result of this repurchase transaction we now own 100% equity interest in all of the net assets of our subsidiary Qufu Shengwang. Therefore, the non-controlling interest of $2,109,028 in our balance sheet as of April 30, 2012 has been eliminated to reflect our 100% interest in Qufu Shengwang.

On July 1, 2012, Qufu Shengwang entered into a Cooperation Agreement with Hegeng (Beijing) Organic Farm Technology Co, Ltd. ("Hegeng"), a Chinese manufacturer and distributor of bio-fertilizers and pesticides, to jointly develop bio-bacterial fertilizers based on the residues from our stevia extraction. Under the Cooperation Agreement, Hegeng provides strain and formula that we apply to the stevia residues to produce bio-bacterial fertilizers in the current facility of Qufu Shengwang. The bio-bacterial fertilizers will be distributed under Qufu Shengwang's name. No additional investment in the facility would be required. During the third quarter of fiscal year 2014, we decided to suspend the agreement with Hegeng due to a lack of sales since the reaction to the products was lower than anticipated in fertilizer market.

On July 30, 2019, Qufu Shengwang was sold to an unaffiliated individual (see Note 3).

Qufu Shengren Import and Export

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

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, 2019 included in our Form 10-K as filed with the SEC. The results of operations and cash flows for the nine months ended January 31, 2020 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, 2019 contained herein has been derived from the audited consolidated financial statements as of April 30, 2019, 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 of discontinued operations and our 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 nine months or less at the time of purchase to be cash and equivalents. As of January 31, 2020, we held $72,958 of our cash and cash equivalents with commercial banking institutions in the PRC, and $83,551 with banks in the United States. As of April 30, 2019, we held $205,693 of our cash and cash equivalents with commercial banking institution in PRC, and $88,506 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, 2020.

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. As of January 31, 2020 and April 30, 2019, the allowance for doubtful accounts was $75,874 and $78,159, respectively.

INVENTORIES

Inventories, consisting of raw materials, work in process, and finished goods related to our products, are stated at the lower of cost and net realizable value that can be estimated utilizing the weighted 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. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost or estimated net realizable value. As of January 31, 2020 and April 30, 2019, the Company did not record a reserve for obsolete or 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 January 31, 2020 and April 30, 2019, the Company wrote down inventories in the amount of $93,640 and $999,548, 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 three to twenty 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.

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 $49,476 and $0 at January 31, 2020 and April 30, 2019, respectively.

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.

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:

Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity's own assumptions.

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 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 January 31, 2020 and April 30, 2019 amounted to $170,216 and $125,854, respectively, and 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 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 is also a lessor, which is an entity that is lease underlying asset to the third party, The Company’s lease revenue is recognized under ASC Topic 842, Leases, (“ASC 842”), which was adopted on January 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 as 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.

GRANT INCOME

Grants received from PRC government agencies are recognized as deferred grant income and recognized in the 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.

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 January 31, 2020, 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 income per common share:

	Three Months Ended January 31,						Nine Months Ended January 31,
Numerator:
	2020			2019			2020			2019
Net loss attributable to Sunwin Stevia International, Inc.	$	(1,181,872	)	$	(1,018,730	)	$	(1,373,216	)	$	(3,314,410	)
Net loss from continuing operations	$	(1,181,872	)	$	(1,012,851	)	$	(1,119,785	)	$	(3,191,724	)
Net loss from discontinued operation		-			(5,879	)		(253,431	)		(122,686	)
Denominator:
Denominator for basic earnings per share - weighted average number of common shares outstanding		199,632,803			199,632,803			199,632,803			199,632,803
Stock awards, options, and warrants		-			-			-			-
Denominator for diluted earnings per share - adjusted weighted average outstanding average number of common shares outstanding		199,632,803			199,632,803			199,632,803			199,632,803
Basic and diluted loss per common share:
Net loss from continuing operations - basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Net loss from discontinued operations - basic and diluted		0.00			(0.00	)		(0.00	)		(0.00	)
Net loss per common share - basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.02	)

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:

As of January 31, 2020	RMB 6.94 to $1.00
As of April 30, 2019	RMB 6.73 to $1.00

Nine months ended January 31, 2020	RMB 6.99 to $1.00
Nine months ended January 31, 2019	RMB 6.76 to $1.00

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 January 31, 2020 and 2019 included net loss and unrealized gains (losses) from foreign currency translation adjustments.

CONCENTRATIONS OF CREDIT RISK

Substantially all of our operations are carried out in the PRC. Accordingly, our business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. Our operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. Our results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

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.

STOCK BASED COMPENSATION

Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award.

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 $633,668 and $317,876 for the three months ended January 31, 2020 and 2019, and $1,279,620 and $699,533 for the nine months ended January 31, 2020 and 2019, respectively.

SHIPPING COSTS

Shipping costs are included in selling expenses and totaled $27,547 and $50,579 for the three months ended January 31, 2020 and 2019, and $75,642 and $155,902 for the nine months ended January 31, 2020 and 2019, respectively.

ADVERTISING

Advertising is expensed as incurred and is included in selling expenses and totaled $50,500 and $181,336 for the three months ended January 31, 2020 and 2019, $298,750 and $235,309 for the nine months ended January 31, 2020 and 2019, respectively.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the current period presentation for amounts related to the discontinue operations (see Note 3). These reclassifications had no impact on net earnings and financial position.

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 May 2014, the FASB issued ASU 2014-09, "Revenue from contracts with Customers (Topic 606)". Under ASU 2014-09, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. This standard, which is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company adopted this standard effective May 1, 2018 by using the full retrospective method to restate prior reporting period presented. The Company has identified its revenue streams and assessed each for the impacts. The Company completed its analysis and concluded that the adoption of Topic 606 did not have a material impact in the timing or amount of revenue recognized, including the presentation of revenues in the Company's consolidated statements of income and comprehensive loss.

In February 2018, the FASB issued ASU 2018-02, "Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income". These amendments provide financial statement preparers with an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (or portion thereof) is recorded. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of ASU 2018-02 is permitted, including adoption in any interim period for the public business entities for reporting periods for which financial statements have not yet been issued. The amendments in this ASU should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company has adopted this guidance in fiscal 2019.

In March 2018, the FASB issued ASU 2018-05, "Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118". The amendments in this ASU add SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No. 118, which expresses the view of the staff regarding application of Topic 740, Income Taxes, in the reporting period that includes December 22, 2017 - the date on which the Tax Cuts and Jobs Act was signed into law. The amendments are effective upon addition to the FASB Accounting Standards Codification. The adoption of this guidance did not have a material impact on our condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820)," which removes, modifies and adds various disclosure requirements around the topic in order to clarify and improve the cost-benefit nature of disclosures. For example, disclosures around transfers between fair value hierarchy levels will be removed and further detail around changes in unrealized gains and losses for the period and unobservable inputs determining level 3 fair value measurements will be added. This standard is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company is currently evaluating the impact of the new standard will have on its condensed consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, "Compensation – Retirement Benefits – Defined Benefit Plans – General (Subtopic 715-20)," which removes, modifies and adds various disclosure requirements around the topic in order to clarify and improve the cost-benefit nature of disclosures. For example, disclosures around the effect of a one-percentage-point change in assumed health care costs will be removed and an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period will be added. This standard is effective for fiscal years ending after December 15, 2020, and early adoption is permitted. These amendments must be applied on a retrospective basis for all periods presented. The Company is currently evaluating the impact of the new standard will have on its condensed consolidated financial statements.

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 condensed consolidated financial statements.

GOING CONCERN

Our unaudited condensed consolidated financial statements have been prepared assuming we will continue as a going concern. The Company has incurred net loss of approximately $1,182,000 and $1,120,000 for the three and nine months ended January 31, 2020 on continued operations and has a significant accumulated deficit of $39.9 million as of January 31, 2020. 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 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.

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 - DISCONTINUED OPERATIONS

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 Qufu Shengwang owes 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 the 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. The Buyer settled all liabilities of Qufu Shengwang due to Natural Green by assuming the liabilities on behalf of Qufu Shengren in the amount of approximately RMB 26,000,000 (approximately $3,779,070) due to another third party.

Prior to July 30, 2019, Qufu Shangwang engaged in our Chinese medicine segment. In our Chinese medicine segment, we manufactured and sold traditional Chinese medicine formula extracts which are used in products made for use by both humans and animals. As a result of the sale of Qufu Shengwang, our Chinese medicine segment is treated as a discontinued operation.

Pursuant to ASC Topic 205-20, Presentation of Financial Statements - Discontinued Operations, the results of operations from the Chinese medicine segment for the three and nine months ended January 31, 2020 and 2019 have been classified as discontinued operations and is included in the line caption of the loss from discontinued operations line in the accompanying consolidated statements of operations and comprehensive loss presented herein. The assets and liabilities also have been classified as discontinued operations under the line captions of current assets held for sale, non-current assets held for sale, current liabilities held for sale and non-current liabilities held for sale in the Company's condensed consolidated balance sheets as of January 31, 2020 and April 30, 2019.

The assets and liabilities classified as discontinued operations in the Company's condensed consolidated financial statements as of January 31, 2020 and April 30, 2019 were set forth below.

	January 31, 2020		April 30, 2019
Assets:
Current assets:
Cash	$	-	$	426,766
Accounts receivable, net		-		322,902
Inventories, net		-		949,705
Due from related parties		-		2,308,159
Prepaid expenses and other		-		135,527
Total current assets		-		4,143,059
Property and equipment, net		-		985,630
Land use rights, net		-		1,795,362
Other long-term asset		-		144,714
Total assets	$	-	$	7,068,765
Liabilities:
Current liabilities:
Accounts payable	$	-	$	389,521
Accrued expenses and other liabilities		-		599,227
Total current liabilities		-		988,748
Long-term loans		-		947,445
Total liabilities *	$	-	$	1,936,193

* Not including intercompany loan of Qufu Shengwang payable to Qufu Natural Green in the amount of RMB27,354,608 (approximately $3,975,960) which was not reflected on the condensed consolidated financial statements as of April 30, 2019 due to consolidation.

The following table presents the results of discontinued operations in the three and nine months ended January 31, 2020 and 2019:

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

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

For the three months ended January 31, 2020 and 2019, loss from discontinued operations amounted to $0 and $5,879. For the nine months ended January 31, 2020 and 2019, loss from discontinued operations amounted to $253,431 and $122,686. The Company realized a loss of $233,415 from the disposal of 100% equity of Qufu Shengwang, which was reflected as loss from sale of discontinued operations on the condensed consolidated statement of operations for the nine months ended January 31, 2020.

NOTE 4 - INVENTORIES

As of January 31, 2020 and April 30, 2019, inventories consisted of the following:

	January 31, 2020		April 30, 2019
	(unaudited)
Raw materials	$	6,166,752	$	5,639,260
Work in process		3,098,863		3,426,545
Finished goods		3,549,358		2,926,151
		12,814,973		11,991,956
Less: reserve for obsolete inventory		-		-
	$	12, 814,973	$	11,991,956

NOTE 5 - PROPERTY AND EQUIPMENT

As of January 31, 2020 and April 30, 2019, property and equipment consisted of the following:

		January 31, 2020			April 30, 2019
Estimated Life		(unaudited)
Office equipment	3-5 Years	$	400,397		$	77,738
Auto and trucks	2-10 Years		595,857			599,154
Manufacturing equipment	2-10 Years		6,503,889			5,353,752
Buildings	5-30 Years		9,397,949			8,082,483
Construction in process			4,757			2,001,045
			16,902,849			16,114,172
Less: accumulated depreciation			(7,714,380	)		(7,120,775	)
		$	9,188,469		$	8,993,397

For the three months ended January 31, 2020 and 2019, depreciation expense totaled $333,339 and $290,386, of which $223,228 and $238,102 were included in cost of revenues, respectively, and of which $110,111 and $52,283 were included in general and administrative expenses, respectively. For the nine months ended January 31, 2020 and 2019, depreciation expense totaled $901,684 and $824,360, of which $720,560 and $700,618 was included in cost of revenues, respectively, and of which $181,124 and $123,741 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.

NOTE 6 - RELATED PARTY TRANSACTIONS

Accounts receivable - related party and revenue - related party

As of January 31, 2020 and April 30, 2019, $2,644,820 and $2,477,659 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. For the three months ended January 31, 2020 and 2019, we recorded revenue - related party and cost of revenue – related party of $1,784,135 and $1,081,379, $1,955,319 and $1,124,137, respectively, from Qufu Shengwang Import and Export. For the nine months ended January 31, 2020 and 2019, we recorded revenue - related party and cost of revenue – related party of $5,882,694 and $3,195,115, $5,671,819 and $3,022,288, respectively, from Qufu Shengwang Import and Export.

Due to (from) related parties

From time to time, we receive advances from related parties and advance funds to related parties for working capital purposes. In the nine months ended January 31, 2020 and 2019, we received advances from related parties for working capital that totaled $4,980,422 and $3,589,014, respectively, and we repaid to related parties a total of $6,215,431 and $666,121, respectively.

In the three months ended January 31, 2020 and 2019, interest expense related to due to related parties amounted to $32,023 and $35,855, and nine months ended January 31, 2020 and 2019, interest expense related to due to related parties amounted to $96,123 and $101,546, respectively, which were included in interest expense - related parties in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss, and in connection with the advances of $715,738 (RMB5,000,000) and $1,145,180 (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 7.0% and 6.3% per annum, respectively. On December 12, 2019, we repaid $1,149,394 including the above advance of $1,145,180 (RMB8,000,000) and its accrued interest. The other advances bear no interest and are payable on demand.

As of January 31, 2020, the balance we owed Pharmaceutical Corporation, Qufu Shengwang Import and Export and Mr. Weidong Chai, a management member of Qufu Shengren Pharmaceutical Co., Ltd., amounted to $4,447,574, $357,891 and $188,159, respectively. On April 30, 2019, the balances we owed to Pharmaceutical Corporation, Qufu Shengwang Import and Export and Mr. Weidong Chai amounted to $5,669,776, $557,976 and $180,769, respectively.

As of January 31, 2020 and April 30, 2019, balances due to (from) related party activities consisted of the following:

	Shandong Shengwang Pharmaceutical Co., Ltd.			Qufu Shengwang Import and Export Co., Ltd.			Mr. Wedong Chai			Total
Balance due to related parties, April 30, 2019	$	5,669,776		$	557,976		$	180,769		$	6,408,521
Working capital advances from related parties		3,843,443			1,095,764			41,215			4,980,422
Repayments		(4,908,085	)		(1,278,716	)		(28,630	)		(6,215,431	)
Effect of foreign currency exchange		(157,560	)		(17,133	)		(5,195	)		(179,888	)
Balance due to related parties, January 31, 2020	$	4,447,574		$	357,891		$	188,159		$	4,993,624

NOTE 7 - PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets as of January 31, 2020 and April 30, 2019 totaled $1,408,253 and $1,676,347, respectively. As of January 31, 2020, prepaid expenses and other current assets includes $1,200,557 prepayments to suppliers for merchandise that had not been shipped to us and services that had not been provided to us and $207,696 for business related employees' advances. As of April 30, 2019, prepaid expenses and other current assets includes $1,389,963 prepayments to suppliers for merchandise that had not been shipped to us and services that had not been provided to us, $14,850 for security deposit and $271,534 for business related employees' advances.

NOTE 8 - 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 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 $436,047) 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 classified as a cancellable operating lease. The Company received a total amount of RMB2,500,000 in July 2019, including the lease deposit of RMB1,000,000 as guarantee and RMB1,500,000 of the semiannual lease payment for the first year. The Company received the RMB1,500,000 for the remaining balance of the first year lease payment in August 2019. The Company recorded a revenue of $210,760 from this operating lease for the period from July 10, 2019 to January 31, 2020.

NOTE 9 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses included the following as of January 31, 2020 and April 30, 2019:

Account	January 31, 2019		April 30, 2019
	(unaudited)
Accounts payable	$	4,891,610	$	5,298,580
Advanced from customers		208,478		26,921
Accrued salary payable		94,798		284,671
Tax payable		170,216		125,854
Deferred revenue		13,283		13,683
Other payable*		2,469,105		1,803,972
Total accounts payable and accrued expenses	$	7,847,490	$	7,680,049

* As of January 31, 2020, other payables consists of general liability, worker's compensation, and medical insurance payable of $410,091, consulting fee payable of $122,507, union and education fees payable of $127,838, interest payables for short-term loans of $650,708, advances from employees of $397,943, security deposit for the operating lease contractor of $144,161 and other advances from third parties of $615,857. As of April 30, 2019, other payables consists of general liability, worker's compensation, and medical insurance payable of $448,528, consulting fee payable of $136,770, union and education fees payable of $131,688, interest payables for short-term loans of $765,061, advances from employees of $221,081 and other miscellaneous payables of $100,844.

NOTE 10 - 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 advance notice prior to maturity date. As of January 31, 2020 and April 30, 2019, short-term loans totaled in the amounts of $10,874,551 and $6,079,983, respectively.

Long-term loans are obtained from various individual lenders that are due more than one year for working capital purpose. These loans are unsecured and can be renewed with one month advance notice prior to maturity date. As of January 31, 2020 and April 30, 2019, long-term loans totaled in the amounts of $1,556,936 and $9,845,706, respectively.

As of January 31, 2020 and April 30, 2019, loan payable, including short-term loans and long-term loans consisted of the following:

	January 31, 2020		April 30, 2019
	(unaudited)
Loan from Min Wu, an employee of Qufu Shengren, due on October 5, 2020, with an annual interest rate of 10%, renewed at October 6, 2019.	$	31,715	$	32,671
Loans from Jianjun Yan, non-related individual, due on October 6, 2020, with an annual interest rate of 10%, renewed at October 7, 2019 and accrued interest converted into debt principal of RMB849,500 ($123,434).		1,276,904		1,189,207
Loan from Jianjun Yan, non-related individual, due on March 31, 2020, with annual interest rate of 4%, renewed at April 1, 2019.		1,175,429		1,210,829
Loan from Junzhen Zhang, non-related individual, due on October 5, 2020, with an annual interest rate of 10%, renewed at October 6, 2019.		23,066		23,760
Loan from Jian Chen, non-related individual, due on January 27, 2021 and April 11, 2020, bearing an annual interest rate of 10%, with the principal amount of RMB770,000 ($111,004) and RMB330,000 ($47,573), renewed on January 28, 2020 and April 11, 2019, respectively.		158,577		163,353
Loan from Qing Kong, non-related individual, due on March 6, 2020, with an annual interest rate of 10%, renewed on March 7, 2019.		76,751		79,063
Loan from Qing Kong, non-related individual, due on January 8, 2021, with an annual interest rate of 10%, renewed on January 9, 2020.		34,887		32,671
Loan from Guihai Chen, non-related individual, due on March 9, 2020, with an annual interest rate of 10%, renewed on March 10, 2019.		19,029		19,602
Loan from Guihai Chen, non-related individual, due on September 20, 2020, with an annual interest rate of 10%, renewed at September 21, 2019 and accrued interest converted into debt principal of RMB20,000 ($2,906).		31,715		29,700
Loan Weifeng Kong, non-related individual, due on November 28, 2020, with an annual interest rate of 10%, renewed on November 29, 2019.		28,832		29,700
Loan Shidong Wang, non-related individual, due on March 8, 2020, with an annual interest rate of 4%, renewed on March 9, 2019.		1,559,244		1,606,200
Loan from Huagui Yong, non-related individual, due on April 8, 2020, with an annual interest rate of 6.3% at April 9, 2019.		72,080		74,251
Loan from Xuxu Gu, non-related individual, due on September 27, 2019, with an annual interest rate of 4% at September 28, 2017.		-		1,588,976
Loan from Xuxu Gu, non-related individual, due on March 8, 2019, with an annual interest rate of 4% at March 9, 2017, extended another two years on March 9, 2019.		-		1,603,825
Loan Xuxu Gu, non-related individual, due on August 15, 2020, with an annual interest rate of 4% at August 16, 2018.		-		504,908
Loan Xuxu Gu, non-related individual, due on July 13, 2020, with an annual interest rate of 4% at July 14, 2018.		418,066		430,657
Loan Yuehu Zhou, non-related individual, due on June 12, 2020, with an annual interest rate of 4% at June 13, 2018.		1,297,447		1,336,521
Loan Mingbang Ma, non-related individual, due on May 22, 2020, with an annual interest rate of 4% at May 23, 2018.		288,322		297,005
Loan Weiwei Lian, non-related individual, due on May 29, 2020, with an annual interest rate of 4% at May 30, 2018.		1,441,608		1,485,024
Loan Guanghua Xia, non-related individual, due on June 8, 2020, with an annual interest rate of 4% at June 9, 2018.		1,297,447		1,336,521
Loan Guanghua Xia, non-related individual, due on December 31, 2020, with an annual interest rate of 4% at January 1, 2019.		403,650		415,807
Loan Guanghua Xia, non-related individual, due on January 10, 2021, with an annual interest rate of 4% at January 11, 2019.		807,300		831,613
Loan from Dadong Mei, non-related individual, due on March 8, 2021, with an annual interest rate of 4%, renewed on March 9, 2019.		1,556,936		1,603,825
Loan Lufeng Li, non-related individual, due on October 20, 2020, with an annual interest rate of 4% at October 21, 2019.		432,482		-
Total	$	12,431,487	$	15,925,689

For the three and nine months ended January 31, 2020 and 2019, interest expense related to short-term loans and long-term loans amounted to $208,942 and $171,705, and $446,288 and $488,641, respectively, which were included in interest expense in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.

NOTE 11 - SEGMENT INFORMATION

The following information is presented in accordance with ASC Topic 280, "Segment Reporting", for the three and nine months ended January 31, 2020 and 2019; 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 January 31, 2020 and 2019 is as follows:

	Three Months Ended January 31,				Nine Months Ended January 31,
	2020		2019		2020		2019
Revenues:
Stevioside - third parties	$	3,320,723		3,944,899		12,617,001		10,254,028
Stevioside - related parties		1,784,135		1,081,378		5,882,694		3,195,115
Total Stevioside		5,104,858		5,026,277		18,499,695		13,449,143

Corporate and other – third party		98,571		622,411		755,390		2,082,405
Corporate and other – related party		-		-		-		-
Total Corporate and other		98,571		622,411		755,390		2,082,405
Total segment and consolidated revenues	$	5,203,429		5,648,688		19,255,085		15,531,548

	Three Months Ended January 31,						Nine Months Ended January 31,
	2020			2019			2020			2019
Interest (expense) income:
Stevioside	$	(240,684	)	$	(207,474	)	$	(541,862	)	$	(589,969	)
Corporate and other		-			-			-			-
Total segment and consolidated interest expense	$	(240,684	)	$	(207,474	)	$	(541,862	)	$	(589,969	)
Depreciation and amortization:
Stevioside	$	275,906		$	290,386		$	763,429		$	824,360
Corporate and other		57,433			-			138,255			-
Total segment and consolidated depreciation and amortization	$	333,339		$	290,386		$	901,684		$	824,360
Income (loss) before income taxes:
Stevioside	$	(1,273,854	)	$	(1,056,344	)	$	(1,235,259	)	$	(2,558,358	)
Corporate and other		91,982			43,493			115,474			(633,366	)
Total consolidated loss before income taxes	$	(1,181,872	)	$	(1,012,851	)	$	(1,119,785	)	$	(3,191,724	)

	January 31, 2020			April 30, 2019
Segment property and equipment:
Stevioside		$	7,692,613		$	7,796,314
Corporate and other			1,495,856			1,197,083
Total property and equipment		$	9,188,469		$	8,993,397

NOTE 12 - CONCENTRATIONS AND CREDIT RISK

(i) Customer Concentrations

For the three and nine months ended January 31, 2020 and 2019, customers accounting for 10% or more of the Company's revenue were as follows:

	For the three months ended January 31,						For the nine months ended January 31,
Customer	2020			2019			2020			2019
A (1)		34.3	%		19.1	%		30.6	%		20.6	%
B		11.4	%		*			*			*
C		10.7	%					*

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

(ii) Vendor Concentrations

For the three and nine months ended January 31, 2020 and 2019, suppliers accounting for 10% or more of the Company's purchase were as follows:

	For the three months ended January 31,						For the nine months ended January 31,
Supplier	2020			2019			2020			2019
A		*			20.5	%		10.9	%		30.0	%
B		15.5	%		31.1	%		17.0	%		14.0	%
C		-			-			10.6	%		*
D		-			10.2	%		-			*
E		40.7	%		-			27.7	%		*
F		12.1	%		-			*			-

* 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 January 31, 2020, we had $72,958 of cash balance held in PRC banks, where there is no equivalent of federal deposit insurance as in the United States. As a result, cash held in PRC financial institutions is not insured. We have not experienced any losses in such accounts through January 31, 2020. Our cash position by geographic area was as follows:

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

NOTE 13 - SUBSEQUENT EVENTS

The Company evaluated subsequent events through March 16, 2020, the date the financial statements were available to issue, and concluded that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the consolidated financial statements.

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 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.

Recent Developments

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

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

While we were able to market and sale our Metformin products, with our current overhead and associated expenses, its profit margin has not been as lucrative as we had projected, and our Metformin production line has been operating at a net loss in fiscal 2019. On July 10, 2019, we entered into a management agreement with Ru Yuan, an unaffiliated individual, to contract out the Metformin production line for 30 years. On July 31, 2019, we entered into an addendum to this agreement to include a renewal period of every 5 years. Under the terms of this agreement, Ms. Yuan will operate the Metformin production line independently from Sunwin assuming all of its profits and liabilities, including employee payroll, benefits, utilities etc., and will pay to Qufu Shengren an annual contract fee of RMB3,000,000 (approximately $436,047).

On July 30, 2019, Qufu Natural Green entered into an Asset Transfer Agreement with Na Li, an unaffiliated individual (the "Buyer") for the sale of 100% equity ownership of Qufu Shengwang. Pursuant to the Asset Transfer Agreement, the Buyer shall pay to Qufu Natural Green a total cash consideration of RMB8,000,000 (approximately $1,162,790) based on the estimated net book value as of July 30, 2019, payable in two installments of RMB5,000,000 (approximately $726,744) on July 30, 2019 and RMB3,000,000 (approximately $436,046) on September 30, 2019. The Buyer assumed all assets and liabilities of Qufu Shengwang including the amount of Qufu Shengwang's debt to Qufu Natural Green of approximately RMB26,000,000 (approximately $3,779,070), and Qufu Natural Green shall assist in completing all documents required for the equity transfer after confirming receipt of the first payment. The Company received the first installment of RMB5,000,000 on July 30, 2019, and received the second installment of RMB3,000,000 on August 20, 2019.

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

Stevioside Segment

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

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

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

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

OUR PERFORMANCE

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

Our revenues totaled approximately $19,255,000 during the nine months ended January 31, 2020, an increase of 24.0%, as compared with the same period in 2019, and our gross margin increased to 16.2% from 11.0%. Our total operating expenses in the nine months ended January 31, 2020 decreased by approximately $622,000, or 14.5% compared to the same period in 2019 primarily due to a decrease of approximately $316,000, or 20.3% in selling expense and a decrease of approximately $887,000, or 43.2% in general and administrative expense, offset by an increase of approximately $580,000, or 82.9% in research and development expenses. Our net loss from continuing operations for the nine months ended January 31, 2020 was approximately $572,000, compared to net loss of $2,591,000 in the same period in 2019. Our operating performance for the nine months ended January 31, 2020 was primarily driven by an increase of 37.6% in sales revenue of from stevia products, including a 23.0% increase in sales to third parties, and an increase in sales to related party customers of approximately 84.1%.

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

Our Outlook

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

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

	-		Chinese domestic food and beverages, particularly herbal tea manufacturers and the pharmaceutical industry, have increased the use of steviosides, and new health awareness trends have also resulted in some new governing laws supporting the growth of this industry;
	-		Southeast and South Asia have renewed and increased their interest in stevia, particularly high grade stevia;
	-		Comparing 2019 to 2011, the usages of stevia in food products shows a 25.6% growth, and in beverage products shows a 34.6% growth; and
	-		Stevia has been growing in popularity in the last 10 years throughout all the global markets.

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

RESULTS OF OPERATIONS

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

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

For the Three Months ended January 31, 2019
	Stevioside					Corporate and Other				Consolidated
Revenues	$	5,026,276		100.0	%	$	622,412	100.0	%	$	5,648,688		100.0	%
Cost of goods sold		4,406,239		87.7	%		472,877	76.0	%		4,879,116		86.4	%
Gross profit		620,037		12.3	%		149,535	24.0	%		769,572		13.6	%
Selling expenses		547,774		10.9	%		70,028	11.3	%		617,802		10.9	%
General and administrative expenses		630,048		12.5	%		13,538	2.2	%		643,586		11.4	%
Research and development expenses		295,400		5.9	%		22,476	3.6	%		317,876		5.6	%
Loss from operations		(853,185	)	(17.0	)%		43,493	7.0	%		(809,692	)	(14.3	)%
Other expenses		(203,159	)	(4.0	)%		-	-			(203,159	)	(3.6	)%
(Loss) income from continuing operation before income taxes	$	(1,056,344	)	(21.0	)%	$	43,493	7.0	%	$	(1,012,851	)	(17.9	)%

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

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

For the Nine Months ended January 31, 2019
	Stevioside					Corporate and Other					Consolidated
Revenues	$	13,449,143		100.0	%	$	2,082,405		100.0	%	$	15,531,548		100.0	%
Cost of goods sold		12,090,275		89.9	%		1,727,936		83.0	%		13,818,211		89.0	%
Gross profit		1,358,868		10.1	%		354,469		17.0	%		1,713,337		11.0	%
Selling expenses		1,360,878		10.1	%		192,371		9.2	%		1,553,249		10.0	%
General and administrative expenses		1,321,072		9.8	%		730,920		35.1	%		2,0151,992		13.2	%
Research and development expenses		634,989		4.7	%		(633,366	)	(30.4	)%		699,533		4.5	%
Loss from operations		(1,958,071	)	(14.6	)%		(633,366	)	(30.4	)%		(2,591,437	)	(16.7	)%
Other expenses		(600,287	)	(4.5	)%		-		-			(600,287	)	(3.9	)%
Loss from continuing operation before income taxes	$	(2,558,358	)	(19.0	)%	$	(633,366	)	(30.4	)%	$	(3,191,724	)	(20.5	)%

Revenues

Total revenues in the three months ended January 31, 2020 decreased by approximately 7.9%, as compared to the same period in 2019. Stevioside revenues, which accounts for 98.1% and 89.0% of our total revenues in the three months ended January 31, 2020 and 2019, respectively, increased by approximately 1.6%, while Metformin revenues decreased by approximately $524,000 or 84.2%.

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

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

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

Cost of Revenues and Gross Margin

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

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

Selling Expenses

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

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

General and Administrative Expenses

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

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

Research and Development Expense

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

Other Income (Expenses)

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

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

Loss from Continuing Operations

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

Loss from Discontinued Operation

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

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

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

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

Net Loss

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

Foreign Currency Translation Gain or (Loss)

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

LIQUIDITY AND CAPITAL RESOURCES

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

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

Accounts receivable, net of allowance for doubtful accounts decreased by approximately $1,537,000 during the nine months ended January 31, 2020, as a result of the decrease in accounts receivable from the third parties as of January 31, 2020. The days for sales outstanding in accounts receivable decreased to 23 days as of January 31, 2020, as compared to 24 days as of April 30, 2019. The days for sales outstanding in accounts receivable for third party sales decreased to 15 days as of January 31, 2020, as compared to 17 days as of April 30, 2019. We will reevaluate and categorize accounts receivable for sales and will target to improve our collection effort in accounts receivable for related party sales and accounts receivable for third party sales in fiscal 2020.

Inventories at January 31, 2020, net of reserve for obsolescence, totaled approximately $12,815,000, as compared to $11,992,000 as of April 30, 2019. The increase is primarily due to our increase in procurements of raw materials in order to meet our anticipated higher sales volume during the next quarters in the fiscal year ended April 30, 2020. The current inventory level will prepare us for our anticipated upcoming increase in demands.

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

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

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

Cash Flows Analysis

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

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

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

NET CASH FLOW USED IN INVESTING ACTIVITIES:

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

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

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

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

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

CASH ALLOCATION BY COUNTRIES

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

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

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

Off Balance Sheet Arrangements

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

	-		Any obligation under certain guarantee contracts,
	-		Any retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets,
	-		Any obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our stock and classified in stockholder's equity in our statement of financial position, and
	-		Any obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or engages in leasing, hedging or research and development services with us.

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

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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting company.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act") that are designed to ensure that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported as specified in the SEC's rules and forms and that such information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer ("CEO"), and our Chief Financial Officer ("CFO"), to allow timely decisions regarding required disclosure.

Our management, with the participation of our CEO and CFO, performed an evaluation of the effectiveness of our disclosure controls and procedures as of January 31, 2020.

Based on this evaluation our management concluded that our disclosure controls and procedures were not effective as of January 31, 2020 such that the information relating to our company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our CEO, to allow timely decisions regarding required disclosure.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act. Our management is also required to assess and report on the effectiveness of our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 ("Section 404"). As reported in our Form 10-K for the year ended April 30, 2019, management assessed the effectiveness of our internal control over financial reporting as of April 30, 2019 and, during our assessment, management identified significant deficiencies related to (i) the U.S. GAAP expertise of our internal accounting staff, (ii) our internal audit functions and (iii) a lack of segregation of duties within accounting functions. Although management believes that these deficiencies do not amount to a material weakness, our internal controls over financial reporting were not effective at April 30, 2019.

Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. As a result, we have not been able to take steps to improve our internal controls over financial reporting during the three months ended January 31, 2020. However, to the extent possible, we will implement procedures to assure that the initiation of transactions, the custody of assets and the recording of transactions will be performed by separate individuals.

A material weakness (within the meaning of PCAOB Auditing Standard No. 5) is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the company's financial reporting.

In light of this significant deficiency, we performed additional analyses and procedures in order to conclude that our consolidated financial statements for the three months ended January 31, 2020 included in this quarterly report on Form 10-Q were fairly stated in accordance with the U.S. GAAP. Accordingly, management believes that despite our significant deficiency, our consolidated financial statements for the three months ended January 31, 2020 are fairly stated, in all material respects, in accordance with the U.S. GAAP.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation of our controls performed during the three months ended January 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 1 A. RISK FACTORS.

Risk factors describing the major risks to our business can be found under Item 1A, "Risk Factors", in our fiscal 2019 Annual Report on Form 10-K. There has been no material change in our risk factors from those previously discussed in the fiscal 2019 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURE.

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS

Exhibit No.		Description of Exhibit
	31.1	Section 302 Certificate of Chief Executive Officer.*
	31.2	Section 302 Certificate of Chief Financial Officer.*
	32.1	Section 906 Certificate of Chief Executive Officer and Chief Financial Officer.*
101.INS		XBRL INSTANCE DOCUMENT**
101.SCH		XBRL TAXONOMY EXTENSION SCHEMA**
101.CAL		XBRL TAXONOMY EXTENSION CALCULATION LINKBASE**
101.DEF		XBRL TAXONOMY EXTENSION DEFINITION LINKBASE**
101.LAB		XBRL TAXONOMY EXTENSION LABEL LINKBASE**
101.PRE		XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE**

* - Filed herewith.

** - In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed "furnished" and not "filed".

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SUNWIN STEVIA INTERNATIONAL, INC.


Dated: March 16, 2020	By: /s/ Dongdong Lin
	Dongdong Lin,
	Chief Executive Officer


Dated: March 16, 2020	By: /s/ Fanjun Wu
	Fanjun Wu,
	Chief Financial Officer