The following discussion and analysis of our financial condition and results of
operations are based upon our condensed consolidated financial statements and
the notes thereto included elsewhere in this Quarterly Report on Form 10-Q,
which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of such financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues, and expenses. On an ongoing basis, we evaluate
these estimates, including those related to useful lives of real estate assets,
bad debts, impairment, contingencies and litigation. We base our estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. There can be no assurance that actual
results will not differ from those estimates.



Application of critical accounting policies

In preparing our financial statements, we are required to formulate working policies regarding the valuation of our assets and liabilities and to develop estimates of these values. In our preparation of financial statements for the three and six months ended September 30, 2021 and 2020, no estimate was made that was (a) subject to a high degree of uncertainty and (b) material to our results.


Results of Operations


The following table presents the key elements of the unaudited operating results during the three and six months ended. September 30, 2021 and 2020:


                                             For the Three Months Ended
                                                    September 30,                      Change
                                                2021               2020            $             %
Revenue                                    $       47,955       $   30,988     $  16,967            55 %
Cost of Sales                                      31,575           28,441         3,134            11 %
Gross Profit                                       16,380            2,547        13,833           543 %
Total operating costs and expenses                114,242           18,730        95,512           510 %
(Loss) from operations before other
income and income taxes                           (97,862 )        (16,183 )     (81,679 )         505 %
Other (loss) income                                   (11 )          1,032        (1,043 )        (101 %)
(Loss) from operations before income
taxes                                             (97,873 )        (15,151 )     (82,722 )         546 %
Income taxes                                            -                -             -           N/A
Net (loss) from continuing operations             (97,873 )        (15,151 )     (82,722 )         546 %
Less: net (loss) attributable to
non-controlling interests                         (14,762 )              -       (14,762 )         N/A
Net (loss) attributable to common
shareholders'                              $      (83,111 )     $  (15,151 )   $ (67,960 )         449 %




                                             For the Six Months Ended
                                                   September 30,                      Change
                                               2021              2020            $              %
Revenue                                    $      78,046      $   99,516     $  (21,470 )         (22 %)
Cost of Sales                                     52,255          67,790        (15,535 )         (23 %)
Gross Profit                                      25,791          31,726         (5,935 )         (19 %)
Total operating costs and expenses               914,365          80,584        833,781         1,035 %
(Loss) from operations before other
income and income taxes                         (888,574 )       (48,858 )     (839,716 )       1,719 %
Other income                                           2           1,414         (1,412 )        (100 %)
(Loss) from operations before income
taxes                                           (888,572 )       (47,444 )     (841,128 )       1,773 %
Income taxes                                           -               -              -             -
Net (loss) from continuing operations           (888,572 )       (47,444 )     (841,128 )       1,773 %
(Loss) on the sale of discontinued
operations, net of income taxes                        -        (713,722 )      713,722          (100 %)
Net income from discontinued operations,
net of income taxes                                    -             743           (743 )        (100 %)
Total net (loss) from discontinued
operations                                             -        (712,979 )      712,979          (100 %)
Net (loss)                                      (888,572 )      (760,423 )     (128,149 )          17 %
Less: net (loss) income attributable to
non-controlling interests                        (14,762 )           364        (15,126 )      (4,155 %)
Net (loss) attributable to common
shareholders'                              $    (873,810 )    $ (760,787 )   $  113,023            15 %




                                       1





All of the Company's operations are currently carried out by its subsidiary,
Yuxinqi. Yuxinqi is a marketing enterprise with a focus on milled rice and other
agricultural products. Incorporated on February 5, 2018, with a short operating
history, Yuxinqi's sales are erratic, since a stable customer base has not been
established yet. Sales by Yuxinqi during the three months ended September 30,
2021 were 55% greater than during the three months ended September 30, 2020. The
increase in revenue occurred primarily because our principal customer, Jiufu
Zhenyuan, increased its orders. However, sales by Yuxinqi during the six months
ended September 30, 2021 were lower than during the six months ended September
30, 2020. The decrease in revenue occurred primarily because our principal
customers, such as Huiye and Shouhang Commerce, reduced their orders.



For the periods ended September 30, 2021 and 2020, the cost of sales of $31,575
and $28,441 for the three months, and $52,255 and $67,790 for the six months,
respectively, was attributable to the sales of milled rice and other foodstuffs.
Those operations yielded a gross profit for the three months periods of $16,380
and $2,547 with a gross margin of 34.2% and 8.2%, and a gross profit for the six
months periods of $25,791 and $ 37,726 with a gross margin of 33.0% and 31.9%,
respectively. The increase in gross margin during the three months ended
September 30, 2021, compared to the same period of the previous year was
primarily attributable to changes in customers and the changes in products.



To focus on the sale of value-added processed products, the Company's
subsidiary, Tianci Liangtian, completed the spin-off of its ownership interest
in Lvxin on April 30, 2020. During the three months ended September 30, 2020,
the Company incurred $713,722 of investment loss due to the divestment of Lvxin.



In April 2021, in order to boost sales, the Company granted a total of 345,000
fully vested shares with a fair value on the grant date of $2.20 per share to 25
individuals for sales promotion services. As a result, $759,000 in compensation
expense was recognized as advertising and promotion expenses for the three and
six months ended September 30, 2021. Therefore, for the periods ended September
30, 2021 and 2020, the Company incurred operating expenses total $114,242 and
$18,730 during the three months ended September 30, 2021 and 2020, and $914,365
and $80,584 during the six months ended September 30, 2021 and 2020,
respectively. The components of operating expenses were:



                                       Three Months Ended           Six Months Ended
                                            Sept. 30                    Sept. 30
                                       2021          2020          2021          2020
Salaries and benefits                $  82,268     $  22,356     $ 115,282     $  46,636
Office Expense                          16,977        15,812        31,279        20,055
Rentals and leases                       6,190         9,882        12,392        19,534
Professional fees                       18,310        50,788        36,420        67,331
Exchange (gain) loss                   (12,553 )     (81,254 )     (45,898 )     (81,254 )
Advertising and promotion expenses       3,050           423       764,890 
       6,854
Depreciation and amortization                -           723             -         1,428
Total operating expenses             $ 114,242     $  18,730     $ 914,365     $  80,584




The Company's operating expenses were partially offset by $45,898 and $81,254 of
gain on exchange realized during the six months ended September 30, 2021 and
2020, and $12,553 and $81,254 of gain on exchange realized during the six months
ended September 30, 2021 and 2020. This represented the increase in the USD
value of Tianci's debt to Organic Agricultural as a result of the decline in the
USD to CNY exchange rate from 6.5565 to 6.4580.



The Company's continuing operations produced a net loss of $97,873 and $15,151
for the three months ended September 30, 2021 and 2020, and $888,572 and $47,444
for the six months ended September 30, 2021 and 2020, respectively.



Liquidity and capital resources

The Company's operations have been financed primarily by proceeds from the sale
of shares. The Company received $920,000 from the sale of 4,119,500 shares to a
single investor during the six months ended September 30, 2021. As of September
30, 2021, our working capital was $632,249, an increase of $776,721 during the
six months ended September 30, 2021, primarily due to the cash received from the
sale of the 4,119,500 shares.



The largest components of working capital at September 30, 2021 were cash of
$741,882 and inventories of $134,604, which were offset by $178,006 in customer
deposits against future sales.



                                       2





Cash Flows



The following table summarizes our cash flows for the six months ended September
30, 2021 and 2020.



                                                       For the Six Months Ended
                                                             September 30,               Change
                                                         2021              2020            $
Net cash (used in) operating activities              $    (226,204 )    $ (136,213 )   $  (89,991 )
Net cash (used in) investing activities                          -          (1,343 )        1,343
Net cash provided by financing activities                  920,000         152,900        767,100
Effect of exchange rate fluctuation on cash and
cash equivalents                                           (22,420 )         9,783       (171,668 )
Net increase in cash and cash equivalents                  671,376          25,127        646,249
Cash and cash equivalents, beginning of year                70,506         242,174       (171,668 )
Cash and cash equivalents, end of year               $     741,882      $ 
267,301     $  474,581




During the six months ended September 30, 2021, our operations used net cash of
$226,204. The Company incurred a cash use from operations primarily because it
recorded a net loss of $117,180 after adding back our non-cash expenses of
$759,000 for stock issues as compensation and depreciation and amortization of
$12,392. In addition, we reduced the balance due to related parties by $63,967,
decreased accounts payable and accrued expenses by $29,192 and increased
inventories by $11,009. During the six months ended September 30, 2020, the
Company recorded $136,213 of cash used in operating activities, primarily
because it recorded an increase in prepayments and deferred expenses of $104,577
and a decrease in due to related parties of $82,076.



The Company had no investing activity during the six months ended September 30,
2021. The Company's only investing activity during the six months ended
September 30, 2020 was the distribution of $1,343 of cash in connection with the
sale of the discontinued operations.



Our financing activities during the six months ended September 30, 2021
generated $920,000 from the sale of common stock. During the six months ended
September 30, 2020, our financing activities generated $46,400 from the sale of
common stock and the receipt of $106,500 for future shares to be issued.



Trends, events and uncertainties

The Company intends to expand its product offerings to include value-added
products, both products based on rice and products based on other food stuffs,
such as organic red beans and millet. Our marketing personnel will endeavor to
expand awareness of our brand, open new marketing channels, and educate the
nation about the health benefits of selenium-enriched rice. In this manner, the
Company hopes to increase sales to support the future operations and development
of the Company. There is no guarantee that the Company's new strategy will
be
successful.



On November 6, 2020 Organic Agricultural entered into a Cooperation Agreement
with Unbounded IOT Block Chain Limited ("Unbounded"), an entity with offices in
Xiamen City, Fujian Province. The purpose of the Cooperation Agreement was to
promote the use of blockchain technology in agriculture, specifically the
development of tracing systems for agricultural products, the development of a
blockchain-based shopping mall for agricultural products, and related
improvements to the agricultural sector of the economy. To accomplish those
purposes, Tianci Wanguan (Xiamen) Digital Technology Co., Ltd. was incorporated
in Xiamen, China on November 5, 2020. Tianci Wanguan is 51% owned by Organic
Agricultural HK and 49% owned by Chen Zewu for the behalf of Unbounded. Each
party committed to provide capital resources to Tianci Wanguan in proportion to
its ownership percentage. On July 19, 2021 the parties executed a supplement to
the Cooperation Agreement. The Supplementary Agreement sets forth performance
criteria for Unbounded's management of Tianci Wanguan: specifically, that within
12 months after the shares mentioned below are issued to Unbounded, Tianci
Wanguan must have made a profit of five million Renminbi from the business
described in the Cooperation Agreement or any other business approved by Organic
Agricultural. Any profits generated by Tianci Wanguan will be held for use by
that company. The Supplementary Agreement further provides that, after
implementing a 5.16 -for-1 stock split contemplated by the Cooperation Agreement
and the supplement, Organic Agricultural will issue 10 million shares of its
common stock to Unbounded. The certificate for the shares will be held by Chen
Zewu, who will vote the shares in accordance with the direction he receives from
Hao Shuping, a member of the Organic Agricultural Board of Directors. If
Unbounded fails to satisfy the criteria described above, the 10 million shares
must be returned to Organic Agricultural. If Unbounded does satisfy the
criteria, then it will have unrestricted ownership of the 10 million shares, and
Organic Agricultural will issue an additional 10 million shares to Unbounded.



                                       3




The COVID-19 outbreak has had a significant adverse impact and created many
uncertainties related to our business, and we expect that it will continue to do
so. The Company is experiencing challenges in sales and which has increased the
Company's financial uncertainty. Our future business outlook and expectations
are very uncertain due to the impact of the COVID-19 pandemic and is very
difficult to quantify. It is difficult to assess or predict the impact of this
unprecedented event on our business, financial results or financial condition.
Factors that will impact the extent to which the COVID-19 pandemic affects our
business, financial results and financial condition include: the duration,
spread and severity of the pandemic; the actions taken to contain the virus or
treat its impact, including government actions to mitigate the economic impact
of the pandemic; and how quickly and to what extent normal economic and
operating conditions can resume, including whether any future outbreaks
interrupt the economic recovery.



The U.S. government, including the SEC, has made statements and taken actions
that have led to changes in relations between the U.S. and China, and will
impact companies with connections to the United States or China. Those actions
by the U.S. government included imposing several rounds of tariffs affecting
certain products manufactured in China and imposing sanctions and restrictions
in relation to China. Actions by the SEC included issuing statements indicating
that it would make enhanced review of companies with significant China-based
operations. It is unknown whether and to what extent new legislation, executive
orders, tariffs, laws or regulations will be adopted, or the effect that any
such actions would have on companies with significant connections to the U.S. or
to China, our industry or on us. Any unfavorable government policies on
cross-border relations, including increased scrutiny on companies with
significant China-based operations, capital controls or tariffs, may affect our
ability to raise capital and the market price of our shares. If any new
legislation, executive orders, tariffs, laws and/or regulations are implemented,
if existing trade agreements are renegotiated or if the U.S. or Chinese
governments take retaliatory actions due to the recent U.S.-China tensions, such
changes could have an adverse effect on our business, financial condition and
results of operations, our ability to raise capital and the market price of our
shares. Changes in United States and China relations and/or regulations may
adversely impact our business, our operating results, our ability to raise
capital and the market price of our shares.



Other than the factors listed above, we are not aware of any trends, events or uncertainties that have had or reasonably expected to have a material impact on our net sales or our revenues or revenues from continuing operations.

Off-balance sheet provisions



We do not currently have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition
or results of operations.


Recent accounting positions

New accounting rules and disclosure requirements can have a significant impact on the comparability of our financial statements. Please refer to note 2 of our condensed consolidated financial statements included in this quarterly report.

There has been no recent accounting pronouncement that we believe would materially affect the financial condition or results of operations of the Company.

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