**United
        States**
 **Securities
        and Exchange Commission**
 Washington,
        D.C. 20549
 
 
 **FORM
        10-QSB**
 
 
 **x** **QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
        OF
        1934**
  For
        the
        quarterly period ended **March 31, 2007**
 
 
 ** ̈** **TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE** ACT
        OF
        1934
  For
        the
        transition period from _______ to _______
 
 
 **SHINECO,****INC.**
 (Exact
        name of small business issuer as specified in its charter)
  
 **Delaware**
              
              **52-2175898**(State
                  or other jurisdiction of incorporation or organization)
              
              (IRS
                  Employer Identification No.)
   **Room
          3106, Building B,**
 **#39
          East 3rd Ring Middle Road, Chaoyang District**
 **Beijing,
          PR China 100022**
 (Address
        of principal executive offices)
 
 (0086)
        10-58693011
 (Issuer's
        telephone number)
 
 -
            1
            -
 **Securities
          registered under Section 12(b) of the Act:** None
 
 **Securities
          registered under Section 12(g) of the Act:**Common Stock $.001 par
          value
 
 Check
          whether the issuer (1) filed all reports required to be filed by Section
          13 or
          15(d) of the Securities Exchange Act during the past 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  ̈  **No
          x**
 
 **APPLICABLE
          ONLY TO CORPORATE ISSUERS**
 
 State
          the
          number of shares outstanding of each of the issuer’s classes of common equity,
          as of the latest practicable date:
 
 **Class
                    of Stock**
                
                **Outstanding
                    July 18, 2007**Common
                    Stock ($.001 par value)
                
                9,298,823
 
 **REPORTS
          TO SECURITY HOLDERS**
 
 We
          are a
          reporting company under the requirements of the Securities Exchange Act
          of 1934
          and will file quarterly, annual and other reports with the Securities and
          Exchange Commission. This quarterly report contains the required audited
          financial statements. We are not required to deliver a quarterly report
          to
          security holders and will not voluntarily deliver a copy of the quarterly
          report
          to security holders, except in connection with our annual meeting of
          shareholders. The reports and other information filed by us will be available
          for inspection and copying at the public reference facilities of the Commission,
          100 F Street, N.E., Washington, D.C. 20549.
 
 Copies
          of
          such material may be obtained by mail from the Public Reference Section
          of the
          Commission at 100 F Street, N.E., Washington, D.C. 20549, at prescribed
          rates.
          Information on the operation of the Public Reference Room may be obtained
          by
          calling the SEC at 1-800-SEC-0330. In addition, the Commission maintains
          a World
          Wide Website on the Internet at http://www.sec.gov that contains reports,
          proxy
          and information statements and other information regarding registrants
          that file
          electronically with the Commission.
 -
              2
              -
 
 SHINECO,
          INC.
 Form
          10-QSB
 
 For
          the
          Quarterly Period Ended March 31, 2007
 
 **Table
          of Contents**
 **Page**Cautionary
                      Statement and Risk Factors that May Affect Future Results
                  4**PART
                      I**ITEM
                      1.
                  Selected
                      Financial StatementsBalance
                      Sheet – March 31, 2007 (unaudited)
                  5Statements
                      of Operations – Three Months Ended March 31, 2007 and 2006
                      (unaudited)
                  6Statements
                      of Cash Flows – Three Months Ended March 31, 2007 and 2006
                      (unaudited)
                  7Notes
                      to Financial Statements (unaudited)
                  8
                      -
                      12ITEM
                      2.
                  Management’s
                      Discussion and Analysis and Plan of Operation
                  13ITEM
                      3.
                  Controls
                      and Procedures**PART
                      II**ITEM
                      1.
                  Legal
                      Proceedings
                  16ITEM
                      2.
                  Changes
                      in Securities
                  16ITEM
                      3.
                  Defaults
                      Upon Senior Securities
                  16ITEM
                      4.
                  Submission
                      of Matters to a Vote of Security Holders
                  16ITEM
                      5.
                  Other
                      Information
                  16ITEM
                      6.
                  Exhibits
                      and Reports on Form 8-K
                  16Signatures
                  17
 -
                3
                -
  
 **CAUTIONARY
          STATEMENT REGARDING FORWARD-LOOKING STATEMENTS:**Certain statements
          contained herein constitute "forward-looking statements" within the meaning
          of
          Section 27 A of the Securities Exchange Act of 1933, as amended (the "Securities
          Act") and Section 21E of the Securities Exchange Act of 1934, as amended
          (the
          "Exchange Act"). These forward-looking statements can be identified by
          the use
          of predictive, future-tense or forward-looking terminology, such as "believes,"
          "anticipates," "expects," "estimates," "plans," "may," "intends," "will,"
          or
          similar terms. These statements appear in a number of places in this report
          and
          include statements regarding the intent, belief or current expectations
          of the
          Company, its directors or its officers with respect to, among other things:
          (i)
          the Company's business and growth strategies and (ii) the Company's financing
          plans.
 
 You
          are
          cautioned that any forward-looking statements are not guarantees of future
          performance and involve significant risks and uncertainties. Actual results
          may
          differ from forward-looking statements.
 
 **RISK
          FACTORS:**Risks, uncertainties and other important factors that could
          cause actual results to differ materially from those in forward-looking
          statements include, but are not limited to, the following:
 
 ·
                Shineco’s
                    success depends heavily upon the continued active participation
                    of our
                    President, Yuying Zhang, and our Director Weixing
                    Yin;
 ·
                our
                    stock is subject to the Penny Stock rules, which impose additional
                    requirements and suitability standards on stock buyers; these
                    rules may
                    decrease the market’s interest in our
                    stock;
 ·
                actions
                    by competitors that negatively affect us—the Chinese herbal remedy market
                    is extremely competitive, and we face competition from a number
                    of larger,
                    better-funded companies;
 ·
                our
                    business depends upon continuing product development and technological
                    change; if we cannot keep up with technological change, we could
                    suffer
                    financial losses;
 ·
                we
                    depend heavily on our proprietary technology; if we cannot protect
                    our
                    patents and proprietary rights, we may lose
                    business;
 ·
                we
                    do the large majority of our business in China; if the Chinese
                    economy
                    slows down, our business could slow down as
                    well;
 ·
                the
                    uncertain legal environment in China could limit the legal protections
                    available to you;
 ·
                the
                    effects of weather and natural disasters or widespread public
                    health
                    problems, including the avian flu, could negatively affect our
                    business
                    and results of operations;
 ·
                changes
                    in China’s political and economic policies could hurt our
                    business;
 ·
                restrictions
                    on currency exchange may limit our ability to receive or use
                    our revenues
                    effectively;
 ·
                the
                    value of our securities will be affected by the foreign exchange
                    rate
                    between U.S. dollars and the Chinese
                    renminbi;
 ·
                the
                    market price for our common stock (if one ever develops) will
                    likely be
                    very volatile;
 ·
                stockholders
                    could experience substantial dilution if we issue more stock
                    to raise more
                    money;
 ·
                a
                    large portion of our common stock is controlled by a small number
                    of
                    stockholders who in effect control our business, which means
                    you will have
                    little or no influence on our
                    business;
 ·
                there
                    is no established market for our stock, so you may never be able
                    to sell
                    your shares;
 ·
                we
                    have never paid dividends and do not intend to pay dividends
                    for the
                    foreseeable future, given our need to retain earnings to finance
                    the
                    development and expansion of our
                    business;
 ·
                the
                    risk that you will never see a return on your investment, and
                    the stock
                    may become worthless;
 ·
                other
                    risks or uncertainties described elsewhere in this report and
                    in other
                    reports we have filed and will file with the Securities and Exchange
                    Commission (SEC).
 
 Forward-looking
          statements speak only as of the date of the report, presentation or filing
          in
          which they are made.  Except to the extent required by the federal
          securities laws, Shineco and its subsidiaries undertake no obligation to
          publicly update or revise any forward-looking statements, whether as a
          result of
          new information, future events or otherwise.
 -
                4
                -
 **SHINECO,
          INC.**


**CONSOLIDATED
      BALANCE SHEETS**


(UNAUDITED)





**March
                31,**
              **2007**
            
            
            **December
                31,**
              **2006****ASSETS**Current
                assetsCash
                and cash equivalents
            
            $
            37,910
            
            
            $
            49,981Trade
                receivables, net
            
            
            1,703,246
            
            
            
            1,417,970Other
                receivables, net
            
            
            110,246
            
            
            
            88,798Vendor
                deposits
            
            
            607,245
            
            
            
            596,632Prepaid
                expenses
            
            
            5,368
            
            
            
            --Inventories
            
            
            1,928,592
            
            
            
            2,044,279Total
                current assets
            
            
            4,392,607
            
            
            
            4,197,660Property,
                plant and equipment, net
            
            
            122,842
            
            
            
            124,362Related
                party receivables
            
            
            3,279
            
            
            
            33,690Investment
                in unconsolidated subsidiary
            
            
            50,995
            
            
            
            56,363Deferred
                charge
            
            
            45,818
            
            
            
            48,291Intangibles,
                net
            
            
            143,662
            
            
            
            147,467**Total
                assets**
            
            $
            4,759,203
            
            
            $
            4,607,833**LIABILITIES
                AND STOCKHOLDERS' EQUITY**Current
                liabilitiesTrade
                payables
            
            $
            793,857
            
            
            $
            815,611Related
                party payables
            
            
            458,173
            
            
            
            453,327Accrued
                liabilities
            
            
            108,294
            
            
            
            74,460Other
                payables
            
            
            124,073
            
            
            
            76,456Notes
                payable
            
            
            815,638
            
            
            
            822,566Taxes
                payable
            
            
            24,633
            
            
            
            58,505Customer
                deposits
            
            
            69,450
            
            
            
            44,873Accrued
                employee benefits
            
            
            45,211
            
            
            
            41,109Accrued
                dividends on preferred stock
            
            
            112,000
            
            
            
            91,000Total
                current liabilities
            
            
            2,551,329
            
            
            
            2,477,907Series
                A Convertible preferred stock, net of subscription receivable of
                $359,892;
              par
                value $.001; liquidation preference $.70 per share; 5,000,000 shares
                authorized;2,000,000
                and 0 shares issued and outstanding
            
            
            1,040,108
            
            
            
            1,040,108Minority
                interest
            
            
            2,737
            
            
            
            5,627Stockholders'
                equityCommon
                stock: par value $.001; 50,000,000 shares authorized;
              9,298,823
                shares issued and outstanding
            
            
            9,299
            
            
            
            9,299Additional
                paid in capital
            
            
            1,079,908
            
            
            
            1,079,908Retained
                earnings
            
            
            17,156
            
            
            
            (42,069
            )Accumulated
                other comprehensive income
            
            
            58,666
            
            
            
            37,053Total
                stockholders' equity
            
            
            1,165,029
            
            
            
            1,084,191**Total
                liabilities and stockholders' equity**
            
            $
            4,759,203
            
            
            $
            4,607,833







**See
      notes to consolidated financial statements.**







-
            5
            -





**SHINECO,
      INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME**


(UNAUDITED)





**Three
                months ended March 31,****2007**
            
            
            **2006**RevenueSales
                revenue
            
            $
            562,564
            
            
            $
            444,048Cost
                of goods sold
            
            
            237,274
            
            
            
            172,568**Gross
                profit**
            
            
            325,290
            
            
            
            271,480Operating
                expensesOther
                selling expenses
            
            
            19,730
            
            
            
            33,026Salaries
                and benefits
            
            
            98,846
            
            
            
            --Depreciation
                and amortization
            
            
            13,711
            
            
            
            --Other
                general and administrative expenses
            
            
            83,712
            
            
            
            162,375**Total
                operating expenses**
            
            
            215,999
            
            
            
            195,401Operating
                income(loss)
            
            
            109,291
            
            
            
            76,079Other
                income (expenses)Interest
                expenses
            
            
            (44,244
            )
            
            
            (19,523
            )Income
                (loss) on equity investments
            
            
            (5,351
            )
            
            
            (2,290
            )Other
            
            
            21,346
            
            
            
            (1,619
            )**Total
                other income (expense)**
            
            
            (28,249
            )
            
            
            (23,432
            )Income
                before taxes and minority interest
            
            
            81,042
            
            
            
            52,647Provision
                for income taxes
            
            
            3,697
            
            
            
            --Income
                before minority interest
            
            
            77,345
            
            
            
            52,647Minority
                interest in (income)/loss of subsidiaries
            
            
            2,880
            
            
            
            1,158Income
                from continuing operations
            
            
            80,225
            
            
            
            53,805Income
                (loss) from operations of disposed subsidiaries
            
            
            --
            
            
            
            --(Loss)
                gain on disposal of subsidiary
            
            
            --
            
            
            
            --Net
                income (loss) from discontinued operations
            
            
            --
            
            
            
            --Net
                income (loss)
            
            $
            80,225
            
            
            $
            53,805Foreign
                currency translation adjustment
            
            
            21,613
            
            
            
            2,811**Comprehensive
                income (loss)**
            
            $
            101,838
            
            
            $
            56,616**Basic
                earnings (loss) per common share:**From
                continuing operations
            
            $
            0.01
            
            
            $
            0.00From
                discontinued operations
            
            $
            --
            
            
            $
            --From
                net income (loss)
            
            $
            0.01
            
            
            $
            0.00**Diluted
                earnings (loss) per common share:**From
                continuing operations
            
            $
            0.01
            
            
            $
            0.00From
                discontinued operations
            
            $
            --
            
            
            $
            --From
                net income (loss)
            
            $
            0.01
            
            
            $
            0.00Denominator
                for basic earnings per share
            
            
            9,298,823
            
            
            
            9,298,823Denominator
                for diluted earnings per share
            
            
            9,298,823
            
            
            
            9,298,823







**See
      notes to consolidated financial statements.**





-
            6
            -





**SHINECO,
      INC.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


(UNAUDITED)





**Three
                months ended March 31,****2007**
            
            
            **2006****Cash
                flows from operating activities:**Net
                income
            
            $
            80,225
            
            
            $
            53,805Adjustments
                to reconcile net income to net cash used in operations:Depreciation
                and amortization
            
            
            11,794
            
            
            
            10,425Loss(income)
                from unconsolidated subsidiaries
            
            
            5,351
            
            
            
            -Minority
                interest
            
            
            (2,880
            )
            
            
            (1,606
            )Changes
                in operating assets and liabilities:Trade
                receivables
            
            
            (270,633
            )
            
            
            550,932Other
                receivables
            
            
            (20,575
            )
            
            
            25,903Vendor
                deposits
            
            
            (5,203
            )
            
            
            (642,847
            )Prepaid
                expenses
            
            
            (2,450
            )
            
            
            (99,172
            )Inventories
            
            
            134,589
            
            
            
            (106,951
            )Trade
                payables
            
            
            (30,583
            )
            
            
            85,219Accrued
                liabilities
            
            
            33,045
            
            
            
            (20,114
            )Other
                payables
            
            
            11,057
            
            
            
            (4,939
            )Taxes
                payable
            
            
            (34,281
            )
            
            
            (16,833
            )Customer
                deposits
            
            
            24,088
            
            
            
            4,264Accrued
                employee benefits
            
            
            3,718
            
            
            
            37,974**Net
                cash provided by (used in) operations**
            
            
            (62,738
            )
            
            
            (123,940
            )Cash
                flows from investing activities:Related
                party receivables
            
            
            30,726
            
            
            
            11,898Purchase
                of property and equipment
            
            
            (4,039
            )
            
            
            (4,500
            )**Net
                cash provided by (used in) investing activities**
            
            
            26,687
            
            
            
            7,398**Cash
                flows from financing activities:**Related
                party payables
            
            
            -9,138
            
            
            
            (60,421
            )Repayments
                on short-term notes payable
            
            
            (14,312
            )
            
            
            (11,772
            )**Net
                cash provided by (used in) financing activities**
            
            
            (23,450
            )
            
            
            (72,193
            )Effect
                of rate changes on cash
            
            
            47,430
            
            
            
            2,811Increase
                in cash and cash equivalents
            
            
            (12,071
            )
            
            
            (185,924
            )Cash
                and cash equivalents, beginning of period
            
            
            49,981
            
            
            
            273,367**Cash
                and cash equivalents, end of period**
            
            $
            37,910
            
            
            $
            87,443**Supplemental
                disclosures of cash flow information:**Cash
                paid for interest
            
            $
            (44,244
            )
            
            $
            (19,523
            )Cash
                paid for income taxes
            
            $
            --
            
            
            $
            --**Supplemental
                disclosures of non-cash investing and financing
                activities:**Stock
                issued for services
            
            $
            --
            
            
            $
            --Inventory
                and intangibles acquired in business combination
            
            $
            --
            
            
            $
            --Accrual
                of preferred stock dividend
            
            $
            21,000
            
            
            $
            21,000







**See
      notes to consolidated financial statements.**





-
            7
            -







**SHINECO,
      INC.**


**NOTES
      TO UNAUDITED****CONSOLIDATED FINANCIAL
      STATEMENTS**








**NOTE
      1.   NATURE OF OPERATIONS**





Shineco,
      Inc. (the Company) was incorporated on August 20, 1997 in the State of Delaware
      as Supcor, Inc. On December 30, 2004 the Company acquired all of the outstanding
      stock of Beijing Tenet Jove Technological Development Co., Ltd. (“Beijing Tenet
      Jove”) in exchange for stock of the Company. The stock exchange agreement is
      subject to the Chinese government’s approval, which has been received from the
      PRC government in August 11, 2006. Beijing Tenet Jove has finished entire
      registration change procedure from Chinese domestic enterprise to foreign
      invested enterprise and acquired corporative operational license from Beijing
      Administration for Industry & Commerce on that date. Now Shineco is legally
      enforceable in the PRC. The consolidated results of operations are primarily
      those of Beijing Tenet Jove and its consolidated subsidiaries.





Beijing
      Tenet Jove was incorporated on December 16, 2003 under the laws of the People’s
      Republic of China (the PRC). In the PRC, Ltd, or Limited, is equivalent to
      Inc,
      or Incorporated, in the United States (US).





The
      Company primarily manufactures and sells (1) Far Infrared Therapeutic Clothing
      and Textile Products, (2) Apocynum-based Nutritional Supplements, and (3) FIR
      Multi-functional Therapeutic Devices, which are innovative therapeutic products
      for complementary treatment of both acute and chronic health concerns. By
      incorporating traditional Chinese medical methodology with modern
      bio-technology, we have developed and commercialized over 100 products under
      our
      brand name of “天益Tenethealth®”, which
      means “Benefit from Nature.”





**NOTE
      2.   BASIS OF PRESENTATION**





The
      accompanying consolidated financial statements are prepared in accordance with
      accounting principles generally accepted in the United States of America (US
      GAAP) and have been retroactively restated to give effect to the
      recapitalization due to a reverse merger consummated on December 30, 2004.
      This
      basis differs from that used in the statutory accounts of the Company, which
      were prepared in accordance with the accounting principles and relevant
      financial regulations applicable to enterprises in the PRC. All necessary
      intercompany transactions and balances have been eliminated in consolidation,
      and all necessary adjustments have been made to present the consolidated
      financial statements in accordance with US GAAP.





The
      accompanying consolidated financial statements include the accounts of the
      Company and its 90% owned subsidiary, Tianjin Tenet Health.





**NOTE
      3.   SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES**





ECONOMIC
      AND POLITICAL RISKS





The
      Company faces a number of risks and challenges as a result of having primary
      operations and markets in the PRC. Changing political climates in the PRC could
      have a significant effect on the Company’s business.





ESTIMATES





The
      preparation of consolidated financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosures of contingent assets and liabilities at the date of the consolidated
      financial statements and the reported amounts of income and expenses during
      the
      reporting period. Actual results could differ from those estimates.





CASH
      AND
      CASH EQUIVALENTS





For
      purposes of the statements of cash flows, cash and cash equivalents includes
      cash on hand and demand deposits held by banks. None of the Company’s deposits
      are insured by the Federal Deposit Insurance Corporation or any other entity
      of
      the U.S. government.





TRADE
      ACCOUNTS RECEIVABLE





Trade
      accounts receivable are recognized and carried at original invoice amount less
      an allowance for any uncollectible amounts. An allowance for doubtful accounts
      is made when collection of the full amount becomes questionable. The allowance
      for doubtful accounts was $215,411 and $213,481 at March 31, 2007 and December
      31, 2006, respectively.





OTHER
      RECEIVABLES





Other
      receivables consist primarily of advances made to third parties. The balances
      due to the Company were $110,246 and $88,798 at March 31, 2007 and December
      31,
      2006, respectively.





-
          8
          -




**SHINECO,
        INC.**
 **NOTES
        TO UNAUDITED CONSOLIDATED FINANCIAL
        STATEMENTS**






INVENTORIES





Inventories
      consist of raw materials, packaging materials, sub-contracting materials,
      production costs, and finished products. The inventories are valued at the
      lower
      of cost (first-in, first-out method) or market. Impairment and changes in market
      value are evaluated on a per item basis. The balances of the Company were
      $1,928,592 and $ 2,044,279 at March 31, 2007 and December 31, 2006,
      respectively.





PROPERTY,
      PLANT AND EQUIPMENT





Property,
      plant and equipment is carried at cost less accumulated depreciation and
      amortization. Depreciation and amortization are computed using the straight-line
      method over the useful lives of the assets. Amortization of leasehold
      improvements is calculated on a straight-line basis over the life of the asset
      or the term of the lease, whichever is shorter. Major renewals and betterments
      are capitalized and depreciated; maintenance and repairs that do not extend
      the
      life of the respective assets are charged to expense as incurred. Upon disposal
      of assets, the cost and related accumulated depreciation are removed from the
      accounts and any gain or loss is included in income. Depreciation related to
      property and equipment used in production is reported in cost of
      sales.





Property
      and equipment are depreciated over their estimated useful lives as
      follows:





Machinery
                and equipment
            10
                yearsVehicles
            7
                yearsOffice
                equipment
            7
                years





Long-term
      assets of the Company are reviewed annually to assess whether the carrying
      value
      has become impaired, according to the guidelines established in Statement of
      Accounting Standards (SFAS) No. 144, “Accounting for the Impairment or Disposal
      of Long-Lived Assets.” The Company also evaluates the periods of amortization to
      determine whether subsequent events and circumstances warrant revised estimates
      of useful lives. No impairment of assets was recorded in the periods
      reported.





REVENUE
      RECOGNITION





Revenues
      are recognized as earned when the following four criteria are met: (1) a
      customer issues purchase orders or otherwise agrees to purchase products; (2)
      products are delivered to the customer; (3) pricing is fixed or determined
      in
      accordance with the purchase order or agreement; and (4) collectibility is
      reasonably assured. The Company sells its products primarily at the wholesale
      level and does not allow returns of its products. Consequently, no reserve
      for
      future returns has been established.





The
      Company has agreements with distributors for the territorial marketing of its
      products. No fees are paid to the Company by the distributors for such
      agreements.





FOREIGN
      CURRENCY AND COMPREHENSIVE INCOME





The
      accompanying consolidated financial statements are presented in United States
      (US) dollars. The functional currency is the Renminbi (RMB). The consolidated
      financial statements are translated into US dollars from RMB at year-end
      exchange rates for assets and liabilities, and weighted average exchange rates
      for revenues and expenses. Capital accounts are translated at their historical
      exchange rates when the capital transactions occurred.





RMB
      is
      not freely convertible into the currency of other nations. All such exchange
      transactions must take place through authorized institutions. There is no
      guarantee the RMB amounts could have been, or could be, converted into US
      dollars at rates used in translation.





TAXES





Deferred
      tax assets and liabilities are recognized for the future tax consequences
      attributable to differences between the financial statement carrying amounts
      of
      existing assets and liabilities and their respective tax bases. Deferred tax
      assets and liabilities are measured using enacted tax rates expected to apply
      to
      taxable income in the years in which those temporary differences are expected
      to
      reverse. The effect on deferred tax assets and liabilities of a change in tax
      rates is recognized in the statement of operations in the period that includes
      the enactment date. A valuation allowance is provided for deferred tax assets
      if
      it is more likely than not these items will either expire before the Company
      is
      able to realize their benefits, or that future deductibility is
      uncertain.





Currently,
      the Company has recorded only minimal income taxes and no deferred taxes because
      it is a high-tech company registered in Chinese Zhongguancun Science Park.
      In
      China, high-tech companies are encouraged to promote their technologies to
      the
      market, so the Company is exempted from income tax for its first three years
      and
      enjoys the policy of paying half of the income tax for its second three
      years.





-
          9
          -


**SHINECO,
        INC.**
 **NOTES
        TO UNAUDITED CONSOLIDATED FINANCIAL
        STATEMENTS**




EARNINGS
      PER SHARE





Basic
      earnings per common share ("EPS") are calculated by dividing net income by
      the
      weighted average number of common shares outstanding during the year. Diluted
      earnings per common share are calculated by adjusting the weighted average
      outstanding shares, assuming conversion of all potentially dilutive securities,
      such as stock options, warrants and conversion features attached to preferred
      stock or debt.





The
      Company issued convertible preferred stock on December 1, 2005, but no exercise
      can be made until after one year from issue, and then only if there is a public
      market for the common stock of the Company. At March 31, 2007 there were no
      exercisable conversion rights attached to the preferred stock.





The
      numerators and denominators used in the computations of basic and diluted EPS
      are presented in the following table:





**Three
                months ended**
              **March
                31,****2007**
            
            
            **2006****NUMERATOR
                FOR BASIC AND DILUTED EPS**Income
                from continuing operations
            
            $
            80,225
            
            
            $
            53,805Accrued
                dividend on Series A Preferred stock
            
            
            (21,000
            )
            
            
            (21,000
            )Income
                from continuing operations available to common
                shareholders
            
            
            59,225
            
            
            
            32,805Income
                from discontinued operations
            
            
            --
            
            
            
            --Net
                income to common stockholders
            
            $
            59,225
            
            
            $
            32,805**DENOMINATOR
                FOR BASIC EPS**Weighted
                average shares of common stock outstanding
            
            
            9,298,823
            
            
            
            9,298,823EPS
                - Basic from continuing operations
            
            $
            0.01
            
            
            $
            0.00EPS
                - Basic from discontinued operations
            
            $
            --
            
            
            $
            --EPS
                - Basic
            
            $
            0.01
            
            
            $
            0.00**DENOMINATOR
                FOR FULLY DILUTED EPS**Weighted
                average shares of common stock outstanding
            
            
            9,298,823
            
            
            
            9,298,823Exercisable
                warrants
            
            
            --
            
            
            
            --Series
                A Preferred stock conversion rights (antidilutive)
            
            
            --
            
            
            
            --Weighted
                average common shares and warrants outstanding
            
            
            9,298,823
            
            
            
            9,298,823EPS
                - Fully diluted from continuing operations
            
            $
            0.01
            
            
            $
            0.00EPS
                - Fully diluted from discontinued operations
            
            $
            --
            
            
            $
            --EPS
                - Fully diluted
            
            $
            0.01
            
            
            $
            0.00





**NOTE
      4.   BUSINESS COMBINATIONS**





Tian
      Yi
      Hua Tai, Tianjin (Tianjin) was incorporated in the PRC on August 12, 2003 as
      a
      manufacturer of clothing and related products. On April 27, 2004 Tianjin merged
      into Beijing Tenet Jove, becoming a 90% subsidiary. The Company paid cash of
      $36,232 and notes payable of $100,823 for an aggregate of $137,055 to the owners
      in exchange for the 90% interest. As the principal owners of Tianjin were the
      same as the principal owners of Beijing Tenet Jove, the transaction was
      accounted for as a transfer of entities under common control whereby the assets
      and liabilities of the acquired company were recorded at their historical cost
      basis and the results of its operations are consolidated with those of the
      Company as if the transfer had occurred at the beginning of the first period
      presented. No adjustment to additional paid-in capital was required, as the
      amount paid was equal to the historical cost basis of the net assets acquired.
      The following table details the net assets acquired in the
      transaction.





Cash
            
            $
            27,559Accounts
                receivable
            
            
            5,398Inventory
            
            
            467,065Other
                receivables
            
            
            123,672Vendor
                deposits
            
            
            205,263Fixed
                assets
            
            
            43,197Payables
            
            
            (707,821
            )Accrued
                liabilities
            
            
            (12,050
            )Net
                assets of subsidiary
            
            
            152,283Minority
                interest @ 10%
            
            
            (15,228
            )Net
                assets acquired
            
            $
            137,055





On
      November 4, 2004, owners of Beijing Tenet Jove acquired a controlling interest
      in the Company from its previous stockholders. On December 30, 2004, the Company
      issued 6,800,000 shares of its common stock in exchange for 100% of the
      outstanding registered capital of Beijing Tenet Jove. Beijing Tenet Jove is
      treated as the accounting acquirer in a reverse merger. Consequently, these
      financial statements reflect the accounts and operations of Beijing Tenet Jove
      and its consolidated subsidiaries, with the adopted capital structure of the
      Company retroactively restated.


-
          10
          -


**SHINECO,
        INC.**
 **NOTES
        TO UNAUDITED CONSOLIDATED FINANCIAL
        STATEMENTS**






**NOTE
      5.   COMMON AND PREFERRED STOCK
      TRANSACTIONS**





Prior
      to
      the reverse merger, the Company issued 1,125,000 shares of its common stock
      for
      consulting services valued at par, for an aggregate of $2,250.





Pursuant
      to the reverse merger, the Company issued 6,800,000 shares of its common stock
      to acquire 100% of Beijing Tenet Jove.





On
      November 12, 2005 the Company effected a 1:2 reverse stock split. Immediately
      prior to the split there were 18,597,640 common shares outstanding and
      immediately following the split there were 9,298,823 common shares
      outstanding.





On
      December 1, 2005 the Company issued 2,000,000 shares of Series A Convertible
      Preferred Stock (“Preferred”) at $.70 per share for an aggregate amount of
      $1,400,000 less subscriptions receivable of $359,892. The Preferred stock has
      a
      par value of $0.001 and a stated value and liquidation preference of $0.70
      per
      share. The Preferred stock bears cumulative dividends at 6% per annum, is
      redeemable for cash for $0.70 per share plus unpaid dividends at the Company’s
      option and has a mandatory redemption clause for those same amounts in the
      case
      of a change in control. The stock is convertible, after one year from the date
      of issue, for common stock at 88% of the market price of the common stock on
      the
      date of conversion. For every four common shares received upon conversion the
      converting shareholder is also to receive a warrant to purchase one additional
      share of common stock at an exercise price of $2.00 per share. The Preferred
      stockholders are protected from dilution and have voting rights equal to the
      common shares they would hold as if converted at the time of any vote. The
      cumulative dividend and redemption features make the Preferred stock more akin
      to debt than to equity. Accordingly, the redemption value is presented as a
      liability on the balance sheet. The conversion feature is not detachable and
      has
      therefore not been provided with a value separate from the Preferred
      stock.





**NOTE
      6.   RELATED PARTY TRANSACTIONS**





Related
      party receivables consist of advances due from stockholders. The amounts bear
      no
      interest and are payable on demand. Balances at March 31, 2007 and December
      31,
      2006 are $3,279 and $33,690, respectively.





Related
      party payables consist of loans from its stockholders. The loans bear no
      interest and are payable on demand. Balances at March 31, 2007 and December
      31,
      2006 are $458,173 and $453,327, respectively.





**NOTE
      7.   PROPERTY, PLANT AND EQUIPMENT**





The
      balances of Property, plant and equipment net were $122,842 and $124,362 at
      March 31, 2007 and December 31, 2006, respectively.





**March
                31, 2007**
            
            
            **December
                31, 2006**Machinery
                and equipment
            
            $
            40,911
            
            
            $
            40,545Vehicles
            
            
            54,734
            
            
            
            54,243Office
                equipment
            
            
            90,224
            
            
            
            85,399Subtotal
            
            
            185,869
            
            
            
            180,187Less:
                accumulated depreciation
            
            
            (63,027
            )
            
            
            (55,825
            )Net
                property and equipment
            
            $
            122,842
            
            
            $
            124,362





Depreciation
      expense was $7,202 and $22,628 for the first quarter of 2007 and the whole
      year
      of 2006, respectively.




**NOTE
      8.  INVESTMENTS**





During
      2006 and 2007, the Company acquired equity interests in eight of its
      distributors by contributing inventory to such distributors. The Company
      accounts for these investments using the equity method if the ownership
      percentage exceeds 20% or if the ownership percentage is less than 20% and
      significant control is evidenced by significant intercompany sales transactions.
      Investments where the ownership percentage is less than 20% and significant
      control is not evident are accounted for at cost. The following table reflects
      certain information about the Company’s investments in unconsolidated
      subsidiaries.





**Date**
            
            
            
            **12/31/06**
            
            **Share
                of**
            
            **Exchange**
            
            **3/31/07****Name**
            
            **Acquired**
            
            **Ownership**
            
            **Investment**
            
            **Income(Loss)**
            
            **Reserve**
            
            **Investment**Jinan
            
            11/25/2005
            
            25.00%
            
            $14,097
            
            $(3,894)
            
            $(14)
            
            $10,189Changchun
            
            10/26/2005
            
            25.00%
            
            30,089
            
            (110)
            
            --
            
            29,979Liaoyang
            
            12/31/2005
            
            25.00%
            
            6,002
            
            (3,737)
            
            (13)
            
            2,252Xuzhou
            
            7/26/2005
            
            15.00%
            
            1,891
            
            466
            
            2
            
            2,359Qiqihaer
            
            1/31/2006
            
            19.00%
            
            1,355
            
            1,220
            
            5
            
            2,580Nanjing
            
            9/1/2006
            
            15.00%
            
            2,657
            
            704
            
            3
            
            3,364Shenyang
            
            9/26/2005
            
            15.00%
            
            272
            
            N/A
            
            --
            
            272Sub-totals
            
            
            
            
            
            $56,363
            
            $(5,351)
            
            $(17)
            
            $50,995




-
          11
          -


**SHINECO,
        INC.**
 **NOTES
        TO UNAUDITED CONSOLIDATED FINANCIAL
        STATEMENTS**


On
      January 4, 2006 Beijing Tenet Jove withdrew the investment in unconsolidated
      subsidiary to Huaian, and on June 2, 2006 Beijing Tenet Jove withdrew the
      investments in unconsolidated subsidiaries to Yantai and Shenzhen. In aggregate,
      the company recognized gains of $53,938 on the disposal of these
      subsidiaries.





**NOTE
      9.   INTANGIBLES**





Intangibles
      consist primarily of manufacturing patent rights, acquired in the business
      combination with Tianjin as well as a purchased trademark. They are determined
      to have a finite life of 10 years and are being amortized straight line over
      that period. Accumulated amortization at March 31, 2007 and December 31, 2006
      is
      $61,841 and $56,195 respectively. Amortization expense recognized during the
      first quarter of 2007 and whole year of 2006 is $5,646 and $26,530,
      respectively.





**NOTE
      10.  CUSTOMER DEPOSITS**





Customer
      deposits at March 31, 2007 and December 31, 2006 consist of $69,450 and $44,873
      in prepayments to the Company for merchandise that had not yet shipped. The
      Company will recognize the deposits as revenue as customers take delivery of
      the
      goods, in compliance with its revenue recognition policy.





**NOTE
      11.  COMMITMENTS**





The
      Company leases factory and office space under non-cancelable leases. Future
      minimum lease payments are reflected in the following table:





2007
            
            
            59,3622008
            
            
            44,5212009
            
            
            44,5212010
            
            
            --Totals
            
            $
            148,404





**NOTE
      12.  CONTINGENCIES**





The
      Company has not, historically, carried any property or casualty insurance.
      No
      amounts have been accrued for any liability that could arise from the lack
      of
      insurance. Management feels the chances of such an obligation arising are
      remote.





**NOTE
      13.  STOCK WARRANTS**





Pursuant
      to the Stock Purchase Agreement executed in conjunction with the reverse merger
      of the Company and Beijing Tenet Jove, a warrant for 5% of the outstanding
      stock
      of the Company was issued to the selling stockholders, exercisable at par value,
      and expiring on December 12, 2005. None of these warrants was outstanding at
      March 31, 2007.





**NOTE
      14.  NEW ACCOUNTING PRONOUNCEMENTS**





In
      February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS
      No.159, “The Fair Value Option for Financial Assets and Financial Liabilities
      Including an amendment of FASB Statement No. 115”.This Statement permits
      entities to choose to measure many financial instruments and certain other
      items
      at fair value. The objective is to improve financial reporting by providing
      entities with the opportunity to mitigate volatility in reported earnings caused
      by measuring related assets and liabilities differently without having to apply
      complex hedge accounting provisions. This Statement is expected to expand the
      use of fair value measurement, which is consistent with the Board’s long-term
      measurement objectives for accounting for financial instruments. Currently
      the
      company does not have any financial instruments which require the adoption
      of
      this Statement, so the Statement will have no impact on our financial
      statements.





In
      February 2007, the Financial Accounting Standards Board (“FASB”) issued FSP FAS
      158-1.This FASB Staff Position (FSP) updates the illustrations contained in
      Appendix B of FASB Statement No. 87, *Employers’ Accounting for Pensions,*Appendix B of FASB Statement No. 88, *Employers’ Accounting for
      Settlements and Curtailments of Defined Benefit Pension Plans and for
      Termination Benefits,*and Appendix C of FASB Statement No. 106,
*Employers’ Accounting for Postretirement Benefits Other Than Pensions,*to reflect the provisions of FASB Statement No. 158, *Employers’
Accounting for Defined Benefit Pension and Other Postretirement
      Plans.*This
      FSP also amends the questions and answers contained in FASB Special Reports,
      *A Guide to Implementation of Statement 87 on Employers’ Accounting for
      Pensions, A Guide to Implementation of Statement 88 on Employers’ Accounting for
      Settlements and Curtailments of Defined Benefit Pension Plans and for
      Termination Benefits,*and *A Guide to Implementation of Statement 106 on
      Employers’ Accounting for Postretirement Benefits Other Than Pensions,*and
      incorporates them into Statements 87, 88, and 106 as Appendixes E, C, and F,
      respectively. This FSP supersedes those FASB Special Reports. Finally, this
      FSP
      makes conforming changes to other guidance and technical corrections to
      Statement 158. This FSP does not provide additional implementation guidance
      for
      Statement 158 beyond the conforming changes, nor does it change any of the
      provisions of Statement 158. Currently the company does not have any employers’
Pensions and Postretirement Benefits which require the adoption of this
      Statement, so the Statement will have no impact on our financial
      statements.





-
            12
            -







**ITEM
      2.       MANAGEMENT’S DISCUSSION AND ANALYSIS AND
      PLAN OF OPERATION**





The
      following discussion and analysis should be read in conjunction with our
      consolidated financial statements, the notes thereto, and other financial
      information contained elsewhere in this Form 10-QSB.





**BUSINESS
      OVERVIEW**





Shineco,
      Inc. (“the Company,” or “we”) was incorporated under Delaware state law on
      August 20, 1997.  On December 30, 2004, the Company acquired all of the
      issued and outstanding shares of Beijing Tenet-Jove Technological Development
      Corp., Ltd. (“Tenet-Jove”), a People’s Republic of China company, in exchange
      for restricted shares of the Company’s common stock, and the sole operating
      business of the Company became that of its subsidiary, Tenet-Jove. On June
      9,
      2005, the Company changed its name to Shineco, Inc.





Our
      Tenet-Jove subsidiary was organized under the laws of the People’s Republic of
      China in 2003 and is headquartered in Beijing.





In
      August, 2006, Beijing Tenet-Jove successfully acquired business certificates
      from China’s Ministry of Commerce, The State Administration of Foreign Exchange,
      The Beijing Administration for Industry & Commerce, The Beijing Municipal
      Office, and The State Administration of Taxation. It has therefore completed
      the
      legal process of acquisition under both Chinese and US law. As a result of
      this
      certification process, Beijing Tenet-Jove changed its legal status in China
      from
      a Chinese domestic enterprise to a wholly foreign-owned enterprise. Tenet-Jove
      acquired the proper corporate operational license from the Beijing
      Administration for Industry & Commerce effective August 11,
      2006.





Tenet-Jove
      currently develops, manufactures and distributes textiles and health supplements
      derived from a native Chinese plant known in Chinese as “Luobuma” (scientific
      name: Apocynum venetum).  We currently market and distribute
      our Apocynum products in China’s growing economy through our national marketing
      network. Our Apocynum products are specialized textile and health supplement
      products designed to incorporate traditional Eastern medicines with modern
      scientific methods. Our products are predicated on centuries-old traditions
      of
      Eastern herbal remedies derived from the Apocynum venetum raw
      material.  These remedies have been carefully documented in Li
      Shizhen’s famous Compendium of Materia Medica (Chinese: Bencao
      Gangmu), which dates back to 1578 A.D., during the Ming
      Dynasty.





We
      do not
      manufacture, distribute, or sell any of our products in the United States or
      Canada.





**Results
      of Operations for Quarter Ended March 31, 2007 Compared to March 31,
      2006**





Our
      operating results are presented on a consolidated basis for the three months
      ended March 31, 2007, as compared to the same period ended March 31, 2006.
      The
      operating results presented in our consolidated financial statements are
      primarily those of Tenet-Jove and its consolidated subsidiaries.





Revenue





Our
      revenues from our wholesale operations for the three months ended March 31,
      2007
      and 2006 were $562,564 and $444,048 respectively, representing an increase
      of
      approximately 26.7% from the same period in the previous year.  Our
      operating revenues derive mainly from the sale of our healthcare products.
      Our
      increases in revenue over the previous year were mainly attributable to our
      increased access to China’s markets due to our successful certification to sell
      our products in China as a wholly foreign-owned enterprise.





We
      believe that revenues will continue to increase in the next several quarters
      as
      a result of our plans to expand our production facilities and to increase
      production of our textiles and health supplements.





Gross
      Profit Margin





Our
      gross
      margin on sales of our products was 57.8% for the period ended March 31, 2007
      as
      compared to 61.1% for the period ended March 31, 2006. Our gross margin
      decreased by 5.4% in the 2007 period as compared to the previous period in
      2006.  The decrease was mainly due to the increase in the cost of
      goods sold, offset by an increase in revenues.





Expenses





Our
      total
      operating expenses were $215,999 for the period ended March 31, 2007, an
      increase of 10.5% compared with total operating expenses of $195,401 for the
      period ended March 31, 2006. The increase was mainly caused by increases in
      salaries and benefits, and depreciation and amortization, offset by decreases
      in
      other selling expense and other general and administrative expense.





Net
      Income





Our
      consolidated net income was $80,225 for the quarterly period ended March 31,
      2007 as compared to $53,805 for the period ended March 31, 2006, reflecting
      an
      increase of 49.1%. The net income rate increased 18.2 % from 12.1% for the
      period ended March 31, 2006 to 14.3% for the period ended March 31, 2007. This
      increase was attributable mainly to the increase in sales revenues and a
      decrease in other general and administrative expenses, offset by increases
      in
      the cost of goods sold and salaries and benefits.




-
          13
          -






Comprehensive
      Income





Our
      consolidated comprehensive income for the period ended March 31, 2007 was
      $101,538, an increase of 79.3% from $56,616 for the period ended March 31,
      2006.
      The difference between comprehensive income and net income for the period ended
      March 31, 2007 was attributable to the foreign currency translation adjustment.
      As the exchange rate from US dollars to RMB changed during 2007, the foreign
      currency translation adjustment was $21,613 for the period ended March 31,
      2007.





Liquidity
      and Sources of Capital





At
      March
      31, 2007, our cash and cash equivalents were $37,910. As of March 31, 2007,
      the
      Company had inventories of $1,928,592, total current assets of $4,392,607,
      total
      current liabilities of $2,551,329 and working capital of $1,841,278, reflecting
      a current ratio of 1.72 and quick ratio of .97, compared to a current ratio
      of
      1.86 and a quick ratio of 1.03 as of December 31, 2006. Our current ratio and
      quick ratio as of March 31, 2007 were slightly decreased compared to those
      of
      December 31, 2006.  Our working capital of $1,841,278 as of March 31,
      2007 reflected a 13.6 % decrease from $2,129,926 as of December 31,
      2006.





We
      generally finance our operations from two sources: cash flow from trade
      receivables, and operations. Our total shareholders’ equity was $1,165,029 as of
      March 31, 2007, as compared to $1,084,191 as of December 31, 2006, an increase
      of $80,838 or 7.5%.





We
      anticipate that our working capital resources are adequate to fund anticipated
      costs and expenses for the year ending December 31, 2007.





As
      of
      March 31, 2007, our cash and bank balances were mainly denominated in Renminbi
      (“RMB”) and United States dollars (“US$”) while our bank borrowings were mainly
      denominated in RMB. Our revenue and expenses, assets and liabilities are mainly
      denominated in RMB and US$. Since the exchange fluctuations amongst these
      currencies are low, we believe there is no significant exchange
      risk.





Management
      believes the Company's working capital is currently sufficient for the Company
      to implement its business plan and that its income from current operations
      will
      be sufficient for its liquidity needs.





**ITEM
      3.       CONTROLS AND
      PROCEDURES**





*Quarterly
      Evaluation of Controls*. As of March 31, 2007, we evaluated the
      effectiveness of the design and operation of our disclosure controls and
      procedures ("Disclosure Controls"). This evaluation (“Evaluation”) was performed
      by our Chairman and Chief Executive Officer, Mr. Yuying Zhang, who is the
      principal executive officer of our Company  (known as “CEO”), and our
      Chief Financial Officer, Dan Liu, who is our principal financial officer
      (“CFO”). In addition, we have discussed these matters with our securities
      counsel. In this section, we present the conclusions of our CEO and CFO based
      on
      their Evaluation as of March 31, 2007, with respect to the effectiveness of
      our
      Disclosure Controls.





*CEO
      and CFO Certifications*. Attached to this quarterly report, as Exhibits 31.1
      through 31.2, are certain certifications of the CEO and CFO, which are required
      in accordance with the Exchange Act and the Commission's rules implementing
      such
      section (the "Rule 13a-14(a)/15d-14(a) Certifications"). This section of the
      quarterly report contains the information concerning the Evaluation referred
      to
      in the Rule 13a-14(a)/15d-14(a) Certifications. This information should be
      read
      in conjunction with the Rule 13a-14(a)/15d-14(a) Certifications for a more
      complete understanding of the topic presented.





*Disclosure
      Controls*. When we refer to Disclosure Controls in this document, we mean
      controls and other procedures of our company that are designed to ensure that
      information required to be disclosed by us in the reports that we file or submit
      under the Exchange Act is recorded, processed, summarized and reported, within
      the time periods specified in the Commission's rules and forms. Disclosure
      controls and procedures include, without limitation, controls and procedures
      designed to ensure that information required to be disclosed by us in the
      reports that we file or submit under the Act is accumulated and communicated
      to
      our management, including our principal executive and principal financial
      officers, or persons performing similar functions, as appropriate to allow
      timely decisions regarding required disclosure.





The
      Disclosure Controls to which we refer do not necessarily include internal
      controls over financial reporting, as defined by Exchange Act Rule 13a-15(f)
      and
      15d-15(f). We have not yet conducted a separate evaluation of our internal
      controls over financial reporting, because we are not required by law to do
      so
      according to SEC Release no. 33-8760, until our first fiscal year ending after
      December 15, 2007. We intend to comply with such reporting and evaluation at
      that time and all times thereafter.





*Limitations
      on the Effectiveness of Controls*. Our management does not expect that our
      Disclosure Controls will prevent all error and all fraud. A control system,
      no
      matter how well developed and operated, can provide only reasonable, but not
      absolute, assurance that the objectives of the Disclosure Controls are met.
      Further, the design of the Disclosure Controls must reflect the fact that there
      are resource constraints, and the benefits of Disclosure Controls must be
      considered relative to their costs. Because of the inherent limitations in
      all
      control systems, no evaluation of Disclosure Controls can provide absolute
      assurance that all Disclosure Control issues and instances of fraud, if any,
      within the Company have been detected. These inherent limitations include the
      realities that judgments in decision-making can be faulty, and that breakdowns
      can occur because of simple error or mistake. Additionally, Disclosure Controls
      can be circumvented by the individual acts of some persons, by collusion of
      two
      or more people, or by management override of the Disclosure Controls. The design
      of a system of Disclosure Controls also is based in part upon certain
      assumptions about the likelihood of future events, and there can be no assurance
      that any design will succeed in achieving its stated objectives under all
      potential future conditions. Over time, Disclosure Controls may become
      inadequate because of changes in conditions, or because the degree of compliance
      with the policies or procedures may deteriorate. Because of the inherent
      limitations in a cost-effective system of Disclosure Controls, misstatements
      due
      to error or fraud may occur and not be detected, or may be detected later than
      expected.





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*Scope
      of the Evaluation*. The CEO and CFO's evaluation of our Disclosure Controls
      included a review of the controls' (i) objectives, (ii) design, (iii)
      implementation, and (iv) the effect of the controls on the information generated
      for use in this quarterly report. In the course of the Evaluation, the CEO
      and
      CFO sought to identify data errors, control problems, acts of fraud, and they
      sought to confirm that appropriate corrective action, including process
      improvements, was being undertaken. This type of evaluation is done on a
      quarterly basis so that the conclusions concerning the effectiveness of our
      Disclosure Controls can be reported in our quarterly reports on Form 10-QSB
      and
      annual reports on Form 10-KSB. The overall goals of these various evaluation
      activities are to monitor our Disclosure Controls, and to make modifications
      if
      and as necessary. Our intent in this regard is that the Disclosure Controls
      will
      be maintained as dynamic systems that change (including improvements and
      corrections) as conditions warrant.




*Conclusions.*
      Based upon the Evaluation, our CEO and CFO have concluded that, as of March
      31,
      2007, our Disclosure Controls are effective at that reasonable assurance level
      to ensure that information required to be disclosed by us in the reports that
      we
      file or submit under the Exchange Act is recorded, processed, summarized and
      reported to management, including the CEO and CFO, within the time periods
      specified in the Commission's rules and forms, and that our Disclosure Controls
      are effective at that assurance level to provide reasonable assurance that
      our
      financial statements are fairly presented in conformity with accounting
      principles generally accepted in the United States. Additionally, there has
      been
      no change in our Disclosure Controls that occurred during our most recent fiscal
      quarter that has materially affected, or is reasonably likely to affect, our
      Disclosure Controls.







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**PART
      II**





**ITEM
      1.       LEGAL PROCEEDINGS**





The
      Company is not a party to any pending legal proceedings, and no such proceedings
      are known to be contemplated.





No
      director, officer or affiliate of the Company, and no owner of record or
      beneficial owner of more than 5 percent of the securities of the Company, or
      any
      associate of any such director, officer or security holder is a party adverse
      to
      the Company or has a material interest adverse to the Company in reference
      to
      pending litigation.





**ITEM
      2.       CHANGES IN
      SECURITIES**





None.





**ITEM
      3.       DEFAULTS UPON SENIOR
      SECURITIES**





None.





**ITEM
      4.       SUBMISSION OF MATTERS TO A VOTE OF
      SECURITY HOLDERS**





No
      matters were submitted to a vote of the security holders of the Company during
      the period ended March 31, 2007.





**ITEM
      5.       OTHER INFORMATION**





None.





**ITEM
      6.       EXHIBITS AND REPORTS ON FORM
      8-K**





(a)           The
      Exhibits listed below are filed as part of this Quarterly Report.





Exhibit
      No.





31.1                      Certification
      Under Section 302 of the Sarbanes-Oxley Act of 2002





31.2                      Certification
      Under Section 302 of the Sarbanes-Oxley Act of 2002





32.1                      Certification
      Under Section 906 of the Sarbanes-Oxley Act of 2002








(b)        We
      filed no reports on Form 8-K for the quarter ended March 31, 2007.





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**SIGNATURES**





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.





Dated:
      July 18, 2007





SHINECO,
      INC.








**/s/
      Yuying Zhang**


By:
      Yuying Zhang


Chairman,
      CEO, and Principal Executive Officer








**/s/
      Dan Liu**


By:
      Dan
      Liu


CFO
      and
      Principal Accounting Officer








In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.








**/s/
      Yuying Zhang**


By:
      Yuying Zhang,


Director,
      CEO and President








**/s/
      Dan Liu**


By:
      Dan
      Liu,


Director,
      CFO








**/s/
      Weixing Yin**


By:
      Weixing Yin,


Director








**/s/
      Shuangpeng Tian**


By:
      Shuangpeng Tian,


Director








**/s/
      Xiaoguang Zhang**


By:
      Xiaoguang Zhang,


Director







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