U.S. Securities and Exchange
Commission
 Washington,
D.C. 20549
 
 FORM
10-Q
 
 [X]       QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For
the Quarterly Period Ended March 31, 2010
 
 
 [
        ]       TRANSITION REPORT UNDER
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934
 
 For the Transition Period From ____to _____
 
 000-53146
 (Commission
File Number)
 
 MAN SHING AGRICULTURAL
HOLDINGS, INC.
 (Exact
name of small business issuer as specified in its charter)
 
 Nevada
              88-0450667(State
      or other jurisdiction of
              (IRS
      Employer Identification No.)incorporation
      or organization)
 
 Unit
1005, 10/F, Tower B
 Hunghom
Commercial Centre
 37
Ma Tau Wai Road, Hunghom
 Kowloon, Hong
Kong
 (Address
of principal executive offices)
 
 (852) 2850
6336
 (Registrant’s
telephone number, including area code)
 
 Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [x] No [ ]
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes [ ] No [
]
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
 
 Large
      accelerated filer
              Non-accelerated
      filer
              (Do
      not check if a smaller reporting company)Accelerated
      filer
              Smaller
      reporting company
              [X]
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes [  ] No [X]
 
 Number of
shares of preferred stock outstanding as of April 30,
2010:        3,600,000
 Number of
shares of common stock outstanding as of April 30,
2010:       37,251,958
 
 CAUTIONARY
STATEMENT REGARDING FORWARD LOOKING INFORMATION
 
 The
discussion contained in this 10-Q under the Securities Exchange Act of 1934, as
amended, contains forward-looking statements that involve risks and
uncertainties. The issuer's actual results could differ significantly from those
discussed herein. These include statements about our expectations, beliefs,
intentions or strategies for the future, which we indicate by words or phrases
such as "anticipate," "expect," "intend," "plan," "will," "we believe," "the
Company believes," "management believes" and similar language, including those
set forth in the discussions under "Notes to Financial Statements" and
"Management's Discussion and Analysis or Plan of Operation" as well as those
discussed elsewhere in this Form 10-Q. We base our forward-looking statements on
information currently available to us, and we assume no obligation to update
them. Statements contained in this Form 10-Q that are not historical facts are
forward-looking statements that are subject to the "safe harbor" created by the
Private Securities Litigation Reform Act of 1995.
 
 
  TABLE OF
      CONTENTSPART
      I. FINANCIAL INFORMATIONITEM
      1. CONSOLIDATED FINANCIAL STATEMENTS
              3ITEM
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF OPERATIONS
              11ITEM
      3. QUANTITATIVE ANDQUALITATIVE DISCLOSURES ABOUT MARKET
    RISK
              13ITEM
      4. CONTROLS AND PROCEDURES
              13ITEM
      4T. CONTROLS AND PROCEDURES
              13PART
      II. OTHER INFORMATIONITEM
      1. LEGAL PROCEEDINGS
              14ITEM
      1A. RISK FACTORS
              14ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
    PROCEEDS
              14ITEM
      3. DEFAULTS UPON SENIOR SECURITIES
              14ITEM
      4. REMOVED AND RESERVED
              14ITEM
      5. OTHER INFORMATION
              14ITEM
      6. EXHIBITS
              14SIGNATURES
              15INDEX
      TO EXHIBITS
              16
 
 2
 
 ITEM
1.CONSOLIDATED FINANCIAL STATEMENTS
 
 
 INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTSPageUnaudited
      Condensed Consolidated Balance Sheets as of March 31, 2010 and June 30,
      2009
              4Unaudited
      Condensed Consolidated Statements of Operations - For the Three and Nine
      Months Ended March 31, 2010 and 2009
              5Unaudited
      Condensed Consolidated Statements of Cash Flows - For the Nine Months
      Ended March 31, 2010 and 2009
              6Notes
      to Unaudited Condensed Consolidated Financial Statements
              7
 
 3
   Man
      Shing Agricultural Holdings, Inc. and SubsidiariesUnaudited
      Balance SheetAs
      of March 31, 2010 and June 30, 2009ASSETS
                
                31/Mar/2010
                
                
                30/Jun/2009CURRENT
      ASSETSCash
      and cash equivalents
                
                $
                82,347
                
                
                $
                86,408Accounts
      receivable, trade
                
                
                1,609,977
                
                
                
                2,479,117Inventory
                
                
                6,233,901
                
                
                
                730,066Prepayment
                
                
                3,046,779
                
                
                
                1,437,450Other
      receivable
                
                
                80,170TOTAL
      CURRENT ASSETS
                
                $
                11,053,175
                
                
                $
                4,733,041FIXED
      ASSETSProperty,
      plant, and equipment
                
                
                861,370
                
                
                
                631,362Accumulated
      depreciation
                
                
                (141,546
                )
                
                
                (89,706
                )NET
      FIXED ASSETS
                
                $
                719,824
                
                
                $
                541,656TOTAL
      ASSETS
                
                $
                11,772,999
                
                
                $
                5,274,697LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESShort-term
      borrowings
                
                $
                352,314
                
                
                $
                73,186Note
      payable
                
                
                1,818,375Accounts
      payable
                
                
                257,750
                
                
                
                346,482Other
      payables and accrued liabilities
                
                
                720,397
                
                
                
                460,048Due
      to shareholders
                
                
                100,988
                
                
                
                100,304Received
      in advance
                
                
                356,023
                
                
                
                128,355Tax
      payable
                
                
                212,054
                
                
                
                57,272TOTAL
      CURRENT LIABILITIES
                
                $
                3,817,901
                
                
                $
                1,165,647TOTAL
      LIABILITIES
                
                $
                3,817,901
                
                
                $
                1,165,647STOCKHOLDERS'
      EQUITYPreferred
      stock
                
                $
                3,600
                
                
                $
                3,700Common
      stock
                
                
                36,252
                
                
                
                33,002Additional
      paid-in capital
                
                
                (207,352
                )
                
                
                (36,700
                )Accumulated
      other comprehensive income(loss)
                
                
                113,702
                
                
                
                133,433Statutory
      reserves
                
                
                2,134,501
                
                
                
                249,362Accumulated
      earnings (deficit)
                
                
                5,874,395
                
                
                
                3,726,253TOTAL
      STOCKHOLDERS' EQUITY
                
                $
                7,955,098
                
                
                $
                4,109,050TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                
                $
                11,772,999
                
                
                $
                5,274,697
 
  4
  Man
      Shing Agricultural Holdings, Inc. and SubsidiariesUnaudited
      Consolidation Statement of OperationsFor
      the Three and Nine Months ended March 31, 2010 and 2009For
      the Three months Ended
                
                
                For
      the Nine months Ended31/Mar/2010
                
                
                31/Mar/2009
                
                
                31/Mar/2010
                
                
                31/Mar/2009RevenuesSales
                
                $
                5,283,909
                
                
                $
                4,202,565
                
                
                $
                15,074,376
                
                
                $
                6,537,932Cost
      of sales
                
                
                3,118,228
                
                
                
                2,937,173
                
                
                
                9,873,399
                
                
                
                4,653,357Gross
      profits
                
                
                2,165,681
                
                
                
                1,265,392
                
                
                
                5,200,977
                
                
                
                1,884,574Operating
      expensesSelling
      and marketing
                
                $
                353,446
                
                
                $
                126,316
                
                
                $
                816,749
                
                
                $
                318,467General
      and administrative
                
                
                85,562
                
                
                
                28,157
                
                
                
                305,552
                
                
                
                54,131Total
      Operating Expenses
                
                
                439,009
                
                
                
                154,472
                
                
                
                1,122,302
                
                
                
                372,597Income
      (Loss) from Operations
                
                
                1,726,673
                
                
                
                1,110,920
                
                
                
                4,078,676
                
                
                
                1,511,977Other
      income (expenses)Finance
      income (costs)
                
                $
                (11,302
                )
                
                $
                (7,318
                )
                
                $
                (27,643
                )
                
                $
                (22,572
                )Non-operating
      income (expense)
                
                
                -
                
                
                
                -
                
                
                
                4,237
                
                
                
                -Total
      other income (loss)
                
                
                (11,302
                )
                
                
                (7,318
                )
                
                
                (23,406
                )
                
                
                (22,572
                )Income
      (loss) from Operations
                
                
                1,715,371
                
                
                
                1,103,602
                
                
                
                4,055,270
                
                
                
                1,489,404Income
      taxes
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                46Net
      Income (Loss)
                
                
                1,715,371
                
                
                
                1,103,602
                
                
                
                4,055,270
                
                
                
                1,489,358Other
      comprehensive income (loss)Foreign
      currency translation gain (loss)
                
                
                21,629
                
                
                
                6,052
                
                
                
                (19,731
                )
                
                
                11,297Comprehensive
      income (loss)
                
                $
                1,737,000
                
                
                $
                1,109,654
                
                
                $
                4,035,539
                
                
                $
                1,500,655Weighted
      average number of shares outstandingBasic
                
                
                36,068,625
                
                
                
                33,001,963
                
                
                
                25,456,776
                
                
                
                33,001,963Dilute
                
                
                72,068,625
                
                
                
                70,001,963
                
                
                
                61,741,962
                
                
                
                70,001,963Earnings
      (loss) per shareBasic
                
                
                0.05
                
                
                
                0.03
                
                
                
                0.16
                
                
                
                0.05Dilute
                
                
                0.02
                
                
                
                0.02
                
                
                
                0.07
                
                
                
                0.02
 
 5
 Man
      Shing Agricultural Holdings, Inc. and SubsidiariesUnaudited
      ConsolidationStatements of Cash FlowsFor
      the Three and Nine Months ended March 31, 2010 and 2009For
      the Nine months Ended31/Mar/2010
                
                
                31/Mar/2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income (loss)
                
                
                4,055,270
                
                
                
                1,489,358Adjustments
      to reconcile net income (loss) tonet
      cash (used in) operating activities:Depreciation
                
                
                51,840
                
                
                
                12,802Accounts
      receivable, trade
                
                
                869,140
                
                
                
                (1,130,461
                )Stock-based
      compensation to service providers
                
                
                (189,491
                )
                
                
                -Prepayment
                
                
                (1,609,329
                )
                
                
                (764,213
                )Inventory
                
                
                (5,503,835
                )
                
                
                533,933Other
      receivable
                
                
                (80,170
                )
                
                
                33,476Accounts
      payable
                
                
                (88,732
                )
                
                
                65,040Tax
      payable
                
                
                154,782
                
                
                
                91,246Other
      payable
                
                
                260,349
                
                
                
                195,766Received
      in advance
                
                
                227,668
                
                
                
                (38,285
                )NET
      CASH (USED IN) OPERATING ACTIVITIES
                
                
                (1,852,509
                )
                
                
                488,664CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of property, plant, and equipment
                
                
                (230,008
                )
                
                
                (41,666
                )NET
      CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
                
                
                (230,008
                )
                
                
                (41,666
                )CASH
      FLOWS FROM FINANCING ACTIVITIES:Increase
      (decrease) of due to shareholders
                
                $
                684Proceeds
      from short-term loan
                
                
                279,128
                
                
                
                (146,269
                )Proceeds
      from Notes payable
                
                
                1,818,375
                
                
                
                -NET
      CASH PROVIDED BY FINANCING ACTIVITIES
                
                
                2,098,187
                
                
                
                (146,269
                )FOREIGN
      CURRENCY TRANSLATION ADJUSTMENT
                
                
                (19,731
                )
                
                
                (232
                )NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                
                
                (4,061
                )
                
                
                300,496CASH
      AND CASH EQUIVALENTS:Beginning
      of period
                
                
                86,408
                
                
                
                136,270End
      of period
                
                $
                82,347
                
                
                $
                436,767Supplemental
      disclosure of cash flow informationCash
      paid for:Interest
                
                $
                13,461
                
                
                $
                16,416Income
      taxes
                
                
                -
                
                
                $
                46
 6
 
 MAN
SHING AGRICULTURAL HOLDINGS, INC. AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE NINE MONTHS ENDED MARCH 31, 2010 AND 2009
 (STATED
IN US DOLLARS)
 1.
                BASIS
      OF PRESENTATION
 
 The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with both generally accepted accounting principles for
interim financial information, and the instructions to Form 10-Q and Article 8
of Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The accompanying unaudited condensed consolidated
financial statements reflect all adjustments (consisting of normal recurring
accruals) that are, in the opinion of management, considered necessary for a
fair presentation of the results for the interim periods presented. Interim
results are not necessarily indicative of results for a full year.
 
 The
unaudited condensed consolidated financial statements and related disclosures
have been prepared with the presumption that users of the interim financial
information have read or have access to the Company’s annual audited
consolidated financial statements for the preceding fiscal year. Accordingly,
these unaudited condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and the related
notes for the year ended June 30, 2009 thereto contained in the Current Report
on Form 8-K filed on August 21, 2009, and its amendments.
 
 2.
                ORGANIZATION
      BACKGROUND
 
 Man Shing
Agricultural Holdings, Inc. (the “Company”) was incorporated on February 8, 2000
under the laws of the State of Nevada.  From the beginning of 2003
until December 31, 2007 the Company had no operations and no assets and was
considered as a dormant company.  Subsequent to December 31, 2007, the
Company began operating in the real estate industry and engaged in the business
of buying, selling, renting, and improving real estate.
 
 As of
August 20, 2009, the Company entered into a Plan of Exchange (the “Agreement”)
between and among the Company, Hero Capital Profits Limited, a company organized
and existing under the laws of the British Virgin Islands (including its
successors and assigns “HCP”), Weifang Xinsheng Food Co., Ltd., a company
organized and existing under the laws of the People’s Republic of China
(“Xinsheng”), the shareholders of Xinsheng (the “Xinsheng Shareholders”) and the
Company’s Majority Shareholder. Pursuant to the terms of the Agreement, the
Company acquired one hundred percent (100%) of the issued and outstanding share
capital of HCP from the HCP Shareholders in exchange for a new issuance
32,800,000 shares of common stock of the Company and the simultaneous transfer
of 3,535,000 shares of the Company’s Preferred Stock to the HCP shareholders,
held in the name of the Northeast Nominee Trust (Duane Bennett, Former President
of the Company as trustee), which gave the HCP shareholders an interest in the
Company representing 99.38% of the issued and outstanding shares. Upon
completion of the exchange, HCP and Xinsheng became the Company’s wholly-owned
subsidiaries. All of these conditions to closing have been met, and the Company,
HCP, Xinsheng, the Xinsheng Shareholders and the Company’s Majority Shareholders
declared the exchange transaction consummated on August 20, 2009.
 
 The
Exchange and the Transfer have been respectively accounted for as reverse
acquisition and recapitalization of the Company and HCP / Xinsheng whereby HCP /
Xinsheng is deemed to be the accounting acquirer (legal acquiree) and the
Company to be the accounting acquiree (legal acquirer) under the Exchange. The
unaudited condensed consolidated financial statements are in substance those of
Xinsheng, with the assets and liabilities, and revenues and expenses, of the
Company and HCP being included effective from the respective consummation dates
of the Exchange and the Transfer.
 The
Company and its subsidiaries are hereinafter referred to as (the
"Company").
 
 On
September 2, 2009, the Company changed its name to Man Shing Agricultural
Holdings, Inc. to more accurately reflect the Company’s business after a stock
exchange transaction with HCP and Xinsheng.
 
 Additionally,
on June 25, 2009, the Company’s board of directors authorized and approved a
reverse stock split (the “Reverse Split”) of the Company’s common stock on the
basis of one share for one hundred shares currently issued and outstanding.
Accordingly, the number of issued and outstanding shares decreased from
20,196,200 shares to 201,962 shares. The Reverse Split was effective on
September 2, 2009.
 
 3.
                DESCRIPTION
      OF BUSINESS
 
 The
Company’s primary business operations are engaged in the production and
processing of fresh vegetables, including ginger, onion, garlic and leek. The
Company strives to provide high quality products to the Company’s customers. The
Company has 110,000 square meters of factor space and utilize 3.335 million
square meters of farm land, which is one of the largest ginger farm lands in the
region. The Company complies with the ISO9002 and the HACCP food safety
standards. All of the Company’s farm land has been certified by the Organic Crop
Improvement Association and has met the Japan Agricultural Standards for
production of organic foods. The Company’s processing factory has also met the
requirement of the British Retail Consortium Global Food Standard and the TESCO,
a UK supermarket, food safety standards. Under the Company’s close monitoring
and supervision program, the Company believes the Company can ensure that all
products produced are in compliance with food safety standards from around the
world.
 
 Our
Products
 
 Fresh
Vegetables
 Ginger                           Burdock
 Onion                            Leeks
 Peeled
Garlic
 Frozen
Vegetables
 Peeled
Ginger             
Diced Garlic
 Diced
Ginger              
Garlic Puree
 Ginger
Puree Cubes    Garlic Puree Cubes
 Ginger
Puree                Diced
Onion
 Ginger
Slice                 Peeled
Garlic
 
 Our
customers
 
 After
years of building up our reputation, we have earned trust from customers around
the world. Our customers include one of the world’s largest chain supermarkets
in Europe and a substantial ingredient producer in Japan. Our customers are
based all over the world including the UK and North America.
 
 The
following table depicts our top five customers and their percentage of current
sales for the nine months ended March 31, 2010.
 
 7
 
 MAN
SHING AGRICULTURAL HOLDINGS, INC. AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE NINE MONTHS ENDED MARCH 31, 2010 AND 2009
 (STATED
IN US DOLLARS)
 Top 5
customers for the nine months ended March 31, 2010
 (Total
sales revenue for the nine months ended March 31, 2010:
US$15,074,376)
 
 Customer
                Revenues
                
                %1.
        Customer A
                US$2,744,860
                
                
                18.20
                %2.   Customer
      B
                US$1,278,950
                
                
                8.50
                %3.
        Customer C
                US$1,178,396
                
                
                7.80
                %4.
        Customer D
                US$  
      901,949
                
                
                6.00
                %5.
        Customer E
                US$  
      765,097
                
                
                5.10
                %Total
                US$6,869,251
                
                
                45.60
                %
 
 Geographic Segmentation of
our Customer base:
 
 Market
                
                %
      of revenue contributionJapan
                
                
                41
                %UK
                
                
                38
                %Netherlands
                
                
                11
                %US
                
                
                10
                %Total
                
                
                100
                %
 
  4.
                RECENTLY
      ISSUED ACCOUNTING STANDARS
 
 The
Company has reviewed all recently issued, but not yet effective, accounting
pronouncements and do not believe the future adoption of any such pronouncements
may be expected to cause a material impact on its financial condition or the
results of its operations.
  Fair
Value Measurements and Disclosures
 (Accounting
Standards Update (“ASU”) 2010-06)
 
 In
January 2010, the FASB issued ASU No. 2010-06, “Fair Value Measurements and
Disclosures (Topic 820) - Improving Disclosures about Fair Value Measurements.”
ASU 2010-06 requires new disclosures regarding transfers in and out of the Level
1 and 2 and activity within Level 3 fair value measurements and clarifies
existing disclosures of inputs and valuation techniques for Level 2 and 3 fair
value measurements. ASU 2010-06 also includes conforming amendments to
employers’ disclosures about postretirement benefit plan assets. The new
disclosures and clarifications of existing disclosures are effective for interim
and annual reporting periods beginning after December 15, 2009, except for
the disclosure of activity within Level 3 fair value measurements, which is
effective for fiscal years beginning after December 15, 2010, and for
interim periods within those years. The adoption of this statement is not
expected to have a material impact on our consolidated financial position or
results of operation.
  FASB
Accounting Standards Codification
 
 (Accounting
Standards Update (“ASU”) 2009-01)
 
 In
June 2009, FASB approved the FASB Accounting Standards Codification (“the
Codification”) as the single source of authoritative nongovernmental GAAP. All
existing accounting standard documents, such as FASB, American Institute of
Certified Public Accountants, Emerging Issues Task Force and other related
literature, excluding guidance from the Securities and Exchange Commission
(“SEC”), have been superseded by the Codification. All other non-grandfathered,
non-SEC accounting literature not included in the Codification has become
nonauthoritative. The Codification did not change GAAP, but instead introduced a
new structure that combines all authoritative standards into a comprehensive,
topically organized online database. The Codification is effective for interim
or annual periods ending after September 15, 2009, and impacts the
Company’s financial statements as all future references to authoritative
accounting literature will be referenced in accordance with the Codification.
There have been no changes to the content of the Company’s financial statements
or disclosures as a result of implementing the Codification during the quarter
ended March 31, 2010.
 
 As a
result of the Company’s implementation of the Codification during the nine
months ended March 31, 2010, previous references to new accounting standards and
literature are no longer applicable. In the current quarter financial
statements, the Company will provide reference to both new and old guidance to
assist in understanding the impacts of recently adopted accounting literature,
particularly for guidance adopted since the beginning of the current fiscal year
but prior to the Codification.
 
 Subsequent Events
 
 (Included
in Accounting Standards Codification (“ASC”) 855 “Subsequent Events”, previously
SFAS No. 165 “Subsequent Events”)
 
 SFAS
No. 165 established general standards of accounting for and disclosure of
events that occur after the balance sheet date, but before the financial
statements are issued or available to be issued (“subsequent events”). An entity
is required to disclose the date through which subsequent events have been
evaluated and the basis for that date. For public entities, this is the date the
financial statements are issued. SFAS No. 165 does not apply to subsequent
events or transactions that are within the scope of other GAAP and did not
result in significant changes in the subsequent events reported by the Company.
SFAS No. 165 became effective for interim or annual periods ending after
June 15, 2009 and did not impact the Company’s financial statements. The
Company evaluated for subsequent events through the issuance date of the
Company’s financial statements. No recognized or non-recognized subsequent
events were noted.
 
 Determination
of the Useful Life of Intangible Assets
 
 (Included
in ASC 350 “Intangibles — Goodwill and Other”, previously FSP SFAS
No. 142-3 “Determination of the Useful Lives of Intangible
Assets”)
 
 FSP SFAS
No. 142-3 amended the factors that should be considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under previously issued goodwill and intangible
assets topics. This change was intended to improve the consistency between the
useful life of a recognized intangible asset and the period of expected cash
flows used to measure the fair value of the asset under topics related to
business combinations and other GAAP. The requirement for determining useful
lives must be applied prospectively to intangible assets acquired after the
effective date and the disclosure requirements must be applied prospectively to
all intangible assets recognized as of, and subsequent to, the effective date.
FSP SFAS No. 142-3 became effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years. The adoption of FSP SFAS No. 142-3 did not impact the
Company’s financial statements.
 
 Noncontrolling
Interests
 
 (Included
in ASC 810 “Consolidation”, previously SFAS No. 160 “Noncontrolling
Interests in Consolidated Financial Statements an amendment of ARB
No. 51”)
 
 SFAS
No. 160 changed the accounting and reporting for minority interests such
that they will be recharacterized as noncontrolling interests and classified as
a component of equity. SFAS No. 160 became effective for fiscal years
beginning after December 15, 2008 with early application prohibited. The
Company implemented SFAS No. 160 at the start of fiscal 2009 and no longer
records an intangible asset when the purchase price of a noncontrolling interest
exceeds the book value at the time of buyout. Any excess or shortfall for
buyouts of noncontrolling interests in mature restaurants is recognized as an
adjustment to additional paid-in capital in stockholders’ equity. Any shortfall
resulting from the early buyout of noncontrolling interests will continue to be
recognized as a benefit in partner investment expense up to the initial amount
recognized at the time of buy-in. Additionally, operating losses can be
allocated to noncontrolling interests even when such allocation results in a
deficit balance (i.e. book value can go negative).
 
 The
Company presents noncontrolling interests (previously shown as minority
interest) as a component of equity on its consolidated balance sheets. Minority
interest expense is no longer separately reported as a reduction to net income
on the consolidated income statement, but is instead shown below net income
under the heading “net income attributable to noncontrolling interests.” The
adoption of SFAS No. 160 did not have any other material impact on the
Company’s financial statements.
 
 Consolidation
of Variable Interest Entities — Amended
 
 (To
be included in ASC 810 “Consolidation”, SFAS No. 167 “Amendments to FASB
Interpretation No. 46(R)”)
 
 SFAS
No. 167 amends FASB Interpretation No. 46(R) “Consolidation of
Variable Interest Entities regarding certain guidance for determining whether an
entity is a variable interest entity and modifies the methods allowed for
determining the primary beneficiary of a variable interest entity. The
amendments include: (1) the elimination of the exemption for qualifying
special purpose entities, (2) a new approach for determining who should
consolidate a variable-interest entity, and (3) changes to when it is
necessary to reassess who should consolidate a variable-interest entity. SFAS
No. 167 is effective for the first annual reporting period beginning after
November 15, 2009, with earlier adoption prohibited. The Company will adopt
SFAS No. 167 in fiscal 2010 and does not anticipate any material impact on
the Company’s financial statements.
 8
 
 MAN
SHING AGRICULTURAL HOLDINGS, INC. AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE NINE MONTHS ENDED MARCH 31, 2010 AND 2009
 (STATED
IN US DOLLARS)
 
 5.
                Accounts
      receivable, net
 
 The
majority of the Company’s sales are on open credit terms and in accordance with
terms specified in the contracts governing the relevant transactions. The
Company evaluates the need of an allowance for doubtful accounts based on
specifically identified amounts that management believes to be uncollectible. If
actual collections experience changes, revisions to the allowance may be
required. Based upon the aforementioned criteria, management has determined that
the allowances for doubtful accounts of $12,494 and $12,457 are required as of
March 31, 2010 and June 30, 2009, respectively.
 
 
 March 31, 2010
                
                
                June 30, 2009Accounts
      receivable, gross
                
                $
                1,622,471
                
                
                $
                2,491,574Less:
      allowance for doubtful accounts
                
                
                (12,494
                )
                
                
                (12,457
                )Accounts
      receivable, net
                
                $
                1,609,977
                
                
                $
                2,479,117
 
 
 6.
                Inventories
 March 31, 2010
                
                
                June 30, 2009Inventories
                
                $
                6,233,901
                
                
                $
                730,066
 
 For the
nine months ended March 31, 2010 and the year ended June 30, 2009, no provision
for obsolete inventories was recorded by the Company.
  7.
                Prepayments
 
 The
balances of $3,046,779 and $1,437,450 as of March 31, 2010 and June 30, 2009,
respectively, represent prepaid consulting fees, prepaid rent, supplies and
other items used in growing and packaging of the ginger.
 
 8.
                Short-term
      borrowing (Line of Credit)
 
 On March
14, 2010, the company entered a loan agreement with Bank of Weifang for $352,314
(2,400,000 RMB). The loan has monthly interest rate of 7.08% and matures in
twelve months. As of March 31, 2010, the outstanding amount of this loan is
$352,314 (2,400,000 RMB).
 
 9.
                Notes
      payable
 
 Effective
September 9, 2009, the Company issued a secured note in the amount of $450,000
(the “Secured Note”) to a non-affiliate, which was secured by 2,250,000 shares
of common stock of the Company. The Secured note is interest-free and due on
September 8, 2010. As of March 31, 2010, the balance of the Secured Note was
$318,375.
 
 On
January 4, 2010, the Company issued a secured convertible redeemable debenture
(“Debenture I”) in the amount of $1,000,000, along with 800,000 shares of the
Company’s common stock, to a non-affiliate investor, which was secured by
6,286,250 shares of the Company’s common stock and 839,562 shares of the
Company’s preferred stock (equivalent to 14,681,870 shares of common stock),
representing a pro rata portion of a majority position in the Company’s common
stock owned by Mr. Shili Liu, the President of the Company.
 
 Debenture
I bears annual interest rate of 8% payable quarterly in cash, and a default
interest rate of 16% per annum. All or any part of the principal amount of
Debenture I, plus accrued interest, could be converted into shares of the
Company’s common stock at a price per share equal to two dollars ($2.00), at the
option of the holder.
 
 On
January 14, 2010, the Company issued a secured convertible redeemable debenture
(“Debenture II”) in the amount of $500,000, along with 400,000 shares of the
Company’s common stock, to a non-affiliate investor, which was secured by
3,143,125 shares of the Company’s common stock and 419,781 shares of the
Company’s preferred stock (equivalent to 7,340,935 shares of common stock),
representing a pro rata portion of a majority position in the Company’s common
stock owned by Mr. Shili Liu, the President of the Company.
 
 Debenture
II bears annual interest rate of 8% payable quarterly in cash, and a default
interest rate of 16% per annum. All or any part of the principal amount of
Debenture II, plus accrued interest, could be converted into shares of the
Company’s common stock at a price per share equal to two dollars ($2.00), at the
option of the holder.
 
 10.
                Amount
      due to director
 
 The
amount is interest-free, unsecured and repayable when the Company is in a
position to do so.
  11.
                Stockholders’
      equity
 
 On August
20, 2009, the Company executed the Plan of Exchange (the “POE”) among the
shareholders of the Company, HCP, the shareholders of HCP and Xinsheng, pursuant
to which the Company issued 32,800,000 new shares of common stock of the Company
to HCP shareholders and simultaneously transferred 3,535,000 shares of the
Company’s Preferred Stock to the HCP shareholders, held in the name of the
Northeast Nominee Trust, in exchange for 100% of the capital stock of HCP and
Xinsheng. Concurrently, the Company effectuated a 1 for 100 reverse split of its
common stock. All common stock and per share data for all periods presented in
these financial statements have been restated to give effect to the reverse
stock split.
 
 On
September 17, 2009, 100,000 shares of Preferred stock were converted into
1,000,000 shares of common stock, based on a rate of 10 shares for one, per the
request of the preferred stockholder.
 
 Immediately
following completion of the share exchange transaction and the preferred stock
conversion, the Company had a total of 34,001,963 shares of its common stock
issued and outstanding.
 
 Pursuant
to a binding term sheet, dated November 26, 2009, the Company issued 500,000
shares of common stock on December 8, 2009 to an investor.
 
 Pursuant
to the two Securities Purchase Agreements, dated January 4, 2010 and January 14,
2010, respectively, the Company issued total 1,200,000 shares of common stock to
the non-affiliated investors.
 
 During
the third quarter of 2010, the Company issued 549,995 shares of the Company’s
common stock to a consultant for the services rendered. The fair value of the
549,995 shares was determined using the bid price of the Company’s common stock
on the grant date, at a price of $0.25 per share. Accordingly, the Company
calculated the stock-based compensation of $137,499 at its fair
value.
  9
 MAN
SHING AGRICULTURAL HOLDINGS, INC. AND SUBSIDIARIES
 NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE NINE MONTHS ENDED MARCH 31, 2010 AND 2009
 (STATED
IN US DOLLARS)
 
 12.
                Stock-based
      compensation
 
 During
the third quarter of 2010, the Company issued 549,995 shares of the Company’s
common stock to a consultant for the services rendered. The fair value of the
549,995 shares was determined using the bid price of the Company’s common stock
on the grant date, at a price of $0.25 per share. Accordingly, the Company
calculated the stock-based compensation of $137,499 at its fair
value.
  13.
                Concentration
      and risk
 
 The
Company's operations are carried out in the People’s Republic of China (“PRC”).
Accordingly, the Company's business, financial condition and results of
operations may be influenced by the political, economic and legal environment in
the PRC, and by the general state of the PRC's economy. The Company's operations
in the PRC are subject to specific considerations and significant risks not
typically associated with companies in North America and Western Europe. The
Company's results may be affected by changes in governmental policies with
respect to laws and regulations, anti-inflationary measures, currency conversion
and remittance abroad, and rates and methods of taxation, among other
things.
  (a)
                Major
      customers
 
 For the
nine months ended March 31, 2010 and the year ended June 30, 2009, 100% of the
Company’s assets were located in the PRC
 
 The
Company had 4 customers that individually comprised 41% and 72% of net revenue
for the nine months ended March 31, 2010 and the year ended June 30, 2009,
respectively.
 
 For the nine months
ended March 31, 2010
 Customers
                
                
                Revenues
                
                
                
                
                
                
                Accounts
                  ReceivableCustomer
      A
                
                
                $
                2,744,860
                
                
                
                18
                %
                
                
                $
                92,726Customer
      B
                
                
                
                1,278,950
                
                
                
                9
                %
                
                
                
                199,596Customer
      C
                
                
                
                1,178,396
                
                
                
                8
                %
                
                
                
                54,808Customer
      D
                
                
                
                901,949
                
                
                
                6
                %
                
                
                
                74,397Total:
                
                $
                6,104,155
                
                
                
                41
                %
                Total:
                
                $
                421,527
 
 
 For the
year ended June 30, 2009
 Customers
                
                
                Revenues
                
                
                
                
                
                
                Accounts
                  ReceivableCustomer
      A
                
                
                $
                3,116,065
                
                
                
                27
                %
                
                
                $
                824,005Customer
      B
                
                
                
                2,360,222
                
                
                
                21
                %
                
                
                
                715,051Customer
      C
                
                
                
                1,562,463
                
                
                
                14
                %
                
                
                
                147,036Customer
      D
                
                
                
                1,198,702
                
                
                
                10
                %
                
                
                
                239,336Total:
                
                $
                8,237,452
                
                
                
                72
                %
                Total:
                
                $
                1,925,429
 
 (b)   Credit
risk
 
 Financial
instruments that potentially subject the Company to significant concentrations
of credit risk consist principally of cash and trade accounts receivable. The
Company performs ongoing credit evaluations of its customers' financial
condition, but does not require collateral to support such
receivables.
  14.
                Subsequent
      events
  We
evaluated subsequent events through the date and time our financial statements
were issued on May 10, 2010. There are no subsequent events through May 10,
2010.
 10
 
 ITEM 2.MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
 
 FORWARD
LOOKING STATEMENTS
 
 Certain
statements in this report, including statements of our expectations, intentions,
plans and beliefs, including those contained in or implied by "Management's
Discussion and Analysis" and the Notes to Unaudited Consolidated Financial
Statements, are "forward-looking statements", within the meaning of Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that
are subject to certain events, risks and uncertainties that may be outside our
control. The words “believe”, “expect”, “anticipate”, “optimistic”, “intend”,
“will”, and similar expressions identify forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date on which they are made. We undertake no obligation to
update or revise any forward-looking statements. These forward-looking
statements include statements of management's plans and objectives for our
future operations and statements of future economic performance, information
regarding our expansion and possible results from expansion, our expected
growth, our capital budget and future capital requirements, the availability of
funds and our ability to meet future capital needs, the realization of our
deferred tax assets, and the assumptions described in this report underlying
such forward-looking statements. Actual results and developments could differ
materially from those expressed in or implied by such statements due to a number
of factors, including, without limitation, those described in the context of
such forward-looking statements, our expansion and acquisition strategy, our
ability to raise additional capital to finance our activities; the
effectiveness, profitability, and the marketability of our products; the future
trading of the common stock of MSAH; the ability of MSAH to operate as a public
company; our ability to protect our proprietary information; general economic
and business conditions; the volatility of our operating results and financial
condition; our ability to attract or retain qualified senior management
personnel and research and development staff; and other risks detailed from time
to time in its filings with the Securities and Exchange Commission (“SEC”), or
otherwise.
 
 DESCRIPTION
OF BUSINESS
 
 General
 
 As used
herein the terms "we", the "Company", "MSAH", the "Registrant," or the "Issuer"
refers to Man Shing Agricultural Holdings, Inc., its subsidiaries and
predecessors, unless indicated otherwise. We were incorporated on February 8,
2000 under the laws of the State of Nevada.  From the beginning of
2003 until December 31, 2007 we had no operations and no assets.  We
were a dormant company with no revenues.  Subsequent to December 31,
2007, we began operating in the real estate industry and engaged in the business
of buying, selling, renting, and improving real estate.
 
 As of
August 20, 2009, we entered into a Plan of Exchange (the “Agreement”) between
and among us, Hero Capital Profits Limited, a company organized and existing
under the laws of the British Virgin Islands (including its successors and
assigns “HCP”), Weifang Xinsheng Food Co., Ltd., a company organized and
existing under the laws of the People’s Republic of China (“Xinsheng”), the
shareholders of Xinsheng (the “Xinsheng Shareholders”) and our majority
shareholder. Pursuant to the terms of the Agreement, we acquired one hundred
percent (100%) of the issued and outstanding share capital of HCP from the
shareholders of HCP (the “HCP Shareholders”) in exchange for a new issuance
32,800,000 shares of common stock of MSAH and the simultaneous transfer of
3,535,000 shares of MSAH Preferred Stock to the HCP shareholders, held in the
name of the Northeast Nominee Trust (Duane Bennett, President of MSAH as
trustee), which gave the HCP Shareholders an interest in MSAH representing
99.38% of the issued and outstanding shares. Upon completion of the exchange,
HCP and Xinsheng became our wholly owned subsidiaries. All of these conditions
to closing have been met, and we, HCP, Xinsheng, the Xinsheng Shareholders and
our majority shareholders declared the exchange transaction consummated on
August 20, 2009. The transaction was treated for accounting purposes as a
capital transaction and recapitalization by the accounting acquirer and as a
re-organization by the accounting acquiree.
 
 On
September 2, 2009, we changed our name to Man Shing Agricultural Holdings, Inc.
to more accurately reflect our business after a stock exchange transaction with
HCP and Xinsheng. Since the reverse merger was consummated, we have continued
operations of Xinsheng, a company which is principally engaged in the production
and processing of fresh vegetables, including ginger, onion, garlic and leeks.
We strive to provide high quality products to our customers. As of March 31,
2010, we have 110,000 square meters of factory space and utilize 4.85 million
square meters of farm land, which is one of the largest ginger farm lands in the
region. We comply with the ISO9002 and the HACCP food safety standards. All of
our farm land has been certified by the Organic Crop Improvement Association and
has met the Japan Agricultural Standards for production of organic foods. Our
processing factory has also met the requirements of the British Retail
Consortium Global Food Standard and the TESCO, a UK supermarket, food safety
standards. Under our close monitoring and supervision program, we believe we can
ensure that all products produced are in compliance with food safety standards
from around the world.
  Our
Products
 
 Fresh
Vegetables
 ·
              Ginger
 ·
              Burdock
 ·
              Onion
 ·
              Peeled
      Garlic
 ·
              Leeks
  Frozen
Vegetables
 ·
              Peeled
      Ginger
 ·
              Diced
      Ginger
 ·
              Ginger
      Puree Cubes
 ·
              Ginger
      Puree
 ·
              Ginger
      Slice
 ·
              Diced
      Garlic
 ·
              Garlic
      Puree
 ·
              Garlic
      Puree Cubes
 ·
              Diced
      Onion
 ·
              Peeled
      Garlic
 
 
 Our
customers
 
 Our
customers include one of the world’s largest chain supermarkets in Europe and a
substantial ingredient producer in Japan. Our customers are based all over the
world including the UK and North America.
 
 The
following table depicts our top five customers and their percentage of current
sales for the third quarter ended March 31, 2010.
 
 11
 
 Top
5 Customers for the nine months ended March 31, 2010
 (Total
sales revenue for the nine months ended March 31, 2010:
US$15,074276)
 
  Customer
              Revenues
              %1.
        Customer A
              US$2,744,860
              18.20%2.   Customer
      B
              US$1,278,950
              8.50%3.
        Customer C
              US$1,178,396
              7.80%4.
        Customer D
              US$   901,949
              6.00%5.
        Customer E
              US$   765,097
              5.10%Total:
              US$6,869,251
              45.60%
 
 Geographic
Segmentation of our Customer Base:
  Market
              
              %
      of revenue contributionJapan
              
              
              41%UK
              
              
              38%Netherlands
              
              
              11%US
              
              
              10%Total
              
              
              100%
 
  Competitive
Advantages
 
 Our major
competitive advantage is that, as of March 31, 2010, we have over 4.85 million
square meters of farmland with turnover for the nine months ended March 31, 2010
of $15 million. Our competitive advantages include:
 
 ·
              We
      are able to comply with certain strict export requirements that small
      local producers are unable to meet.
 
 ·
              Overseas
      customers are willing to pay a high premium to obtain a safety assurance
      from us.
 
 ·
              Labor
      costs are relatively low in China as compared to other developing
      countries.
 
 ·
              Our
      plant is situated in Weifang, a major farming region based in Shandong
      province, China.
 
 ·
              Local
      governments have made inspections stricter and have recently rejected
      sub-standard exporters but we comply with the highest safety
      standards.
 
 ·
              Local
      governments have tightened the export license renewal procedures on local
      producers.
 
 ·
              The
      current market and stricter government regulation will allow responsible
      producers, like us, to develop at a faster
rate.
 
 ·
              The
      demand for China’s frozen vegetables remains strong, thus our products
      demand remains strong.
 
 Our social
responsibility
 
 As an
agent of social and economic development, we realize the importance of
sustaining village development. We hire and train the local workforce hoping to
help raise the overall level of community prosperity.
 
 RESULTS
OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2010 COMPARED TO THE
THREE AND NINE MONTHS ENDED MARCH 31, 2009
 For
      the three months ended March 31,
              For
      the nine months ended March 31,2010
              2009
              2010
              2009Sales:
              $
              5,283,909
              $
              4,202,565
              $
              15,074,376
              $
              6,537,932Cost
      of Goods Sold:
              
              3,118,228
              
              2,937,173
              
              9,873,399
              
              4,653,357Operating
      Expenses:
              
              439,009
              
              154,472
              
              1,122,302
              
              372,597Income
      from Operations:
              
              1,726,673
              
              1,110,920
              
              4,078,676
              
              1,511,977Other
      Income (Expenses):
              
              (11,302)
              
              (7,318)
              
              (23,406)
              
              (22,572)Income
      Taxes:
              
              -
              
              -
              
              -
              
              (46)Net
      Income:
              
              1,715,371
              
              1,103,602
              
              4,055,270
              
              1,489,358Other
      Comprehensive Income (Loss):
              
              21,629
              
              6,052
              
              (19,731)
              
              11,297Total
      Comprehensive Income:
              $
              1,737,000
              $
              1,109,654
              $
              4,035,539
              $
              1,500,655
 
 12
 Revenues
 
 We had
net revenues of $5,283,909 and $15,074,376 for the three and nine months ended
March 31, 2010, increased by $26% and $131% as compared to $4,202,565 and
$6,537,972 of the same periods ended March 31, 2009, respectively. The sales
revenues were due primarily to the sales of our frozen and fresh ginger and
other agricultural products. The increase in revenues were contributed by
increase in demand and selling price of our products which was due to our
expanding business, our marketing strategy, our customer loyalty, and the
quality of our products and services.
 
 We
recognize revenue when persuasive evidence of a sale exists, transfer of title
has occurred, the selling price is fixed or determinable and collectability is
reasonably assured. Sales revenue represents the invoiced value of goods, net of
a value-added tax (“VAT”). All of our products that are sold in the PRC are
subject to a Chinese value-added tax at a rate of 17% of the gross sales price
or at a rate approved by the Chinese local government. This VAT may be offset by
the VAT paid by us on raw materials and other materials included in the cost of
producing their finished product.
 
 Our sales
arrangements are not subject to warranty. We did not record any product returns
for the three and nine months ended March 31, 2010 and 2009.
 
 Cost
of Sales
 
 Cost of
sales primarily includes cost of sales to planting and harvest and maintain our
ginger and other agricultural products. During the three and nine months ended
March 31, 2010, we had cost of sales of $3,118,228 and $9,873,399, or
approximately 59% and 65% of revenues respectively, versus cost of sales of
$2,937,173 and $4,653,257, or approximately 70% and 71% of revenues of the same
periods in 2009 respectively. The cost of sales as a percentage of revenue
decreased due the large increase in sales and the more efficient use of
supplies.
 
 Gross
profit
 
 We had
gross profit of $2,165,681 and $5,200,977 for three and nine months ended March
31, 2010, respectively, increased by 71% or 176% as compared to the same
periods ended March 31, 2009, respectively. Gross profit margin was 41% and 35%
for the three and nine months ended March 31, 2010, respectively, as compared to
30% and 29% for the same periods in 2009, respectively. Gross profit margin
increased by 11% and 6% for the three-month and nine-month period ended March
31, 2010 as compared to the same period in 2009.
 
 The
increase in gross profit margin for our ginger and agricultural products during
the three and nine months ended March 31, 2010 was due primarily to the increase
in our selling prices and the reduction in material costs and overheads,
resulting from better utilization of our plantation and processing facilities
due to economies of scale from higher output volume.
 
 Expenses
 
 Operating
expenses for the three and nine months ended March 31, 2010 were $438,009 and
$1,122,302, respectively, compared to operating expenses of $154,472 and
$372,597 for the same periods ended March 31, 2009, respectively. The increases
in operating expenses during the three and nine months ended March 31, 2010 were
mainly attributable to the increase in the sales and marketing expenses by
$227,131 and $498,283, respectively, in connection with the expansion in both
existing and new markets.
 
 Income/Losses
 
 We had a
net income of $1,715,371 and $4,055,270 for the three and nine months periods
ended March 31, 2010, respectively, compared to $1,103,602 and $1,489,358 for
the same periods ended March 31, 2009, respectively. Our net income is a
function of revenues, cost of sales and other expenses as described above. The
increase in net income in 2010 was due primarily to the increase in sales of our
fresh and frozen ginger and other agricultural products, as a result of our
expanding business, our marketing strategy, our customer loyalty, and the
quality of our product and service.
 
 Impact
of Inflation
 
 We
believe that inflation has had a negligible effect on operations. We believe
that we can offset inflationary increases in the cost of operations by
increasing sales and improving operating efficiencies.
 
 Liquidity
and Capital Resources
 
 Cash
flows used in operating activities during the nine months ended March 31, 2010
were $1,852,509, compared to cash flows of $488,664 provided by operating
activities during the nine months ended March 31, 2009. Negative cash flows from
operations for the nine months ended March 31, 2010 were due primarily to the
increase in inventory by $5,503,835, which was in connection with planting of
the ginger, the increase in other receivables by $353,567 and the increase in
prepayment by $1,335,932, partially offset by the net income of $4,055,270, the
decrease in accounts receivable by $869,140. Positive cash flows from operations
for the nine months ended March 31, 2009 were due to the net income of
$1,489,358, the decrease in inventory by $533,933 and the increase in other
payable by $195,766, partially offset by the increase in account receivable by
$1,130,461 and the increase in prepayment by $764,213.
 
 Cash
flows used in investing activities were $230,008 and $41,666 for the nine months
ended March 31, 2010 and 2009, respectively, due primarily to the purchase of
property and equipment.
 
 Cash
flows provided by financing activities were $2,098,187 for the nine months ended
March 31, 2010, consisting of issuance of a secured note in the amount of
$450,000 and a secured convertible redeemable debenture in the amount of
$1,500,000 and proceeds from a loan of $279,128. We had no cash flows from
financing activities during the nine months ended March 31, 2009.
 
 Demand
for the products and services will be dependent on, among other things, market
acceptance of our products, the fresh vegetables market in general, and general
economic conditions, which are cyclical in nature. Inasmuch as a major portion
of our activities is the receipt of revenues from the sales of our products, our
business operations may be adversely affected by our competitors and prolonged
recession periods.
 
 Our
success will be dependent upon implementing our plan of operations and the risks
associated with our business plans. We engaged in the production and processing
of fresh vegetables, including ginger, onion, garlic and leek. We strive to
provide high quality products to our customers. We plan to strengthen our
position in the existing and new markets. We also plan to expand our operations
through aggressively marketing our products and our brand.
 
 We do not
have any off-balance sheet arrangements.
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
 
 The
information to be reported under this item is not required of smaller reporting
companies.
 
 ITEM
4. CONTROLS AND PROCEDURES
 
 Disclosure
Controls and Procedures
 
 Disclosure
controls and procedures are the Company’s controls and other procedures that are
designed to ensure that information required to be disclosed by the Company in
the reports that the Company files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange 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 the Company in the reports
that it files under the Exchange Act is accumulated and communicated to the
Company’s management, including its Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required disclosure.
Management is responsible for establishing and maintaining adequate internal
control over financial reporting.
 
 Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined
under Rule 13a-14(c) promulgated under the Exchange Act as of March 31, 2010,
and, based on their evaluation, as of the end of such period, the our disclosure
controls and procedures were effective as of the end of the period covered by
the Quarterly Report.
 
 Changes
in Internal Controls Over Financial Reporting
 
 Our Chief
Executive Officer (who is also our principal executive officer) and Chief
Financial Officer (who is also our principal financial officer) (collectively,
the “Certifying Officers”) concluded that there was no change in our internal
controls over financial reporting identified in connection with the evaluation
that occurred during our last fiscal quarter that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.
 
 Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate. All internal control systems, no matter
how well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation. Because of the inherent
limitations of internal control, there is a risk that material misstatements may
not be prevented or detected on a timely basis by internal control over
financial reporting. However, these inherent limitations are known features of
the financial reporting process. Therefore, it is possible to design into the
process safeguards to reduce, though not eliminate, this risk.
 
 13
 
 PART II. OTHER
INFORMATION
 
 ITEM
1.      LEGAL PROCEEDINGS
 
 Not
Applicable
 
 ITEM
1A. RISK FACTORS
 
 The
information to be reported under this item has not changed since the fiscal year
ended June 30, 2009, which was disclosed in the previously filed amendment to
Current report on Form 8-K/A, dated September 11, 2009.
 
 ITEM
2.      UNREGISTERED SALES OF EQUITY SECURITIES AND USE
OF PROCEEDS
 
 Pursuant
to the two Securities Purchase Agreements, dated January 4, 2010 and January 14,
2010, respectively, the Company issued total 1,200,000 shares of common stock to
the non-affiliated investors.
  During
the third quarter of 2010, the Company issued 549,995 shares of the Company’s
common stock to a consultant for services rendered. The fair value of the
549,995 shares was determined using the bid price of the Company’s common stock
on the grant date, at a price of $0.25 per share. Accordingly, the Company
calculated the stock-based compensation of $137,499 at its fair
value.
 
 ITEM
3.      DEFAULTS UPON SENIOR SECURITIES
 
 Not
Applicable
 
 ITEM
4.      REMOVED AND RESERVED
 
 Not
Applicable
 
 ITEM
5.      OTHER INFORMATION
 
 Not
Applicable
 
 ITEM
      6.
              EXHIBITS
 
 The
      exhibits listed on the Exhibit Index are filed as part of this
      report.
 
 Exhibit No.
              Description31.1
              Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 200231.2
              Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 200232.1
              Certification
      of the Chief Executive Officer and Chief Financial Officer pursuant to
      Section 906 of the Sarbanes-Oxley Act of
2002
 
 Reports on Form 8-K filed in
the third quarter of 2009
 
 1.
              On
      January 7, 2010, we filed a current report in Form 8-K to announce that we
      entered a Securities Purchase Agreement regarding the purchase up to One
      Million Dollars ($1,000,000) of investment units (the “Units”), where each
      unit consists of a secured convertible redeemable debenture in the amount
      of $100,000, along with 80,000 shares of the Company’s Common Stock, and
      one right to buy an additional Unit for up to three
      years.
 
 2.
              On
      January 12, 2010, we filed an amendment to current report in Form 8-K/A to
      amend the current report in Form 8-K filed on January 7,
      2010.
 
 3.
              On
      January 20, 2010, we filed a current report in Form 8-K to announce that
      we entered a Securities Purchase Agreement regarding the purchase up to
      Five Hundred Thousand Dollars ($500,000) of investment units (the
      “Units”), where each unit consists of a secured convertible redeemable
      debenture in the amount of $100,000, along with 80,000 shares of the
      Company’s Common Stock, and one right to buy an additional Unit for up to
      three years.
 4.
              On
      February 11, 2010, we filed a current report in Form 8-K to announce an
      Addendum to Registration Rights Agreement, pursuant to which the deadline
      of Form S-1 filing was extended.
 
 
 Reports on Form 8-K filed
subsequent to the third quarter of 2009
 
 5.
              On
      April 16, 2010, we filed a current report in Form 8-K to announce an
      Addendum to Series 2009 Secured Note Due March 8, 2010 dated September 9,
      2009 (the “Secured Note”), pursuant to which the due date of the Secured
      Notes was extended, and any default arising out of any failure by the
      Company to make payments of interest, principal or other amounts on or
      prior to the originally scheduled Maturity Date of the Note was
      waived.
 
 6.
              On
      May 3, 2010, we filed a current report in Form 8-K to announce an Addendum
      to Registration Rights Agreement, pursuant to which the deadline of Form
      S-1 filing was extended.
 
 14
 
 SIGNATURES
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, there
unto duly authorized.
  
 MAN
      SHING AGRICULTURAL HOLDINGS, INC.Date:
      May 11, 2010
              By:
              /s/ Eddie CheungEddie
      Cheung
                Chief
      Executive Officer
 
 15
 
 INDEX
TO EXHIBITS
 
 Exhibit No.
              Description31.1
              Certification of Chief Executive Officer pursuant to
      Section 302 of the Sarbanes-Oxley Act of 200231.2
              Certification of Chief Financial Officer pursuant to
      Section 302 of the Sarbanes-Oxley Act of 200232.1
              Certification of the Chief Executive Officer and Chief
      Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002