# EDGAR Filing Document

**Accession Number:** 0001749849
**File Stem:** 0001213900-23-010595
**Filing Date:** 2023-2
**Character Count:** 98971
**Document Hash:** 77a3725009c9ca1537ea4d99e7546a80
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-23-010595.hdr.sgml**: 20230213

**ACCESSION NUMBER**: 0001213900-23-010595

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 65

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230213

**DATE AS OF CHANGE**: 20230213

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Organic Agricultural Co Ltd
- **CENTRAL INDEX KEY:** 0001749849
- **STANDARD INDUSTRIAL CLASSIFICATION:** AGRICULTURE PRODUCTION - CROPS [0100]
- **IRS NUMBER:** 825442097
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 0331

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-56168
- **FILM NUMBER:** 23616207

**BUSINESS ADDRESS:**
- **STREET 1:** ROOM 6504 BUILDING 3, KEJICHUANGXINCHENG
- **STREET 2:** CHUANGXINCHUANGYE PLAZA
- **CITY:** HARBIN, HEILONGJIANG PROVINCE
- **STATE:** F4
- **ZIP:** 150090
- **BUSINESS PHONE:** 86 0451 51527001

**MAIL ADDRESS:**
- **STREET 1:** ROOM 6504 BUILDING 3, KEJICHUANGXINCHENG
- **STREET 2:** CHUANGXINCHUANGYE PLAZA
- **CITY:** HARBIN, HEILONGJIANG PROVINCE
- **STATE:** F4
- **ZIP:** 150090

?xml version="1.0" encoding="ASCII"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 10-Q**

(Mark One)

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended December 31, 2022**

**or**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from_____________ to____________**

**Commission File Number: 0-56168**

**<u>ORGANIC AGRICULTURAL COMPANY LIMITED</u>**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Nevada** | **82-5442097** |
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification Number) |

---

**Room G510, Building No. 3, Kejichuangxincheng Chuangxinchuangye Plaza,** 

**High and New Technology Industrial Development District,** 

**Harbin City, Heilongjiang Province, China 150090**

**Office: +86 (0451) 5152-7001**

(Address, including zip code, and telephone number, including area code,

of Registrant's principal executive offices)

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

---

| | | |
|:---|:---|:---|
| **Title of Each Class** | **Trading Symbol** | **Name of Each Exchange on Which<br> Registered** |
| None | None | Not Applicable |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☐ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12 b-2 of the Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

As of the date of filing of this report, there were outstanding 93,726,994 shares of the issuer's common stock, par value $0.001 per share.

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
|  | [PART I—FINANCIAL INFORMATION](#a_001) |  |
| Item 1 | [Financial Statements](#a_002) | 1 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_003) | 2 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#a_004) | 7 |
| Item 4. | [Controls and Procedures](#a_005) | 7 |
|  | [PART II—OTHER INFORMATION](#a_006) |  |
| Item 1. | [Legal Proceedings](#a_007) | 8 |
| Item 1A. | [Risk Factors](#a_008) | 8 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#a_009) | 8 |
| Item 3. | [Defaults Upon Senior Securities](#a_010) | 8 |
| Item 4. | [Mine Safety Disclosure](#a_011) | 8 |
| Item 5. | [Other Information](#a_012) | 8 |
| Item 6. | [Exhibits](#a_013) | 9 |

---

i

**<u>PART I – FINANCIAL INFORMATION</u>**

**Item 1. Financial Statements.**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

---

| | |
|:---|:---|
|  | **Page** |
| **ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES** |  |
| [Condensed Consolidated Balance Sheets as of December 31, 2022 (Unaudited) and March 31, 2022](#b_001) | F-1 |
| [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended December 31, 2022 and 2021 (Unaudited)](#b_002) | F-2 |
| [Condensed Consolidated Statements of Changes in Shareholders' Equity for the Nine Months Ended December 31, 2022 and 2021 (Unaudited)](#b_003) | F-3 |
| [Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2022 and 2021 (Unaudited)](#b_004) | F-4 |
| [Notes to Condensed Consolidated Financial Statements (Unaudited)](#b_005) | F-5 – F-16 |

---

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**AS OF DECEMBER 31, 2022 AND MARCH 31, 2022**

**(EXPRESSED IN US DOLLARS)**

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2022** | **March 31,**<br>**2022** |
|  | **Unaudited** | |
| **Assets** |  |  |
| **Current assets:** |  |  |
| Cash | $83966 | $402449 |
| Accounts receivable | 8620 | 2532 |
| Due from related parties | 1722 | 17373 |
| Prepaid expenses | 13585 | 36330 |
| Inventories | 157497 | 205873 |
| Other receivables | 30853 | 32071 |
| Current assets, discontinued operations (Note 3) | - | 69075 |
| **Total current assets** | **296243** | **765703** |
| **Total assets** | $**296243** | $**765703** |
| **Liabilities and shareholders' equity** |  |  |
| **Current liabilities:** |  |  |
| Accounts payable and accrued expenses | $27341 | $64347 |
| Customer deposits | 151040 | 164804 |
| Due to related parties | 3035 | 21148 |
| Other payables | 739 | 925 |
| Current liabilities, discontinued operations (Note 3) | - | 210604 |
| **Total current liabilities** | **182155** | **461828** |
| **Total liabilities** | **182155** | **461828** |
| **Shareholders' equity:** |  |  |
| Preferred stock; $0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding at December 31, 2022 and March 31, 2022 | - | - |
| Common stock; $0.001 par value, 274,000,000 shares authorized; 93,726,994 and 83,536,994 shares issued and outstanding at December 31, 2022 and March 31, 2022, respectively | 93727 | 83537 |
| Additional paid-in capital | 5153407 | 4266611 |
| (Subscription receivable) | (866032) |  |
| (Deficit) | (4250354) | (3803720) |
| Other comprehensive (loss) | (16660) | (173204) |
| **Total shareholders' equity of the Company** | **114088** | **373224** |
| Non-controlling interest | - | (69349) |
| **Total shareholders' equity** | **114088** | **303875** |
| **Total liabilities and shareholders' equity** | $**296243** | $**765703** |

---

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

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)**

**FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2022 AND 2021**

**(UNAUDITED) (EXPRESSED IN US DOLLARS)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended<br> December 31,** | **For the Three Months Ended<br> December 31,** | **For the Nine Months Ended<br> December 31,** | **For the Nine Months Ended<br> December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| **Revenue** | $93531 | $164876 | $170792 | $242922 |
| Cost of sales | 83514 | 119572 | 146276 | 171827 |
| **Gross profit** | 10017 | 45304 | 24516 | 71095 |
| Selling, general and administrative expenses | 9564 | 99107 | 544920 | 983346 |
| **Operating income (loss)** | 453 | (53803) | (520404) | (912251) |
| Other income (loss) | (46) | 234 | 2435 | 236 |
| **Income (loss) before provision for income taxes** | 407 | (53569) | (517969) | (912015) |
| Provision for income taxes | - | - | - | - |
| **Net income (loss) from continuing operations** | 407 | (53569) | (517969) | (912015) |
| Gain on the sale of discontinued operations, net of income taxes (Note 3) | - | - | 68359 | - |
| (Loss) from discontinued operations, net of income taxes (Note 3) | - | (66463) | (1) | (96589) |
| **Net income (loss)** | 407 | (120032) | (449611) | (1008604) |
| Less: (loss) from discontinued operations attributable to non-controlling interests | - | (32566) | - | (47328) |
| **Net income (loss) attributable to common shareholders** | $407 | $(87466) | $(449611) | $(961276) |
| **Amounts attributable to common shareholders:** |  |  |  |  |
| Net income (loss) from continuing operations | $407 | $(53569) | $(517969) | $(912015) |
| Net income (loss) from discontinued operations | - | (33897) | 68358 | (49261) |
| **Net income (loss) attributable to common shareholders** | $407 | $(87466) | $(449611) | $(961276) |
| Income (loss) per share – continuing operations – basic and diluted | $0.00 | $0.00 | $(0.01) | $(0.01) |
| Income (loss) per share discontinued operations – basic and diluted | 0.00 | 0.00 | 0.00 | 0.00 |
| **Basic and diluted income (loss) per share**  | $0.00 | $0.00 | $(0.01) | $(0.01) |
| **Weighted average number of shares outstanding- basic and diluted\***  | 87309961 | 87712798 | 84835023 | 80750245 |
| **Other comprehensive (loss):** |  |  |  |  |
| Net income (loss) | $407 | $(120032) | $(449611) | $(1008604) |
| Foreign currency translation adjustment | (74897) | (26824) | 163193 | (52658) |
| **Comprehensive (loss)** | (74490) | (146856) | (286418) | (1061262) |
| Less: comprehensive income (loss) attributable to non-controlling interests | - | (32808) | 3672 | (47570) |
| **Comprehensive (loss) attributable to the common shareholders** | $(74490) | $(114048) | $(290090) | $(1013692) |

---

\* After giving retroactive effect to a 5.16 for 1 forward stock split effective October 21, 2021.

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

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' (DEFICIT) EQUITY**

**FOR THE NINE MONTHS ENDED DECEMBER 31, 2022 AND 2021**

**(UNAUDITED) (EXPRESSED IN US DOLLARS, EXCEPT SHARES)**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common stock \*** | **Common stock \*** | | | | | | | |
|  | **Quantity** | **Amount** | **Additional<br> Paid-in**<br>**Capital** | **Subscription**<br>**Receivable** |<br>**(Deficit)** | **Other<br> Comprehensive<br> Income**<br>**(Loss)** | **Total<br> Shareholders'<br> Equity**<br>**(Deficit)** | **Non-<br> controlling**<br>**Interest** | **Total<br> Shareholders'<br> Equity<br> (Deficit)**<br>**and NCI** |
| **Balance at March 31, 2021** | **60500174** | $**60500** | $**2610648** | $**-**  | $**(2684213)** | $**(113743)** | $**(126808)** | $**-**  | $**(126808)** |
| Net (loss) |  | - | - |  | (790699) |  | (790699) |  | (790699) |
| Sale of common shares | 21256620 | 21257 | 898743 | - | - |  | 920000 |  | 920000 |
| Shares issued as compensation | 1780200 | 1780 | 757220 | - | - |  | 759000 |  | 759000 |
| Foreign currency translation adjustment | - | - | - | - | - | (25774) | (25774) | - | (25774) |
| **Balance at June 30, 2021 (unaudited)** | **83536994** | **83537** | **4266611** | **-**  | **(3474912)** | **(139517)** | **735719** | **-**  | **735719** |
| Net (loss) |  | - | - |  | (83111) |  | (83111) | (14762) | (97873) |
| Foreign currency translation adjustment | - | - | - | - | - | (60) | (60) | - | (60) |
| **Balance at September 30, 2021 (unaudited)** | **83536994** | **83537** | **4266611** | **-**  | **(3558023)** | **(139577)** | **652548** | **(14762)** | **637786** |
| Net (loss) |  |  |  |  | (87466) |  | (87466) | (32566) | (120032) |
| Foreign currency translation adjustment | - | - | - | - | - | (26582) | (26582) | (242) | (26824) |
| **Balance at December 31, 2021 (unaudited)** | **83536974** | $**83537** | $**4266611** | $**-**  | $**(3645489)** | $**(166159)** | $**538500** | $**(47570)** | $**490930** |
| **Balance at March 31, 2022** | **83536994** | $**83537** | $**4266611** | $**-**  | $**(3803720)** | $**(173204)** | $**373224** | $**(69349)** | $**303875** |
| Net (loss) |  | - | - |  | (217141) |  | (217141) |  | (217141) |
| Foreign currency translation adjustment | - | - | - | - | - | 107161 | 107161 | 3672 | 110833 |
| **Balance at June 30, 2022 (unaudited)** | **83536994** | **83537** | **4266611** | **-**  | **(4020861)** | **(66043)** | **263244** | **(65677)** | **197567** |
| Net (loss) |  | - | - |  | (232877) |  | (232877) | **-** | (232877) |
| Shares issued as compensation | 140000 | 140 | 12446 | - | - |  | 12586 |  | 12586 |
| Foreign currency translation adjustment | - | - | - | - |  | 127257 | 127257 |  | 127257 |
| Divestment of Tianci Wanguan | **-**  | **-**  | **-**  | - | 2977 | (2977) | - | 65677 | 65677 |
| **Balance at September 30, 2022 (unaudited)** | **83676994** | **83677** | **4279057** | **-**  | **(4250761)** | **58237** | **170210** | **-**  | **170210** |
| Net income |  | - | - |  | 407 |  | 407 |  | 407 |
| Shares issued as compensation | 50000 | 50 | 4350 |  |  |  | 4400 |  | 4400 |
| Sale of common shares | 10000000 | 10000 | 870000 | (866032) |  |  | 13968 |  | 13968 |
| Foreign currency translation adjustment | - | - | - | - | - | (74897) | (74897) | - | (74897) |
| **Balance at December 31, 2022 (unaudited)** | **93726994** | $**93727** | $**5153407** | $**(866032)** | $**(4250354)** | $**(16660)** | $**114088** | $**-**  | $**114088** |

---

\* After giving retroactive effect to a 5.16 for 1 forward stock split effective October 21, 2021.

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

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**FOR THE NINE MONTHS ENDED DECEMBER 31, 2022 AND 2021**

**(UNAUDITED) (EXPRESSED IN US DOLLARS)**

---

| | | |
|:---|:---|:---|
|  | **For the Nine Months Ended<br> December 31,** | **For the Nine Months Ended<br> December 31,** |
|  | **2022** | **2021** |
| **Cash Flows from Operating Activities** |  |  |
| Net (loss) from continuing operations | $(517969) | $(912015) |
| Net income (loss) from discontinued operations | 68358 | (96589) |
| Shares issued as compensation | 16986 | 759000 |
| Depreciation and amortization | - | 18796 |
| Gain on sale of discontinued operations | (68359) | - |
| Exchange loss (gain) | 192194 | (70061) |
| Changes in operating assets and liabilities, discontinued operations | (5381) | - |
| Changes in operating assets and liabilities, continuing operations: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | (6331) | (637) |
| &nbsp;&nbsp;&nbsp;Prepaid and deferred expenses | 19944 | (77407) |
| &nbsp;&nbsp;&nbsp;Inventories | 32003 | (69824) |
| &nbsp;&nbsp;&nbsp;Other receivables | (1372) | (39636) |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (35138) | (9908) |
| &nbsp;&nbsp;&nbsp;Customer deposits | (502) | 164295 |
| &nbsp;&nbsp;&nbsp;Due to (from) related parties | (3013) | (40607) |
| &nbsp;&nbsp;&nbsp;Lease liability | - | (38574) |
| &nbsp;&nbsp;&nbsp;Other payables | (112) | (763) |
| **Net cash (used in) operating activities** | **(308692)** | **(413930)** |
| **Cash Flows from Investing Activities** |  |  |
| Cash disbursed on divestment of Tianci Wanguan | (288) | - |
| **Net cash (used in) investing activities** | **(288)** | **-**  |
| **Cash Flows from Financing Activities** |  |  |
| Proceeds from sale of common stock | 13968 | 920000 |
| **Net cash provided by financing activities** | **13968** | **920000** |
| Effect of exchange rate fluctuations on cash | (29485) | (9870) |
| **Net (decrease) increase in cash** | **(324497)** | **496200** |
| Cash, beginning of period-continuing operations | 402449 | 70506 |
| Cash, beginning of period-discontinued operations | 6014 | - |
| **Cash, beginning of period** | **408463** | **70506** |
| Cash, end of period-continuing operations | 83966 | 566706 |
| Cash, end of period-discontinued operations | - | - |
| **Cash, end of period** | $**83966** | $**566706** |
| **Supplemental disclosure of cash flow information:** |  |  |
| Cash paid for income taxes | $**-**  | $**-**  |
| Cash paid for interest | $**-**  | $**-**  |
| **Supplemental disclosure of non-cash activities:** |  |  |
| Gain on sale of discontinued operations | $68359 | $- |
| Shares issued for compensation | $16986 | $759000 |
| Issuance of common stock as cash was not received | $866032 | $- |

---

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

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED) (AMOUNTS IN US DOLLARS)**

**NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION**

Organic Agricultural Company Limited ("Organic Agricultural", the "Company", "we" or "us") was incorporated in the State of Nevada on April 17, 2018.

The Company, through its subsidiaries with headquarters in Harbin, China, sells selenium-enriched products and other agricultural products. At December 31, 2022, the Company's subsidiaries are as follows:

● Organic Agricultural (Samoa) Co., Ltd. ("Organic Agricultural Samoa"), a limited company incorporated in Samoa on December 15, 2017, is wholly owned by Organic Agricultural. Organic Agricultural Samoa owns all of the outstanding shares of capital stock of Organic Agricultural Company Limited (Hong Kong).

● Organic Agricultural Company Limited (Hong Kong) ("Organic Agricultural HK"), which was established on December 6, 2017 under the laws of Hong Kong, is wholly owned by Organic Agricultural Samoa. Organic Agricultural HK owns all of the registered equity of Heilongjiang Tianci Liangtian Agricultural Technology Development Company Limited.

● Heilongjiang Tianci Liangtian Agricultural Technology Development Company Limited. ("Tianci Liangtian"), a company incorporated in Heilongjiang, China on November 2, 2017, is wholly owned by Organic Agricultural HK. Tianci Liangtian owns all of the registered equity of Heilongjiang Yuxinqi Agricultural Technology Development Company Limited.

● Heilongjiang Yuxinqi Agricultural Technology Development Company Limited ("Yuxinqi"), a company incorporated in Heilongjiang, China on February 5, 2018, is wholly owned by Tianci Liangtian. Yuxinqi sells agricultural products, including paddy and other crops, to customers.

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED) (AMOUNTS IN US DOLLARS)**

**NOTE 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION *(Continued)***

***Divestment of Tianci Wanguan***

On November 6, 2020 Organic Agricultural entered into a Cooperation Agreement with Unbounded IOT Block Chain Limited ("Unbounded"). The purpose of the Cooperation Agreement was to promote the use of blockchain technology in agriculture, specifically the development of tracing systems for agricultural products, the development of a blockchain-based shopping mall for agricultural products, and related improvements to the agricultural sector of the economy. To accomplish those purposes, Tianci Wanguan (Xiamen) Digital Technology Co., Ltd. ("Tianci Wanguan") was incorporated on November 5, 2020. Tianci Wanguan was 51% owned by Organic Agricultural HK and 49% owned by Chen Zewu on behalf of Unbounded. On July 19, 2021 the parties executed a Supplementary Agreement to the Cooperation Agreement.

The Supplementary Agreement set forth performance criteria for Unbounded's management of Tianci Wanguan: specifically that within 12 months after the shares mentioned below are issued to Unbounded, Tianci Wanguan must generate a profit of five million Renminbi (approximately US$774,000) from the business described in the Cooperation Agreement or any other business approved by Organic Agricultural. On November 23, 2021, Organic Agricultural issued 10 million shares of its common stock to Chen Zewu, who held them as agent for Unbounded. If Unbounded failed to satisfy the criteria described above, the 10 million shares must be returned to Organic Agricultural. If Unbounded did satisfy the criteria, then it would have unrestricted ownership of the 10 million shares, and Organic Agricultural would issue an additional 10 million shares to Unbounded. According to FASB ASC 505-50-S99-1 and 2, as the 10,000,000 shares issued on November 23, 2021 were unvested and forfeitable, these shares were treated as unissued until they vest when the target described above was met.

The share-based compensation was measured at grant date, based on the fair value of the award and would be recognized over its vesting period if it was determined that the target would more likely than not be met. After the criteria described above was satisfied, the Company would grant to Unbounded a total of 20,000,000 shares, including the 10,000,000 shares issued on November 23, 2021, with a fair value on the grant date, which is July 19, 2021, of $0.0969 per share. If the performance condition described above was satisfied, $1,938,000 in compensation expense would have been recognized under the provisions of ASC 718.

As of June 30, 2022, the Company had suspended the operations of Tianci Wanguan and on August 19, 2022, completed the divestment of its subsidiary. On August 19, 2022, the Company and Unbounded entered into an Agreement on Termination of Joint Operation. The parties agreed that Organic Agricultural would surrender to Unbounded its 51% interest in Tianci Wanguan, and Unbounded would return the 10 million shares to Organic Agricultural. The 10,000,000 shares previously issued on November 23, 2021 were returned and cancelled with no compensation expense recognized.

In accordance with U.S. GAAP, the financial position and results of operations of Tianci Wanguan are presented as discontinued operations and, as such, have been excluded from continuing operations for all periods presented. The restated historical financial statements reflecting the divestment are unaudited. The cash flows and comprehensive income related to Tianci Wanguan have not been segregated and are included in the Condensed Consolidated Statements of Cash Flows and Comprehensive Income, respectively, for all periods presented. With the exception of Note 3, the Notes to the Unaudited Condensed Consolidated Financial Statements reflect the continuing operations of the Company. See Note 3 - Discontinued Operations below for additional information regarding discontinued operations.

Certain amounts in the prior year's condensed consolidated financial statements and related footnotes thereto have been reclassified to conform with the current year presentation as a result of the divestment of Tianci Wanguan.

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED) (AMOUNTS IN US DOLLARS)**

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Going concern***

Management has determined there is substantial doubt about our ability to continue as a going concern as a result of our lack of significant revenues and recurring losses. If we are unable to generate significant revenue or secure additional financing, we may be required to cease or curtail our operations. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company's operations have been financed primarily by proceeds from the sale of shares. The Company received $920,000 in April 2021 from the sale of shares. The Company sold an additional 10 million shares of its common stock in November 2022 for a price of $880,000 USD, with the payments for the shares scheduled to be paid before August 15, 2023. The Company will use these funds for working capital.

The marketing personnel of the Company are developing new customers and hope to build a stable base of customers. In this manner, Management hopes to generate sufficient operating cash inflow to support its future operations and development of the Company in addition to capital raised from sales of shares and shareholders' support based on need.

***Basis of presentation***

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal and recurring nature considered necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements. The results of operations for the interim period are not necessarily indicative of the results that will be realized for the entire fiscal year. These condensed consolidated financial statements should be read in conjunction with Organic Agricultural Company's audited financial statements and accompanying notes thereto as of and for the year ended March 31, 2022 included in Company's current report on Form 10-K as filed with the SEC on July 14, 2022.

The Company's condensed consolidated financial statements are expressed in U.S. Dollars and are presented in accordance with U.S. GAAP.

***Principles of consolidation***

The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation. The condensed consolidated financial statements include the assets, liabilities, and net income or loss of these subsidiaries.

The Company's subsidiaries as of December 31, 2022 are listed as follows:

---

| | | |
|:---|:---|:---|
| **Name** | **Place of<br> Incorporation** | **Attributable<br> equity interest <br> %** |
| Organic Agricultural (Samoa) Co., Ltd. | Samoa | 100 |
| Organic Agricultural Company Limited (Hong Kong) | Hong Kong | 100 |
| Heilongjiang Tianci Liangtian Agricultural Technology Development Company Limited | China | 100 |
| Heilongjiang Yuxinqi Agricultural Technology Development Company Limited | China | 100 |

---

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED) (AMOUNTS IN US DOLLARS)**

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES *(Continued)***

***Use of estimates***

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the inventory valuation allowance. This estimate is often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates.

***Cash***

Cash consists of cash on hand and bank deposits, which are unrestricted as to withdrawal and use in the PRC and the USA. All highly liquid investments with original stated maturities of three months or less are classified as cash. The Company's cash consisted of cash on hand and cash in bank, as of December 31, 2022 and March 31, 2022.

***Revenue recognition***

The Company follows the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products and contracts by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that economic benefits will flow to the entity, and specific criteria have been met for each of the Company's activities as described below.

The Company sells paddy and selenium-enriched paddy products, rice and other agricultural products and provides software development services. All revenue is recognized when it is both earned and realized. The Company's policy is to recognize the sale when the products and services, ownership and risk of loss have transferred to the purchasers, and collection of the sales proceeds, if not prepaid, is reasonably assured, all of which generally occur when the customer receives the products and services. Accordingly, revenue is recognized at the point in time when delivery is made and services are provided.

Given the nature of this revenue generated by the Company's business and the applicable rules guiding revenue recognition, the Company's revenue recognition practices do not include estimates that materially affect results of operations nor does the Company have any policy for return of products.

***Fair value measurements***

The Company applies the provisions of FASB ASC 820, *Fair Value Measurements* for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining the fair value for the assets and liabilities required or permitted to be recorded, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED) (AMOUNTS IN US DOLLARS)**

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES *(Continued)***

ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that are to be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices, other than those in Level 1, in markets that are not active or for similar assets and liabilities, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Financial assets and liabilities of the Company primarily consists of cash, accounts receivable, prepaid expenses, inventories, other receivables, accounts payable and accrued liabilities, customer deposits, due to related parties, and other payables. As at December 31, 2022 and March 31, 2022, the carrying values of these financial instruments approximated their fair values due to the short-term nature of these instruments.

***Functional currency and foreign currency translation***

An entity's functional currency is the currency of the primary economic environment in which it operates. Normally that is the currency of the environment in which the entity primarily generates and expends cash. Management's judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. The functional currency of the Company is the Chinese Renminbi ("RMB'), except the functional currency of Organic Agricultural HK is the Hong Kong Dollar ("HKD"), and the functional currency of Organic Agricultural Samoa and Organic Agricultural is the United States dollar ("US Dollars" "USD" or "$"). The reporting currency of these condensed consolidated financial statements is in US Dollars.

The financial statements of the Company, which are prepared using the RMB and the HKD, are translated into the Company's reporting currency, the US Dollar. Assets and liabilities are translated using the exchange rate at each reporting period end date. Revenue and expenses are translated using average rates prevailing during each reporting period, and shareholders' equity is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income or loss.

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. Foreign currency exchange gains and losses resulting from these transactions are included in operations.

The exchange rates used for foreign currency translation are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the nine months ended <br> December 31,** | **For the nine months ended <br> December 31,** | |
|  | **2022** | **2021** | **March 31,**<br>**2022** |
|  | (USD to<br> RMB/USD <br> to HKD) | (USD to<br> RMB/USD<br> to HKD) | (USD to<br> RMB/USD<br> to HKD) |
| Assets and liabilities - period end exchange rate | 6.8983/7.8088 | 6.3614/7.7974 | 6.3431/7.8306 |
| Revenue and expenses - period average | 6.8557/7.8390 | 6.3939/7.7896 | N/A |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the three months ended <br> December 31,** | **For the three months ended <br> December 31,** | **For the three months ended <br> December 31,** | **For the three months ended <br> December 31,** |
|  | **2022** | **2022** | **2021** | **2021** |
|  | (USD to<br> RMB/USD <br> to HKD) | (USD to<br> RMB/USD <br> to HKD) | (USD to<br> RMB/USD<br> to HKD) | (USD to<br> RMB/USD<br> to HKD) |
| Assets and liabilities - period end exchange rate |  | 6.8983/7.8088 |  | 6.3614/7.7974 |
| Revenue and expenses - period average |  | 7.1111/7.8227 |  | 6.4413/7.7777 |

---

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED) (AMOUNTS IN US DOLLARS)**

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES *(Continued)***

***Income taxes***

The Company follows FASB ASC Topic 740, *Income Taxes*, which requires the recognition of deferred income taxes for the differences between the basis of assets and liabilities for financial statements and income tax purposes. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Deferred tax assets are also recognized for operating losses and for tax credit carryforwards. A valuation allowance is established, when necessary, to reduce net deferred tax assets to the amount expected to be realized.

ASC 740-10-30 requires income tax positions to meet a more-likely-than-not recognition threshold to be recognized in the financial statements. Under ASC 740-10-40, previously recognized tax positions that no longer meet the more-likely-than-not threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met.

The application of tax laws and regulations is subject to legal and factual interpretations, judgments and uncertainties. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policies, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability may be materially different from our estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities or the net deferred tax asset valuation allowance.

*China*

 

According to the "PRC Income Tax Law", Tianci Liantian and Yuxinqi are subject to the 25% standard enterprise income tax rate in the PRC.

*United States*

The Company is subject to the U.S. corporation tax rate of 21%.

*Samoa*

Organic Agricultural (Samoa) Co., Ltd was incorporated in Samoa and, under the current laws of Samoa, it is not subject to income tax.

*Hong Kong*

Organic Agricultural Company Limited (Hong Kong) was incorporated in Hong Kong and is subject to Hong Kong profits tax. Organic Agricultural Company Limited (Hong Kong) is subject to Hong Kong taxation on its activities conducted in Hong Kong and income arising in or derived from Hong Kong. The applicable statutory tax rate is 16.5%.

***Earnings (loss) per share***

The Company computes earnings (loss) per share ("EPS") in accordance with FASB ASC 260, *Earnings Per Share*. ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average common shares outstanding during the period. Stock splits are given retroactive recognition for earnings (loss) per share.

Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of contracts to issue ordinary common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. The computation of diluted EPS includes the estimated impact of the exercise of contracts to purchase common stock using the treasury stock method and the potential common shares associated with convertible debt using the if-converted method. Potential common shares that have an anti-dilutive effect (i.e., those that increase earnings per share or decrease loss per share) are excluded from the calculation of diluted EPS.

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED) (AMOUNTS IN US DOLLARS)**

**NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES *(Continued)***

***Share-based compensation***

The Company follows the provisions of FASB ASC 718 requiring equity awards to be accounted for under the fair value method. Accordingly, share-based compensation is measured at grant date, based on the fair value of the award and recognized over its vesting period. During the nine months ended December 31, 2022, specifically on July 1, 2022, the Company granted a total of 140,000 shares with a fair value on the grant date of $0.0899 per share to 11 individuals for a sales bonus on promotion services, and on November 29, 2022, the Company granted a total of 50,000 shares with a fair value on the grant date of $0.0880 per share for promotion services. A total of $16,986 in compensation expense was recognized under the provisions of ASC 718. During the nine months ended December 31, 2021, specifically on April 12, 2021, the Company granted a total of 1,780,200 shares with a fair value on the grant date of $0.43 per share to 25 individuals for sales promotion services during the period from April 12, 2021 through December 31, 2021. $759,000 in compensation expense was recognized under the provisions of ASC 718. These shares were fully vested when issued.

***Segment information and geographic data***

The Company is operating in one segment in accordance with the accounting guidance in FASB ASC Topic 280, *Segment Reporting*. The Company's revenues are from the sales of agricultural products to customers in the People's Republic of China ("PRC"). All assets of the Company are located in the PRC.

***Concentration of credit and customer risks***

The Company maintains cash balances in two banks in China. In China, the insurance coverage of each bank is RMB500,000 (approximately US$70,000). As of December 31, 2022, the Company had no cash on deposit in excess of the insurance amounts.

During the nine months ended December 31, 2022, two customers, Jiufu Zhenyuan and Chuangyi Agriculture, generated 60% and 13% of our revenues, respectively. During the nine months ended December 31, 2021, Jiufu Zhenyuan, generated 93% of our revenues.

***Risks and uncertainties***

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

Recently, since December 2022, many of the restrictive measures previously adopted by the PRC governments at various levels to control the spread of the COVID-19 virus have been revoked or replaced with more flexible measures since December 2022. The revocation or replacement of the restrictive measures to contain the COVID-19 pandemic could have a positive impact on the Company's normal operations. However, there has recently been and may continue to be an increase in COVID-19 cases in China, and as a result, we experienced temporary disruption to our operations where many employees were infected with COVID-19 in December 2022. The extent to which the COVID-19 pandemic impacts the Company's business, prospects and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the pandemic, its severity, the actions to contain the virus or treat its impact, and when and to what extent normal economic and operating activities can resume. With the uncertainties surrounding the COVID-19 outbreak, the threat to the Company's business disruption and the related financial impact remains.

***Recently adopted accounting standards***

We do not believe any recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the condensed consolidated financial position, statements of operations and cash flows.

***Stock split***

On October 21, 2021, the Company implemented a 5.16-for-1 forward split of its outstanding common stock. The Distribution Date was November 18, 2021, at which time Organic Agricultural issued an additional 4.16 shares of common stock to the holders of each outstanding share of common stock.

The stock split increased the number of shares outstanding by 67,347,638. The par value per share remained $0.001. The financial statements in this Report and all share and per share amounts have been retroactively adjusted to give effect to this stock split.

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED) (AMOUNTS IN US DOLLARS)**

**NOTE 3. DISCONTINUED OPERATIONS**

As discussed in Note 1. Basis of Presentation above, on August 19, 2022, the Company completed the divestment of Tianci Wanguan and the requirements for the presentation of Tianci Wanguan as a discontinued operation were met on that date. Accordingly, Tianci Wanguan's historical financial results are reflected in the Company's unaudited condensed consolidated financial statements as discontinued operations. The Company did not allocate any general corporate overhead or interest expense to discontinued operations.

The financial results of Tianci Wanguan are presented as income (loss) from discontinued operations, net of income taxes in the unaudited condensed consolidated statements of operations. The following table presents the financial results of Tianci Wanguan.

---

| | | |
|:---|:---|:---|
|  | **Nine months ended** | **Nine months ended** |
|  | **December 31,<br> 2022** | **December 31,<br> 2021** |
|  | **(Unaudited)** | **(Unaudited)** |
| **Net sales** | $**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -**  | $**&nbsp;&nbsp;&nbsp;&nbsp;-**  |
| Cost of sales | - | - |
| **Gross profit** | **-**  | **-**  |
| Selling, general and administrative expenses | **1** | **96589** |
| **Operating income (loss)** | **(1)** | **(96589)** |
| Other income | - | - |
| **Income (loss) before income taxes** | **(1)** | **(96589)** |
| Income tax (expense) benefit | - | - |
| **Income (loss) from discontinued operations, net of income taxes** | **(1)** | **(96589)** |
| Less: Net income (loss) attributable to non-controlling interest | - | (47328) |
| **Net income (loss) from discontinued operations attributable to controlling interest** | $**(1)** | $**(49261)** |

---

The following table summarizes the carrying value of major classes of assets and liabilities of Tianci Wanguan, reclassified as assets and liabilities of discontinued operations at March 31, 2022.

---

| | |
|:---|:---|
|  | **March 31,<br> 2022** |
| **ASSETS** | |
| Cash | $6014 |
| Prepaid expenses | 63061 |
| **Total current assets, discontinued operations** | $**69075** |
| **LIABILITIES** |  |
| Accounts payable and accrued expenses | $14267 |
| Customer deposits | 151346 |
| Other payables | 44991 |
| **Total current liabilities, discontinued operations** | $**210604** |

---

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED) (AMOUNTS IN US DOLLARS)**

**NOTE 4. PREPAID EXPENSES**

Prepaid expenses include prepayments for expenses, and prepayments of processing charges and products to be purchased. As of December 31, 2022 and March 31, 2022, prepayments and deferred expenses were as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2022** | **March 31,<br> 2022** |
|  | **(Unaudited)** | |
| Prepayments for expenses | $1967 | $8325 |
| Prepayments for short-term lease | 4043 | 19324 |
| Prepayments of processing charges and products to be purchased: |  |  |
| &nbsp;&nbsp;&nbsp;Baoqing County Fengnian Agricultural Product Purchase and Sale Ltd. | 5432 | 5908 |
| &nbsp;&nbsp;&nbsp;Heilongjiang Yaohe County Heifengyuan Apiculture Ltd. | 1779 | 2236 |
| &nbsp;&nbsp;&nbsp;Others | 364 | 537 |
| **Total** | $**13585** | $**36330** |

---

For the nine months ended December 31, 2022, prepayments for the short-term lease were reduced by US$15,281 and recorded as rent expense.

**NOTE 4. INVENTORIES**

The Company's inventories are all non-perishable products. The Company's inventory consists principally of rice and other products which are vacuum-packed and have more than one year shelf life. The Company reviews its products and sells products near the end of their shelf life through promotions. As of December 31, 2022 and March 31, 2022, no reserve was considered necessary. The Company values inventory on its balance sheet at the lower of cost or net realizable value. Inventories consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** <br>**2022** | **March 31,<br> 2022** |
|  | **(Unaudited)** | |
| Rice and other products | $127210 | $182030 |
| Packing and other materials | 30287 | 23843 |
| **Total inventories at cost** | $**157497** | $**205873** |

---

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED) (AMOUNTS IN US DOLLARS)**

**NOTE 5. INCOME TAXES**

A reconciliation of income (loss) before income taxes for domestic and foreign locations for the nine months ended December 31, 2022 and 2021 is as follows:

---

| | | |
|:---|:---|:---|
|  | **For the three months ended<br> December 31,** | **For the three months ended<br> December 31,** |
|  | **2022** | **2021** |
|  | **(Unaudited)** | **(Unaudited)** |
| United States | $(30616) | $(29237) |
| Foreign | 31023 | (24332) |
| Income (loss) before income taxes | $407 | $(53569) |

---

---

| | | |
|:---|:---|:---|
|  | **For the nine months ended<br> December 31,** | **For the nine months ended<br> December 31,** |
|  | **2022** | **2021** |
|  | **(Unaudited)** | **(Unaudited)** |
| United States | $(91766) | $(828851) |
| Foreign | (426203) | (83164) |
| (Loss) before income taxes | $(517969) | $(912015) |

---

The difference between the U.S. federal statutory income tax rate and the Company's effective tax rate was as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2022** | **December 31,<br> 2021** |
|  | **(Unaudited)** | **(Unaudited)** |
| U.S. federal statutory income tax rate | 21% | 21% |
| U.S. Valuation allowance | (21)% | (21)% |
| Rates for Tianci Liangtian, and Yuxinqi, net | 25% | 25% |
| PRC Valuation allowance | (25)% | (25)% |
| The Company's effective tax rate | **(0)%** | **(0)%** |

---

The Company did not recognize deferred tax assets since it is not likely to incur taxes against which such deferred tax assets may be offset. The deferred tax assets would apply to the Company in the U.S. and to Yuxinqi and Tianci Liangtian in China.

As of December 31, 2022, Yuxinqi and Tianci Liangtian have total net operating loss carry forwards of approximately $1,328,000 in the PRC that expire in 2027. Due to the uncertainty of utilizing these carry forwards, the Company provided a 100% valuation allowance on the net deferred tax assets of approximately $332,000 and $296,000 related to its operations in the PRC as of December 31, 2022 and March 31, 2022, respectively. The PRC valuation allowance increased by approximately $36,000 and $45,000 for the nine months ended December 31, 2022 and 2021, respectively.

The Company incurred losses from its United States operations during all periods presented of approximately $1,540,000. The Company's United States operations consist solely of ownership of its foreign subsidiaries, and the losses arise from administrative expenses and shares issued as compensation. Accordingly, management provided a 100% valuation allowance of approximately $323,000 and $304,000 against the net deferred tax assets related to the Company's United States operations as of December 31, 2022 and March 31, 2022, respectively, because the deferred tax benefits of the net operating loss carry forwards in the United States will not likely be realized. The US valuation allowance increased by approximately $19,000 and $174,000 for the nine months ended December 31, 2022 and 2021, respectively.

The Company is subject to examination by the Internal Revenue Service (IRS) in the United States as well as by the taxing authorities in China, where the Company has its operations. The tax years subject to examination vary by jurisdiction. The table below presents the earliest tax years that remain subject to examination by jurisdiction.

---

| | |
|:---|:---|
|  | **The year as of** |
| U.S. Federal | March 31, 2019 |
| China | December 31, 2018 |

---

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED) (AMOUNTS IN US DOLLARS)**

**NOTE 6. CUSTOMER DEPOSITS**

Customer deposits consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31, <br> 2022** | **March 31,<br> 2022** |
|  | **(Unaudited)** |  |
| Shouhang | $51801 | $56335 |
| Beiqinhai | 98807 | 107455 |
| Others | 432 | 1014 |
| **Total customer deposits** | $**151040** | $**164804** |

---

**NOTE 7. RELATED PARTY TRANSACTIONS**

Amounts due to related parties consisted of the following as of the periods indicated:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2022** | **March 31,<br> 2022** |
|  | **(Unaudited)** |  |
| Jiufu Zhenyuan | $- | 1159 |
| Shen Zhenai | 188 | 19192 |
| Heilongjiang Chuangyi | 2847 | - |
| Xun Jianjun | - | 797 |
|  | $**3035** | $**21148** |

---

Shen Zhenai is the President, Chairman of the Board, director and a shareholder of the Company, and Xun Jianjun is the CEO and a shareholder of the Company. These advances represent temporary borrowings for operating costs between the Company and management. They are non-interest bearing and due on demand.

Jilin Jiufu Zhenyuan Technology Development Co, Ltd ("Jiufu Zhenyuan") owns 22.68% of the Company and its President is a member of the Company's Board of Director. The advances represent advances for purchases from the Company in the future. During the nine months ended December 31, 2022, Jiufu Zhenyuan purchased agricultural products from the Company totaling $103,194.

Heilongjiang Chuangyi Agriculture Co., Ltd ("Heilongjiang Chuangyi") owns 9.60% of the Company. The advances represent advances for purchases from the Company in the future. During the nine months ended December 31, 2022, Heilongjiang Chuangyi purchased agricultural products from the Company totaling $21,947.

Amounts due from related parties consisted of the following as of the periods indicated:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2022** | **March 31,<br> 2022** |
|  | **(Unaudited)** |  |
| Hao Shuping | $&nbsp;&nbsp;&nbsp;&nbsp; - | $17373 |
| Jiufu Zhenyuan | 1722 | - |
|  | $**1722** | $**17373** |

---

Hao Shuping is the largest shareholder of the Company. This amount was a temporary loan from the Company and was non-interest bearing. On June 30, 2022, an agreement for the assignment of debt was signed between Hao Shuping, Shen Zhenai, Tianci Liangtian and Yuxingqi, whereby the total receivable due from Hao Shuping was transferred to Shen Zhenai, partially offsetting the amount due to Shen Zhenai.

During the nine months ended December 31, 2022 and 2021, Hao Shuping, a member of the Company's Board of Directors, purchased agricultural products from the Company totaling $49 and $1,485, respectively.

**ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED) (AMOUNTS IN US DOLLARS)**

**NOTE 8. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES**

On April 1, 2019, the Company adopted FASB ASC 842, "Leases" ("new lease standard"). The new lease standard was adopted using the optional transition method approach that allows for the cumulative effect adjustment to be recorded without restating prior periods. The Company has elected the practical expedient package related to the identification, classification and accounting for initial direct costs whereby prior conclusions do not have to be reassessed for leases that commenced before the effective date. As the Company will not reassess such conclusions, the Company has not adopted the practical expedient to use hindsight to determine the likelihood of whether a lease will be extended or terminated or whether a purchase option will be exercised.

Operating leases are reflected on our balance sheet within "operating lease right-of-use asset." Right-of use ("ROU") assets and the related operating lease liabilities represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease agreement. ROU assets and liabilities are recognized at the commencement date, or the date on which the lessor makes the underlying asset available for use, based upon the present value of the lease payments over the respective lease term. Lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease regarding the terms.

Tianci Liangtian has an operating lease for office space (approximately 666 square meters). Under the terms of the lease, Tianci Liangtian paid approximately US$1,549 in lease deposits and committed to make annual lease payments. On December 20, 2019, the lease was renewed. Under the renewed terms, annual lease payments are RMB290,000 (approximately US$45,000, including VAT tax) for the period from December 20, 2019 to December 19, 2020. On December 20, 2020, the contract expired. Because of the COVID-19 pandemic, the renewal was delayed. On May 14, 2021, Yuxinqi and the lessor signed a supplemental agreement which, due to a leak in the building, credited Yuxinqi with RMB62,570 (approximately US$10,000) of rental expense paid for the previous rental period. On May 14, 2021, Yuxinqi signed a new lease agreement (approximately 370 square meters). Under the terms, Yuxinqi reduced the rental area due to a leak in the building, and committed to make annual lease payments of RMB153,758 (approximately US$24,000, including VAT tax) for the period from December 20, 2020 to January 19, 2022. For the period from January 20, 2022 to March 19, 2022, Yuxingqi renewed the lease agreement and committed to make a lease payment of RMB 30,247 (approximately US$4,700, including VAT tax). The lease obligation was fully paid. This lease was not renewed.

On March 23, 2022, Yuxingqi leased office space from March 23, 2022 to March 22, 2023 under an operating lease agreement (approximately 337.3 square meters). Under the terms of the lease, Yuxingqi committed to make annual lease payments of RMB136,606.50 (approximately US$20,000, including VAT tax). The annual payment was fully paid on March 23, 2022. Since it is a short-term lease, the payment was recorded as prepaid expenses.

The Company's adoption of the new lease standard included new processes and controls regarding asset financing transactions, financial reporting and a system-related implementation required for the new lease standard. The impact of the adoption of the new lease standard included the recognition of right-of-use ("ROU") asset and lease liabilities. For the nine months ended December 31, 2022 and 2021, the amortization of ROU was nil and US$14,146, respectively.

**NOTE 9. SUBSCRIPTION RECEIVABLE**

Subscription receivable consisted of the following as of the periods indicated:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2022** | **March 31,<br> 2022** |
|  | **(Unaudited)** |  |
| Sun Ying | $74032 | $&nbsp;&nbsp;&nbsp;&nbsp;- |
| Heilongjiang Chuangyi Agriculture Co., Ltd. | 792000 | - |
|  | $**866032** | $**-**  |

---

On November 28, 2022 the Registrant entered into an agreement to sell 9,000,000 shares of its common stock to Heilongjiang Chuangyi Agriculture Co., Ltd. for a price of 5,670,000 RMB (US$792,000). Payment is due as follows: 900,000 RMB(US$125,714) on March 1, 2023; 1,800,000 RMB (US$251,429) on April 15, 2023; and 2,970,000 RMB (US$414,857) on August 15, 2023.

On November 29, 2022 the Registrant entered into an agreement to sell 1,000,000 shares of its common stock to Sun Ying for a price of 630,000 RMB (US$88,000). Payment is due as follows: 315,000 RMB (US$44,000) on March 1, 2023 and 315,000 RMB (US$44,000) on April 15, 2023. The Company received partial proceeds of 100,000 RMB (US$13,968) from Sun Ying as of December 31, 2022.

**NOTE 10. CONTINGENCIES**

Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

The Company was not subject to any material loss contingencies as of December 31, 2022 and through the date of this report.

**NOTE 11. SUBSEQUENT EVENTS**

The Management of the Company determined that there were no reportable subsequent events to be adjusted for and/or disclosed as of February 13, 2023.

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

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

**Application of Critical Accounting Policies**

The discussion and analysis of the Company's financial condition and results of operations is based upon its condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. These items are monitored and analyzed by management for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates if past experience or other assumptions do not turn out to be substantially accurate.

In connection with the preparation of our financial statements for the nine months ended December 31, 2022, there was one accounting estimate made which was (a) subject to a high degree of uncertainty and (b) material to our results. That was the determination to record the $866,032 subscription receivable without a reserve. The Company made that determination based on its knowledge of the subscribers' financial condition.

**Results of Operations** 

The following table shows key components of the unaudited results of operations during the three and nine months ended December 31, 2022 and 2021:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Three Months Ended<br> December 31,** | **For the Three Months Ended<br> December 31,****Change** | **Change** |
|  | **2022** | **2021** | **%** |
| Revenue | $93531 | $164876) | (43)% |
| Cost of Sales | 83514 | 119572) | (30)% |
| **Gross Profit** | **10017** | **45304)** | (78)% |
| Total operating costs and expenses | 9564 | 99107) | (90)% |
| Income (loss) from operations before other (expense) income and income taxes | 453 | (53803) | (101)% |
| Other (expense) income | (46) | 234) | (120)% |
| **Income (loss) from operations before income taxes** | 407 | (53569) | (101)% |
| Income taxes | - | - | N/A |
| **Net income (loss) from continuing operations** | 407 | (53569) | (101)% |
| (Loss) from discontinued operations, net of income taxes | - | (66463) | (100)% |
| **Net income (loss)** | **407** | **(120032)** | (100)% |
| Less: (loss) from discontinued operations attributable to non-controlling interests | - | (32566) | (100)% |
| **Net income (loss) attributable to common shareholders'** | $**407** | $**(87466)** | **(100)%** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Nine Months Ended<br> December 31,** | **For the Nine Months Ended<br> December 31,****Change** | **Change** |
|  | **2022** | **2021** | **%** |
| Revenue | $170792 | $242922) | (30)% |
| Cost of Sales | 146276 | 171827) | (15)% |
| **Gross Profit** | **24516** | **71095)** | (66)% |
| Total operating costs and expenses | 544920 | 983346) | (45)% |
| (Loss) from operations before other income and income taxes | (520404) | (912251) | (43)% |
| Other income | 2435 | 236 | 932% |
| **(Loss) from operations before income taxes** | (517969) | (912015) | (43)% |
| Income taxes | - | - | N/A |
| **Net (loss) from continuing operations** | (517969) | (912015) | (43)% |
| Income (loss) from discontinued operations, net of income taxes | 68358 | (96589) | (171)% |
| **Net (loss)** | **(449611)** | **(1008604)** | **(55)%** |
| Less: (loss) from discontinued operations attributable to non-controlling interests | - | (47328) | (100)% |
| **Net (loss) attributable to common shareholders'** | $**(449611)** | $**(961276)** | **(53)%** |

---

All of our revenue during the three and nine months ended December 31, 2022 and 2021 was generated by our subsidiary Yuxinqi. Yuxinqi is a marketing enterprise with a focus on milled rice and other agricultural products. Incorporated on February 5, 2018, Yuxinqi's sales are erratic, since a stable customer base has not been established yet. Sales by Yuxinqi during the three and nine months ended December 31, 2022 were 43% and 30% less than during the three and nine months ended December 31, 2021. The decrease in revenue occurred primarily because of the decrease in orders from Jiufu Zhenyuan, which is a shareholder and whose president is a member of our board.

For the three and nine months ended December 31, 2022 and 2021, our revenue was attributable to the sales of milled rice and other foodstuffs. The cost of sales were $83,514 and $119,572 for the three months and $146,276 and $171,827 for the nine months ended December 31, 2022 and 2021, respectively. Those operations yielded gross profit for the three months periods of $10,017 and $45,304 and for the nine months periods of $24,516 and $71,095 with gross margin of 10.7%, 27.5%, 14.4% and 29.3%, respectively. The decrease in gross margin during the three and nine months ended December 31, 2022, compared to the same period of the previous year was primarily attributable to our promotions of new products at discount prices and below-cost sales of products near the end of their shelf life.

In April 2021, in order to boost sales, the Company granted a total of 1,780,200 fully vested shares with a fair value on the grant date of $0.43 per share to 25 individuals for sales promotion services. As a result, $759,000 (the market value of the shares on date of grant) in compensation expense was recognized as advertising and promotion expenses for the nine months ended December 31, 2021, representing the primary component of the Company's operating expenses during the nine months ended December 31, 2021. In July 2022, the Company granted a total of 140,000 fully vested shares with a fair value on the grant date of $0.0899 per share to 11 individuals for sales promotion services. On November 29, 2022, the Company granted a total of 50,000 shares with a fair value on the grant date of $0.0880 per share for sales promotion services. As a result, $16,986 (the market value of the shares on date of grant) in compensation expense was recognized as advertising and promotion expenses for the nine months ended December 31, 2022. The Company incurred operating expenses totaling $9,564 and $99,107 during the three months ended December 31, 2022 and 2021, and $544,920 and $983,346 during the nine months ended December 31, 2022 and 2021, respectively. The components of operating expenses (unaudited) were:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended <br> December 31** | **Three Months Ended <br> December 31** | **Nine Months Ended <br> December 31** | **Nine Months Ended <br> December 31** |
|  | **2022** | **2021** | **2022** | **2021** |
| Salaries and benefits | $37808 | $68814 | $130349 | $154243 |
| Office expenses | 11360 | 20066 | 115429 | 51072 |
| Rentals and leases | 4445 | 1754 | 13811 | 14146 |
| Professional fees | 22875 | 22624 | 65710 | 59044 |
| Exchange (gain) loss | (76195) | (24163) | 192194 | (70061) |
| Advertising and promotion expenses | 9271 | 10012 | 27427 | 774902 |
| **Total operating expenses** | $**9564** | $**99107** | $**544920** | $**983346** |

---

Salaries and benefits decreased in the three and nine months ended December 31, 2022, because sales bonuses decreased due to the decrease in sales. Office expenses increased in the nine months ended December 31, 2022 primarily attributable to a consulting fee of $59,459 for investor relations services.

The Company's operating expenses for the three months ended December 31, 2022 included $76,195 of an exchange gain. This represented the increase in the USD value of Tianci's debt to Organic Agricultural, which increased as a result of the depreciation in the USD to CNY exchange rate from 7.1128 to 6.8983. The Company's operating expenses for the nine months ended December 31, 2022 included $192,194 of exchange loss. This represented the decrease in the USD value of Tianci's debt to Organic Agricultural, which decreased as a result of the appreciation in the USD to CNY exchange rate from 6.3431 to 6.8983. By comparison, the Company's operating expenses during the three and nine months ended December 31, 2021 were partially offset by $24,163 and $70,061 of exchange gain. This represented the increase in the USD value of Tianci's debt to Organic Agricultural, which increased as a result of the depreciation in the USD to CNY exchange rate from 6.5565 to 6.3614.

The Company's operations produced a net income of $407 and a net loss of $53,569 from continuing operations for the three months, and a net loss of $517,969 and $912,015 for the nine months ended December 31, 2022 and 2021, respectively.

The Company produced a gain from discontinued operations of $nil and $68,358 for the three and nine months end December 31, 2022 from its disposal, and a net loss of $66,463 and $96,589 for the three and nine months end December 31, 2021 from its operations. On August 19, 2022, the Company completed the divestment of Tianci Wanguan.

**Liquidity and Capital Resources**

The Company's operations have been financed primarily by proceeds from the sale of shares. The Company received $920,000 from the sale of 21,256,620 shares to a single investor during the nine months ended December 31, 2021. The Company received partial proceeds of $13,968 from the sale of 10,000,000 shares for a price of $880,000 to two investors during the nine months ended December 31, 2022. The two subscribers have agreed to pay the remaining proceeds of $866,032 on or before August 15, 2023. The debt is recorded as a subscription receivable in shareholders' equity at December 31, 2022. As of December 31, 2022, our working capital was $114,088, a decrease of $189,787 during the nine months ended December 31, 2022, primarily due to the net loss we incurred during those nine months.

The largest components of working capital at December 31, 2022 were cash of $83,966, and inventories of $157,497, which were offset by $151,040 in customer deposits against future sales.

***<u>Cash Flows</u>***

The following unaudited table summarizes our cash flows for the nine months ended December 31, 2022 and 2021.

---

| | | |
|:---|:---|:---|
|  | **For the Nine Months Ended**<br>**December 31,** | **For the Nine Months Ended**<br>**December 31,** |
|  | **2021** | **2020** |
| Net cash (used in) operating activities | $(308692) | $(413930) |
| Net cash (used in) investing activities | (288) | -) |
| Net cash provided by financing activities | 13968 | 920000) |
| Effect of exchange rate fluctuation on cash and cash equivalents | (29485) | (9870) |
| Net (decrease) increase in cash and cash equivalents | (324497) | 496200) |
| Cash and cash equivalents, beginning of period | 408463 | 70506 |
| **Cash and cash equivalents, end of period** | $**83966** | $**566706)** |

---

During the nine months ended December 31, 2022, our operations used net cash of $308,692. The Company incurred a cash use from operations primarily because it recorded a net loss of $517,969 from continuing operations. For the nine months end December 31, 2022, the difference between net loss and cash used was primarily attributable to the non-cash expense of $192,194 for exchange loss. During the nine months ended December 31, 2021, the Company recorded $413,930 of cash used in operating activities, primarily because of its net loss of $1,008,604. For the nine months end December 31, 2021, the difference between net loss and cash used was primarily attributable to the non-cash expense of $759,000 for stock we issued as compensation.

The Company had no investing activities during the nine months ended December 31, 2021, and recorded $288 for cash disbursed on divestment in Tianci Wanguan for the nine months ended December 31, 2022.

Our financing activities during the nine months ended December 31, 2022 generated $13,968 from the sale of common stock. Our financing activities during the nine months ended December 31, 2021 generated $920,000 from the sale of common stock.

**Trends, Events and Uncertainties**

There is substantial doubt about our ability to continue as a going concern as a result of our lack of significant revenues and recurring losses. If we are unable to generate significant revenue or secure additional financing, we may be required to cease or curtail our operations.

The Company is expanding its product offerings to include more products, our marketing personnel are developing new customers with the hope of building a stable base of customers. In this manner, the Company hopes to increase sales to support the future operations and development of the Company. There is no guarantee that the Company's new strategy will be successful. As of December 31, 2022, a stable customer base has not been established yet.

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

Recently, since December 2022, many of the restrictive measures previously adopted by the PRC governments at various levels to control the spread of the COVID-19 virus have been revoked or replaced with more flexible measures since December 2022. The revocation or replacement of the restrictive measures to contain the COVID-19 pandemic could have a positive impact on the Company's normal operations. However, there has recently been and may continue to be an increase in COVID-19 cases in China, and as a result, we experienced temporary disruption to our operations where many employees were infected with COVID-19 in December 2022. The extent to which the COVID-19 pandemic impacts the Company's business, prospects and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the pandemic, its severity, the actions to contain the virus or treat its impact, and when and to what extent normal economic and operating activities can resume. With the uncertainties surrounding the COVID-19 outbreak, the threat to the Company's business disruption and the related financial impact remains.

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

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

**Off-Balance Sheet Arrangements**

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

**Recent Accounting Pronouncements**

There were no recent accounting pronouncements that we expect to have a material effect on the Company's financial position or results of operations. Please refer to Note 2 of our condensed consolidated financial statements included in this quarterly report.

**Item 3. Quantitative and Qualitative Disclosures about Market Risk.**

Not applicable.

**Item 4. Controls and Procedures.**

***Evaluation of Disclosure Controls and Procedures***

Our management maintains disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are designed to provide reasonable assurance that the material information required to be disclosed by us in our periodic reports filed or submitted under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified in the SEC'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 Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management team, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of December 31, 2022. Based on this evaluation, we concluded that our disclosure controls and procedures have the following material weaknesses:

● The relatively small number of employees who are responsible for accounting functions prevents us from segregating duties within our internal control system.

● Our internal financial staff lack expertise in identifying and addressing complex accounting issue under U.S. Generally Accepted Accounting Principles.

● Our Chief Financial Officer is not familiar with the accounting and reporting requirements of a U.S. public company.

● We have not developed sufficient documentation concerning our existing financial processes, risk assessment and internal controls.

Based on their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company's system of disclosure controls and procedures were not effective as of December 31, 2022 for the purposes described in this paragraph.

**Changes in Internal Control over Financial Reporting**

No changes in the Company's internal control over financial reporting came to management's attention during the quarter ended December 31, 2022 that have materially affected, or are likely to materially affect, the Company's internal control over financial reporting.

**PART II – OTHER INFORMATION**

**Item 1. Legal Proceedings.**

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our companies or our subsidiaries' officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

**Item 1A. Risk Factors.**

There have been no material changes from the risk factors included in the Company's Annual Report on Form 10-K for the year ended March 31, 2022, as filed with the SEC on July 14, 2022.

**Item 2. Unregistered Sale of Equity Securities and Use of Proceeds.**

During the quarter ended December 31, 2022, the Company recorded three sales of unregistered shares:

On November 28, 2022 the Registrant entered into an agreement to sell 9,000,000 shares of its common stock to Heilongjiang Chuangyi Agriculture Co., Ltd. for a price of 5,670,000 RMB (US$792,000). Payment is due as follows: 900,000 RMB (US$125,714) on March 1, 2023; 1,800,000 RMB (US$251,429) on April 15, 2023; and 2,970,000 RMB (US$414,857) on August 15, 2023. The shares were sold in a private offering to an investor who was purchasing for its own account. The offering, therefore, was exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) of the Securities Act.

On November 29, 2022 the Registrant entered into an agreement to sell 1,000,000 shares of its common stock to Sun Ying for a price of 630,000 RMB (US$88,000). Payment is due as follows: 315,000 RMB (US$44,000) on March 1, 2023 and 315,000 RMB (US$44,000) on April 15, 2023. The Company received partial proceeds of 100,000 RMB (US$13,968) from Sun Ying as of December 31, 2022. The shares were sold in a private offering to an investor who was purchasing for their own account. The offering, therefore, was exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) of the Securities Act.

On November 29, 2022, the Company issued a total of 50,000 shares with a fair value on the grant date of $0.088 per share to 1 individual in exchange for sales promotion services. The shares were sold in a private offering to an investor who was purchasing for his own account. The offering, therefore, was exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) of the Securities Act.

The Company did not repurchase any of its equity securities that were registered under Section 12 of the Securities Act during the quarter ended December 31, 2022.

**Item 3. Defaults upon Senior Securities.**

Not applicable

**Item 4. Mine Safety Disclosure**

Not applicable.

**Item 5. Other Information.**

None.

**Item 6. Exhibits**

**INDEX TO EXHIBITS**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description of Exhibit** |
| 31.1 | [Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](f10q1222ex31-1_organicagri.htm) |
| 31.2 | [Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](f10q1222ex31-2_organicagri.htm) |
| 32.1 | [Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](f10q1222ex32-1_organicagri.htm) |
| 32.2 | [Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](f10q1222ex32-2_organicagri.htm) |
| 101.INS | Inline XBRL Instance Document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

**SIGNATURES**

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

**ORGANIC AGRICULTURAL COMPANY LIMITED**

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ Jianjun Xun | Chief Executive Officer | February 13, 2023 |
| Jianjun Xun | (Principal Executive Officer) |  |
| /s/ Wang Qiu | Chief Financial Officer | February 13, 2023 |
| Wang Qiu | (Principal Financial and Accounting Officer) |  |

---

## Exhibit 31.1

**EXHIBIT 31.1**

**Certification of Principal Executive Officer**

**Section 302 Certification**

I, Jianjun Xun, certify that:

1. I have reviewed this quarterly report on Form 10-Q of ORGANIC
AGRICULTURAL COMPANY LIMITED;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I
are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e)
and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f))
for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I
have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors
and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | February 13, 2023 | /s/ Jianjun Xun |
|  |  | Jianjun Xun, Chief Executive Officer<br> (Principal Executive Officer) |

---

## Exhibit 31.2

**EXHIBIT 31.2**

**Certification of Principal Financial Officer**

**Section 302 Certification**

I, Wang Qiu, certify that:

1. I have reviewed this quarterly report on Form 10-Q of ORGANIC
AGRICULTURAL COMPANY LIMITED;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I
are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e)
and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f))
for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I
have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors
and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: | February 13, 2023 | /s/ Wang Qiu |
|  |  | Wang Qiu, Chief Financial Officer<br> (Principal Financial Officer) |

---

## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATIONS PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of ORGANIC AGRICULTURAL COMPANY LIMITED (the "Company") on Form 10-Q for the period ended December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Xun Jianjun, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | | |
|:---|:---|:---|:---|
| By: | /s/ Jianjun Xun | Dated: | February 13, 2023 |
|  | Jianjun Xun |  |  |
| Title: | Chief Executive Officer<br> (Principal Executive Officer) | Chief Executive Officer<br> (Principal Executive Officer) | Chief Executive Officer<br> (Principal Executive Officer) |

---

## Exhibit 32.2

**EXHIBIT 32.2**

**CERTIFICATIONS PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of ORGANIC AGRICULTURAL COMPANY LIMITED (the "Company") on Form 10-Q for the period ended December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Wang Qiu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents,
in all material respects, the financial condition and result of operations of the Company.

---

| | | | |
|:---|:---|:---|:---|
| By: | /s/ Wang Qiu | Dated: | February 13, 2023 |
|  | Wang Qiu |  |  |
| Title: | Chief Financial Officer<br> (Principal Financial Officer) | Chief Financial Officer<br> (Principal Financial Officer) | Chief Financial Officer<br> (Principal Financial Officer) |

---