10QSB

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM l0-QSB

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 2005

[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________to _________

Commissions file number 0-32307

Shineco, Inc.
(Exact name of small business issuer as specified in its charter)

Delaware                                            52-2175898
(State or other jurisdiction                   (IRS Employer ID Number)
of incorporation or organization)                                                        

515 Madison Avenue, New York, NY  10022
(Address of principal executive offices)

(212) 755-3631
(Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_]

As of September 30, 2005, the issuer had 9,298,823 shares of Common Stock, par value $.001 per share, issued and outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [_] No [X]

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

Forward-Looking Statements

This Form 10-QSB includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated by reference in this Form 10-QSB which address activities, events or developments which the Company expects or anticipates, will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof), finding suitable merger or acquisition candidates, expansion and growth of the Company's business and operations, and other such matters are forward-looking statements. These statements are based on certain assumptions and analysis made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual re sults or developments will conform with the Company's expectations and predictions is subject to a number of risks and uncertainties, general economic market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulations; and other factors, most of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this Form 10-QSB are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements.

SHINECO, INC.


INDEX

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PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheet as of September 30, 2005


SHINECO, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 2005
(Unaudited)

	September 30,
ASSETS	2005
Current assets
Cash and cash equivalents	$         101,167
Trade receivables, net	1,597,653
Other receivables	538,815
Prepaid expenses	49,425
Inventories	2,284,041
Total current assets	4,571,101
Property, plant and equipment, net	109,194
Intangibles, net	19,208
Total assets	$      4,699,503
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Trade payables	$      1,005,453
Accrued liabilities	113,065
Other payables	1,762,846
Taxes payable	20,936
Customer deposits	46,746
Total current liabilities	2,949,046
Minority interest	89,082
Commitments and contingencies
Stockholders' equity
Preferred stock: par value $.001; 5,000,000 shares authorized; no      shares issued and outstanding	-
Common stock: par value $.001; 50,000,000 shares authorized;      9,298,823 shares issued and outstanding	9,299
Additional paid in capital	1,079,908
Retained earnings	534,485
Accumulated other comprehensive income	37,683
Total stockholders' equity	1,661,375
Total liabilities and stockholders' equity	$      4,699,503

*See accompanying notes to financial statements.

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Condensed Consolidated Statements of Operations for the Three and Nine Month Periods
Ended September 30, 2005 and 2004


SHINECO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
SEPTEMBER, 30, 2005
(Unaudited)

	Three months ended		Nine months ended
	September 30,		September 30,
	2005	2004	2005	2004
Revenues
Sales revenues	$           708,807	$        1,047,876	$        1,965,321	$        2,601,595
Cost of goods sold	363,266	843,381	965,553	1,320,684
Gross profit	345,541	204,495	999,768	1,280,911
Operating expenses
Other selling expenses	65,272	117,617	332,420	499,858
Other general and adminstrative expenses	234,947	104,086	567,676	453,709
Total operating expenses	300,219	221,703	900,096	953,567
Net operating income	45,322	(17,208)	99,672	327,344
Other income (expense)
Interest expense	(45,832)	-	(75,186)	(19,463)
Other	(6,770)	37,970	(6,219)	(1,658)
Total other income (expense)	(52,602)	37,970	(81,405)	(21,121)
Income (loss) before taxes and minority interest	(7,280)	20,762	18,267	306,223
Provision for income taxes	-	(1,692)	(1,007)	(1,692)
Income (loss) before minority interest	(7,280)	19,070	17,260	304,531
Minority interest in (income) loss of subsidiaries	3,297	-	4,272	(9,261)
Net income (loss)	$             (3,983)	$             19,070	$             21,532	$           295,270
Foreign currency translation adjustment	37,683	-	37,683	-
Comprehensive income	$             33,700	$             19,070	$             59,215	$           295,270

*See accompanying notes to financial statements.

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Condensed Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 2005, And 2004


SHINECO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SEPTEMBER, 30, 2005
(Unaudited)

		Nine months ended
		September 30,
		2005	2004
Cash flows from operating activities:
	Net income	$         21,532	$       295,270
	Adjustments to reconcile net loss to
	net cash provided by (used in) operations:
	Depreciation and amortization	19,476	12,312
	Minority interest	(4,639)	138,187
	Changes in operating assets and liabilities:
	Trade receivables	(355,209)	(1,040,073)
	Other receivables	(143,141)	(158,441)
	Vendor deposits	132,650	(64,549)
	Prepaid expenses	8,372	(23,299)
	Inventories	75,616	(972,674)
	Trade payables	(57,857)	933,523
	Accrued liabilities	79,214	32,782
	Other payables	1,562,686	161,885
	Taxes payable	(68,654)	16,482
	Customer deposits	(372,827)	277,578
	Net cash provided by (used in) operations	897,218	(391,017)
Cash flows from investing activities:
	Purchase of property and equipment	(19,841)	(84,715)
	Net cash used in investing activities	(19,841)	(84,715)
Cash flows from financing activities:
	Related party receivables	80,902	-
	Related party payables	(602,015)	542,720
	Repayments on short-term notes payable	(321,384)	-
	Net cash provided by (used in) financing activities	(842,497)	542,720
	Effect of rate changes on cash	2,015	-
	Increase in cash and cash equivalents	36,895	66,988
	Cash and cash equivalents, beginning of period	64,272	4,454
	Cash and cash equivalents, end of period	$       101,167	$         71,442
Supplemental disclosures of cash flow information:
	Cash paid for interest	$         76,952	$         30,489
	Cash paid for income taxes	$         67,200	$                 -
Supplemental disclosures of non-cash investing and financing activities:
	Inventory and intangibles acquired in business combination	$                 -	$    1,026,571

*See accompanying notes to financial statements.

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Notes to the Condensed Consolidated Financial Statements


SHINECO, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2005
(UNAUDITED)

QUARTERLY FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-QSB but do not include all of the information and footnotes required by generally accepted accounting principles and should, therefore, be read in conjunction with the Company’s 2004 financial statements in Form 10-QSB. These statements do include all normal recurring adjustments, which the Company believes necessary for a fair presentation of the statements. The interim operating results are not necessarily indicative of the results for a full year.

1.             NATURE OF OPERATIONS

Shineco, Inc. (the Company) was incorporated on August 20, 1997 as Supcor, Inc. in the State of Delaware. On December 30, 2004 the Company acquired all of the outstanding stock of Beijing Tenet Jove Technological Development Co., Ltd. in exchange for stock of the Company. The Company changed its name to Shineco, Inc. on May 18, 2005. The consolidated results of operations are primarily those of Beijing Tenet Jove and its consolidated subsidiaries.

Beijing Tenet Jove Technological Development Co., Ltd. (Beijing Tenet Jove) was incorporated on December 16, 2003 under the laws of the People’s Republic of China (the PRC). It is a hi-tech biotechnology company that is engaged in the business of development, manufacturing and distribution of a series of functional healthcare products based on self-owned patents.

2.             BASIS OF PRESENTATION

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

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. The Company’s subsidiaries at September 30, 2005 are as follows:

Subsidiary name	Date established	Date merged	Ownership
Tenet Health Technological Development Co., Ltd.	August 12, 2003	April 27, 2004	90%
Nan Jing Apocynum Trade Co., Ltd.	February 13, 2004	February 13, 2004	51%
Qiqihaer Tenet Jove Technology and Trade Co., Ltd.	January 14, 2004	January 14, 2004	55%

3.             SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ECONOMIC AND POLITICAL RISKS

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

ESTIMATES

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

CASH AND CASH EQUIVALENTS

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

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TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable are recognized and carried at original invoice amount less an allowance for any uncollectible amounts. An allowance for doubtful accounts is made when collection of the full amount becomes questionable. The allowance for doubtful accounts was $165,766 at September 30, 2005.

INVENTORIES

Inventories consist of raw materials, packaging materials, sub-contracting materials, production costs, and finished products.  The inventories are valued at the lower of cost (first-in, first-out method) or market.  Impairment and changes in market value are evaluated on a per item basis.

If the cost of the inventory exceeds the market value evaluation based on total inventory, provisions are made for the difference between the cost and the market value.  Provision for potential obsolete or slow moving inventory is made based on analysis of inventory levels, age of inventory and future sales forecasts.

PROPERTY, PLANT AND EQUIPMENT

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

                                                Machinery and equipment                                     10 years
                                                Vehicles                                                                 7 years
                                                Office equipment                                                    7 years

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

REVENUE RECOGNITION

Revenues are recognized as earned when the following four criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the seller's price to the buyer is fixed or determinable; and (4) collectibility is reasonably assured.

ADVERTISING EXPENSE

Advertising costs are expensed as incurred.

FOREIGN CURRENCY AND COMPREHENSIVE INCOME

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

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

TAXES

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

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

EARNINGS PER SHARE

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

The numerator and denominator used in the basic and diluted EPS of common stock computations are presented in the following table:

	Three months ended September 30,		Nine months ended September 30,
	2005	2004	2005	2004
NUMERATOR FOR BASIC AND DILUTED EPS
Net income (loss) to common stockholders	$             (3,983)	$            19,070	$            21,532	$          295,270
DENOMINATOR FOR BASIC EPS
Weighted average shares of common stock outstanding	9,298,823	9,298,823	9,298,823	9,298,823
EPS - Basic	$               (0.00)	$                0.00	$                0.00	$                0.03
DENOMINATOR FOR FULLY DILUTED EPS
Weighted average common shares and warrants outstanding	9,638,823	9,298,823	9,638,823	9,298,823
EPS - Fully diluted	$               (0.00)	$                0.00	$                0.00	$                0.03

4.             BUSINESS COMBINATIONS

On September 22, 2000, Tian Bai Technological Development Co., Ltd (Tian Bai) was incorporated in the PRC to manufacture and sell healthcare clothing and related products. On December 16, 2003 Beijing Tenet Jove was incorporated in the PRC and purchased a 51% interest in Tian Bai, beginning a parent subsidiary relationship. Beijing Tenet Jove intended to add other companies to its holdings, and operated Tian Bai as a consolidated subsidiary. Tian Bai was subsequently sold.

On January 12, 2004, Haer Bin Tenet Health Technology Development Co., Ltd (Haer Bin) was incorporated in the PRC, as a 51% owned subsidiary of Beijing Tenet Jove, and on January 14, 2004, QiQihaer Tenet Jove Technology and Trade Co., Ltd. (QiQiHaer) was established in the PRC as a 55% owned subsidiary of Beijing Tenet Jove. On February 13, 2004 another 51% subsidiary was formed by the name of Nan Jing Apocynum Trade Co., Ltd. , also in the PRC.

Tianjin Tenet Health Technology and Trade Co., Ltd. (Tianjin Tenet Health) was incorporated in the PRC on August 12, 2003 as a manufacturer of biotechnological healthcare products. On April 27, 2004 Tianjin Tenet Health merged into Beijing Tenet Jove, becoming a 90% subsidiary. The Company received primarily inventory and manufacturing patents in exchange for issuance of its registered capital. The merger was accounted for using the purchase method.

On July 27, 2004, Beijing Tenet Jove sold all of its equity interest in Haer Bin, and on October 18, 2004 Beijing Tenet Jove sold all of its equity interest in Tian Bai. In aggregate, the Company recognized gains of $80,945 on the sales of these subsidiaries during 2004.

On November 4, 2004, owners of Beijing Tenet Jove acquired a controlling interest in the Company from its previous stockholders. On December 30, 2004, the Company issued 13,600,000 (6,800,000 adjusted for 1:2 reverse split) shares of its common stock in exchange for 100% of the outstanding registered capital of Beijing Tenet Jove. Beijing Tenet Jove is treated as the accounting acquirer in a reverse merger. Consequently, these financial statements reflect the accounts and operations of Beijing Tenet Jove, with the adopted capital structure of the Company retroactively restated.

5.             INTANGIBLES

Intangibles consist primarily of manufacturing patent rights, acquired in the business combination with Tianjin. They are determined to have a finite life of 15 years and are being amortized straight line over that period.

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6.             CUSTOMER DEPOSITS

Customer deposits at September 30, 2005 consist of $46,746 in prepayments to the Company for merchandise that had not yet been shipped. The Company will recognize the deposits as revenue as customers take delivery of the goods, in compliance with its revenue recognition policy.

7.             STOCK WARRANTS

Pursuant to the Stock Purchase Agreement executed in conjunction with the reverse merger of the Company and Beijing Tenet Jove, a warrant for 5% of the outstanding stock of the Company was issued to the selling stockholders, exercisable at par value, and expiring on December 12, 2005. Certain information regarding outstanding and exercisable warrants is summarized as follows:

Exercise Price	Number Outstanding	Weighted Average Exercise Price	Weighted Average Life - Years
$0.001	340,000	$0.001	.25

8.             STOCK TRANSACTIONS

On April 12, 2005 the Company effected a 1:2 reverse stock split. Fractional shares were rounded up to the nearest whole share. Prior to the split 18,597,640 shares were issued and outstanding. Subsequent to the split 9,298,823 shares were issued and outstanding.

On August 22, 2005 the Company amended its articles of incorporation to increase authorized common shares from 25,000,000 to 50,000,000.


ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS

(1) Caution Regarding Forward-Looking Information

The following discussion relates to the results of our operations to date, and our financial condition: This report contains forward looking statements relating to our Company's future economic performance, plans and objectives of management for future operations, projections of revenue mix and other financial items that are based on the beliefs of, as well as assumptions made by and information currently known to, our management. The words "expects, intends, believes, anticipates, may, could, should" and similar expressions and variations thereof are intended to identify forward-looking statements. The cautionary statements set forth in this section are intended to emphasize that actual results may differ materially from those contained in any forward looking statement.

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

(2)BUSINESS DESCRIPTION

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

We are a biotechnology healthcare product manufacturer and health solution provider in the PRC. We principally develop, manufacture, and distribute healthcare products through our national sales and services network to our customers in the PRC.

Our healthcare business is comprised of research, development and application of “health-building” technology based on Apocynum. 

Since the establishment of Tenet Jove in 2003, we have gradually developed a series of products and established a nation-wide marketing network.

The Company’s revenues for the nine months ended September 30, 2005 and 2004 were $1,965,321 and $2,601,595 respectively. The Company's selling, general and administrative expenses for the nine months ended September 30, 2005, were $921,235 and for the nine months ended September 30, 2004, were $953,567.

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(3) Critical Accounting Policies and Estimates

Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure or contingent liabilities. We base these estimates on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances, and these estimates form the basis for our judgments concerning the carrying values of assets and liabilities that are not readily apparent from other sources. We periodically evaluate these estimates and judgments based on available information and experience. Actual results will differ from our estimates under different assumptions and conditions. If actual results significantly differ from our est imates, our financial condition and results of operations could be materially impacted.

We believe that the accounting policies described below are critical to understanding our business, results of operations and financial condition because they involve more significant judgments and estimates used in the preparation of our consolidated financial statements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our consolidated financial statements. We have discussed the development, selection and application of our critical accounting policies with the audit committee of our board of directors, and our audit committee has reviewed our disclosure relating to our critical accounting policies in this "Management's Discussion and Analysis or Plan of Operations."

ESTIMATES

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

CASH AND CASH EQUIVALENTS

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

TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable are recognized and carried at original invoice amount less an allowance for any uncollectible amounts. An allowance for doubtful accounts is made when collection of the full amount becomes questionable. The allowance for doubtful accounts was $165,766 at September 30, 2005.

INVENTORIES

Inventories consist of raw materials, packaging materials, sub-contracting materials, production costs, and finished products.  The inventories are valued at the lower of cost (first-in, first-out method) or market.  Impairment and changes in market value are evaluated on a per item basis. If the cost of the inventory exceeds the market value evaluation based on total inventory, provisions are made for the difference between the cost and the market value.  Provision for potential obsolete or slow moving inventory is made based on analysis of inventory levels, age of inventory and future sales forecasts.

(4) Results of Operations

Our operating results are presented on a consolidated basis for the nine months ended September 30, 2005, as compared to the nine months ended September 30, 2004.

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	Nine months ended
	September 30,
	2005		2004
		Percentage		Percentage	Growth in	Increase in
	Amount	of revenue	Amount	of revenue	amount	percentage
Revenues
Sales revenues	$  1,965,321		$  2,601,595		$   (636,274)	-24.46%
Cost of goods sold	965,553	49.13%	1,320,684	50.76%	(355,131)	-26.89%
Gross profit	999,768	50.87%	1,280,911	49.24%	(281,143)	-21.95%
Operating expenses
Other selling expenses	332,420	16.91%	499,858	19.22%	(167,438)	-33.50%
Other general and adminstrative expenses	567,676	28.89%	453,709	17.44%	113,967	25.12%
Total operating expenses	900,096	45.80%	953,567	36.66%	(53,471)	-5.61%
Net operating income	99,672	5.07%	327,344	12.58%	(227,672)	-69.55%
Other income (expense)
Interest expense	(75,186)	-3.82%	(19,463)	-0.75%	(55,723)	286.30%
Other	(6,219)	-0.32%	(1,658)	-0.06%	(4,561)	275.09%
Total other income (expense)	(81,405)	-4.14%	(21,121)	-0.81%	(60,284)	285.42%
Income (loss) before taxes and minority interest	18,267	0.93%	306,223	11.77%	(287,956)	-94.03%
Provision for income taxes	(1,007)	-0.05%	(1,692)	-0.06%	685	-40.48%
Income (loss) before minority interest	17,260	0.88%	304,531	11.71%	(287,271)	-94.33%
Minority interest in (income) loss of subsidiaries	4,272	0.22%	(9,261)	-0.36%	13,533	-146.13%
Net income (loss)	$       21,532 =========	1.10%	$     295,270 ==========	11.35%	(273,738)	-92.71%
Foreign currency translation adjustment	37,683	1.91%	-		37,683	n/a
Comprehensive income (loss)	$       59,215 ==========	3.01%	$     295,270 ==========	11.35%	(236,055)	-79,95%

REVENUES

Our sales revenue for the nine months ended September 30, 2005 was $1,965,321, representing a decrease of 24.46% compared to the corresponding period of 2004. We derive our sales revenues primarily from sales of our products.  Our operating revenues are composed of sales of healthcare products and franchising fees from vendors. The decrease in net revenues was due to a combination of: (1) on-going market reorganization and sales prices regulations; (2) slowdown sales season; and (3) China government adopted new rules of direct –sale that  in part influenced our established marketing behaviors.   We managed to expand our revenue by expanding sales network.  The expanded revenue stream from new markets partially offset the negative impact caused by market reorganization, sales prices regulations, slowdown sales season and government regulation influences, thereby resulting in a slight decrease in total revenues for the nine months ended September 30, 2005.

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GROSS PROFIT MARGIN

Our gross margin on sales was 50.87% in the nine months ended September 30, 2005 compared to 49.24% in the same period of 2004. Our gross margin slightly increased for the nine months ended September 30, 2005 compared to the corresponding period of 2004. The increase was attributed to effective cost controls and partially to the favorable product mix.

NET INCOME

Our consolidated net income decreased to $21,532 for the nine months ended September 30, 2005 as compared to $295,270 for the same period of 2004. This decrease is attributable to a decrease in revenue of 24.46% for the nine months ended September 30, 2005 as compared to the same period of 2004, and an increase in commercial and manufacturing expenses.

LIQUIDITY AND SOURCES OF CAPITAL

We generally finance our operations from cash flow generated internally and customer deposits. As of September 30, 2005, the Company had current assets of $4,571,101, current liabilities of $2,949,046, working capital of $1,622,055 and shareholders’ equity of $1,661,375.

Our operations provided net cash of $897,193 for the nine months ended September 30, 2005. At September 30, 2005, cash and cash equivalents were $ 101,167. Working capital was $1,622,055 at September 30, 2005, reflecting a current ratio of 1.55. Our current ratio at December 31, 2004 was 1.59.

We anticipate that our working capital resources are adequate to fund anticipated costs and expenses for the remainder of 2005.

As of September 30, 2005, our cash and bank balances were mainly denominated in Renminbi (“RMB”) and United States dollars (“US$”) while our bank borrowings were mainly denominated in RMB.  Our revenue and expenses, assets and liabilities are mainly denominated in RMB and US$. Since the exchange fluctuations amongst these currencies are low, we believe there is no significant exchange risk.

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

FOREIGN CURRENCY AND COMPREHENSIVE INCOME

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

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

OPERATING EXPENSES

For the nine months ended September 30, 2005, operating and general and administrative expenses were $900,096 as compared to $953,567 for the nine months ended September 30, 2004, a decrease of $53,471. It was caused by the decrease in sales.

OVERALL

The Company reported net income for the nine months ended September 30, 2005 of $ $21,532 compared to net income for the nine months ended September 30, 2004 of $295,270.  This translates to income per-share of $.00 for the nine months ended June 30, 2005, as compared to earnings per share of $.03 for the nine months ended September 30, 2004.

Sources of Capital

As of September 30, 2005, the Company had cash on hand of $101,167.  Management believes it will have the resources available to maintain its current business operations as a result of continued sales of its products.  As of September 30, 2005, the Company had working capital of $1,622,055.

ITEM 3.  Controls and Procedures

We carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Securities Exchange Act rules 13a-15(e) and 15d-15(e). Based upon that evaluation, the Chief Executive office and Chief Financial Officer concluded that our disclosure controls and procedures as of September 30, 2005 are effective in timely alerting them to material information relating to the

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company required to be included in our periodic SEC filings. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.


PART II - OTHER INFORMATION

Item 1 Legal Proceedings

N/A

Item 3 Defaults Upon Senior Securities

N/A

Item 4 Submission of Matters to a Vote of Security Holders

N/A

Item 6 Exhibits and Reports on Form 8-K

(a) The exhibits required to be filed herewith by Item 601 of Regulation S-B, as described in the following index of exhibits, are incorporated herein by reference, as follows:

Exhibit No.            Description

3.1                 Articles of Incorporation of Supcor, Inc. (1)
3.1(a)            Articles of Amendment to Articles of Incorporation (2)
3.1 (b)           Articles of Amendment to the Articles of Incorporation (3)
3.2                 By-Laws of Supcor, Inc. (1)
31.1              Certification under Section 302 of the Sarbanes-Oxley Act of 2002
31.2              Certification under Section 302 of the Sarbanes-Oxley Act of 2002
32.1              Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)           Incorporated by reference from the Form 10-SB filed by the Company on August 24, 2004

(2)           Incorporated by reference from the Form 10-SB/A filed by the Company on October 7, 2004.

(3)           Incorporated by reference from the Form 10-KSB filed by the Company on July 25, 2005

(b)           The Company did not file any reports on Form 8-K during the quarter ended September 30, 2005

SIGNATURES

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


                                                                                                         Shineco, Inc.

Date: November 20, 2005

                                                                                                         By: /s/ Yuying Zhang                             
                                                                                                               Yuying Zhang
                                                                                                                Chief Executive Officer and President

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EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Yuying Zhang, certify that:

1. I have reviewed this Form 10-QSB quarterly report for the period ended September 30, 2005, of Shineco, Inc.

2. Based on my knowledge, this annual 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this period 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 annual report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures 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 annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

c) presented in this period report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

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

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

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6. The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 20, 2005

                                                                                           By: /s/ Yuying Zhang                                        
                                                                                                  Yuying Zhang
                                                                                                  Chief Executive Officer and President

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EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Lin Wen, certify that:

1. I have reviewed this Form 10-QSB quarterly report for the period ended September 30, 2005, of Shineco, Inc.

2. Based on my knowledge, this annual 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this period 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 annual report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures 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 annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

c) presented in this period report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

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

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

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6. The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


Date: November 20, 2005

                                                                                                 By: /s/ Lin Wen                          
                                                                                                        Lin Wen
                                                                                                        Secretary

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EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C., SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-QSB of Shineco, Inc. (the "Company") for the quarter ended September 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned Chief Executive Officer and President, and the Secretary of the Company, hereby certify pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 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 Shineco, Inc.

Date: November 20, 2005

                                                                                        By: /s/ Yuying Zhang                                        
                                                                                              Yuying Zhang
                                                                                             Chief Executive Officer and President

                                                                                        By: /s/ Lin Wen                                                 
                                                                                              Lin Wen, Secretary

End of Filing

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