UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
For the quarterly period
ended
or
For the transition period from_____________ to____________
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification Number) |
Office:
(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 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.
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).
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 | ☐ | |
| ☐ | Smaller reporting company | |||
| 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
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
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
TABLE OF CONTENTS
| Page | ||
| PART I—FINANCIAL INFORMATION | ||
| Item 1 | Financial Statements. | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 2 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 6 |
| Item 4. | Controls and Procedures. | 7 |
| PART II—OTHER INFORMATION | ||
| Item 1. | Legal Proceedings. | 8 |
| Item 1A. | Risk Factors | 8 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 8 |
| Item 3. | Defaults Upon Senior Securities. | 8 |
| Item 4. | Mine Safety Disclosure | 8 |
| Item 5. | Other Information. | 8 |
| Item 6. | Exhibits. | 9 |
i
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES
1
ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2022 AND MARCH 31, 2022
(EXPRESSED IN US DOLLARS)
| June 30, | March 31, | |||||||
| 2022 | 2022 | |||||||
| Unaudited | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Due from related parties | ||||||||
| Prepaid expenses | ||||||||
| Inventories | ||||||||
| Other receivables | ||||||||
| Total current assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and shareholders’ equity (deficit) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Customer deposits | ||||||||
| Due to related parties | ||||||||
| Other payables | ||||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| Shareholders’ equity: | ||||||||
| Preferred stock; $ | ||||||||
| Common stock; $ | ||||||||
| Additional paid-in capital | ||||||||
| (Deficit) | ( | ) | ( | ) | ||||
| Other comprehensive (loss) | ( | ) | ( | ) | ||||
| Total shareholders’ equity of the Company | ||||||||
| Non-controlling interest | ( | ) | ( | ) | ||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
| * |
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-1
ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED JUNE 30, 2022 AND 2021
(UNAUDITED) (EXPRESSED IN US DOLLARS)
| For the Three Months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Revenue | $ | $ | ||||||
| Cost of sales | ||||||||
| Gross profit | ||||||||
| Selling, general and administrative expenses | ||||||||
| Operating (loss) | ( | ) | ( | ) | ||||
| Other income | ||||||||
| (Loss) before provision for income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Net (loss) | ( | ) | ( | ) | ||||
| Less: net (loss) from operations attributable to non-controlling interests | ||||||||
| Net (loss) attributable to common shareholders | $ | ( | ) | $ | ( | ) | ||
| $ | ( | ) | $ | ( | ) | |||
| Other comprehensive (loss): | ||||||||
| Net (loss) | $ | ( | ) | $ | ( | ) | ||
| Foreign currency translation adjustment | ( | ) | ||||||
| Comprehensive (loss) | ( | ) | ( | ) | ||||
| Less: comprehensive income attributable to non-controlling interests | ||||||||
| Comprehensive (loss) attributable to the common shareholders | $ | ( | ) | $ | ( | ) | ||
| * |
The accompanying notes are an integral part of these condensed consolidated financial statements
F-2
ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ (DEFICIT) EQUITY
FOR THE THREE MONTHS ENDED JUNE 30, 2022 AND 2021
(UNAUDITED) (EXPRESSED IN US DOLLARS, EXCEPT SHARES)
| Common stock * | Additional Paid-in | Other Comprehensive Income | Total Shareholders’ Equity | Non- controlling | Total Shareholders’ Equity (Deficit) | |||||||||||||||||||||||||||
| Quantity | Amount | Capital | (Deficit) | (Loss) | (Deficit) | Interest | and NCI | |||||||||||||||||||||||||
| Balance at March 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | - | $ | ( | ) | ||||||||||||||||
| Net (loss) | - | ( | ) | ( | ) | - | ( | ) | ||||||||||||||||||||||||
| Sale of common shares | ||||||||||||||||||||||||||||||||
| Shares issued as compensation | ||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | - | ( | ) | |||||||||||||||||||||||||
| Balance at June 30, 2021 (unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | |||||||||||||||||||||
| Balance at March 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||
| Net (loss) | - | ( | ) | ( | ) | - | ( | ) | ||||||||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||||||||||
| Balance at June 30, 2022 (unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||
| * |
The accompanying notes are an integral part of these condensed consolidated financial statements
F-3
ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 2022 AND 2021
(UNAUDITED) (EXPRESSED IN US DOLLARS)
| For the Three Months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net (loss) | $ | ( | ) | $ | ( | ) | ||
| Shares issued as compensation | ||||||||
| Amortization | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Prepaid and deferred expenses | ||||||||
| Inventories | ( | ) | ||||||
| Other receivables | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ( | ) | ||||
| Customer deposits | ( | ) | ( | ) | ||||
| Due from/to related parties | ( | ) | ( | ) | ||||
| Lease liability | ( | ) | ||||||
| Other payables | ( | ) | ||||||
| Net cash (used in) operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from sale of common stock | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate fluctuations on cash | ( | ) | ||||||
| Net (decrease) increase in cash | ( | ) | ||||||
| Cash, beginning of year | ||||||||
| Cash, end of period | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for income taxes | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| Supplemental disclosure of non-cash activities: | ||||||||
| Operating ROU assets and related lease liabilities | $ | $ | ||||||
| Shares issued as compensation | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
F-4
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 June 30, 2022, the Company’s subsidiaries were:
| ● | 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 and |
| ● | 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. |
| ● | Tianci Wanguan (Xiamen) Digital
Technology Company Limited (“Tianci Wanguan”), a company incorporated in Xiamen, China on November 5, 2020, is |
F-5
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)
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 is
The share-based compensation will be measured
at grant date, based on the fair value of the award and recognized over its vesting period once it is determined that the target will
more likely than not be met. After the criteria described above is satisfied, the Company will grant to Unbounded a total of
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. Accordingly, Unbounded did not meet
the performance requirements and the
F-6
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 $
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 June 30, 2022 are listed as follows:
| Name | Place of Incorporation | Attributable equity interest % | ||||
| Organic Agricultural (Samoa) Co., Ltd. | ||||||
| Organic Agricultural Company Limited (Hong Kong) | ||||||
| Heilongjiang Tianci Liangtian Agricultural Technology Development Company Limited | ||||||
| Heilongjiang Yuxinqi Agricultural Technology Development Company Limited | ||||||
| Tianci Wanguan (Xiamen) Digital Technology Company Limited | ||||||
F-7
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 and the treatment of the shares issued to Unbounded. These estimates are 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. All highly liquid investments with original stated maturities of three months or less are classified as cash. The Company’s cash consist of cash on hand and cash in bank, as of June 30, 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.
F-8
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 June 30, 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 three months ended June 30, | March 31, | |||||||||||
| 2022 | 2021 | 2022 | ||||||||||
| (USD to RMB/USD to HKD) | (USD to RMB/USD to HKD) | (USD to RMB/USD to HKD) | ||||||||||
| Assets and liabilities - period end exchange rate | ||||||||||||
| Revenue and expenses - period average | ||||||||||||
F-9
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, Tianci Wanguan and Yuxinqi are subject to the
United States
The Company is subject to the U.S. corporation
tax rate of
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
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.
F-10
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 three months ended June 30, 2021, specifically
on April 12, 2021, the Company granted a total of
Segment information and geographic data
The Company is operating in
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 RMB
During the three months ended June 30, 2022,
two customers, Jiufu Zhenyuan and Chuangyi Agriculture, generated
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 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, there has been an increasing number of COVID-19 cases, including cases involving the COVID-19 Delta and Omicron variants, in multiple cities in China. The Chinese local authorities have reinstated certain measures to keep COVID-19 in check, including compulsory quarantine arrangements, travel restrictions and stay-at-home orders. The reinstatement of these restrictions in early 2022 have adversely affected our operations by, for example, making it more difficult to conduct our sales and marketing and promotional efforts. The COVID-19 global pandemic has resulted in, and may intensify, global economic distress, and the duration and extent of the impact of COVID-19 outbreak is highly uncertain at this time. We are unable to predict the extent to which the pandemic and related impacts will continue to adversely impact our business operations, financial performance, results of operations, financial position and the achievement of our strategic objectives.
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
The stock split increased the number of shares
outstanding by
F-11
ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (AMOUNTS IN US DOLLARS)
NOTE 3. PREPAID EXPENSES
Prepaid expenses include prepayments for expenses, and prepayments of processing charges and products to be purchased. As of June 30, 2022 and March 31, 2022, prepayments and deferred expenses were as follows:
| June 30, 2022 | March 31, 2022 | |||||||
| (Unaudited) | ||||||||
| Prepayments for expenses | $ | $ | ||||||
| Prepayments for short-term lease | ||||||||
| Prepayments of processing charges and products to be purchased: | ||||||||
| Fujian Fangwei Information Technology Ltd. | ||||||||
| Baoqing County Fengnian Agricultural Product Purchase and Sale Ltd. | ||||||||
| Heilongjiang Yaohe County Heifengyuan Apiculture Ltd. | ||||||||
| Others | ||||||||
| Total | $ | $ | ||||||
For the three months ended June 30, 2022, prepayments
for short-term lease were reduced by US$
NOTE 4. INVENTORIES
The Company’s inventories are all non-perishable products. 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:
June 30, 2022 | March 31, 2022 | |||||||
| (Unaudited) | ||||||||
| Rice and other products | $ | $ | ||||||
| Packing and other materials | ||||||||
| Total inventories at cost | $ | $ | ||||||
F-12
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 three months ended June 30, 2022 and 2021 is as follows:
| For the three months ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| United States | $ | ( | ) | $ | ( | ) | ||
| Foreign | ( | ) | ( | ) | ||||
| (Loss) before income taxes | $ | ( | ) | $ | ( | ) | ||
The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate was as follows:
June 30, 2022 | June 30, 2021 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| U.S. federal statutory income tax rate | % | % | ||||||
| U.S. Valuation allowance | ( | )% | ( | )% | ||||
| Rates for Tianci Liangtian, Tianci Wanguan and Yuxinqi, net | % | % | ||||||
| PRC Valuation allowance | ( | )% | ( | )% | ||||
| The Company’s effective tax rate | ( | )% | ( | )% | ||||
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, Tianci Liangtian and Tianci Wanguan in China.
As of June 30, 2022, Yuxinqi, Tianci Liangtian
and Tianci Wanguan have total net operating loss carry forwards of approximately $
The Company incurred losses from its United States
operations during all periods presented of approximately $
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 | ||||
| China |
F-13
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:
June
30, | March 31, 2022 | |||||||
| (Unaudited) | ||||||||
| Shouhang | $ | $ | ||||||
| Beiqinhai | ||||||||
| Guangjunxing | ||||||||
| Others | ||||||||
| Total customer deposits | $ | $ | ||||||
NOTE 7. RELATED PARTY TRANSACTIONS
Amounts due to related parties consisted of the following as of the periods indicated:
June
30, | March 31, 2022 | |||||||
| (Unaudited) | ||||||||
| Jiufu Zhenyuan | $ | |||||||
| Shen Zhenai | ||||||||
| Xun Jianjun | - | |||||||
| $ | $ | |||||||
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.
Jiufu Zhenyuan owns
During the three months ended June 30, 2022 and 2021, Hao Shuping,
a member of the Company’s Board of Directors, purchased agricultural products from the Company totaling $
Amounts due from related parties consisted of the following as of the periods indicated:
June
30, | March 31, 2022 | |||||||
| (Unaudited) | ||||||||
| Hao Shuping | $ | $ | ||||||
| $ | $ | |||||||
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 year ended March 31, 2022, Hao Shuping
purchased agricultural products from the Company totaling $
F-14
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
On March 23, 2022, Yuxingqi leased office space
from March 23, 2022 to March 22, 2023 under an operating lease agreement (approximately
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 three months ended June 30, 2022 and 2021, the amortization of ROU was and US$
NOTE 9. 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 June 30, 2022 and through the date of this report.
NOTE 10. SUBSEQUENT EVENTS
The Management of the Company determined that there were no reportable subsequent events to be adjusted for and/or disclosed as of August 23, 2022 except as follows:
Divestment of Tianci Wanguan
The Company, with Board of Directors approval on August
14, 2022, made a determination to cease the joint operations of Tianci Wanguan with Unbounded. On August 19, 2022 (the “Distribution
Date”), the Company completed the divestment of its
F-15
ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (AMOUNTS IN US DOLLARS)
NOTE 10. SUBSEQUENT EVENTS (Continued)
The Company will recognize $
After the Distribution Date beginning in the second quarter of fiscal year 2023, Tianci Wanguan’s historical financial results for periods prior to the Distribution Date will be reflected in the Company’s consolidated financial statements as a discontinued operation.
The following unaudited Pro Forma Consolidated Statements of Operations and Cash Flows of the Company for the three months ended June 30, 2022 are presented as if the divestment had occurred as of April 1, 2022 in that they reflect the reclassification of Tianci Wanguan as Discontinued Operations for all periods presented. The following unaudited Pro Forma Condensed Consolidated Balance Sheet of the Company as of June 30, 2022 is presented as if the divestment occurred on June 30, 2022.
The unaudited Pro Forma Consolidated Financial Statements are presented based on information currently available including certain assumptions and estimates. They are intended for informational purposes only, and do not purport to represent what the Company’s financial position and operating results would have been had the divestment and related events occurred on the dates indicated above, or to project the Company’s financial position or results of operations for any future date or period. Furthermore, they do not reflect all actions that may be undertaken by the Company after the divestment and disposition of Tianci Wanguan.
The unaudited Pro Forma Consolidated Financial Statements and the accompanying notes should be read in conjunction with the unaudited Consolidated Financial Statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Historical Organic Agricultural
This column reflects the Company’s historical financial statements for the period presented and does not reflect any adjustments related to the divestment and related events. The historical Organic Agricultural Consolidated Balance Sheet as of June 30, 2022 and the Consolidated Statements of Operations and Cash Flows for the three months ended June 30, 2022 were derived from the Company’s unaudited Condensed Consolidated Financial Statements.
Tianci Wanguan Discontinued Operations
The unaudited pro forma financial information related to the Tianci Wanguan’s Discontinued Operations has been prepared in accordance with the discontinued operations guidance in Accounting Standards Codification 205, “Financial Statement Presentation” and therefore does not reflect what the Company’s or Tianci Wanguan’s results of operations would have been on a stand-alone basis and are not necessarily indicative of the Company’s or Tianci Wanguan’s future results of operations. Discontinued Operations do not include any allocation of general corporate overhead expenses of the Company to Tianci Wanguan. The information in the Tianci Wanguan Discontinued Operations column in the unaudited Pro Forma Consolidated Statement of Operations was prepared based on the Company’s quarterly audited financial statements and only include costs that are directly attributable to the operating results of Tianci Wanguan.
The Company believes that the adjustments included within the Tianci Wanguan Discontinued Operations column are consistent with the guidance for discontinued operations in accordance with U.S. GAAP. The Company’s current estimates on a discontinued operations basis are preliminary and could change as the Company finalizes the accounting for the discontinued operations to be reported in the Quarterly Report on Form 10-Q for the three months ending September 30, 2022.
Pro Forma Adjustments
The information in the “Pro Forma Adjustments” columns in the unaudited Pro Forma Consolidated Statements of Operations and the unaudited Pro Forma Condensed Consolidated Balance Sheets reflect additional pro forma adjustments which are further described in the accompanying notes. The Pro Forma Adjustments are based on available information and assumptions that the Company’s management believes are reasonable, that reflect the impact of events directly attributable to the divestment that are factually supportable, and for purposes of the Pro Forma Statements of Income, are expected to have a continuing impact on the Company. The Pro Forma Adjustments do not reflect future events that may occur after the divestment.
F-16
ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (AMOUNTS IN US DOLLARS)
NOTE 10. SUBSEQUENT EVENTS (Continued)
Organic Agricultural Company Limited
Pro Forma Consolidated Statement of Operations (Unaudited)
For the Three Months Ended June 30, 2022
(EXPRESSED IN U.S. DOLLARS)
| Historical Organic Agricultural | Tianci Wanguan Discontinued Operations | Pro Forma Adjustments | Pro Forma Organic Agricultural Continuing Operations | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of sales | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Selling, general and administrative expenses | ( | ) | ||||||||||||||
| Operating (loss) | ( | ) | ( | ) | ||||||||||||
| Other income | ||||||||||||||||
| (Loss) before provision for income taxes | ( | ) | ( | ) | ||||||||||||
| Provision for income taxes | ||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||
| Less: Net income attributable to non-controlling interests | ||||||||||||||||
| Net (loss) attributable to common shareholders | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
| ( | ) | ( | ) | |||||||||||||
| | ||||||||||||||||
F-17
ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (AMOUNTS IN US DOLLARS)
NOTE 10. SUBSEQUENT EVENTS (Continued)
Organic Agricultural Company Limited
Pro Forma Consolidated Balance Sheet (Unaudited)
As of June 30, 2022
(EXPRESSED IN U.S. DOLLARS)
| Historical Organic Agricultural | Tianci Wanguan Discontinued Operations | Pro Forma Adjustments | Pro Forma Organic Agricultural Continuing Operations | |||||||||||||
| Assets | ||||||||||||||||
| Cash and cash equivalents | $ | $ | ( | ) | $ | $ | ||||||||||
| Accounts receivable | ||||||||||||||||
| Prepaid expenses | ( | ) | ||||||||||||||
| Inventories | ||||||||||||||||
| Other receivables | ||||||||||||||||
| Total current assets | ( | ) | ||||||||||||||
| Total assets | $ | $ | ( | ) | $ | $ | ||||||||||
| Liabilities and shareholders’ equity | ||||||||||||||||
| Accounts payable and accrued expenses | $ | $ | $ | $ | ||||||||||||
| Customer deposits | ( | ) | ||||||||||||||
| Due to related parties | ||||||||||||||||
| Other payables | ( | ) | ||||||||||||||
| Total current liabilities | ( | ) | ||||||||||||||
| Total liabilities | ( | ) | ||||||||||||||
| Shareholders’ equity | ||||||||||||||||
| Preferred stock | ||||||||||||||||
| Common Stock | ||||||||||||||||
| Additional Paid-in Capital | ||||||||||||||||
| (Deficit) | ( | ) | ( | ) | ||||||||||||
| Other comprehensive (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Total shareholders’ equity of the Company | ||||||||||||||||
| Non-controlling interest | ( | ) | ||||||||||||||
| Total shareholders’ equity | ||||||||||||||||
| Total liabilities and shareholders’ equity | $ | $ | ( | ) | $ | $ | ||||||||||
F-18
ORGANIC AGRICULTURAL COMPANY LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (AMOUNTS IN US DOLLARS)
NOTE 10. SUBSEQUENT EVENTS (Continued)
Organic Agricultural Company Limited
Pro Forma Consolidated Statement of Cash Flows (Unaudited)
For the Three Months Ended June 30, 2022
(EXPRESSED IN U.S. DOLLARS)
| Historical Organic Agricultural | Tianci Wanguan Discontinued Operations | Pro Forma Adjustments | Pro Forma Continuing Operations | |||||||||||||
| Net cash (used in) provided by operating activities | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
| Effect of exchange rate fluctuations on cash and cash equivalents | ( | ) | ||||||||||||||
| Net (decrease) increase in cash and cash equivalents | ( | ) | ( | ) | ||||||||||||
| Cash and cash equivalents, beginning of year | ( | ) | ||||||||||||||
| Cash and cash equivalents, end of year | $ | $ | ( | ) | $ | $ | ||||||||||
The unaudited Pro Forma Consolidated Statements of Operations and Cash Flows for the three months ended June 30, 2022 and the unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2022, did not require any pro forma adjustments.
F-19
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 three months ended June 30, 2022, there was one accounting estimate we made that was subject to a high degree of uncertainty and was critical to our results, as follows:
Valuation of Unvested Shares:
On November 23, 2021 the Company issued 10 million common shares to Chen Zewu as agent for Unbounded IOT Block Chain Limited, which owns the minority interest in Tianci Wanguan and is responsible for managing that company. Our agreement with Unbounded provides that the shares will vest only if Tianci Wanguan generates a profit of five million Renminbi during the twelve months following November 23, 2021. Upon vesting of the shares, the Company would record a compensation expense of $1,938,000. As of June 30, 2022, the Company had suspended the operations of Tianci Wanguan and on August 19, 2022, completed the divestment. Accordingly, Unbounded did not meet the performance requirement and the 10,000,000 shares previously issued on November 23, 2021, were returned and cancelled with no compensation expense recognized.
Results of Operations
The following table shows key components of the unaudited results of operations during the three months ended June 30, 2022 and 2021:
| For the Three Months Ended June 30, | Change | |||||||||||||||
| 2022 | 2021 | $ | % | |||||||||||||
| Revenue | $ | 38,984 | $ | 30,091 | $ | 8,893 | 30 | % | ||||||||
| Cost of Sales | 31,272 | 20,680 | 10,592 | 51 | % | |||||||||||
| Gross Profit | 7,712 | 9,411 | (1,699 | ) | (18 | )% | ||||||||||
| Total operating costs and expenses | 225,870 | 800,123 | (574,253 | ) | (72 | )% | ||||||||||
| (Loss) from operations before other income and income taxes | (218,158 | ) | (790,712 | ) | 572,554 | (72 | )% | |||||||||
| Other income | 1,017 | 13 | 1,004 | 7,723 | % | |||||||||||
| (Loss) from operations before income taxes | (217,141 | ) | (790,699 | ) | 573,558 | (73 | )% | |||||||||
| Income taxes | - | - | - | N/A | ||||||||||||
| Net (loss) from operations | (217,141 | ) | (790,699 | ) | 573,558 | (73 | )% | |||||||||
| Less: net (loss) attributable to non-controlling interests | - | - | - | N/A | ||||||||||||
| Net (loss) attributable to common shareholders’ | $ | (217,141 | ) | $ | (790,699 | ) | $ | 573,558 | (73 | )% | ||||||
2
All of our revenue during the three months ended June 30, 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 months ended June 30, 2022 were 30% greater than during the three months ended June 30, 2021. The increase in revenue occurred primarily because of orders from a new customer, Chuangyi Agriculture.
For the three months ended June 30, 2022 and 2021, our revenue was attributable to the sales of milled rice and other foodstuffs. The cost of sales were $31,272 and $20,680 for the three months ended June 30, 2022 and 2021, respectively. Those operations yielded gross profit for the three months periods of $7,712 and $9,411 with gross margin of 19.8% and 31.3%, respectively. The decrease in gross margin during the three months ended June 30, 2022, compared to the same period of the previous year was primarily attributable to below-cost sales of a new product, Guxiaole series products, to attract a new customer, Qingdao Huadao.
In April 2021, in order to boost sales, the Company granted a total of 345,000 fully vested shares with a fair value on the grant date of $2.20 per share to 25 individuals for sales promotion services. As a result, $759,000 (the market value of the shares on date of grant) in compensation expense was recognized as advertising and promotion expenses for the three months ended June 30, 2021, representing the primary component of the Company’s operating expenses during the three months ended June 30, 2021. The Company incurred operating expenses totaling $225,870 and $800,123 during the three months ended June 30, 2022 and 2021, respectively. The components of operating expenses (unaudited) were:
| Three Months Ended June 30 | ||||||||
| 2022 | 2021 | |||||||
| Salaries and benefits | $ | 46,318 | $ | 33,014 | ||||
| Office expense | 26,678 | 14,302 | ||||||
| Rentals and leases | 4,742 | 6,202 | ||||||
| Professional fees | 17,723 | 18,110 | ||||||
| Exchange (gain) loss | 127,543 | (33,345 | ) | |||||
| Advertising and promotion expenses | 2,866 | 761,840 | ||||||
| Total operating expenses | $ | 225,870 | $ | 800,123 | ||||
Salaries and benefits and office expenses increased in the three months ended June 30, 2022, because Yuxingqi implemented an expansion of its business.
The Company’s operating expenses for the three months ended June 30, 2022 included $127,543 of loss on exchange. This represented the decrease in the USD value of Tianci’s debt to Organic Agricultural, which increased as a result of the appreciation in the USD to CNY exchange rate from 6.3431 to 6.6977. By comparison, the Company’s operating expenses during the three months ended June 30, 2021 were partially offset by $33,345 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 decline in the USD to CNY exchange rate from 6.5565 to 6.4579.
The Company’s operations produced a net loss of $217,141 and $790,699 for the three months ended June 30, 2022 and 2021, respectively.
3
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 in this agreement, Tianci Wanguan (Xiamen) Digital Technology Co., Ltd. (“Tianci Wanguan”) was incorporated on November 5, 2020. Tianci Wanguan is 51% owned by Organic Agricultural HK and 49% owned by Chen Zewu on behalf of Unbounded. On July 19, 2021 the parties executed a supplement to the Cooperation Agreement.
The Supplementary Agreement sets forth performance criteria for Unbounded’s management of Tianci Wanguan: specifically that within 12 months after the shares mentioned below are issued to Unbounded, Tianci Wanguan must 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 Chen Zewu to be held for the benefit of Unbounded. If Unbounded fails to satisfy the criteria described above, the 10 million shares must be returned to Organic Agricultural. If Unbounded does satisfy the criteria, then it will have unrestricted ownership of the 10 million shares, and Organic Agricultural will issue an additional 10 million shares to Unbounded. According to FASB ASC 505-50-S99-1 and 2, as the 10,000,000 shares issued on November 23, 2021 are unvested and forfeitable, these shares are treated as unissued until they vest when the target described above is met.
As of June 30, 2022, the Company had suspended the operations of Tianci Wanguan and on August 19, 2022, completed the divestment of this subsidiary. Accordingly, Unbounded did not meet the performance requirement and the 10,000,000 shares previously issued on November 23, 2021 were returned and cancelled with no compensation expense recognized (See Note 10).
The assets and liabilities of Tianci Wanguan will be shown separately and the results of operations and cash flows of Tianci Wanguan will be shown as discontinued operations in the Company’s financial statements for the three months ending September 30, 2022, as the determination to divest of this subsidiary was not made by the Board of Directors until August 14, 2022.
4
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 three months ended June 30, 2021. As of June 30, 2022, our working capital was $197,567, a decrease of $106,308 during the three months ended June 30, 2022, primarily due to the net loss from operations.
The largest components of working capital at June 30, 2022 were cash of $308,012 and inventories of $173,870, which were offset by $299,089 in customer deposits against future sales.
Cash Flows
The following unaudited table summarizes our cash flows for the three months ended June 30, 2022 and 2021.
For the Three Months Ended June 30, | Change | |||||||||||
| 2022 | 2021 | $ | ||||||||||
| Net cash (used in) operating activities | $ | (215,745 | ) | $ | (84,086 | ) | $ | (131,659 | ) | |||
| Net cash provided by financing activities | - | 920,000 | (920,000 | ) | ||||||||
| Effect of exchange rate fluctuation on cash and cash equivalents | 115,294 | (22,109 | ) | 137,403 | ||||||||
| Net (decrease) increase in cash and cash equivalents | (100,451 | ) | 813,805 | (914,256 | ) | |||||||
| Cash and cash equivalents, beginning of year | 408,463 | 70,506 | 337,957 | |||||||||
| Cash and cash equivalents, end of period | $ | 308,012 | $ | 884,311 | $ | (576,299 | ) | |||||
During the three months ended June 30, 2022, our operations used net cash of $215,745. The Company incurred a cash use from operations primarily because it recorded a net loss of $217,141. During the three months ended June 30, 2021, the Company recorded $84,086 of cash used in operating activities, primarily because of its net loss of $790,699. 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. Our cash uses included an increase in account receivable by $17,140 and a $15,052 increase in inventories.
The Company had no investing activities during the three months ended June 30, 2022 and 2021.
The Company had no financing activities during the three months ended June 30, 2022. Our financing activities during the three months ended June 30, 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 and the Company is 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 June 30, 2022, a stable customer base has not been established yet.
5
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, there has been an increasing number of COVID-19 cases, including cases involving the COVID-19 Delta and Omicron variants, in multiple cities in China. The Chinese local authorities have reinstated certain measures to keep COVID-19 in check, including compulsory quarantine arrangements, travel restrictions and stay-at-home orders. The reinstatement of these restrictions in early 2022 have adversely affected our operations by, for example, making it more difficult to conduct our sales and marketing and promotional efforts. The COVID-19 global pandemic has resulted in, and may intensify, global economic distress, and the duration and extent of the impact of COVID-19 outbreak is highly uncertain at this time. We are unable to predict the extent to which the pandemic and related impacts will continue to adversely impact our business operations, financial performance, results of operations, financial position and the achievement of our strategic objectives.
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.
6
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 June 30, 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 June 30, 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 has come to management’s attention during the quarter ended June 30, 2022 that have materially affected, or are likely to materially affect, the Company’s internal control over financial reporting.
7
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 June 30, 2022, the Company did not complete any unregistered sales of equity securities.
Item 3. Defaults upon Senior Securities.
Not applicable
Item 4. Mine Safety Disclosure
Not applicable.
Item 5. Other Information.
None.
8
Item 6. Exhibits
INDEX TO EXHIBITS
9
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 | August 23, 2022 | ||
| Jianjun Xun | (Principal Executive Officer) | |||
| /s/ Wang Qiu | Chief Financial Officer | August 23, 2022 | ||
| Wang Qiu | (Principal Financial and Accounting Officer) |
10
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:
(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;
(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;
(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
(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):
(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
(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: August 23, 2022 | /s/ Jianjun Xun |
| Jianjun Xun, Chief Executive Officer | |
| (Principal Executive Officer) |
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:
(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;
(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;
(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
(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):
(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
(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: August 23, 2022 | /s/ Wang Qiu |
| Wang Qiu, Chief Financial Officer | |
| (Principal Financial Officer) |
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 June 30, 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:
| 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: August 23, 2022 |
| Jianjun Xun | ||
| Title: | Chief Executive Officer (Principal Executive Officer) |
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 June 30, 2020, 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:
| 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 result of operations of the Company. |
| By: | /s/ Wang Qiu |
Dated: August 23, 2022 |
Wang Qiu |
||
| Title: | Chief Financial Officer |
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares |
Jun. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
| Preferred stock, authorized | 1,000,000 | 1,000,000 |
| Preferred stock, shares issued | ||
| Preferred stock, shares outstanding | ||
| Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 274,000,000 | 274,000,000 |
| Common stock, shares issued | 83,536,974 | 83,536,974 |
| Common stock, shares outstanding | 83,536,974 | 83,536,974 |
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) |
3 Months Ended | |||
|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|||
| Income Statement [Abstract] | ||||
| Revenue | $ 38,984 | $ 30,091 | ||
| Cost of sales | 31,272 | 20,680 | ||
| Gross profit | 7,712 | 9,411 | ||
| Selling, general and administrative expenses | 225,870 | 800,123 | ||
| Operating (loss) | (218,158) | (790,712) | ||
| Other income | 1,017 | 13 | ||
| (Loss) before provision for income taxes | (217,141) | (790,699) | ||
| Provision for income taxes | ||||
| Net (loss) | (217,141) | (790,699) | ||
| Less: net (loss) from operations attributable to non-controlling interests | ||||
| Net (loss) attributable to common shareholders | $ (217,141) | $ (790,699) | ||
| Basic and diluted (loss) per share (in Dollars per share) | $ 0 | $ (0.01) | ||
| Weighted average number of shares outstanding- basic and diluted (in Shares) | [1] | 83,536,974 | 75,052,933 | |
| Other comprehensive (loss): | ||||
| Net (loss) | $ (217,141) | $ (790,699) | ||
| Foreign currency translation adjustment | 110,833 | (25,774) | ||
| Comprehensive (loss) | (106,308) | (816,473) | ||
| Less: comprehensive income attributable to non-controlling interests | 3,672 | |||
| Comprehensive (loss) attributable to the common shareholders | $ (109,980) | $ (816,473) | ||
| ||||
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (Parentheticals) - $ / shares |
3 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Income Statement [Abstract] | ||
| Basic and diluted (loss) per share (in Dollars per share) | $ 0.00 | $ (0.01) |
| Weighted average number of shares outstanding- basic and diluted | 83,536,974 | 75,052,933 |
Condensed Consolidated Statements of Changes in Shareholders’ (Deficit) Equity - USD ($) |
Common stock |
Additional Paid-in Capital |
(Deficit) |
Other Comprehensive Income (Loss) |
Total Shareholders’ Equity (Deficit) |
Non- controlling Interest |
Total |
|||
|---|---|---|---|---|---|---|---|---|---|---|
| Balance at Mar. 31, 2021 | $ 60,500 | [1] | $ 2,610,648 | $ (2,684,213) | $ (113,743) | $ (126,808) | $ (126,808) | |||
| Balance (in Shares) at Mar. 31, 2021 | [1] | 60,500,154 | ||||||||
| Net (loss) | [1] | (790,699) | (790,699) | (790,699) | ||||||
| Sale of common shares | $ 21,257 | [1] | 898,743 | 920,000 | 920,000 | |||||
| Sale of common shares (in Shares) | [1] | 21,256,620 | ||||||||
| Shares issued as compensation | $ 1,780 | [1] | 757,220 | 759,000 | 759,000 | |||||
| Shares issued as compensation (in Shares) | [1] | 1,780,200 | ||||||||
| Foreign currency translation adjustment | [1] | (25,774) | (25,774) | (25,774) | ||||||
| Foreign currency translation adjustment (in Shares) | [1] | |||||||||
| Balance at Jun. 30, 2021 | $ 83,537 | [1] | 4,266,611 | (3,474,912) | (139,517) | 735,719 | 735,719 | |||
| Balance (in Shares) at Jun. 30, 2021 | [1] | 83,536,974 | ||||||||
| Balance at Mar. 31, 2022 | $ 83,537 | [1] | 4,266,611 | (3,803,720) | (173,204) | 373,224 | (69,349) | 303,875 | ||
| Balance (in Shares) at Mar. 31, 2022 | [1] | 83,536,974 | ||||||||
| Net (loss) | [1] | (217,141) | (217,141) | (217,141) | ||||||
| Foreign currency translation adjustment | [1] | 107,161 | 107,161 | 3,672 | 110,833 | |||||
| Balance at Jun. 30, 2022 | $ 83,537 | [1] | $ 4,266,611 | $ (4,020,861) | $ (66,043) | $ 263,244 | $ (65,677) | $ 197,567 | ||
| Balance (in Shares) at Jun. 30, 2022 | [1] | 83,536,974 | ||||||||
| ||||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) |
3 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Cash Flows from Operating Activities: | ||
| Net (loss) | $ (217,141) | $ (790,699) |
| Shares issued as compensation | 759,000 | |
| Amortization | 6,202 | |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | (975) | (17,140) |
| Prepaid and deferred expenses | 9,749 | 1,883 |
| Inventories | 21,390 | (15,052) |
| Other receivables | 3,906 | (6,281) |
| Accounts payable and accrued expenses | (28,891) | (8,357) |
| Customer deposits | (8,339) | (1,086) |
| Due from/to related parties | (1,174) | (1,335) |
| Lease liability | (9,696) | |
| Other payables | 5,730 | (1,525) |
| Net cash (used in) operating activities | (215,745) | (84,086) |
| Cash Flows from Financing Activities: | ||
| Proceeds from sale of common stock | 920,000 | |
| Net cash provided by financing activities | 920,000 | |
| Effect of exchange rate fluctuations on cash | 115,294 | (22,109) |
| Net (decrease) increase in cash | (100,451) | 813,805 |
| Cash, beginning of year | 408,463 | 70,506 |
| Cash, end of period | 308,012 | 884,311 |
| Supplemental disclosure of cash flow information: | ||
| Cash paid for income taxes | ||
| Cash paid for interest | ||
| Supplemental disclosure of non-cash activities: | ||
| Operating ROU assets and related lease liabilities | 28,493 | |
| Shares issued as compensation | $ 759,000 | |
Nature of Operations and Basis of Presentation |
3 Months Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||
| NATURE OF OPERATIONS AND BASIS OF PRESENTATION | 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 June 30, 2022, the Company’s subsidiaries were:
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 is 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 sets forth performance criteria for Unbounded’s management of Tianci Wanguan: specifically that within 12 months after the shares mentioned below are issued to Unbounded, Tianci Wanguan must 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 is holding them as agent for Unbounded. If Unbounded fails to satisfy the criteria described above, the 10 million shares must be returned to Organic Agricultural. If Unbounded does satisfy the criteria, then it will have unrestricted ownership of the 10 million shares, and Organic Agricultural will issue an additional 10 million shares to Unbounded. According to FASB ASC 505-50-S99-1 and 2, as the 10,000,000 shares issued on November 23, 2021 are unvested and forfeitable, these shares are treated as unissued until they vest when the target described above is met.
The share-based compensation will be measured at grant date, based on the fair value of the award and recognized over its vesting period once it is determined that the target will more likely than not be met. After the criteria described above is satisfied, the Company will 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 is satisfied, $1,938,000 in compensation expense will be 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. Accordingly, Unbounded did not meet the performance requirements and the 10,000,000 shares previously issued on November 23, 2021 were returned and cancelled with no compensation expense recognized (See Note 10). |
Summary of Significant Accounting Policies |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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 used 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 June 30, 2022 are listed as follows:
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 and the treatment of the shares issued to Unbounded. These estimates are 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. All highly liquid investments with original stated maturities of three months or less are classified as cash. The Company’s cash consist of cash on hand and cash in bank, as of June 30, 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.
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 June 30, 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:
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, Tianci Wanguan 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.
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 three months ended June 30, 2021, specifically on April 12, 2021, the Company granted a total of 345,000 shares with a fair value on the grant date of $2.20 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$75,000). As of June 30, 2022, the Company had RMB1,259,599 (approximately USD$188,000) in excess of the insurance amounts.
During the three months ended June 30, 2022, two customers, Jiufu Zhenyuan and Chuangyi Agriculture, generated 55% and 15% of our revenues, respectively. During the three months ended June 30, 2021, Jiufu Zhenyuan, generated 85% 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 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, there has been an increasing number of COVID-19 cases, including cases involving the COVID-19 Delta and Omicron variants, in multiple cities in China. The Chinese local authorities have reinstated certain measures to keep COVID-19 in check, including compulsory quarantine arrangements, travel restrictions and stay-at-home orders. The reinstatement of these restrictions in early 2022 have adversely affected our operations by, for example, making it more difficult to conduct our sales and marketing and promotional efforts. The COVID-19 global pandemic has resulted in, and may intensify, global economic distress, and the duration and extent of the impact of COVID-19 outbreak is highly uncertain at this time. We are unable to predict the extent to which the pandemic and related impacts will continue to adversely impact our business operations, financial performance, results of operations, financial position and the achievement of our strategic objectives.
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. |
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Prepaid Expenses |
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| PREPAID EXPENSES | NOTE 3. PREPAID EXPENSES
Prepaid expenses include prepayments for expenses, and prepayments of processing charges and products to be purchased. As of June 30, 2022 and March 31, 2022, prepayments and deferred expenses were as follows:
For the three months ended June 30, 2022, prepayments for short-term lease were reduced by US$5,701 and recorded as rent expense. |
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Inventories |
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| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| INVENTORIES | NOTE 4. INVENTORIES
The Company’s inventories are all non-perishable products. 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:
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Income Taxes |
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| INCOME TAXES | NOTE 5. INCOME TAXES
A reconciliation of income (loss) before income taxes for domestic and foreign locations for the three months ended June 30, 2022 and 2021 is as follows:
The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate was as follows:
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, Tianci Liangtian and Tianci Wanguan in China.
As of June 30, 2022, Yuxinqi, Tianci Liangtian and Tianci Wanguan have total net operating loss carry forwards of approximately $1,382,000 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 $346,000 and $296,000 related to its operations in the PRC as of June 30, 2022 and March 31, 2022, respectively. The PRC valuation allowance increased by approximately $50,000 and $3,000 for the three months ended June 30, 2022 and 2021, respectively.
The Company incurred losses from its United States operations during all periods presented of approximately $1,469,000. 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 $309,000 and $304,000 against the net deferred tax assets related to the Company’s United States operations as of June 30, 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 $5,000 and $163,000 for the three months ended June 30, 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.
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Customer Deposits |
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| CUSTOMER DEPOSITS | NOTE 6. CUSTOMER DEPOSITS
Customer deposits consisted of the following:
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Related Party Transactions |
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| RELATED PARTY TRANSACTIONS | NOTE 7. RELATED PARTY TRANSACTIONS
Amounts due to related parties consisted of the following as of the periods indicated:
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.
Jiufu Zhenyuan owns 22.73% of the Company and is a board member. The advances represent advances for purchases. During the three months ended June 30, 2022, Jiufu Zhenyuan purchased agricultural products from the Company totaling $21,273.
During the three months ended June 30, 2022 and 2021, Hao Shuping, a member of the Company’s Board of Directors, purchased agricultural products from the Company totaling $57 and $1,487, respectively.
Amounts due from related parties consisted of the following as of the periods indicated:
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 year ended March 31, 2022, Hao Shuping purchased agricultural products from the Company totaling $1,807. |
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Right-of-Use Assets and Lease Liabilities |
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| Rightofuse Assets And Lease Liabilities Abstract | |
| RIGHT-OF-USE ASSETS AND LEASE LIABILITIES | 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 record 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 three months ended June 30, 2022 and 2021, the amortization of ROU was and US$6,202, respectively. |
Contingencies |
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| Commitments and Contingencies Disclosure [Abstract] | |
| CONTINGENCIES | NOTE 9. 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 June 30, 2022 and through the date of this report. |
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| Subsequent Events [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUBSEQUENT EVENTS | NOTE 10. SUBSEQUENT EVENTS
The Management of the Company determined that there were no reportable subsequent events to be adjusted for and/or disclosed as of August 23, 2022 except as follows:
Divestment of Tianci Wanguan
The Company, with Board of Directors approval on August 14, 2022, made a determination to cease the joint operations of Tianci Wanguan with Unbounded. On August 19, 2022 (the “Distribution Date”), the Company completed the divestment of its 51% equity interest in Tianci Wanguan to Unbounded. The 10 million shares of its common stock previously issued to Chen Zewu, on behalf of Unbounded, on November 23, 2021 were returned and cancelled.
The Company will recognize $68,359 of investment income from the divestment of Tianci Wanguan in the three months ended September 30, 2022.
After the Distribution Date beginning in the second quarter of fiscal year 2023, Tianci Wanguan’s historical financial results for periods prior to the Distribution Date will be reflected in the Company’s consolidated financial statements as a discontinued operation.
The following unaudited Pro Forma Consolidated Statements of Operations and Cash Flows of the Company for the three months ended June 30, 2022 are presented as if the divestment had occurred as of April 1, 2022 in that they reflect the reclassification of Tianci Wanguan as Discontinued Operations for all periods presented. The following unaudited Pro Forma Condensed Consolidated Balance Sheet of the Company as of June 30, 2022 is presented as if the divestment occurred on June 30, 2022.
The unaudited Pro Forma Consolidated Financial Statements are presented based on information currently available including certain assumptions and estimates. They are intended for informational purposes only, and do not purport to represent what the Company’s financial position and operating results would have been had the divestment and related events occurred on the dates indicated above, or to project the Company’s financial position or results of operations for any future date or period. Furthermore, they do not reflect all actions that may be undertaken by the Company after the divestment and disposition of Tianci Wanguan.
The unaudited Pro Forma Consolidated Financial Statements and the accompanying notes should be read in conjunction with the unaudited Consolidated Financial Statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Historical Organic Agricultural
This column reflects the Company’s historical financial statements for the period presented and does not reflect any adjustments related to the divestment and related events. The historical Organic Agricultural Consolidated Balance Sheet as of June 30, 2022 and the Consolidated Statements of Operations and Cash Flows for the three months ended June 30, 2022 were derived from the Company’s unaudited Condensed Consolidated Financial Statements.
Tianci Wanguan Discontinued Operations
The unaudited pro forma financial information related to the Tianci Wanguan’s Discontinued Operations has been prepared in accordance with the discontinued operations guidance in Accounting Standards Codification 205, “Financial Statement Presentation” and therefore does not reflect what the Company’s or Tianci Wanguan’s results of operations would have been on a stand-alone basis and are not necessarily indicative of the Company’s or Tianci Wanguan’s future results of operations. Discontinued Operations do not include any allocation of general corporate overhead expenses of the Company to Tianci Wanguan. The information in the Tianci Wanguan Discontinued Operations column in the unaudited Pro Forma Consolidated Statement of Operations was prepared based on the Company’s quarterly audited financial statements and only include costs that are directly attributable to the operating results of Tianci Wanguan.
The Company believes that the adjustments included within the Tianci Wanguan Discontinued Operations column are consistent with the guidance for discontinued operations in accordance with U.S. GAAP. The Company’s current estimates on a discontinued operations basis are preliminary and could change as the Company finalizes the accounting for the discontinued operations to be reported in the Quarterly Report on Form 10-Q for the three months ending September 30, 2022.
Pro Forma Adjustments
The information in the “Pro Forma Adjustments” columns in the unaudited Pro Forma Consolidated Statements of Operations and the unaudited Pro Forma Condensed Consolidated Balance Sheets reflect additional pro forma adjustments which are further described in the accompanying notes. The Pro Forma Adjustments are based on available information and assumptions that the Company’s management believes are reasonable, that reflect the impact of events directly attributable to the divestment that are factually supportable, and for purposes of the Pro Forma Statements of Income, are expected to have a continuing impact on the Company. The Pro Forma Adjustments do not reflect future events that may occur after the divestment.
Organic Agricultural Company Limited Pro Forma Consolidated Statement of Operations (Unaudited) For the Three Months Ended June 30, 2022 (EXPRESSED IN U.S. DOLLARS)
Organic Agricultural Company Limited Pro Forma Consolidated Balance Sheet (Unaudited) As of June 30, 2022 (EXPRESSED IN U.S. DOLLARS)
Organic Agricultural Company Limited Pro Forma Consolidated Statement of Cash Flows (Unaudited) For the Three Months Ended June 30, 2022 (EXPRESSED IN U.S. DOLLARS)
The unaudited Pro Forma Consolidated Statements of Operations and Cash Flows for the three months ended June 30, 2022 and the unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2022, did not require any pro forma adjustments. |
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Accounting Policies, by Policy (Policies) |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Going concern | 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 used 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.
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| Basis of presentation | 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.
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| Principles of consolidation | 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 June 30, 2022 are listed as follows:
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| Use of estimates | 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 and the treatment of the shares issued to Unbounded. These estimates are 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.
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| Cash | Cash
Cash consists of cash on hand and bank deposits, which are unrestricted as to withdrawal and use in the PRC. All highly liquid investments with original stated maturities of three months or less are classified as cash. The Company’s cash consist of cash on hand and cash in bank, as of June 30, 2022 and March 31 2022.
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| Revenue recognition | 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.
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| Fair value measurements | 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.
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 June 30, 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.
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| Functional currency and foreign currency translation | 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:
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| Income taxes | 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, Tianci Wanguan 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%.
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| Earnings (loss) per share | 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.
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| Share-based compensation | 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 three months ended June 30, 2021, specifically on April 12, 2021, the Company granted a total of 345,000 shares with a fair value on the grant date of $2.20 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.
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| Segment information and geographic data | 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.
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| Concentration of credit and customer risks | 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$75,000). As of June 30, 2022, the Company had RMB1,259,599 (approximately USD$188,000) in excess of the insurance amounts.
During the three months ended June 30, 2022, two customers, Jiufu Zhenyuan and Chuangyi Agriculture, generated 55% and 15% of our revenues, respectively. During the three months ended June 30, 2021, Jiufu Zhenyuan, generated 85% of our revenues.
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| Risks and uncertainties | 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 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, there has been an increasing number of COVID-19 cases, including cases involving the COVID-19 Delta and Omicron variants, in multiple cities in China. The Chinese local authorities have reinstated certain measures to keep COVID-19 in check, including compulsory quarantine arrangements, travel restrictions and stay-at-home orders. The reinstatement of these restrictions in early 2022 have adversely affected our operations by, for example, making it more difficult to conduct our sales and marketing and promotional efforts. The COVID-19 global pandemic has resulted in, and may intensify, global economic distress, and the duration and extent of the impact of COVID-19 outbreak is highly uncertain at this time. We are unable to predict the extent to which the pandemic and related impacts will continue to adversely impact our business operations, financial performance, results of operations, financial position and the achievement of our strategic objectives.
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| Recently adopted accounting standards | 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.
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| Stock split | 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. |
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Summary of Significant Accounting Policies (Tables) |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of company's subsidiaries |
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| Schedule of exchange rates used for foreign currency translation |
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Prepaid Expenses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prepaid Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of prepaid expenses include prepayments for expenses, and prepayments of processing charges and product |
|
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Inventories (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of inventories |
|
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Income Taxes (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of reconciliation income (loss) before income taxes |
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| Schedule of difference between the U.S. federal statutory income tax rate and the company's effective tax rate |
|
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| Schedule of earliest tax year that remain subject to examination by jurisdiction |
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Customer Deposits (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of customer deposits |
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Related Party Transactions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of amounts due to related parties |
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| Schedule of amounts due from related parties |
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Subsequent Events (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Subsequent Events [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of consolidated statement of operations (unaudited) |
|
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| Schedule of consolidated balance sheet (unaudited) |
|
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| Schedule of consolidated statement of cash flows (unaudited) |
|
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Nature of Operations and Basis of Presentation (Details) - USD ($) |
1 Months Ended | 3 Months Ended | ||||
|---|---|---|---|---|---|---|
Nov. 23, 2021 |
Jul. 19, 2021 |
Jun. 30, 2022 |
Nov. 06, 2020 |
Nov. 05, 2020 |
Dec. 06, 2017 |
|
| Nature of Operations and Basis of Presentation (Details) [Line Items] | ||||||
| Description of supplementary agreement | The Supplementary Agreement sets forth performance criteria for Unbounded’s management of Tianci Wanguan: specifically that within 12 months after the shares mentioned below are issued to Unbounded, Tianci Wanguan must 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 is holding them as agent for Unbounded. If Unbounded fails to satisfy the criteria described above, the 10 million shares must be returned to Organic Agricultural. If Unbounded does satisfy the criteria, then it will have unrestricted ownership of the 10 million shares, and Organic Agricultural will issue an additional 10 million shares to Unbounded. | |||||
| Unvested and forfeitable share issued | 10,000,000 | |||||
| Compensation expense | $ 1,938,000 | |||||
| Previously issued shares | 10,000,000 | |||||
| Grant [Member] | ||||||
| Nature of Operations and Basis of Presentation (Details) [Line Items] | ||||||
| Number of shares issued | 20,000,000 | |||||
| Shares issued | 10,000,000 | |||||
| Fair value price per share | $ 0.0969 | |||||
| Unbounded IOT Block Chain Limited [Member] | ||||||
| Nature of Operations and Basis of Presentation (Details) [Line Items] | ||||||
| Percentage of equity interest acquired | 49.00% | |||||
| Tianci Wanguan (Xiamen) Digital Technology Company Limited [Member] | ||||||
| Nature of Operations and Basis of Presentation (Details) [Line Items] | ||||||
| Percentage of equity interest acquired | 51.00% | |||||
| Organic Agricultural HK [Member] | ||||||
| Nature of Operations and Basis of Presentation (Details) [Line Items] | ||||||
| Percentage of equity interest acquired | 51.00% | 51.00% | ||||
Summary of Significant Accounting Policies (Details) |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|---|
|
Apr. 30, 2021
USD ($)
|
Nov. 18, 2021
$ / shares
shares
|
Jun. 30, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
Mar. 31, 2021 |
Jun. 30, 2022
CNY (¥)
|
Apr. 12, 2021
$ / shares
shares
|
|
| Summary of Significant Accounting Policies (Details) [Line Items] | |||||||
| Received from sale of shares (in Dollars) | $ | $ 920,000 | ||||||
| U.S. corporation tax rate | 21.00% | ||||||
| Applicable statutory tax rate | 16.50% | ||||||
| Number of shares granted (in Shares) | 345,000 | ||||||
| Fair value (in Dollars per share) | $ / shares | $ 2.2 | ||||||
| Number of employees | 25 | ||||||
| Compensation expense (in Dollars) | $ | $ 759,000 | ||||||
| Number of operating segment | 1 | ||||||
| Insurance coverage | $ 75,000 | ¥ 500,000 | |||||
| Insurance amounts | $ 188,000 | ¥ 1,259,599 | |||||
| Additional shares of common stock (in Shares) | 4.16 | ||||||
| Stock split par value (in Dollars per share) | $ / shares | $ 0.001 | ||||||
| Additional Paid-in Capital [Member] | |||||||
| Summary of Significant Accounting Policies (Details) [Line Items] | |||||||
| Common stock, shares outstanding (in Shares) | 67,347,638 | ||||||
| Jiufu Zhenyuan [Member] | |||||||
| Summary of Significant Accounting Policies (Details) [Line Items] | |||||||
| Percentage of revenue | 85.00% | 55.00% | |||||
| Chuangyi Agriculture [Member] | |||||||
| Summary of Significant Accounting Policies (Details) [Line Items] | |||||||
| Percentage of revenue | 15.00% | ||||||
| PRC [Member] | |||||||
| Summary of Significant Accounting Policies (Details) [Line Items] | |||||||
| Income tax rate | 25.00% |
Summary of Significant Accounting Policies (Details) - Schedule of company's subsidiaries |
3 Months Ended |
|---|---|
Jun. 30, 2022 | |
| Organic Agricultural (Samoa) Co., Ltd. [Member] | |
| Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
| Place of Incorporation | Samoa |
| Attributable equity interest | 100.00% |
| Organic Agricultural Company Limited (Hong Kong) [Member] | |
| Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
| Place of Incorporation | Hong Kong |
| Attributable equity interest | 100.00% |
| Heilongjiang Tianci Liangtian Agricultural Technology Development Company Limited [Member] | |
| Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
| Place of Incorporation | China |
| Attributable equity interest | 100.00% |
| Heilongjiang Yuxinqi Agricultural Technology Development Company Limited [Member] | |
| Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
| Place of Incorporation | China |
| Attributable equity interest | 100.00% |
| Tianci Wanguan (Xiamen) Digital Technology Company Limited [Member] | |
| Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |
| Place of Incorporation | China |
| Attributable equity interest | 51.00% |
Summary of Significant Accounting Policies (Details) - Schedule of exchange rates used for foreign currency translation |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Mar. 31, 2022 |
|
| USD to RMB [Member] | Minimum [Member] | Assets and liabilities [Member] | |||
| Summary of Significant Accounting Policies (Details) - Schedule of exchange rates used for foreign currency translation [Line Items] | |||
| Foreign currency translation | 6.6977 | 6.4579 | 6.3431 |
| USD to HKD [Member] | Maximum [Member] | Assets and liabilities [Member] | |||
| Summary of Significant Accounting Policies (Details) - Schedule of exchange rates used for foreign currency translation [Line Items] | |||
| Foreign currency translation | 7.8467 | 7.7652 | 7.8306 |
| Revenue and expenses [Member] | |||
| Summary of Significant Accounting Policies (Details) - Schedule of exchange rates used for foreign currency translation [Line Items] | |||
| Foreign currency translation | N/A | ||
| Revenue and expenses [Member] | USD to RMB [Member] | Minimum [Member] | |||
| Summary of Significant Accounting Policies (Details) - Schedule of exchange rates used for foreign currency translation [Line Items] | |||
| Foreign currency translation | 6.6078 | 6.4596 | |
| Revenue and expenses [Member] | USD to HKD [Member] | Maximum [Member] | |||
| Summary of Significant Accounting Policies (Details) - Schedule of exchange rates used for foreign currency translation [Line Items] | |||
| Foreign currency translation | 7.8463 | 7.7655 | |
Prepaid Expenses (Details) |
Jun. 30, 2022
USD ($)
|
|---|---|
| Disclosure Text Block Supplement [Abstract] | |
| Rent expense | $ 5,701 |
Prepaid Expenses (Details) - Schedule of prepaid expenses include prepayments for expenses, and prepayments of processing charges and product - USD ($) |
3 Months Ended | 12 Months Ended |
|---|---|---|
Jun. 30, 2022 |
Mar. 31, 2022 |
|
| Related Party Transaction [Line Items] | ||
| Prepayments for expenses | $ 6,319 | $ 8,325 |
| Prepayments for short-term lease | 13,623 | 19,324 |
| Others | 16 | 537 |
| Total | 87,804 | 99,391 |
| Fujian Fangwei Information Technology Ltd [Member] | ||
| Related Party Transaction [Line Items] | ||
| Prepayments of processing charges and products to be purchased | 59,722 | 63,061 |
| Baoqing County Fengnian Agricultural Product Purchase and Sale Ltd [Member] | ||
| Related Party Transaction [Line Items] | ||
| Prepayments of processing charges and products to be purchased | 5,595 | 5,908 |
| Heilongjiang Yaohe County Heifengyuan Apiculture Ltd [Member] | ||
| Related Party Transaction [Line Items] | ||
| Prepayments of processing charges and products to be purchased | $ 2,529 | $ 2,236 |
Inventories (Details) - Schedule of inventories - USD ($) |
Jun. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Inventory [Line Items] | ||
| Total inventories at cost | $ 173,870 | $ 205,873 |
| Rice and other products [Member] | ||
| Inventory [Line Items] | ||
| Total inventories at cost | 150,652 | 182,030 |
| Packing and other materials [Member] | ||
| Inventory [Line Items] | ||
| Total inventories at cost | $ 23,218 | $ 23,843 |
Income Taxes (Details) - USD ($) |
3 Months Ended | ||
|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Mar. 31, 2022 |
|
| Income Taxes (Details) [Line Items] | |||
| Percentage of allowance on all deferred tax assets | 100.00% | ||
| Expired term | 2027 | ||
| PRC [Member] | |||
| Income Taxes (Details) [Line Items] | |||
| Operating loss carryforwards | $ 1,382,000 | ||
| Valuation allowance | 346,000 | $ 296,000 | |
| Valuation allowance increased | 50,000 | $ 3,000 | |
| United States [Member] | |||
| Income Taxes (Details) [Line Items] | |||
| Valuation allowance | 309,000 | $ 304,000 | |
| Valuation allowance increased | 5,000 | $ 163,000 | |
| Incurred losses | $ 1,469,000 | ||
| Percentage of valuation allowance | 100.00% | ||
Income Taxes (Details) - Schedule of reconciliation income (loss) before income taxes - USD ($) |
3 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Schedule Of Reconciliation Income Loss Before Income Taxes Abstract | ||
| United States | $ (20,470) | $ (777,152) |
| Foreign | (196,671) | (13,547) |
| (Loss) before income taxes | $ (217,141) | $ (790,699) |
Income Taxes (Details) - Schedule of difference between the U.S. federal statutory income tax rate and the company's effective tax rate |
3 Months Ended | |
|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
| Schedule Of Difference Between The USFederal Statutory Income Tax Rate And The Companys Effective Tax Rate Abstract | ||
| U.S. federal statutory income tax rate | 21.00% | 21.00% |
| U.S. Valuation allowance | (21.00%) | (21.00%) |
| Rates for Tianci Liangtian, Tianci Wanguan and Yuxinqi, net | 25.00% | 25.00% |
| PRC Valuation allowance | (25.00%) | (25.00%) |
| The Company’s effective tax rate | 0.00% | 0.00% |
Income Taxes (Details) - Schedule of earliest tax year that remain subject to examination by jurisdiction |
3 Months Ended |
|---|---|
Jun. 30, 2022 | |
| U.S. Federal [Member] | |
| Income Taxes (Details) - Schedule of earliest tax year that remain subject to examination by jurisdiction [Line Items] | |
| Tax examination date | Mar. 31, 2019 |
| China [Member] | |
| Income Taxes (Details) - Schedule of earliest tax year that remain subject to examination by jurisdiction [Line Items] | |
| Tax examination date | Dec. 31, 2017 |
Customer Deposits (Details) - Schedule of customer deposits - USD ($) |
Jun. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Contract with Customer, Asset, Past Due [Line Items] | ||
| Total customer deposits | $ 299,089 | $ 316,150 |
| Shouhang [Member] | ||
| Contract with Customer, Asset, Past Due [Line Items] | ||
| Total customer deposits | 53,353 | 56,335 |
| Beiqinhai [Member] | ||
| Contract with Customer, Asset, Past Due [Line Items] | ||
| Total customer deposits | 101,766 | 107,455 |
| Guangjunxing [Member] | ||
| Contract with Customer, Asset, Past Due [Line Items] | ||
| Total customer deposits | 143,332 | 151,346 |
| Others [Member] | ||
| Contract with Customer, Asset, Past Due [Line Items] | ||
| Total customer deposits | $ 638 | $ 1,014 |
Related Party Transactions (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Mar. 31, 2022 |
|
| Related Party Transactions (Details) [Line Items] | |||
| Purchased agricultural products | $ 57 | $ 1,487 | $ 1,807 |
| Jiufu Zhenyuan [Member] | |||
| Related Party Transactions (Details) [Line Items] | |||
| Percentage of ownership | 22.73% | ||
| Jiufu Zhenyuan [Member] | |||
| Related Party Transactions (Details) [Line Items] | |||
| Purchased agricultural products | $ 21,273 | ||
Related Party Transactions (Details) - Schedule of amounts due to related parties - USD ($) |
Jun. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Related Party Transactions (Details) - Schedule of amounts due to related parties [Line Items] | ||
| Amount due to related parties | $ 2,711 | $ 21,148 |
| Jiufu Zhenyuan [Member] | ||
| Related Party Transactions (Details) - Schedule of amounts due to related parties [Line Items] | ||
| Amount due to related parties | 984 | 1,159 |
| Shen Zhenai [Member] | ||
| Related Party Transactions (Details) - Schedule of amounts due to related parties [Line Items] | ||
| Amount due to related parties | $ 1,727 | 19,192 |
| Xun Jianjun [Member] | ||
| Related Party Transactions (Details) - Schedule of amounts due to related parties [Line Items] | ||
| Amount due to related parties | $ 797 |
Related Party Transactions (Details) - Schedule of amounts due from related parties - USD ($) |
Jun. 30, 2022 |
Mar. 31, 2022 |
|---|---|---|
| Related Party Transactions (Details) - Schedule of amounts due from related parties [Line Items] | ||
| Amount due from related parties | $ 17,373 | |
| Hao Shuping [Member] | ||
| Related Party Transactions (Details) - Schedule of amounts due from related parties [Line Items] | ||
| Amount due from related parties | $ 17,373 |
Right-of-Use Assets and Lease Liabilities (Details) |
1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | 13 Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
May 14, 2021
USD ($)
m²
|
May 14, 2021
CNY (¥)
m²
|
Mar. 23, 2022
USD ($)
m²
|
Mar. 23, 2022
CNY (¥)
m²
|
Mar. 19, 2022
USD ($)
|
Mar. 19, 2022
CNY (¥)
|
Jun. 30, 2022
USD ($)
m²
|
Jun. 30, 2021
USD ($)
|
Dec. 19, 2020
USD ($)
|
Dec. 19, 2020
CNY (¥)
|
Jan. 19, 2022
USD ($)
|
Jan. 19, 2022
CNY (¥)
|
|
| Right-of-Use Assets and Lease Liabilities (Details) [Line Items] | ||||||||||||
| Amortization expenses | $ | $ 6,202 | |||||||||||
| Operating Lease Agreement [Member] | Tianci Liangtian [Member] | ||||||||||||
| Right-of-Use Assets and Lease Liabilities (Details) [Line Items] | ||||||||||||
| Area of lease office (in Square Meters) | 666 | |||||||||||
| Lease deposits | $ | $ 1,549 | |||||||||||
| Annual lease payments | $ 45,000 | ¥ 290,000 | ||||||||||
| Operating Lease Agreement [Member] | Yuxinqi [Member] | ||||||||||||
| Right-of-Use Assets and Lease Liabilities (Details) [Line Items] | ||||||||||||
| Area of lease office (in Square Meters) | 337.3 | 337.3 | ||||||||||
| Annual lease payments | $ 20,000 | ¥ 136,606.5 | ||||||||||
| Supplemental Agreement [Member] | Yuxinqi [Member] | ||||||||||||
| Right-of-Use Assets and Lease Liabilities (Details) [Line Items] | ||||||||||||
| Rent expenses | $ 10,000 | ¥ 62,570 | ||||||||||
| New Lease Agreement [Member] | Yuxinqi [Member] | ||||||||||||
| Right-of-Use Assets and Lease Liabilities (Details) [Line Items] | ||||||||||||
| Area of lease office (in Square Meters) | 370 | 370 | ||||||||||
| Annual lease payments | $ 24,000 | ¥ 153,758 | ||||||||||
| Renewed Lease Agreement [Member] | Yuxinqi [Member] | ||||||||||||
| Right-of-Use Assets and Lease Liabilities (Details) [Line Items] | ||||||||||||
| Annual lease payments | $ 4,700 | ¥ 30,247 | ||||||||||
Subsequent Events (Details) - Forecast [Member] - USD ($) shares in Millions |
3 Months Ended | |
|---|---|---|
Aug. 19, 2022 |
Sep. 30, 2022 |
|
| Subsequent Events (Details) [Line Items] | ||
| Income from investment | $ 68,359 | |
| Tianci Wanguan [Member] | ||
| Subsequent Events (Details) [Line Items] | ||
| Equity interest | 51.00% | |
| Chen Zewu [Member] | ||
| Subsequent Events (Details) [Line Items] | ||
| Shares of common stock | 10 |
Subsequent Events (Details) - Schedule of consolidated statement of operations (unaudited) |
3 Months Ended |
|---|---|
|
Jun. 30, 2022
USD ($)
$ / shares
shares
| |
| Historical Organic Agricultural [Member] | |
| Condensed Income Statements, Captions [Line Items] | |
| Revenue | $ 38,984 |
| Cost of sales | 31,272 |
| Gross profit | 7,712 |
| Selling, general and administrative expenses | 225,870 |
| Operating (loss) | (218,158) |
| Other income | 1,017 |
| (Loss) before provision for income taxes | (217,141) |
| Provision for income taxes | |
| Net loss | (217,141) |
| Less: Net income attributable to non-controlling interests | |
| Net (loss) attributable to common shareholders | $ (217,141) |
| Basic (loss) per share (in Dollars per share) | $ / shares | $ 0 |
| Weighted average number of shares outstanding- basic (in Shares) | shares | 83,536,974 |
| Tianci Wanguan Discontinued Operations [Member] | |
| Condensed Income Statements, Captions [Line Items] | |
| Revenue | |
| Cost of sales | |
| Gross profit | |
| Selling, general and administrative expenses | (1) |
| Operating (loss) | 1 |
| Other income | |
| (Loss) before provision for income taxes | 1 |
| Provision for income taxes | |
| Net loss | 1 |
| Less: Net income attributable to non-controlling interests | |
| Net (loss) attributable to common shareholders | $ 1 |
| Basic (loss) per share (in Dollars per share) | $ / shares | |
| Weighted average number of shares outstanding- basic (in Shares) | shares | |
| Pro Forma Adjustments [Member] | |
| Condensed Income Statements, Captions [Line Items] | |
| Revenue | |
| Cost of sales | |
| Gross profit | |
| Selling, general and administrative expenses | |
| Operating (loss) | |
| Other income | |
| (Loss) before provision for income taxes | |
| Provision for income taxes | |
| Net loss | |
| Less: Net income attributable to non-controlling interests | |
| Net (loss) attributable to common shareholders | |
| Basic (loss) per share (in Dollars per share) | $ / shares | |
| Weighted average number of shares outstanding- basic (in Shares) | shares | |
| Pro Forma Organic Agricultural Continuing Operations [Member] | |
| Condensed Income Statements, Captions [Line Items] | |
| Revenue | $ 38,984 |
| Cost of sales | 31,272 |
| Gross profit | 7,712 |
| Selling, general and administrative expenses | 225,869 |
| Operating (loss) | (218,157) |
| Other income | 1,017 |
| (Loss) before provision for income taxes | (217,140) |
| Provision for income taxes | |
| Net loss | (217,140) |
| Less: Net income attributable to non-controlling interests | |
| Net (loss) attributable to common shareholders | $ (217,140) |
| Basic (loss) per share (in Dollars per share) | $ / shares | $ 0 |
| Weighted average number of shares outstanding- basic (in Shares) | shares | 83,536,974 |
Subsequent Events (Details) - Schedule of consolidated statement of operations (unaudited) (Parentheticals) |
3 Months Ended |
|---|---|
|
Jun. 30, 2022
$ / shares
shares
| |
| Historical Organic Agricultural [Member] | |
| Condensed Income Statements, Captions [Line Items] | |
| Diluted (loss) per share | $ / shares | $ 0.00 |
| Weighted average number of shares outstanding diluted | shares | 83,536,974 |
| Tianci Wanguan Discontinued Operations [Member] | |
| Condensed Income Statements, Captions [Line Items] | |
| Diluted (loss) per share | $ / shares | |
| Weighted average number of shares outstanding diluted | shares | |
| Pro Forma Adjustments [Member] | |
| Condensed Income Statements, Captions [Line Items] | |
| Diluted (loss) per share | $ / shares | |
| Weighted average number of shares outstanding diluted | shares | |
| Pro Forma Organic Agricultural Continuing Operations [Member] | |
| Condensed Income Statements, Captions [Line Items] | |
| Diluted (loss) per share | $ / shares | $ 0.00 |
| Weighted average number of shares outstanding diluted | shares | 83,536,974 |
Subsequent Events (Details) - Schedule of consolidated balance sheet (unaudited) |
Jun. 30, 2022
USD ($)
|
|---|---|
| Historical Organic Agricultural [Member] | |
| Assets | |
| Cash and cash equivalents | $ 308,012 |
| Accounts receivable | 3,359 |
| Prepaid expenses | 87,804 |
| Inventories | 173,870 |
| Other receivables | 26,519 |
| Total current assets | 599,564 |
| Total assets | 599,564 |
| Liabilities and shareholders’ equity | |
| Accounts payable and accrued expenses | 48,600 |
| Customer deposits | 299,089 |
| Due to related parties | 2,711 |
| Other payables | 51,597 |
| Total current liabilities | 401,997 |
| Total liabilities | 401,997 |
| Shareholders’ equity | |
| Preferred stock | |
| Common Stock | 83,537 |
| Additional Paid-in Capital | 4,266,611 |
| (Deficit) | (4,020,861) |
| Other comprehensive (loss) | (66,043) |
| Total shareholders’ equity of the Company | 263,244 |
| Non-controlling interest | (65,677) |
| Total shareholders’ equity | 197,567 |
| Total liabilities and shareholders’ equity | 599,564 |
| Tianci Wanguan Discontinued Operations [Member] | |
| Assets | |
| Cash and cash equivalents | (290) |
| Accounts receivable | |
| Prepaid expenses | (59,722) |
| Inventories | |
| Other receivables | |
| Total current assets | (60,012) |
| Total assets | (60,012) |
| Liabilities and shareholders’ equity | |
| Accounts payable and accrued expenses | |
| Customer deposits | (143,332) |
| Due to related parties | |
| Other payables | (50,716) |
| Total current liabilities | (194,048) |
| Total liabilities | (194,048) |
| Shareholders’ equity | |
| Preferred stock | |
| Common Stock | |
| Additional Paid-in Capital | |
| (Deficit) | 71,336 |
| Other comprehensive (loss) | (2,977) |
| Total shareholders’ equity of the Company | 68,359 |
| Non-controlling interest | 65,677 |
| Total shareholders’ equity | 134,036 |
| Total liabilities and shareholders’ equity | (60,012) |
| Pro Forma Adjustments [Member] | |
| Assets | |
| Cash and cash equivalents | |
| Accounts receivable | |
| Prepaid expenses | |
| Inventories | |
| Other receivables | |
| Total current assets | |
| Total assets | |
| Liabilities and shareholders’ equity | |
| Accounts payable and accrued expenses | |
| Customer deposits | |
| Due to related parties | |
| Other payables | |
| Total current liabilities | |
| Total liabilities | |
| Shareholders’ equity | |
| Preferred stock | |
| Common Stock | |
| Additional Paid-in Capital | |
| (Deficit) | |
| Other comprehensive (loss) | |
| Total shareholders’ equity of the Company | |
| Non-controlling interest | |
| Total shareholders’ equity | |
| Total liabilities and shareholders’ equity | |
| Pro Forma Organic Agricultural Continuing Operations [Member] | |
| Assets | |
| Cash and cash equivalents | 307,722 |
| Accounts receivable | 3,359 |
| Prepaid expenses | 28,082 |
| Inventories | 173,870 |
| Other receivables | 26,519 |
| Total current assets | 539,552 |
| Total assets | 539,552 |
| Liabilities and shareholders’ equity | |
| Accounts payable and accrued expenses | 48,600 |
| Customer deposits | 155,757 |
| Due to related parties | 2,711 |
| Other payables | 881 |
| Total current liabilities | 207,949 |
| Total liabilities | 207,949 |
| Shareholders’ equity | |
| Preferred stock | |
| Common Stock | 83,537 |
| Additional Paid-in Capital | 4,266,611 |
| (Deficit) | (3,949,525) |
| Other comprehensive (loss) | (69,020) |
| Total shareholders’ equity of the Company | 331,603 |
| Non-controlling interest | |
| Total shareholders’ equity | 331,603 |
| Total liabilities and shareholders’ equity | $ 539,552 |
Subsequent Events (Details) - Schedule of consolidated statement of cash flows (unaudited) |
3 Months Ended |
|---|---|
|
Jun. 30, 2022
USD ($)
| |
| Historical Organic Agricultural [Member] | |
| Condensed Cash Flow Statements, Captions [Line Items] | |
| Net cash (used in) provided by operating activities | $ (215,745) |
| Effect of exchange rate fluctuations on cash and cash equivalents | 115,294 |
| Net (decrease) increase in cash and cash equivalents | (100,451) |
| Cash and cash equivalents, beginning of year | 408,463 |
| Cash and cash equivalents, end of year | 308,012 |
| Tianci Wanguan Discontinued Operations [Member] | |
| Condensed Cash Flow Statements, Captions [Line Items] | |
| Net cash (used in) provided by operating activities | 13,218 |
| Effect of exchange rate fluctuations on cash and cash equivalents | (7,494) |
| Net (decrease) increase in cash and cash equivalents | 5,724 |
| Cash and cash equivalents, beginning of year | (6,014) |
| Cash and cash equivalents, end of year | (290) |
| Pro Forma Adjustments [Member] | |
| Condensed Cash Flow Statements, Captions [Line Items] | |
| Net cash (used in) provided by operating activities | |
| Effect of exchange rate fluctuations on cash and cash equivalents | |
| Net (decrease) increase in cash and cash equivalents | |
| Cash and cash equivalents, beginning of year | |
| Cash and cash equivalents, end of year | |
| Pro Forma Organic Agricultural Continuing Operations [Member] | |
| Condensed Cash Flow Statements, Captions [Line Items] | |
| Net cash (used in) provided by operating activities | (202,527) |
| Effect of exchange rate fluctuations on cash and cash equivalents | 107,800 |
| Net (decrease) increase in cash and cash equivalents | (94,727) |
| Cash and cash equivalents, beginning of year | 402,449 |
| Cash and cash equivalents, end of year | $ 307,722 |
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