This Quarterly Report on Form 10-Q (the "Form 10-Q") contains "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act. Forward-looking statements can be identified by the use of forward-looking terminology, such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative thereof or other variations thereon, or by discussions of strategy that involve risks and uncertainties These statements reflect management's current beliefs and are based on information now available to it. Accordingly, these statements are subject to certain risks, uncertainties and contingencies that could cause the Company's actual results, performance or achievements in 2018 and beyond to differ materially from those expressed in, or implied by, such statements. Such statements, include, but are not limited to, statements contained in this Form 10-Q relating to the Company's business, financial performance, business strategy, recently announced transactions and capital outlook. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: a continued decline in general economic conditions nationally and internationally; decreased demand for our products and services; market acceptance of our products; the impact of any litigation or infringement actions brought against us; competition from other providers and products; the inability to raise capital to fund continuing operations; changes in government regulation; the ability to complete customer transactions, and other factors relating to our industry, our operations and results of operations and any businesses that may be acquired by us. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned. Readers of this Form 10-Q should not place undue reliance on any forward-looking statements. Except as required by federal securities laws, the Company undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties.

You should read the following discussion and analysis of the financial condition and results of operations of the Company together with the financial statements and the related notes presented in Item 1 of this Form 10-Q.

1. Consolidated revenues are generated from business activities as follows:

1.1. The Organic fertilizer of HSA

From 1st October 2019, HSA leased its fertilizer operation to Mr. Lee Ping (the head of the existing management team) as such HSA's revenues are derived from leasing contracts thereon.

So from 1st October 2020, there is no more sales revenue generated from HSA but leasing and contracting revenue of $2,653,964 representing 51% of the group's revenue of $5,242,971 and gross profit of $2,653,964 compares to the group's total gross profit of -4,021,315 for nine months ended 31.12.2021: whereas revenue for the nine months ended September 30, 2020 was USD 2.73 million or 55.18 percent of the Company's total sales of goods revenue of USD 4.9 million in the same period. Gross profit for same division for the nine months ended September 30, 2020 was USD2.7million or 72% of the Company's total gross profit in sales of goods of USD 3.78 million in the same period.

1.2 Cattle farms (MEIJI) & (JHMC)

From 1st October 2019, MEIJI leased its Cattle farms' operation to Mr. Fan Xin September (the head of the existing management team) as such MEIJI's revenues are derived from leasing contracts thereon.

So from 1st October 2020, there is no more sales revenue generated from MEIJI but leasing and contracting revenue of $1,280,674 representing 24% of the group total revenue of 5,242,971 and gross profit of $909,434 compares to the group's total gross profit of -4,021,315 for nine months ended September 30,2021: whereas revenue for the nine months ended September 30,2020 was $0.97 million, or 19.69%, of the Company's total sales of goods revenue of USD 4.95million in the same period. Gross profit for the Cattle Farm (MEIJI) division for the nine months ended September 30, 2020 was $0.76 million, or 19.98% percent of the Company's total gross profit on sales of goods of $3.78 million in the same period.





 1.3 Plantation of (JHST)

From 1st October 2019, JHST leased its Cattle farms' operation to Mr. Fan Xin September (the head of the existing management team) as such MEIJI's revenues are derived from leasing contracts thereon.

So from 1st October 2020, there is no more sales revenue generated from JHST but leasing and contracting revenue of $1,308,333 representing 28% of the group total revenue of 5,242,971 and gross profit of $457,917 compares to the group's total gross profit of - of -4,021,315 for nine months ended September 30,2021: whereas revenue for the nine months ended September 30,2020 was $1.24 million, or 25.13%, of t the Company's total sales of goods revenue of USD 4.95million in the same period. Gross profit for the plantation division for t the nine months ended September 30, 2020 was $0.30 million, or 7.88% percent of the Company's total gross profit on sales of goods of $3.78 million in the same period.





                                       1

1.4 Marketing & Trading operation of The Corporate Sector

$0 and 0for nine ended September 30, 2021, and 2020.

1.5 Project Development of (CA)

The project developments (or Technology engineering consulting and services) works are carried out by CA on aquaculture related projects and by SIAF and MEIJI on non-aquaculture and agriculture projects:

$0 and 0for nine ended September 30, 2021, and 2020.

Back Ground and history

A summary of each business division and operations is described below:





Businesses Division:

? Fishery Division refers to the operations of Capital Award Inc. ("Capital

Award" or "CA") covering its engineering, technology and consulting service

management of fishery farms, technology transfers and seafood sales and


  marketing, where;

Capital Award generates revenues from providing engineering consulting services as turnkey contractors to owners and developers of fishery projects that are being designed and engineered into turnkey contracts by Capital Award in China using its A Power Module Technology Systems ("APM") as follows:

(A). Engineering and Technology Services; via Consulting and Service Contracts ("CSC's") for the development, construction, and supply of plant and equipment, and management of fishery (and prawn or shrimp) farms and related business operations. From January 2020 up to the date of this annual report CA has not been able to do any fishery project or fishery project development due to the effects of the Pandemic COVID-19 as such, there was no revenue generated from January 2020 to September 30th2021.

(B). Seafood Sales from CA's projected farms; became a discontinued segment of operations from October 5, 2016 when Tri-way was disposed to other third parties in term Tri-way was reclassified as an unconsolidated equity investee on same date.





?   Corporate & Others Division refers to the trading segment of business
    operations of the Group named internally under corporate division of Sino
    Agro Food, Inc., including import/export business and consulting and service
    operations provided to projects that are not included in the above
    categories, and not limited to corporate affairs. Over the years up until end
    of fiscal year 2019 the corporate division imported mainly live seafood from
    South Africa countries, Vietnam, Thailand, Russian and other nearby countries
    and frozen beef from Australia and South America countries; however it is due
    to the interruptions and adverse impacts caused by the Pandemic COVID-19 made
    it impossible and unprofitable to continue the imports of live seafood, and
    the poor political relationship between China and Australia in 2020 induced
    high risks on the imports of Australian beef. The Corporate's trading
    division based on standalone figures ended up with a loss of over $1.6
    million and $ 0 as at 31.12 2020 and 30.09.2021 respectively.

Leasing and subcontracting of operations:

Over the years, there has been significant capital expenditures (CPE) and working capital (WC) required for and employed on the developments, expansion and operations of the minor operational activities that we managed to fund while our two core businesses (in the Cattle and beef of SJAP and the Fishery of CA) were generating sufficient cash flows and incomes, however after the collapse of the SJAP's business from 2016 and the poor performances of the Mega farms from 2017 ("Crises") for reasons mentioned in the earlier

chapters and the previous Ks and Qs reports, the Company is no longer in the position to support and to finance the growth of these minor operational businesses in the way as they were before the Crises, therefore in order that capital spending could be kept within an affordable level, the Company decided to lease and sub-contract the following operations to their respective operational managements from 1st October 2019 as such there are no sales revenue and income derived from these operations but leasing and sub-contracting revenues and incomes thereon.





?   The operation of Hunan Shenghua A Power Agriculture Co. Ltd. ("HSA") is in
    manufacturing and sales of organic fertilizer. From 1st October 2019 the
    Company contracted out its manufacturing and sales of organic fertilizer to
    its operational management; as such income of HSA is derived mainly from said
    management contract.




?   Plantation Division refers to the operations of Jiangmen City Heng Sheng Tai
    Agriculture Development Co. Ltd. ("JHST") in the HU Plantation business where
    dragon fruit flowers (dried and fresh), crops of vegetables and immortal
    vegetables (dried) are sold to wholesale and retail markets. JHST's financial
    statements are consolidated into the financial statements of Macau EIJI
    Company Ltd. ("MEIJI") as one entity. From 1st October 2019 the Company
    contracted out its plantation operation to its operational management; as
    such income of JHST is derived mainly from said management contract.




                                       2





?   Cattle Farm Division refers to the operations of Cattle Farm 1 under Jiangmen
    City Hang Mei Cattle Farm Development Co. Ltd ("JHMC") where cattle are sold
    live to third party livestock wholesalers who sell them mainly to Guangzhou
    and Beijing livestock wholesale markets. The financial statements of JHMC are
    consolidated into MEIJI as one entity along with MEIJI's operation in the
    consulting and service for development of other cattle farms (e.g., Cattle
    Farm 2) or related projects. From 1st October 2019 the Company contracted out
    its cattle operation to its operational management; as such incomes of JHMC
    are derived mainly from said management contract.

Investments in equity investees:

SJAP: Up until 1st October 2019, cattle and beef divisional operation of our partially owned subsidiary Qinghai Sanjiang A Power Agriculture Co., Ltd. ("SJAP") in manufacturing and sales of organic fertilizer, bulk livestock feed, concentrated livestock feed, and the sales of live cattle inclusive of: (a) cattle that are not being slaughtered in our own slaughter house operated by Qinghai Zhong He Meat Products Co., Limited ("QZH") are sold live to third party livestock wholesalers, and (b) cattle that are sold to QZH and slaughtered and deboned and packed by QZH; and the sales of meats deboned and packed by QZH that are sold to various meat distributors, wholesalers and super market chains and our own retail butcher stores. QZH is a fully owned subsidiary of SJAP; as such, the financial statements of these three companies (SJAP, QZH and HSA) are consolidated into our wholly owned subsidiary, A Power Agro Agriculture Development (Macau) Limited ("APWAM"), as one entity. SJAP and QZH are both variable interest entities over which we exercise significant control. As of December 30, 2017, QZH was derecognized as variable interest entity and its operating profit and/or loss no longer accretive to the Company's 41.25% holding in SJAP, a variable interest entity. On September 30th 2019, Mr. Solomon Lee resigned as the Chairman of SJAP resulting in categorization of SJAP as an Investor in Associate from a subsidiary status, and SJAP contracted out its business operations to its existing operational management, as such it is not a variable interest entity and SJAP was reclassified as an unconsolidated equity investee and SJAP's cattle and beef operation is discontinued on same date.

TWL: Up until 5th October 2016, our divisional fishery production and sales operation was with our fully owned subsidiary Tri-way Industries Limited (TWL or Tri-way, a private company incorporated in Hong Kong ) and our 75% owned subsidiary Jiangman Fishery Development Co. Ltd. (JFD, a limited liability company incorporated in China) operating one indoor APM farm in Enping District, Enping City. On 5th October 2016 we carve out Tri-way that became an unconsolidated investee of the Company resulted with the Company owning 36.6% equity interest in Tri-way derived from (i) 23.89% as a result of retained interest in Tri-way, and (ii) 12.71% acquired in exchange for outstanding debt owed to the Company at the time.

Somehow, the extremely poor operational performances of its Mega Farm (AFF 4 & 5) and its incomes in 2017 to 2019 were generated mainly from the operations of AFF 1, 2 , 3a & 3b and other sub-contracted farms. Coupling the said poor performances of the Mega farm, impacts of the COVID-19 Pandemic of 2020 caused a complete write-off for AFF 1, 2,and 3 as well as to Tri-way's sub-contracted farms incurring losses over $77 million for the fiscal year of 2020 causing all farms to stop work for over 7 months without sufficient workers, feed, supplementary, medications, transportation and maintenances etc. to keep the live stocks going and they all died during the period calculating to multiple million pieces (equivalent to multiple of thousand metric tons). Tri-way is in a very poor financial situation as such it is not practically possible for Tri-way to revitalize and to rebuild its operations in a hurry but to reduce its operations and to concentrate its efforts on rebuilding of brood stocks, the production of fingerling and nursery stocks and repairing the damages etc. It is anticipating that under current conditions, Tri-way will take a long period to recovery.





                                       3

© Edgar Online, source Glimpses