6-K

SECURITIES ANDEXCHANGE COMMISSION

Washington, D.C.20549

FORM 6-K

Report of ForeignPrivate Issuer

Pursuant to Rule 13a-16or 15d-16 of

the SecuritiesExchange Act of 1934

For the six monthsended March 31, 2021

Commission FileNumber: 001-38397

Farmmi, Inc.

(Registrant’s name)

Fl 1, BuildingNo. 1, 888 Tianning Street, Liandu District

Lishui, ZhejiangProvince

People’sRepublic of China 323000

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.:

Form 20-F x	Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K on paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K on paper as permitted by Regulation S-T Rule 101(b)(7): ¨

Incorporation By Reference

This report on Form 6-K is hereby incorporated by reference into the Company’s registration statements on Form S-8 (file No. 333-224463), Form F-1 (file No. 333-228677), Form F-3 (file No. 333-254036), Form F-3 (file No. 333-254397), Form F-1 (file No. 333-255387) and Form F-1MEF (file No. 333-255590).

ExplanatoryNote:

The Registrant is filing this Report on Form 6-K to report its financial results for the six months ended March 31, 2021 and to discuss its recent corporate developments.

Attached as exhibits to this Report on Form 6-K are:

(1)	the<br> unaudited condensed interim consolidated financial statements and related notes as Exhibit 99.1;
(2)	Management’s<br> Discussion and Analysis of Financial Condition and Results of Operations as Exhibit 99.2;
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(3)	the<br> press release dated August 2, 2021;
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(4)	Interactive<br> Data File disclosure as Exhibit 101 in accordance with Rule 405 of Regulation S-T.
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SPECIAL NOTEREGARDING FORWARD-LOOKING STATEMENTS

Statements in this current report with respect to the Company’s current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of the Company. Forward-looking statements include, but are not limited to, those statements using words such as “believe,” “expect,” “plans,” “strategy,” “prospects,” “forecast,” “estimate,” “project,” “anticipate,” “aim,” “intend,” “seek,” “may,” “might,” “could” or “should,” and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management’s assumptions, judgments and beliefs in light of the information currently available to it. The Company cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, including but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the company with the Securities and Exchange Commission. Therefore, investors should not place undue reliance on such forward-looking statements. Actual results may differ significantly from those set forth in the forward-looking statements.

All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

Exhibit Index:

99.1	Unaudited<br> Consolidated Financial Statements and Related Notes for the Six Months Ended March 31, 2021 and 2020
99.2	Management’s<br> Discussion and Analysis of Financial Condition and Results of Operations
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99.3	Press<br> release dated August 2, 2021
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101.INS	XBRL<br> Instance Document.
---	---
101.SCH	XBRL<br> Taxonomy Extension Schema Document.
101.CAL	XBRL<br> Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL<br> Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL<br> Taxonomy Extension Labels Linkbase Document.
101.PRE	XBRL<br> Taxonomy Extension Presentation Linkbase Document.

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.

	FARMMI, INC.
Date: August 2,<br> 2021	By:	/s/<br> Yefang Zhang
	Name:	Yefang Zhang
	Title:	Chief Executive Officer

Exhibit 99.1

FARMMI, INC.

UNAUDITED CONDENSED CONSOLIDATEDFINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED MARCH 31,2021 AND 2020

FARMMI, INC.
TABLE OF CONTENTS
	Page
Unaudited Condensed Consolidated Financial Statements
Unaudited Condensed Consolidated Balance Sheets as of March 31, 2021 and September 30, 2020		F-3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income for the six months ended March 31, 2021 and 2020		F-4
Unaudited Condensed Consolidated Statements of Changes in Equity for the six months ended March 31, 2021 and 2020		F-5
Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended March 31, 2021 and 2020		F-6
Notes to Unaudited Condensed Consolidated Financial Statements		F-7<br> - F-30

Farmmi, Inc.

Condensed Consolidated Balance Sheets

		September 30,
		2020
Assets
Current Assets
Cash	14,365,889	$	548,151
Restricted cash	1,678,928		1,617,000
Short-term deposit	2,747,337		-
Accounts receivable, net	13,802,588		10,758,119
Advances to suppliers, net	13,071,571		23,371,852
Inventories, net	845,002		583,639
Other current assets	129,577		143,410
Total current assets	46,640,892		37,022,171
Property, plant and equipment, net	265,247		265,895
Intangible assets, net	61,834		80,642
Operating lease right-of-use assets, net	737,222		823,038
Total Assets	47,705,195	$	38,191,746
Liabilities and Equity
Current Liabilities
Short-term bank loans	1,968,925	$	2,058,000
Bank acceptance notes payable	3,357,856		3,234,000
Accounts payable	261,611		413,255
Due to related parties	2,019,088		1,716,270
Operating lease liabilities – current	145,647		138,850
Other current liabilities	156,209		807,012
Total current liabilities	7,909,336		8,367,387
Operating lease liabilities – non-current	577,018		669,202
Total Liabilities	8,486,354		9,036,589
Equity
Common stock, 0.001 par value, 200,000,000 shares authorized, 27,583,770 shares issued and outstanding at March 31, 2021; and 20,000,000 shares authorized, 20,517,703 shares issued and outstanding at September 30, 2020	27,584		20,518
Additional paid-in capital	27,842,612		20,335,228
Statutory reserve	975,309		972,092
Retained earnings	8,129,825		6,770,426
Accumulated other comprehensive income (loss)	1,340,887		186,912
Total Farmmi, Inc.’s Stockholders' Equity	38,316,217		28,285,176
Noncontrolling Interest	902,624		869,981
Total Equity	39,218,841		29,155,157
Total Liabilities and Equity	47,705,195	$	38,191,746

All values are in US Dollars.

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

F-3

Farmmi, Inc.

Condensed Consolidated Statements of Operationsand Comprehensive Income

(Unaudited)

	For the Six Months Ended<br> <br>March 31,
	2021			2020
Revenues
Sales to third parties		17,786,110		$	13,574,767
Sales to related parties		1,618			6,015
Total revenues		17,787,728			13,580,782
Cost of revenues		(14,799,813	)		(11,470,717	)
Gross Profit		2,987,915			2,110,065
Operating expenses
Allowance for doubtful debts		331,467			-
Selling and distribution expenses		(192,065	)		(142,382	)
General and administrative expenses		(1,684,863	)		(828,414	)
Total operating expenses		(1,545,461	)		(970,796	)
Income from operations		1,442,454			1,139,269
Other income (expenses)
Interest income		285			141
Interest expense		(61,866	)		(1,290,039	)
Other (expenses) income, net		(1,722	)		110,966
Total other expenses, net		(63,303	)		(1,178,932	)
Income (loss) before income taxes		1,379,151			(39,663	)
Provision for income taxes		(17,212	)		(24,144	)
Net income (loss)		1,361,939			(63,807	)
Net<br> loss attributable to non-controlling interest		677			6,755
Net income (loss) attributable to Farmmi, Inc.	$	1,362,616		$	(57,052	)
Comprehensive income
Net income (loss)		1,361,939			(63,807	)
Other comprehensive income: foreign currency translation gain		1,187,295			204,790
Total comprehensive income		2,549,234			140,983
Comprehensive (income) loss attributable to non-controlling interest		(32,643	)		631
Comprehensive income attributable to Farmmi, Inc.	$	2,516,591		$	141,614
Weighted average number of shares, basic		20,855,641			13,783,362
Weighted average number of shares, diluted		20,855,641			18,404,780
Basic earnings (loss) per common share	$	0.07		$	(0.00	)
Diluted earnings (loss) per common share	$	0.07		$	(0.00	)

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

F-4

Farmmi, Inc.

Condensed Consolidated Statements of Changes in Equity

For the Six Months Ended March 31, 2021 and 2020

(Unaudited)

												Accumulated
					Additional							Other			Total
	Common Stock				Paid-in		Statutory		Retained			Comprehensive			Stockholders'			Non-Controlling			Total
	Shares		Amount		Capital		Reserve		Earnings			Income<br> (loss)			Equity			Interest			Equity
Balance at September 30, 2019		12,589,857	$	12,590	$	15,762,867	$	597,528	$	6,321,384		$	(1,195,866	)	$	21,498,503		$	839,048		$	22,337,551
Issuance of common shares for convertible notes redemption		3,306,428		3,306		2,269,319		-		-			-			2,272,625			-			2,272,625
Foreign currency translation gain		-		-		-		-		-			198,666			198,666			6,124			204,790
Net loss		-		-		-		-		(57,052	)		-			(57,052	)		(6,755	)		(63,807	)
Balance at March 31, 2020		15,896,285	$	15,896	$	18,032,186	$	597,528	$	6,264,332		$	(997,200	)	$	23,912,742		$	838,417		$	24,751,159
Balance at September 30, 2020		20,517,703	$	20,518	$	20,335,228	$	972,092	$	6,770,426		$	186,912		$	28,285,176		$	869,981		$	29,155,157
Share-based compensation		596,600		597		804,813		-		-			-			805,410			-			805,410
Issuance of common shares, net		6,469,467		6,469		6,702,571		-		-			-			6,709,040			-			6,709,040
Foreign currency translation gain		-		-		-		-		-			1,153,975			1,153,975			33,320			1,187,295
Net income		-		-		-		-		1,362,616			-			1,362,616			(677	)		1,361,939
Statutory reserve		-		-		-		3,217		(3,217	)		-			-			-			-
Balance at March 31, 2021		27,583,770	$	27,584	$	27,842,612	$	975,309	$	8,129,825		$	1,340,887		$	38,316,217		$	902,624		$	39,218,841

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

F-5

Farmmi, Inc.

Condensed ConsolidatedStatements of Cash Flows

(Unaudited)

	For the Six Months Ended<br> <br>March 31,
	2021			2020
Cash flows from operating<br> activities
Net income (loss)	$	1,361,939		$	(63,807	)
Adjustments to reconcile net<br> loss to net cash provided by (used in) operating activities:
Changes in allowances –<br> accounts receivable		244,335			-
Changes in allowances –<br> advances to suppliers		(575,802	)		-
Changes in allowances - inventories		(19,180	)		225,408
Depreciation and amortization		48,879			15,790
Share-based compensation		805,410			-
Non-cash lease expenses		-			14,255
Accrued interest expense for<br> convertible notes		-			132,511
Amortization of deferred financing<br> costs		-			1,093,440
Changes in operating assets<br> and liabilities:
Accounts<br> receivable, net		(2,873,919	)		4,944,245
Advances<br> to suppliers, net		11,789,665			2,428,891
Inventory,<br> net		(220,226	)		542,280
Due from<br> related parties		-			(3,675,034	)
Other<br> current assets		12,141			40,705
Accounts<br> payable		(167,748	)		150,615
Advances<br> from customers		622			45,777
Operating<br> lease liabilities		1,005			157
Other<br> current liabilities		(681,862	)		(208,414	)
Net<br> cash provided by operating activities		9,725,259			5,686,467
Cash flows from investing<br> activities
Purchase<br> of property, plant and equipment		(14,745	)		(164,588	)
Purchase<br> of intangible assets		(1,353	)		(82,138	)
Short-term<br> deposits		(2,751,873	)
Net<br> cash used in investing activities		(2,767,971	)		(246,726	)
Cash flows from financing<br> activities
Net proceeds<br> from stock issuance		6,709,040			-
Borrowings<br> from bank loans		-			1,853,800
Repayments<br> of bank loans		(168,170	)		(1,426,000	)
Repayments<br> of loans from related parties		302,793			(881,557	)
Net<br> cash provided by (used in) financing activities		6,843,663			(453,757	)
Effect<br> of exchange rate changes on cash and restricted cash		78,715			(39,666	)
Net increase in cash and<br> restricted cash		13,800,951			4,946,318
Cash<br> and restricted cash, beginning of period		2,165,151			753,815
Cash<br> and restricted cash, end of period	$	16,044,817		$	5,700,133
Supplemental disclosure<br> information:
Income<br> taxes paid	$	327		$	22,998
Interest<br> paid	$	46,922		$	42,596
Non-cash financing activities
Right<br> of use assets obtained in exchange for operating lease obligations	$	836,994		$	317,540
Conversion<br> of notes to 3,306,428 and 131,223 shares of common stock	$	-		$	2,272,625
Accrued<br> interest for convertible notes	$	-		$	132,511

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

F-6

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Organizationand nature of business

Farmmi, Inc. (“FMI”) is a holding company incorporated under the laws of the Cayman Islands on July 28, 2015. FMI’s Chief Executive Officer (“CEO”) Ms. Yefang Zhang, as the sole shareholder of FarmNet Limited which is the sole shareholder of FMI, and her husband Mr. Zhengyu Wang, a director of FMI, are the ultimate shareholders of the Company (“Controlling Shareholders”). FMI owns 100% equity interest of Farmmi International Limited (“Farmmi International”), a Hong Kong company, who in turn owns 100% equity interest of Hangzhou Suyuan Agriculture Technology Co., Ltd. (“Suyuan Agriculture”), a company incorporated in the People’s Republic of China (“PRC” or “China”), through Farmmi (Hangzhou) Enterprise Management Co., Ltd. (“Farmmi Enterprise”) and Lishui Farmmi Technology Co., Ltd. (“Farmmi Technology”), two wholly foreign-owned entities (“WFOE”) formed by Farmmi International under the laws of China. Farmmi Enterprise and Farmmi Technology each owns 50% of Suyuan Agriculture. Suyuan Agriculture owns 96.15% equity interest of Zhejiang Forest Food Co., Ltd. (“Forest Food”) and 100% equity interest of Zhejiang FLS Mushroom Co., Ltd. (“FLS Mushroom”). Except for Forest Food and FLS Mushroom who are the main operating entities located in China, all other entities are holding companies without any material activities.

On September 18, 2016, Suyuan Agriculture entered into a series of contractual agreements with Zhengyu Wang, the owner of Hangzhou Nongyuan Network Technology Co., Ltd. (“Nongyuan Network”) and Nongyuan Network. Nongyuan Network is a company incorporated on December 8, 2015 that focuses on the development of network marketing and provides a network platform for sales of agriculture products. These agreements include an Exclusive Management Consulting and Technology Agreement, an Equity Pledge Agreement, an Exclusive Call Option Agreement, a Proxy Agreement and a Power of Attorney (collectively, the “Original VIE Agreements”). The Original VIE Agreements obligated Suyuan Agriculture to absorb a majority of the risk of loss from Nongyuan Network’s activities and entitled Suyuan Agriculture to receive a majority of their residual returns. In essence, Suyuan Agriculture and the Company had gained effective control over Nongyuan Network.

On December 4, 2019, Zhengyu Wang transferred his 100% shares of Nongyuan Network to his daughter Xinyang Wang. As a result, Xinyang Wang holds 100% shares of Nongyuan Network. On December 10, 2019, Xinyang Wang, as the new shareholder of Nongyuan Network, signed a series of VIE agreements (the “Xinyang Wang VIE Agreements”) with Nongyuan Network and Suyuan Agriculture. On May 15, 2020, the following agreements were signed with the effective date of December 10, 2019:

(1)	Zhengyu<br> Wang, Nongyuan Network and Suyuan Agriculture signed a termination agreement to confirm that<br> the Original VIE Agreements have been terminated because Zhengyu Wang is no longer the shareholder<br> of Nongyuan Network;
(2)	Zhengyu<br> Wang, Dehong Zhang (the legal representative of Nongyuan Network), Xinyang Wang, Nongyuan<br> Network and Suyuan Agriculture signed a joint statement to confirm that the board of directors<br> of the Company has the ultimate authority over the matters of the VIE entity Nongyuan Network.
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FMI believes that Xinyang Wang VIE Agreements enable Suyuan Agriculture and FMI to keep the effective control over Nongyuan Network. Therefore, FMI believes that Nongyuan Network should be considered as Variable Interest Entity (“VIE”) under the Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 Consolidation. Accordingly, the accounts of this entity are consolidated with those of Suyuan Agriculture.

Since FMI and its subsidiaries are effectively controlled by the same Controlling Shareholders, they are considered under common control. The consolidation of FMI and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.

On December 26, 2017, Zhejiang Farmmi Food Co., Ltd. (“Farmmi Food”) was established under the laws of the PRC. Initially Farmmi Food was wholly owned by Farmmi Technology. In January 2018, the share ownership was transferred to Suyuan Agriculture. In May 2018, Farmmi Food received its food production permit and began operation.

On March 22, 2019, Lishui Farmmi E-Commerce Co., Ltd. (“Farmmi E-Commerce”) was established under the laws of the PRC. Nongyuan Network and Suyuan Agriculture owns 98% and 2% of interests in Farmmi E-Commerce, respectively.

On April 7, 2021, Zhejiang Farmmi Biotechnology Co., Ltd. (“Farmmi Biotech”) was established under the laws of the PRC. Suyuan Agriculture owns 100% interest in Farmmi Biotech.

On April 25, 2021, Zhejiang Farmmi (Hangzhou) Ecology Agriculture Development Co., Ltd. (“Farmmi Ecology”) was established under the laws of the PRC. Farmmi International owns 100% interest in Farmmi Ecology.

On May 11, 2021, Zhejiang Farmmi Agricultural Supply Chain Co., Ltd. (“Farmmi Supply Chain”) was established under the laws of the PRC. Farmmi Ecology owns 100% interest in Farmmi Supply Chain.

F-7

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Organizationand nature of business (continued)

Details of the subsidiaries of FMI are set out below:

	Date of	Place of	% of
Name of Entity	Incorporation	Incorporation	Ownership	Principal Activities
FMI	July 28, 2015	Cayman	Parent	Holding Company
Farmmi International	August 20, 2015	Hong Kong	100	Holding Company
Farmmi Enterprise	May 23, 2016	Zhejiang, China	100	Holding Company
Farmmi Technology	June 6, 2016	Zhejiang, China	100	Holding Company
Suyuan Agriculture	December 8, 2015	Zhejiang, China	100	Holding Company
Forest Food	May 8, 2003	Zhejiang, China	96.15	Dehydrating, further processing and<br> distribution of edible fungus
FLS Mushroom	March 25, 2011	Zhejiang, China	100	Light processing and distribution of
				dried mushrooms
Farmmi Food	December 26, 2017	Zhejiang, China	100	Dehydrating, further processing and
				distribution of edible fungus
Nongyuan Network	July 7, 2016	Zhejiang, China	0 (VIE)	Trading
Farmmi E-Commerce	March 22, 2019	Zhejiang, China	Subsidiary of the VIE	Technology development, technical services and technical consultation related to agricultural products
Farmmi Biotech	April 7, 2021	Zhejiang, China	100	Research and development of mushroom powder and mushroom extract
Farmmi Ecology	April 25, 2021	Zhejiang China	100	Holding Company
Farmmi Supply Chain	May 11, 2021	Zhejiang China	100	Agricultural products supply chain

FMI, Farmmi International, Farmmi Enterprise, Farmmi Technology, Suyuan Agriculture, Forest Food, FLS Mushroom, Farmmi Food, Nongyuan Network, Farmmi E-Commerce, Farmmi Biotech, Farmmi Ecology and Farmmi Supply Chain (herein collectively referred to as the “Company”) are engaged in processing and distributing dried Shiitake mushrooms and Mu Er mushrooms. Approximately 95% of the Company’s products are sold in China and the remaining 5% internationally, including USA, Japan, Canada, Europe and the Middle East.

Note 2 — Summaryof significant accounting policies

Basis of presentation and principles of consolidation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been consistently applied. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The consolidated financial statements of the Company reflect the principal activities of FMI, Farmmi international, Farmmi Enterprise, Farmmi Technology, Suyuan Agriculture, and Suyuan Agriculture’s main operation subsidiaries, Forest Food, Farmmi Food and FLS Mushroom, and the VIE Nongyuan Network and its subsidiary Farmmi E-Commerce. All intercompany transactions and balances have been eliminated upon consolidation.

Consolidation of variable interest entities

In accordance with accounting standards regarding consolidation of variable interest entities (“VIEs”), VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

F-8

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summaryof significant accounting policies (continued)

The Company determined that Nongyuan Network is a VIE because the Company is the primary beneficiary of risks and rewards of this VIE. The carrying amount of this VIE’s assets and liabilities are as follows:

	March 31,			September 30,
	2021			2020
Current assets	$	3,972,028		$	4,335,297
Non-current assets		329,957			392,517
Total assets		4,301,985			4,727,814
Total liabilities		(3,664,616	)		(4,135,859	)
Net assets	$	637,369		$	591,955

The financial performance of the VIE reported in the unaudited condensed consolidated statements of operations and comprehensive income for the six months ended March 31, 2021 and 2020 includes sales of $2,551,503 and $2,004,174, operating expenses of $2,528,720 and $1,996,513, and net income of $22,783 and net income of $7,661, respectively.

Use of estimates

In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant items subject to such estimates and assumptions include allowance for doubtful accounts and advances to suppliers, the valuation of inventories, the useful lives of property, plant and equipment, the valuation of beneficial conversion feature of the convertible notes, and the valuation of deferred tax assets.

Cash

Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. All cash balances are in bank accounts in PRC. Cash maintained in banks within the People’s Republic of China of less than RMB0.5 million (equivalent to $70,550) per bank are covered by “deposit insurance regulation” promulgated by the State Council of the People’s Republic of China.

Restricted cash

The Company adopted Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows: Restricted Cash on October 1, 2018. This ASU applies to all entities that have restricted cash or restricted cash equivalents to be presented in the statement of cash flows under ASC Topic 230. As of March 31, 2021 and December 31, 2020, the Company had restricted cash of $1,678,928 and $1,617,000, respectively. As of March 31, 2021 and September 30, 2020, restricted cash of $1,678,928 and $1,617,000 is secured against bank acceptance notes issued by the Company facilitated by Hangzhou United Bank and may be used as the repayment of bank acceptance notes upon maturity on June 15, 2021 (Note 9), respectively. As of June 15, 2021, restricted cash of $1,678,928 was utilized to repay bank acceptance notes on maturity.

Short-term deposit

Short-term deposit relates to fixed terms cash deposits with financial institutions with original maturities of more than three months and less than a year.

F-9

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summaryof significant accounting policies (continued)

Accounts receivable, net

Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses. The Company reviews its accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s payment history, its current credit-worthiness and current economic trends. Accounts are written off after efforts at collection prove unsuccessful. As of March 31, 2021 and September 30, 2020, allowance for doubtful accounts was $445,485 and $194,118, respectively.

Advances to suppliers, net

Advances to suppliers represent prepayments made to ensure continuous high-quality supplies and favorable purchase prices for premium quality. These advances are directly related to the purchases of raw materials used to fulfill sales orders. The Company is required from time to time to make cash advances when placing its purchase orders. These advances are settled upon suppliers delivering raw materials to the Company when the transfer of ownership occurs. The Company reviews its advances to suppliers on a periodic basis and makes general and specific allowances when there is doubt as to the ability of a supplier to provide supplies to the Company or refund an advance. As of March 31, 2021 and September 30, 2020, allowance for doubtful accounts was $176,516 and $723,655, respectively.

Inventory, net

The Company values its inventories at the lower of cost, determined on a weighted average basis, or net realizable value. The Company reviews its inventories periodically to determine if any reserves are necessary for potential obsolescence or if the carrying value exceeds net realizable value. The Company recorded inventory reserve of $1,370 and $19,761 as of March 31, 2021 and September 30, 2020, respectively.

Property, plant and equipment, net

Property, plant and equipment are stated at cost less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its present working condition and location for its intended use.

Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets. The estimated useful lives for significant property and equipment are as follows:

Plant, machinery and equipment	5 – 10 years
Transportation equipment	4 years
Office equipment	3 – 5 years
Leasehold improvement	Shorter of lease term or useful life

Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized.

F-10

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summaryof significant accounting policies (continued)

Intangible assets, net

Intangible assets consist primarily of purchased software. Intangible assets are stated at cost less accumulated amortization, which are amortized using the straight-line method with the estimated useful lives of three years.

Amortization expenses were $23,239 and $2,114 for the six months ended March 31, 2021 and 2020, respectively.

Estimated amortization expense of the existing intangible assets for the next five years is $39,827, $21,963, nil, nil and nil.

Impairment of long-lived assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairment of long-lived assets was recognized for the six months ended March 31, 2021 and 2020.

Revenue recognition

The Company follows ASU 2014-09 Revenue from Contracts with Customers (“ASC Topic 606”). In accordance with ASC 606, to determine revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.

The Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. All of the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as a price per ton.

The Company’s contract liabilities primarily include advance from customers. As of March 31, 2021 and September 30, 2020, the contract liabilities are $33,649 and $31,809, respectively, and included in other current liabilities on the consolidated balance sheets. For the six months ended March 31, 2021 and 2020, there was no revenue recognized from performance obligations related to prior periods.

Refer to Note 15 — Segment reporting for details of revenue segregation.

Cost of revenues

Cost of revenues includes cost of raw materials purchased, inbound freight cost, cost of direct labor, depreciation expense and other overhead. Write-down of inventory for lower of cost or net realizable value adjustments is also recorded in cost of revenues.

F-11

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summaryof significant accounting policies (continued)

Earnings (loss) per share

The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, Earnings per Share (“ASC 260”). 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 for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential 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. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

The component of basic and diluted EPS were as follows:
Year Ended March 31,	2021		2020
Net income (loss) available for common shareholders (A)	$	1,362,616	$	(57,052	)
Weighted average outstanding shares of ordinary shares (B)		20,855,641		13,783,362
Dilutive effect of investor and placement agent warrants		-		4,621,418
Diluted ordinary shares and ordinary shares equivalents (C)		20,855,641		18,404,780
Earnings per share
Basic (A/B)	$	0.07	$	(0.00	)
Diluted (A/C)	$	0.07	$	(0.00	)

Fair value of financial instruments

The FASB ASC Topic 820, Fair Value Measurements, defines fair value, establishes a three-level valuation hierarchy for fair value measurements and enhances disclosure requirements.

The three levels are defined as follows:

Level 1 — Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 — Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.

Level 3 — Inputs to the valuation methodology are unobservable.

Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, restricted cash, accounts receivable, advances to suppliers, other current assets, accounts payable, due to related parties, convertible notes payable, operating lease liabilities –current, other current liabilities, short-term bank loans and bank acceptance notes payable approximate their recorded values due to their short-term maturities. The fair value of longer term operating lease liabilities approximate their recorded values as their stated interest rates approximate the rates currently available.

F-12

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summaryof significant accounting policies (continued)

Beneficial conversion feature

The Company evaluates the conversion feature to determine whether it was beneficial as described in ASC 470-20. The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible notes payable and may not be settled in cash upon conversion, is treated as a discount to the convertible notes payable. This discount is amortized over the period from the date of issuance to the date the notes is due using the effective interest method. If the notes payable are retired prior to the end of their contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the shares of common stock at the commitment date to be received upon conversion.

Debt issuance costs and debt discounts

The Company may record debt issuance costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense through the maturity of the debt. If a conversion of the underlying debt occurs prior to maturity a proportionate share of the unamortized amounts is immediately expensed.

Concentrations of credit risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, accounts receivable and advances to suppliers. As of March 31, 2021 and September 30 2020, $18,792,154 and $2,165,151 of the Company’s cash is maintained in banks within the People’s Republic of China of which deposits of RMB0.5 million (equivalent to $70,550) per bank are covered by “deposit insurance regulation” promulgated by the State Council of the People’s Republic of China. The Company has not experienced any losses in such accounts. A significant portion of the Company’s sales are credit sales primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas. The Company also makes cash advances to certain suppliers to ensure the stable supply of key raw materials. The Company performs ongoing credit evaluations of its customers and key suppliers to help further reduce credit risk.

Comprehensive income (loss)

Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity but are excluded from net income (loss). Other comprehensive income (loss) consists of foreign currency translation adjustment from the Company not using the U.S. dollar as its functional currency.

F-13

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summaryof significant accounting policies (continued)

Leases

The Company adopted ASU 2016-02, Leases on October 1, 2019 and used the alternative transition approach which permits the effects of adoption to be applied at the effective date. The new standard provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients”, which permits the Company not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The Company also elected the short-term lease exemption and combining the lease and non-lease components practical expedients. The Company has not elected the practical expedient to use hindsight to determine the lease term for its leases at transition. The most significant impact upon adoption relates to the recognition of new Right-of-use (“ROU”) assets and lease liabilities on the Company’s consolidated balance sheets for office space operating leases. Upon adoption, the Company recognized additional operating liabilities of approximately $0.3 million, with corresponding ROU assets of the same amount based on the present value of the remaining rental payments under current leasing standards for existing operating leases. There was no cumulative effect of adopting the standard.

Foreign currency translation

The Company’s financial information is presented in U.S. dollars (“USD”). The functional currency of the Company is the Chinese Yuan Renminbi (“RMB”), the currency of PRC. Any transactions which are denominated in currencies other than RMB are translated into RMB at the exchange rate quoted by the People’s Bank of China prevailing at the dates of the transactions, and exchange gains and losses are included in the statements of operations as foreign currency transaction gain or loss. The consolidated financial statements of the Company have been translated into U.S. dollars in accordance with ASC 830, Foreign Currency Matters. The financial information is first prepared in RMB and then translated into U.S. dollars at period-end exchange rates for assets and liabilities and average exchange rates for revenue and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.

The exchange rates in effect as of March 31, 2021 and September 30, 2020 were RMB1 for $0.1526 and $0.1470, respectively. The average exchange rates for the six months ended March 31, 2021 and 2020 were RMB1 for $0.1529 and $0.1426, respectively.

Shipping and handling expenses

All shipping and handling costs are expensed as incurred and included in selling expenses. Total shipping and handling expenses were $146,366 and $79,302 for the six months ended March 31, 2021 and 2020, respectively.

F-14

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summaryof significant accounting policies (continued)

Value added tax

The Company is generally subject to the value added tax (“VAT”) for selling merchandise, except for FLS Mushroom. Before May 1, 2018, the applicable VAT rate was 13% or 17% (depending on the type of goods involved) for products sold in PRC. After May 1, 2018, the Company is subject to a tax rate of 12% or 16%, and after April 1, 2019, the tax rate was further reduced to 9% or 13% based on the new Chinese tax law. Pursuant to approval issued by the State Administration of Taxation, FLS Mushroom’s major operation can be classified as agriculture products and its revenue is exempt from VAT. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under the commercial practice of PRC, the Company pays VAT based on tax invoices issued. The tax invoices may be issued subsequent to the date on which revenue is recognized, and there may be a considerable delay between the date on which the revenue is recognized and the date on which the tax invoice is issued. In the event the PRC tax authorities dispute the date on which revenue is recognized for tax purposes, the PRC tax authorities have the right to assess a penalty based on the amount of taxes which is determined to be late or deficient, with any penalty being expensed in the period when a determination is made by the tax authorities that a penalty is due. During the reporting periods, the Company had no dispute with PRC tax authorities and there was no tax penalty incurred.

Income taxes

The Company is subject to the income tax laws of the PRC. No taxable income was generated outside the PRC for the years ended September 30, 2020, 2019 and 2018. The Company accounts for income taxes in accordance with ASC 740, Income Taxes. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or not be deductible in the future.

ASC 740-10-25 prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. It also provides guidance on the recognition of income tax assets and liabilities, classification accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures. There were no material uncertain tax positions as of September 30, 2020 and 2019. As of March 31, 2021, the tax years ended December 31, 2015 through December 31, 2020 for the Company’s PRC subsidiary remain open for statutory examination by PRC tax authorities.

Statement of Cash Flows

In accordance with ASC 230, Statement of Cash Flows, cash flows from the Company’s operations are formulated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.

F-15

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summaryof significant accounting policies (continued)

Risks and uncertainties

The operations of the Company are located in PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environments in PRC, in addition to the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political and social conditions in PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.

The Company’s sales, purchases and expense transactions are denominated in RMB, and a substantial part of the Company’s assets and liabilities are also denominated in RMB. RMB is not freely convertible into foreign currencies under the current law. In China, foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China, the central bank of China. Remittances in currencies other than RMB may require certain supporting documentation in order to effect the remittance.

The Company’s operating entities in PRC do not carry any business interruption insurance, product liability insurance or any other insurance policy except for a limited property insurance policy. As a result, the Company may incur uninsured losses, increasing the possibility that investors would lose their entire investment in the Company.

The Company’s business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt the Company’s operations.

In December 2019, a novel strain of coronavirus (“COVID-19”) was identified in Wuhan, China. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic—the first pandemic caused by a coronavirus. The outbreak has reached more than 160 countries, resulting in the implementation of significant governmental measures, including lockdowns, closures, quarantines, and travel bans, intended to control the spread of the virus. The Chinese government has ordered quarantines, travel restrictions, and the temporary closure of stores and facilities. Companies are also taking precautions, such as requiring employees to work remotely, imposing travel restrictions and temporarily closing businesses.

Because of the shelter-in-place orders and travel restrictions mandated by the Chinese government, the production and sales activities of the Company temporarily suspended during the end of January and February 2020, which adversely impacted the Company’s production and sales during that period. Although the production and sales have resumed at the end of March 2020, if COVID-19 further impacts its production and sales, the Company’s financial condition, results of operations, and cash flows could continue to be adversely affected.

Consequently, the COVID-19 outbreak has adversely affected the Company’s business operations and condition and operating results for 2020, including but not limited to material negative impact on its total revenue, slower collection of accounts receivable and accrued allowance for bad debt, slower utilization of advances to suppliers and accrued allowance, and inventory allowance. The Company will continue to monitor and modify the operating strategies. Management does not expect a continued decline in sales in long term based on the existing sale orders.

F-16

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summaryof significant accounting policies (continued)

Recent accounting pronouncements

The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. ASU 2016-13 was subsequently amended by ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments — CreditLosses, ASU 2019-04 Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivativesand Hedging, and Topic 825, Financial Instruments, and ASU 2019-05, Targeted Transition Relief. For public entities, ASU 2016-13 and its amendments is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. For all other entities, this guidance and its amendments will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. As an emerging growth company, the Company plans to adopt this guidance effective October 1, 2023. The Company is currently evaluating the impact of its pending adoption of ASU 2016-13 on its consolidated financial statements but does not expect this guidance will have a material impact on its consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes. ASU 2019-12 is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, with early adoption permitted. The Company will adopt this guidance effective October 1, 2021. The Company is currently evaluating the impact of its pending adoption of this guidance on its consolidated financial statements but does not expect this guidance will have a material impact on its consolidated financial statements.

F-17

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3 – Accounts receivable,net

Accounts receivable consisted of the following:

	March 31,<br> <br>2021			September 30,<br> <br>2020
Accounts<br> receivable – trade	$	14,246,831		$	10,952,237
Accounts<br> receivable – related party		1,242			-
Accounts receivable<br> – total		14,248,073			10,952,237
Less:<br> allowance for doubtful accounts		(445,485	)		(194,118	)
Accounts<br> receivable, net	$	13,802,588		$	10,758,119

Allowance for doubtful accounts of $445,485 and $194,118 was made for certain accounts receivable as of March 31, 2021 and September 30, 2020, respectively. The Company’s accounts receivable primarily includes balance due from customers when the Company’s products are sold and delivered to customers. $7,362,650 or 53% of the March 31, 2021 balance has been subsequently collected as of July 22, 2021. The Company expects to collect the remaining balance of accounts receivable by September 2021.

Note 4 – Advances to suppliers,net

Movement of advances to suppliers is as follows:

	March 31,			September 30,
	2021			2020
Beginning<br> balance	$	24,095,507		$	14,034,379
Increased during<br> the year		11,545,708			40,398,618
Less: utilized<br> during the year		(23,335,373	)		(31,303,861	)
Exchange<br> rate difference		942,245			966,371
Sub-total		13,248,087			24,095,507
Less:<br> allowance for doubtful accounts		(176,516	)		(723,655	)
Ending balance	$	13,071,571		$	23,371,852

On April 1, 2016, the Company entered into two separate framework supply agreements (“Framework Agreements”) with two co-operatives, Jingning Liannong Trading Co., Ltd (“JLT”) and Qingyuan Nongbang Mushroom Industry Co., Ltd (“QNMI”). These two Framework Agreements were renewed for another three years in April 2019 upon expiration. Jingning County and Qingyuan County where JLT and QNMI are located produce premium Shiitake and Mu Er. Many competitors of the Company and other large buyers go there to source their supplies. Family farms and co-operatives traditionally request advance payments to secure supplies. By making advance payments to these suppliers, the Company is also able to lock in a more favorable price for premium quality than would be available in the open market. Allowance for doubtful accounts of $176,516 and $723,655 was made for certain advances to suppliers as of March 31, 2021 and September 30, 2020, respectively.

F-18

FARMMI, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIALSTATEMENTS

Note 4 – Advances to suppliers, net (continued)

The Framework Agreements only provide general guidelines. Actual prices are negotiated and agreed upon in individual purchase orders, and are typically set at market prices based on the quality grade and quantities determined and agreed with the suppliers. Prices may vary based on market demand and crop condition etc. The Company can generally secure the premium quality raw material supplies at prices slightly higher than the typical market prices for average quality raw materials. The quality of supplies must meet standardized specifications of both the mushroom industry and standards set by the Company.

The Company advances certain initial payments based on its estimated purchase plan from these two suppliers and additional advances based on individual purchase orders placed. The Company pays advances for no other reason than to secure an adequate supply of dried mushrooms to meet its sales demands. The Company’s purchase orders require that the advances shall be refunded by suppliers if they fail to produce any dried mushrooms or fail to deliver supplies to the Company timely.

Advances to suppliers are carried at cost and evaluated for recoverability. The realizability evaluation process is similar to that of the lower of cost or net realizable value evaluation process for inventories. The Company periodically evaluates its advances for recoverability by monitoring suppliers’ ability to deliver a sufficient supply of mushrooms as well as current crop and market condition. This includes analyzing historical quantity and quality of production with monitoring of crop information provided by the Company’s field personnel related to weather or disaster or any other reason. If for any reason the Company believes that it will not receive supplies of the contracted volumes, the Company will assess its advances for any likelihood of recoverability and adjust advances on its financial statements at the lower of cost or estimated recoverable amounts. The advances are made primarily to JLT and QNMI, which are co-operatives formed by many family farms, with which the Company has had long-term relationships over the years. If any of these family farms fail to deliver supplies, the Company would expect to receive a refund of the advances through JLT/QNMI. The Company accrues for any allowance for possible loss on advances when there is doubt as to the collectability of the refund.

As of March 31, 2021, approximately $7.4 million, or 68% has been utilized as of the date of this report, and the remaining balance is expected to be utilized by September 2021. The Company continuously makes advances to its suppliers on a rolling basis, which typically represent 30% of the total amount of each purchase order. The Company may maintain its outstanding advance payments at a relatively high level going forward because the Company anticipates continuous large orders from its largest customer, China Forestry Group Corporation.

Note 5 — Inventories, net

Inventories, net, consisted of the following:

	March<br> 31, <br> 2021			September<br> 30,<br> 2020
Raw<br> materials	$	766,569		$	563,772
Packaging materials		53,426			39,628
Finished<br> goods		26,377			-
Inventories<br> - total		846,372			603,400
Less:<br> allowance for inventory reserve		(1,370	)		(19,761	)
Inventories,<br> net	$	845,002		$	583,639

F-19

FARMMI, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIALSTATEMENTS

Note 6 — Property, plant and equipment, net

---

Property, plant and equipment, stated at cost less accumulated depreciation, consisted of the following:

	March<br> 31,			September<br> 30,
	2021			2020
	(Unaudited)
Office<br> equipment	$	36,070		$	34,320
Transportation<br> equipment		71,626			68,984
Plant, machinery<br> and equipment		193,446			114,551
Leasehold<br> improvements		175,345			226,879
Subtotal		476,487			444,734
Accumulated<br> depreciation		(211,240	)		(178,839	)
Total	$	265,247		$	265,895

Depreciation expense was $25,594 and $13,676 for the six months ended March 31, 2021 and 2020, respectively.

Note 7 — Short-term bank loans
Short-term bank loans consist<br> of the following:
	March 31,		September 30,
---	---	---	---	---
	2021		2020
Bank of China (Lishui Branch) (1)	$	1,526,298	$	1,470,000
Hangzhou United Rural Commercial Bank Co., Ltd. (2)		442,627		588,000
Total	$	1,968,925	$	2,058,000
(1)	The<br> loan in the amount of RMB9 million (equivalent of approximately $1.27 million) from Bank<br> of China (Lishui Branch), was facilitated on January 6, 2020 through Forest Food, a<br> subsidiary of the Company, as working capital for six months, with the original maturity<br> of July 6, 2020 at an annual effective interest rate of 3.98%. The loan was repaid in<br> full upon maturity and re-issued to the Company at RMB10 million (equivalent of approximately<br> $1.53 million) on July 9, 2020 as working capital for one year, with a new maturity<br> date of July 7, 2021 at a lower annual interest rate of 3.95%. As of July 7, 2021,<br> principal of RMB10 million (equivalent of approximately $1.53 million) was fully repaid.<br> This loan was reissued at RMB6.4 million (equivalent of approximately $0.98 million) on July 5,<br> 2021 as working capital for six months with a new maturity date of January 4, 2022 at<br> an annual interest rate of 3.95%.
---	---
	The loan is secured by the real property and land use right<br>owned by Forasen Group Co., Ltd., a related party. The loan is also guaranteed by a related party Zhejiang Tantech Bamboo Technology<br>Co., Ltd., and three third parties Zhejiang Lishui Xinyite Automation Technology Co., Ltd., Lishui Kaige Bearing Co., Ltd.,<br>and Zhejiang MeiFeng Tea Industry co., Ltd, as well as two principal officers of the Company.
(2)	The loan in the amount of RMB4 million (equivalent of approximately $0.59 million) from Hangzhou United Rural Commercial Bank Co., Ltd.,<br>was facilitated on November 13, 2019 through Suyuan Agriculture, a subsidiary of the Company, as working capital for one year, with<br>the maturity date of November 12, 2020 at an annual effective interest rate of 6.09%. At maturity date, RMB0.6 million (equivalent<br>of approximately $88,200) was repaid, the remaining balance of RMB3.4 million (equivalent of approximately $499,800) was extended to May 10,<br>2021 at an annual effective interest rate of 6.09%. As of March 31, 2021, principal of RMB1.1 million (equivalent of approximately<br>$168,000) was repaid, while the remaining principal of RMB2.9 million ($442,627) was fully repaid on May 8, 2021.
---	---
	The loan was secured by an office property and land use right<br>owned by Zhejiang Tantech Bamboo Technology Co., Ltd., a related party of the Company, of which valued at RMB6.85 million (equivalent<br>of approximately $1 million).

Interest expenses amounted to $46,922 and $42,596 for the six months ended March 31, 2021 and 2020, respectively.

F-20

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 8 –Bank acceptance notes payable

On June 15, 2020, the Company issued RMB22 million (equivalent of approximately $3.23 million) bank acceptance notes to its suppliers facilitated by Hangzhou United Bank for one year, with the maturity date of June 15, 2021. The Company incurred fees of RMB11,000 (equivalent of $1,620) related to the issuance of these bank acceptance notes. As of June 15, 2021, these bank acceptance notes were fully paid.

These bank acceptance notes are secured by restricted cash of RMB11 million (equivalent of approximately $1.62 million) and is also secured by the real property and land use right owned by Xinyang Wang, the 100% shareholder of Nongyuan Network.

Note 9 - Share-basedcompensation

On April 26, 2018, the Company adopted its 2018 Share Incentive Plan (the “2018 Plan”), which permits the grant of share options and restricted shares to the employees and directors of the Company. Under the plan, a total of 1,168,000 shares were initially reserved for issuance. The 2018 Plan is valid and effective for a term of ten years commencing from its adoption. Under the 2018 Plan, the Company granted 596,600 restricted share units to its employees on March 11, 2021, share-based compensation expenses related to the restricted share units granted was recognized with the amount of $805,410 for the six months ended March 31, 2021.

F-21

FARMMI, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIALSTATEMENTS

Note 10 — Related party transactions

The relationship and the nature of related party transactions are summarized as follow:

Name of Related Party	Relationship to the Company	Nature of Transactions
Forasen Group Co., Ltd. (“Forasen Group”)	Owned by Mr. Zhengyu Wang, the Chairman of Board of Directors of the Company	Provides a guarantee for<br> the Company’s bank loans; purchases from the Company; leases factory building to the Company; provides the real property and<br> land use right as additional security for a bank loan.
Zhejiang Tantech Bamboo Technology Co., Ltd.	Under common control of Mr. Zhengyu Wang and Ms. Yefang Zhang, CEO of the Company	Lease factory building to the Company; purchases from the Company; provide the real property and land use right as additional security for the Company’s short-term bank loan.
Hangzhou Forasen Energy Technology Co., Ltd.	Controlled by Mr. Zhengyu Wang	Purchase from the Company
Zhejiang Forasen Asset Management Co., Ltd.	Controlled by Zhengyu Wang and CEO Yefang Zhang	Sublease of office space from the Company. Provided a working capital loan; provides a guarantee for the Company’s bank loans Provides a guarantee for the Company’s bank loans
Hangzhou Forasen Technology Co., Ltd	Controlled by Mr. Zhengyu Wang	Provide the real property and land use right as additional security for the issuance of bank acceptance notes by Nongyuan Network
Yefang Zhang	CEO of the Company
Zhengyu Wang	Chairman of Board of Directors of the Company
Xinyang Wang	Shareholder of Nongyuan Network

F-22

FARMMI,INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 10 —Related party transactions (continued)

Due to related parties consisted of the following:

	March 31,		September 30,
	2021		2020
Yefang Zhang	$	1,999,870	$	1,714,811
Zhejiang Tantech Bamboo Technology Co., Ltd.		16,410		1,459
Forasen Group Co.		2,808		-
Total	$	2,019,088	$	1,716,270

As of March 31, 2021 and September 30, 2020, the balance of due to related parties mainly consisted of advances from the Company’s principal shareholder for working capital purposes during the Company’s normal course of business. These advances are non-interest bearing and due on demand.

Sales to related parties

The Company periodically sells merchandise to its affiliates during the ordinary course of business. For the six months ended March 31, 2021 and 2020, the Company recorded sales to related parties of $1,618 and $6,015, respectively.

Operating lease from related parties

In October 2009, the Company entered into a lease agreement with Forasen Group for leasing the factory building. The lease term was 10 years with monthly rent of RMB22,400 (equivalent of $3,293). The lease agreement was renewed in October 2019 for another 10 years with the same monthly rent. This lease agreement was terminated on July 31, 2020.

In July 2020, the Company entered into a lease agreement with Zhejiang Tantech Bamboo Technology Co., Ltd. for leasing the factory building. The lease term is 10 years with annual rent of RMB459,360 (equivalent of $67,526).

In August 2020, the Company entered into a one year lease agreement with Forasen Group for leasing a processing facility, with monthly rent of RMB 9,200 (equivalent of $1,313).

For the six months ended March 31, 2021 and 2020, the Company recorded lease expense of $30,513 and $4,910, respectively, and interest expense arising from lease of $10,124 and $157, respectively.

Sublease to a related party

In August 2020, the Company entered into a sublease agreement with Hangzhou Forasen Technology Co., Ltd to sublease its office space. The lease term is two years with annual rent of RMB283,258 (equivalent of $41,639).

For the six months ended March 31, 2021 and 2020, the Company recorded lease income of $19,810 and nil, respectively.

Guarantees provided by related parties

The Company’s related parties provide guarantees for the Company’s short-term bank loans (see Note 7). The Company’s related parties also pledged their properties as collaterals to safeguard the Company’s short-term bank loans (see Note 7) and bank acceptance notes (see Note 8).

F-23

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 11 —Equity

Common stock

On September 12, 2020, the authorized share capital of the Company was increased from US$20,000 divided into 20,000,000 ordinary shares of US$0.001 par value each to US$200,000 divided into 200,000,000 ordinary shares of US$0.001 par value each.

Additional paid-in capital

As disclosed in Note 9, on March 11, 2021, the Company granted 596,600 restricted share units to its employees and the related share-based compensation was $805,410 for the six months ended March 31, 2021.

On March 24, 2021, the Company issued and sold a total of 6,469,467 ordinary shares at a price to the public of $1.15 per share. The net proceeds were $6.7 million.

Statutory reserve

The Company is required to make appropriations to reserve funds, comprising the statutory surplus reserve and discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”).

Appropriations to the statutory surplus reserve are required to be at least 10% of the after tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entities’ registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. As of March 31, 2021 and September 30, 2020, the balance of the required statutory reserves was $975,309 and $972,092, respectively.

Noncontrolling interest

The Company’s noncontrolling interest consists of the following:

	March 31,			September 30,
	2021			2020
Paid-in capital	$	107,461		$	107,461
Additional paid-in capital		807,953			807,953
Foreign currency translation loss attributed to noncontrolling interest		(593	)		(33,913	)
Net loss attributed to noncontrolling interest		(12,197	)		(11,520	)
Total noncontrolling interest	$	902,624		$	869,981

F-24

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 12 — Taxes

Corporation Income Tax (“CIT”)

The Company is subject to income taxes on an entity basis on income derived from the location in which each entity is domiciled.

FMI is incorporated in the Cayman Islands as an offshore holding company and is not subject to tax on income or capital gain under the laws of the Cayman Islands.

Farmmi International is incorporated in Hong Kong as a holding company with no activities. Under the Hong Kong tax laws, an entity is not subject to income tax if no revenue is generated in Hong Kong.

In China the Corporate Income Tax Law generally applies an income tax rate of 25% to all enterprises. FLS Mushroom, Nongyuan Network, Farmmi Enterprise and Farmmi Technology are registered in PRC and are all subject to corporate income tax at a statutory rate of 25% on net income reported after certain tax adjustments. Forest Food, Farmmi Food, Nongyuan Network and Farmmi E-Commerce are approved by local government as small-scaled minimal profit enterprises. Once an enterprise meets certain requirements and is identified as a small-scale minimal profit enterprise, the part of its taxable income not more than RMB1 million is subject to a reduced rate of 5% and the part between RMB1 million and 3 million is subject to a reduced rate of 10%. Forest Food, Farmmi Food, FLS Mushroom and Nongyuan Network are entities with primary operating activities. Suyuan Agriculture, Farmmi Enterprise and Farmmi Technology are holding companies with no activities.

Under the Enterprise Income Tax (“EIT”) Law of PRC, domestic enterprises and foreign investment enterprises are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on a case-by-case basis. EIT is typically governed by the local tax authority in China. Each local tax authority at times may grant special tax treatment to local enterprises as a way to encourage specific agricultural industry and stimulate local economy. FLS Mushroom and Farmmi Food are engaged in agricultural industry and their income are tax exempted. Farmmi Food, Nongyuan Network, Farmmi Technology and Farmmi E-Commerce are subject to corporate income tax at a reduced rate of 5% as approved by local government as small-scaled minimal profit enterprises. Net income of $2.35 million and $1.69 million were exempt from income tax for the six months ended March 31, 2021 and 2020, respectively. The estimated tax savings as the result of the tax break for the six months ended March 31, 2021 and 2020 amounted to $587,864 and $421,450, respectively. Per share effect of the tax exemption were $0.03 and $0.03 for the six months ended March 31, 2021 and 2020, respectively.

F-25

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 12 — Taxes(continued)

Corporation income tax (“CIT”) (continued)

The following table reconciles PRC statutory rates to the Company’s effective tax rates for the six months ended March 31, 2021 and 2020:

	For<br> the six months ended
	March 31,
	2021			2020
Statutory<br> PRC income tax rate		25.00	%		25.00	%
Effect of income<br> tax exemption		(47.99	)%		(31.11	)%
Favorable tax<br> rate impact (a)		0.41	%		0.10	%
Changes of deferred<br> tax assets valuation allowances		0.82	%		7.70	%
Non-PRC<br> entities not subject to PRC income tax		(23.01	)%		(62.57	)%
Total		1.25	%		(60.88	)%
(a)	FLS Mushroom<br> and Farmmi Food are engaged in agricultural industry and their income are tax exempted. Farmmi<br> Food, Nongyuan Network, Farmmi Technology and Farmmi E-Commerce are<br> subject to corporate income tax at a reduced rate of 5% as approved by local government<br> as small-scaled minimal profit enterprises.
---	---

The provision for income tax consists of the following:

	For the six months ended<br> <br>March 31,
	2021		2020
	(unaudited)		(unaudited)
Current	$	17,212	$	24,144
Deferred		-		-
Total	$	17,212	$	24,144

Components of deferred tax assets are as follows:

	As of March 31,<br> <br>2021			As of<br> <br>September 30,<br> <br>2020
	(unaudited)
Net<br> operating loss carryforwards	$	224,543		$	199,342
Deferred		(224,543	)		(199,342	)
Total	$	-		$	-

The deferred tax expense (benefit) is the change of deferred tax assets and deferred tax liabilities resulting from the temporary difference between tax basis and U.S. GAAP. Forest Food had a cumulative net operating loss of approximately $845,000 and $797,000, respectively, as of March 31, 2021 and September 30, 2020, which may be available to reduce future taxable income. Suyuan Agricultural had a cumulative net operating loss of approximately $53,000 and nil, respectively, as of March 31, 2021 and September 30, 2020. Deferred tax assets were primarily the result of these net operating losses.

As of each reporting date, management considers evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. On the basis of this evaluation, a full valuation allowance of $224,543 and $199,342 was recorded against the gross deferred tax asset balance at March 31, 2021 and September 30, 2020, respectively. The amount of the deferred tax asset is considered unrealizable because it is more likely than not that Forest Food will not generate sufficient future taxable income to utilize the net operating loss.

F-26

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 13 — Concentrationof major customers and suppliers

For the six months ended March 31, 2021 and 2020, one major customer accounted for approximately 79% and 45% of the Company’s total sales, respectively. Any decrease in sales to this major customer may negatively impact the Company’s operations and cash flows if the Company fails to increase its sales to other customers.

As of March 31, 2021 and September 30, 2020, one major customer accounted for approximately 97% and 94% of the Company’s accounts receivable balance, respectively.

For the six months ended March 31, 2021, three major suppliers accounted for approximately 53%, 26% and 15% of the total purchases, respectively. For the six months ended March 31, 2020, two major suppliers accounted for approximately 56% and 25% of the total purchases, respectively.

As of March 31, 2021, three major suppliers accounted for approximately 46%, 37% and 16% of the Company’s advances to supplier balances. As of September 30, 2020, two major suppliers accounted for approximately 45% and 44% of the Company’s advances to suppliers balance.

Note 14 — Leases

Effective October 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) using the alternative transition approach which allowed the Company to continue to apply the guidance under the lease standard in effect at the time in the comparative periods presented. Upon adoption, the Company recorded operating lease right-of-use assets and corresponding operating lease liabilities of $824,629 and $809,613, respectively with no impact on retained earnings. Financial position for reporting periods beginning on or after October 1, 2019, are presented under the new guidance, while prior period amounts are not adjusted and continue to be reported in accordance with previous guidance.

The component of lease cost was as follows:

	For the six months ended<br> <br>March 31,
	2021		2020
	(unaudited)		(unaudited)
Operating<br> lease cost	$	70,502	$	14,255
Short-term<br> lease cost		8,425		-
Total<br> lease cost	$	78,927	$	14,255

As of March 31, 2021 and September 30, 2020, the remaining lease term was an average of 7.3 years and 7.9 years, respectively. The Company’s lease agreements do not provide a readily determinable implicit rate nor is it available to the Company from its lessors. Instead, the Company estimates its incremental borrowing rate based on the benchmark lending rate for one-year loan as published by China’s central bank in order to discount lease payments to present value. The discount rate of the Company’s operating leases was 3.95% per annum as of March 31, 2021 and 2020.

Supplemental balance sheet information related to operating leases was as follows:

	As<br> of March 31,<br><br> 2021
Operating<br> lease right-of-use assets	$	836,994
Operating lease<br> right-of-use assets – accumulated amortization		(99,772	)
Operating<br> lease right-of-use assets – net	$	737,222
Operating lease<br> liabilities, current	$	145,647
Operating<br> lease liabilities, non-current		577,018
Total<br> operating lease liabilities	$	722,665

F-27

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 14 – Leases (continued)

As of March 31, 2021, maturities of operating lease liabilities were as follows:

	As of March 31,
Twelve months ending March 31,	2021
2022	$	186,923
2023		176,168
2024		64,323
2025		64,323
2026		64,323
Thereafter		275,621
Total future minimum lease payments		831,681
Less: Imputed interest		(109,016	)
Total	$	722,665

Note 15 — Segmentreporting

ASC 280, Segment Reporting, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments.

The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company currently has three main products from which revenue is earned and expenses are incurred: Shiitake Mushroom, Mu Er Mushroom and other edible fungi and other agricultural products. The operations of these product categories have similar economic characteristics. In particular, the Company uses the same or similar production processes; sells to the same or similar type of customers and uses the same or similar methods to distribute these products. The resources required by these products share high similarity. Switching cost between different products is minimal. Production is primarily determined by sales orders received and market trend. Therefore, management, including the chief operating decision maker, primarily relies on the revenue data of different products in allocating resources and assessing performance. Based on management’s assessment, the Company has determined that it has only one operating segment and therefore one reportable segment as defined by ASC.

The following table presents revenue by major product categories (from third parties and related party) for the six months ended March 31, 2021 and 2020, respectively:

	For the six months ended<br> <br>March 31,
	2021		2020
	(unaudited)		(unaudited)
Shiitake	$	10,104,540	$	7,346,174
Mu Er		7,340,137		5,762,752
Other edible fungi and other agricultural products		343,051		471,856
Total lease cost	$	17,787,728	$	13,580,782

F-28

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 15 — Segmentreporting (continued)

All of the Company’s long-lived assets are located in PRC. The majority of the Company’s products are sold in China. Geographic information about the revenues, which are classified based on customers, is set out as follows:

	For the six months ended<br> <br>March 31,
	2021		2020
	(unaudited)		(unaudited)
Revenue from China	$	16,973,392	$	13,086,183
Revenue from other countries		814,336		494,599
Total	$	17,787,728	$	13,580,782

Note 16 – Subsequentevents

(1)	Establishment of new subsidiaries

On April 7, 2021, Zhejiang Farmmi Biotechnology Co., Ltd. (“Farmmi Biotech”) was established under the laws of the PRC. Suyuan Agriculture owns 100% interest in Farmmi Biotech.

On April 25, 2021, Zhejiang Farmmi (Hangzhou) Ecology Agriculture Development Co., Ltd. (“Farmmi Ecology”) was established under the laws of the PRC. Farmmi International owns 100% interest in Farmmi Ecology.

On May 11, 2021, Zhejiang Farmmi Agricultural Supply Chain Co., Ltd. (“Farmmi Supply Chain”) was established under the laws of the PRC. Farmmi Ecology owns 100% interest in Farmmi Supply Chain.

(2)	Issuance of ordinary shares

On April 13, 2021, the Company issued and sold a total of 970,419 ordinary shares at a price to the public of $1.15 per share and the net proceeds were approximately $1.0 million.

On May 3, 2021, the Company issued and sold a total of 161,000,000 ordinary shares at a price to the public of $0.30 per share and the net proceeds were approximately $43.9 million.

(3) Increase in authorized share capital of the Company

On July 22, 2021, as approved by a special resolution in Annual Shareholder Meeting, the Company’s authorized share capital was increased from US$200,000 divided into 200,000,000 ordinary shares of US$0.001 par value each to $600,000 divided into 600,000,000 ordinary shares of US$0.001 par value each.

Note 17 — Condensedfinancial information of the parent company

Pursuant to the requirements of Rule 12-04(a), 5-04(c) and 4-08(e)(3) of Regulation S-X, the condensed financial information of the parent company shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The Company performed a test on the restricted net assets of consolidated subsidiaries in accordance with such requirement and concluded that it was applicable to the Company as the restricted net assets of the Company’s PRC subsidiaries exceeded 25% of the consolidated net assets of the Company, therefore, the condensed financial statements for the parent company are included herein.

For purposes of the above test, restricted net assets of consolidated subsidiaries shall mean that amount of the Company’s proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party

The condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the parent company used the equity method to account for investment in its subsidiaries. Such investment is presented on the condensed balance sheets as “Investment in subsidiaries” and the respective profit or loss as “Equity in earnings of subsidiaries” on the condensed statements of income.

The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S GAAP have been condensed or omitted.

The Company did not pay any dividend for the periods presented. As of March 31, 2021 and September 30, 2020, there were no material contingencies, significant provisions for long-term obligations, or guarantees of the Company, except for those which have been separately disclosed in the consolidated financial statements, if any.

F-29

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 17 —Condensed financial information of the parent company (continued)

Farmmi, Inc.

ParentCompany Balance Sheets

		As of<br> <br>September 30,<br> <br>2020
Assets
Current assets
Cash	597,190	$	2,122
Other current assets	1,446		-
Non-current assets
Investment<br> in subsidiaries	40,622,413		30,217,865
Total assets	41,221,049	$	30,219,987
Liabilities and Shareholders’<br> Equity
Current liabilities
Due to related parties	1,999,136		1,894,811
Other current<br> liabilities	3,072		40,000
Total<br> liabilities	2,002,208		1,934,811
Commitments and contingencies
Shareholders’ equity
Common stock, 0.001 par value,<br> 200,000,000 shares authorized, 27,583,770 and 20,517,703 shares issued and outstanding at March 31, 2021 and September 30,<br> 2020, respectively	27,584		20,518
Additional paid-in capital	27,842,612		20,335,228
Retained<br> earnings	11,348,645		7,929,430
Total<br> shareholders’ equity	39,218,841		28,285,176
Total<br> liabilities and shareholders’ equity	41,221,049	$	30,219,987

All values are in US Dollars.

F-30

FARMMI, INC.

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 17 — CondensedFinancial Information of the Parent Company (Continued)

Farmmi, Inc.

ParentCompany Statements of Operations

	For the six months ended<br> <br>March 31,
	2021			2020
	(unaudited)			(unaudited)
Operating expenses:
General and administrative expenses	$	(1,267,506	)	$	(236,794	)
Other expenses
Interest expenses		-			(132,511	)
Amortization of debt issuance costs		-			(1,093,440	)
Other expenses		(408	)		(509	)
Loss from operations		(1,267,914	)		(1,463,254	)
Equity in income of subsidiaries and VIE		2,630,530			1,406,202
Net income (loss) attributable to Farmmi, Inc.	$	1,362,616		$	(57,052	)

Farmmi, Inc.

ParentCompany Statements of Cash Flows

	For the six months ended<br> <br>March 31,
	2021			2020
	(unaudited)			(unaudited)
Net cash (used in) provided by operating activities	$	(500,878	)	$	894,914
Net cash provided by (used in) financing activities		1,087,746			(922,071	)
Net decrease in cash and restricted cash		586,867			(27,157	)
Cash and restricted cash, beginning of year		2,122			635,683
Cash and restricted cash, end of year	$	588,989		$	608,526

F-31

Exhibit 99.2

MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The followingdiscussion and analysis of our company’s financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and the related notes included elsewhere in this report. This discussion contains forward-looking statements thatinvolve risks and uncertainties. Actual results and the timing of selected events could differ materially from those anticipated in theseforward-looking statements as a result of various factors.

SPECIAL NOTEREGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements. All statements contained in this report other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the “Risk Factors” section. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Business Overview

We currently produce and/or sell the following categories of agricultural products: Shiitake mushrooms, Mu Er mushrooms, other edible fungi and other agricultural products. We do not grow fungi, but purchase dried edible fungi from third party suppliers, mainly from family farms, and two co-operatives representing family farms, Jingning Liannong Trading Co. Ltd. (“JLT”) and Qingyuan Nongbang Mushroom Industry Co., Ltd. (“QNMI”), with whom we have worked with for many years. JLT and QNMI are two companies in Lishui area where our facilities are located. They are co-operatives representing family farms which plant and provide edible fungi. JLT and QNMI themselves do not have any facilities and do not process any fungi. They are established to share resources such as procurement information and to enjoy the advantage of economy of scale. After we select and filter the dried edible fungi for specific size and quality from our suppliers, we may further dehydrate them again, as deemed necessary, to ensure the uniform level of dryness of our products. We then package the fungi products for sale. The only products we process and package are edible fungi, which are processed and packaged at our own processing facilities. For other agricultural products, such as rice and edible oil, we purchase them from third-party suppliers, and sell these products at our online store Farmmi Liangpin Market. Mainly through distributors, we offer gourmet dried mushrooms to domestic and overseas retail supermarkets, produce distributors and foodservice distributors and operators. We have become an enterprise with advanced processing equipment and business management experience, and we pride ourselves on consistently producing quality mushrooms and serving our customers with a high level of commitment.

Currently, we estimate that approximately 95.4% of our products are sold in China to domestic distributors and the remaining 4.6% are sold internationally, including USA, Japan, Canada and other countries, through distributors. In addition, in order to enhance our e-commerce marketing presence, we developed our own e-commerce websites farmmi.com.cn and www.farmmi88.com.

Growth Strategy

Increasingour market share — the premium quality of our products has been long recognized by our customers. People’s increasing awareness of healthy dietary will likely lead to increased demand of our products. Our development plan mainly focuses on developing high-quality agricultural products market. Through our continued efforts of building e-commerce platform, expansion to international market, and building stable relationship with suppliers, we expect to expand our product lines and improve our brand awareness and customer loyalty, to meet the demands of market and customers, and improve our sales performance.

Expansionof our sources of supply, productivity and sales network — to meet the increasing demand, we emphasize cooperation with major suppliers as well as small family farms to ensure the quantity and quality of raw materials. While expanding supply resource, we also plan to increase our processing capability and upgrade production facilities to increase productivity. In addition to our present sales network, we intend to continue to train our employees, upgrade relevant information technology and supply chain system, with the goal of making an integrated sales network with an international approach.

Securinghigh quality raw materials with competitive price — to meet the increasing demand for our products, we have been increasing our cooperation with major suppliers, with whom we have been working together for many years, to secure the quality and quantity of our raw materials. We also have dedicated teams that constantly visit and communicate with the family farm suppliers, to monitor the quality and quantity of raw materials. By working closely with our suppliers throughout the planting seasons, we have been providing such suppliers technical support to secure the stable supply of our raw materials. With our deep understanding of the edible fungi market, we have been able to purchase raw materials of premium quality at favorable prices. Edible fungi can be stored for a long time after simple processing, therefore we have been purchasing edible fungi when we expect their purchase price to increase, and store them to fulfill future sales orders. This strategy has been proven effective and will continue to be used by us as a cost control method.

Factors Affecting OurResults of Operations

Government Policy May Impactour Business and Operating Results

We have not seen any impact of unfavorable government policy upon our business in recent years. However, our business and operating results will be affected by China’s overall economic growth and government policies. Unfavorable changes in government policies could affect the demand for our products and could materially and adversely affect our results of operations. Our edible fungi products are currently eligible for certain favorable government tax incentive and other incentives, any future changes in the government’s policy upon edible fungi industry may have a negative effect on our operations.

2

Price Inelasticity of Raw MaterialsMay Reduce Our Profit

As a processor of edible fungi, we rely on a continuous and stable supply of edible fungi raw materials to ensure our operation and expansion. The price of edible fungi may be inelastic when we wish to purchase supplies, resulting in an increase in raw material prices and thus reduce our profit. In addition, although we compete primarily the high-end market which puts more emphasize on the flavor, texture and quality of our products, we risk losing customers by increasing our selling prices.

Competition in Edible Fungi Industry

Although we have a lot of competitive advantages, such as premium product quality, stable and experienced factory employees, favorable production locations within proximity of significant mushroom planting bases and strong relationships with our significant suppliers, we face a series of challenges.

Our products face competition from a number of companies operating in the vicinity. One of the largest competitors has high sales volume, which enables this competitor to purchase and sell edible fungi at a relatively lower price. Another major competitor has much larger plants and warehouses than we have and its main product is Mu Er mushrooms with different sorts and qualities. Competition from these two major competitors may prevent us from increasing our revenue.

On the other hand, although we believe we distinguish our Company from our competitors on the basis of product quality, the edible fungi industry is fragmented and subject to relatively low barriers of entry. Many of our competitors can provide products at relatively lower prices to increase their supplies which may affect our profit margins as we seek to compete with them.

Economy and Politics

Our results of operations have been adversely affected, to the extent that the COVID-19 or any other epidemic harms the Chinese and global economy in general. Any potential impact to our results will depend on, to a large extent, future developments and new information that may emerge regarding the duration and severity of the COVID-19 and the actions taken by government authorities and other entities to contain the COVID-19 or treat its impact, almost all of which are beyond our control.

Our ability to be successful in China depends in part on our awareness of trends in politics that may affect our company, including, for example, government initiatives that would either encourage or discourage programs and companies that produce healthy foods or efforts to increase export of agricultural products. In addition, we must be aware of political situations in destination countries of our products, particularly if such countries take action to stifle importation of food products from abroad.

3

Trend Information

We have noted the existence of the following trends since October 2020, all of which are likely to affect our business to the extent they continue in the future:

China’s edible fungi industryis growing, both in absolute terms and in market share.

Through its development of enoki mushroom industrialization technology in the 1960s, Japan became the world leader in mushroom farming. As other countries’ fungi farming technology improved, China began to supplant Japan and now became the largest worldwide edible mushroom producer. China’s growth has outpaced worldwide production growth rates. While China’s growth rates in the past much higher than world growth rates, it appears to be moving from rapid expansion to a more mature industry. As China’s mushroom industry is moving from rapid expansion to a more mature stage, we expect the effect of industry growth on promoting our sales volume will decrease.

The recoveryof economic activities in China since the end of COVID-19 lockdown in April 2020 has increased orders from our customers.

Our sales volume of Shiitake mushroom for the six months ended March 31, 2021 was approximately 768 tons. This number represents an increase of 177 tons compared with 591 tons sales volume for the same period of fiscal 2020. In the meanwhile, our sales volume of Mu Er for the six months ended March 31, 2021 was approximately 559 tons. This number represents an increase of 83 tons compared with 476 tons sales volume for the same period of fiscal 2020. On an overall basis, our sales volume of Shiitake mushroom and Mu Er was 1,328 tons for the six months ended March 31, 2021, an increase of 261 tons as compared with 1,067 tons sales volume for the same period of fiscal 2020. The increased sales of Shiitake mushroom and Mu Er was primarily because of the recovery of economic activities in China since the end of COVID-19 lockdown in April 2020 which resulted in an increase of customer orders. We expect our sales of Shiitake mushroom and Mu Er will keep increase in the foreseeable future as we expect to receive more customer orders arising from the recovery of economic activities.

4

Our aggregate employee salarieshave been increasing.

During the period of October 2020 to June 2021, our monthly salary expense was as follows:

The decrease in monthly employee salaries of February was mainly due to the Chinese New Year Holiday, when certain employees took extended unpaid leaves during the holiday period. Apart from a decrease in February 2021, monthly salaries during the period of October 2020 to June 2021 presented an increasing trend as a major portion of employee salaries are commissions and are directly related to sales volume.

Raw material costs have been onthe upward trends.

With our deep understanding of the edible fungi market, constant market research, and communication with our suppliers, we have been able to obtain favorable price for premium raw materials. With increased sales orders we receive, we need to purchase additional raw materials to meet the new demand. We expect the raw material costs in fiscal year 2021 will be increasing, fluctuating between 1% and 5% comparing with fiscal year 2020.

5

During the period from October 2020 to June 2021, the average monthly unit price per ton for Shiitake and Mu Er we purchased were as follows:

The decrease in average unit price of Shiitake in June 2021 was a temporal drop as we bought Shiitake in bulk at a lower price. We anticipate that for fiscal year 2021, the average unit price of Shiitake and Mu Er we purchase will be about $9,506 per ton and $10,035 per ton, respectively. We expect our gross margin will be slightly higher in fiscal year 2021 than in fiscal year 2020.

We expect the agriculture industryin China to become increasingly reliant on Internet sales.

Government initiatives such as the concept of “Internet+” articulated by Premier Li Keqiang beginning in 2015, reflect the government’s push to incorporate Internet and other information technology in conventional industries. One of the specific applications of this concept has been “Internet + Agriculture”, which reflects the increased use of technology both in the growing and sales sides of farming. In September 2018, we started another online store, Farmmi Liangpin Market, which mainly faced retail customers and started to generate revenue since October 2018. Besides selling edible fungi, this store also sells other agricultural products, such as rice, edible oil and other local specialty food products from different provinces of China. In December 2020, we closed our online store, Farmmi Liangpin Market, due to profitability issue.

In addition, we have seen shifts of Chinese consumers to purchase products — including food products like ours — online. We have been building our online store Farmmi Liangpin Market (now called Farmmi Jicai) in response to this trend, and this online store mainly targets on small wholesale clients, such as restaurants and retailers. Since its launch in December 2016, our online sales have been increasing rapidly.

6

During the six months ended March 31, 2021, our online sales accounted for 13.4% of our total sales. For the six months ended March 31, 2021, our aggregate online sales were $2,386,065, an increase of 19.2% compared with online sales for the same period in 2020, and the average monthly online sales were $397,677. The following chart shows our online sales for each month from October 2020 to June 2021:

The online sales during the six months ended March 31, 2021 increased as compared to the same period of last year. The increase in monthly online sales was mainly attributable to the recovery of economic activities in China which improve the demand for our products.

Increased sales to China Forest.

China Forest, one of the biggest edible fungi exporters in China, has been one of our major customers since 2016. Our sales to China Forest for the six months ended March 31, 2021 totaled $14,058,516, an increase of 35.1% from $10,409,681 for the same period in 2020, mainly due to the increased sales volume of Shiitake mushroom and Mu Er. Our sales of Shiitake mushroom to China Forest for the six months ended March 31, 2021 were 591 tons, an increase of 34.5% from 439 tons for the same period in 2020. Our sales of Mu Er to China Forest for the six months ended March 31, 2021 were 481 tons, an increase of 14.3% from 421 tons for the same period in 2020.

7

Critical AccountingPolicies and Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures in the financial statements. Critical accounting policies are those accounting policies that may be material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and that have a material impact on financial condition or operating performance. While we base our estimates and judgments on our experience and on various other factors that we believe to be reasonable under the circumstances, actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies used in the preparation of our financial statements require significant judgments and estimates. For additional information relating to these and other accounting policies, see Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this report.

Use of estimates

In preparing the consolidated financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment; allowances pertaining to the allowance for doubtful accounts and advances to suppliers; the valuation of inventories; the valuation of beneficial conversion feature of the convertible notes; and the valuation of deferred tax assets.

Revenue recognition

We recognized revenue following Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (“ASC Topic 606”). In accordance with ASC 606, to determine revenue recognition for contracts with customers, we perform the following five steps: (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.

We recognize revenue when we transfer our goods and services to customers in an amount that reflects the consideration to which we expect to be entitled in such exchange. All of our contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as a price per ton. We evaluate whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. In accordance with ASC 606, when we act as a principal, that we obtain control of the specified goods before they are transferred to the customers, the revenues should be recognized in the gross amount of consideration to which it expects to be entitled in exchange for the specified goods transferred.

The contract liabilities are recorded on the unaudited condensed consolidated balance sheets as advances from customers as of March 31, 2021 and September 30, 2020. For the six months ended March 31, 2021 and 2020, there was no revenue recognized from performance obligations related to prior periods.

We do not have any contract assets since revenue is recognized when control of the promised goods is transferred and the payment from customers is not contingent on a future event.

Refer to Note 15 — Segment reporting for details of revenue segregation of our Unaudited Condensed Consolidated Financial Statements.

Accounts receivable

Accounts receivable are presented net of allowance for doubtful accounts. We maintain allowance for doubtful accounts for estimated losses. We review our accounts receivable on a periodic basis and make general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, we consider various factors, including the age of the balance, customer’s payment history, its current credit-worthiness and current economic trends. Accounts are written off after efforts at collection prove unsuccessful. As of March 31, 2021 and September 30, 2020, allowance for doubtful accounts was $445,485 and $194,118, respectively.

Advances to suppliers,net

Advances to suppliers represent prepayments made to ensure continuous high-quality supplies and favorable purchase prices for premium quality. These advances are directly related to the purchases of raw materials used to fulfill sales orders. We are required from time to time to make cash advances when placing purchase orders. These advances are settled upon suppliers delivering raw materials to us when the transfer of ownership occurs. We review advances to suppliers on a periodic basis and make general and specific allowances when there is doubt as to the ability of a supplier to provide supplies to us or refund an advance. As of March 31, 2021 and September 30, 2020, allowance for doubtful accounts was $176,516 and $723,655, respectively.

Inventory, net

We value our inventory at the lower of cost, determined on a weighted average basis, or net realizable value. We review our inventory periodically to determine if any reserves are necessary for potential obsolescence or if the carrying value exceeds net realizable value. We recorded inventory reserve of $1,370 and $19,761 as of March 31, 2021 and September 30, 2020, respectively.

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Recent accounting pronouncements

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. ASU 2016-13 was subsequently amended by Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Accounting Standards Update 2019-04 Codification Improvements to Topic 326, Financial Instruments — Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, and Accounting Standards Update 2019-05, Targeted Transition Relief. For public entities, ASU 2016-13 and its amendments is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. For all other entities, this guidance and its amendments will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. As an emerging growth company, we plan to adopt this guidance effective October 1, 2023. We are currently evaluating the impact of our pending adoption of ASU 2016-13 on our consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes. ASU 2019-12 is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, with early adoption permitted. The Company will adopt this guidance effective October 1, 2021. The Company is currently evaluating the impact of its pending adoption of this guidance on its consolidated financial statements but does not expect this guidance will have a material impact on its consolidated financial statements.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the unaudited condensed consolidated financial position, statements of operations and cash flows.

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Results of Operationsfor the Six Months Ended March 31, 2021 and 2020

Overview

The following table summarizes our results of operations for the six months ended March 31, 2021 and 2020:

	Six<br> Months Ended March 31,						Variance
	2021			2020			Amount			%
Revenue	$	17,787,728		$	13,580,782			4,206,946			31.0
Cost of revenues		(14,799,813	)		(11,470,717	)		3,329,096			29.0
Gross profit		2,987,915			2,110,065			877,850			41.6
Allowance for doubtful debts		331,467			-			331,467			100.0
Selling and distribution expenses		(192,065	)		(142,382	)		49,683			34.9
General<br> and administrative expenses		(1,684,863	)		(828,414	)		856,449			103.4
Income from operations		1,442,454			1,139,269			303,185			26.6
Interest income		285			141			144			102.1
Interest expense		(61,866	)		(1,290,039	)		(1,228,173	)		(95.2	)
Other (expense)<br> income net		(1,722	)		110,966			(112,688	)		(101.6	)
Income (loss) before income taxes		1,379,151			(39,663	)		1,418,814			3,577.2
Provision<br> for income taxes		(17,212	)		(24,144	)		(6,932	)		(28.7	)
Net income<br> (loss)	$	1,361,939		$	(63,807	)		1,425,746			2,234.5

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Revenues

Currently, we have three main types of revenue streams deriving from our three major product categories: Shiitake, Mu Er and other edible fungi and other agricultural products.

The following table sets forth the breakdown of our revenues for the six months ended March 31, 2021 and 2020, respectively:

	Six Months Ended March 31,										Variance
	2021		%			2020		%			Amount			%
Shiitake	$	10,104,540		56.8	%	$	7,346,174		54.1	%	$	2,758,366			37.6	%
Mu Er		7,340,137		41.3	%		5,762,752		42.4	%		1,577,385			27.4	%
Other edible fungi and other agricultural products		343,051		1.9	%		471,856		3.5	%		(128,805	)		(27.3	)%
Total	$	17,787,728		100.0	%	$	13,580,782		100.0	%	$	4,206,946			31.0	%

Total revenues for the six months ended March 31, 2021 increased by $4,206,945, or 31.0%, to $17,794,331 from $13,580,782 for the same period of last year.

Revenue from sales of Shiitake increased by $2,758,366 or 37.6%, to $10,111,143 for the six months ended March 31, 2021 from $7,346,174 for the same period of last year, mainly due to the increased sales volume, from 591 tons for the six months ended March 31, 2020 to 768 tons for the six months ended March 31, 2021, which resulted in an increase of $2,268,188 in revenue from sales of Shiitake. The increase in sales volume of Shiitake was mainly attributed to the recovery of economic activities in China since the end of lockdown in April 2020 which resulted in an increase of customer orders. Also, the average unit sales price for Shiitake increased from $12,430 per ton for the six months ended March 31, 2020 to $13,160 per ton for the six months ended March 31, 2021, which resulted in an increase of $490,178 in revenue from sales of Shiitake. The increase in the average unit sales price of Shiitake was a result of increase in cost of revenue of Shiitake by which we adjusted our sales price to coincide with the increase in cost price.

Revenue from sales of Mu Er increased by $1,577,385, or 27.4%, to $7,340,137 for the six months ended March 31, 2021 from $5,762,752 for the same period of last year, mainly due to the increased sales volume. Sales volume of Mu Er increased to 559 tons for the six months ended March 31, 2021 from 476 tons for the same period of last year, which resulted in an increase of $1,050,009 in revenue from sales of Mu Er. The increase in sales volume of Mu Er was mainly attributed to the recovery of economic activities in China since the end of lockdown in April 2020 which resulted in an increase of customer orders. Also, the average unit sales price for Mu Er increased from $12,103 per ton for the six months ended March 31, 2020 to $13,125 per ton for the six months ended March 31, 2021, which resulted in an increase of $527,376 in revenue from sales of Mu Er. The increase in average unit sales price of Mu Er was a result of increase in cost of revenue of Mu Er by which we adjusted our sales price to coincide with the increase in cost price.

Revenue from sales of other edible fungi and other agricultural products decreased by $128,805, or 27.3%, to $343,051 for the six months ended March 31, 2021 from $471,856 for the same period of last year. The decrease was mainly attributed to the decrease in sales volume from 18 tons for the six months ended March 31, 2020 to 11 tons for the six months ended March 31, 2021, which resulted in a decrease of $204,402 in revenue from sales of other edible fungi and other agricultural products. The decrease in sales volume of other edible fungi and other agricultural products was caused by lesser customer orders in other edible fungi and other agricultural products as the increase in average unit sales price reduced demand and orders from customers. The decrease was partially offset by an increase in average unit sales price from $26,322 per ton for the six months ended March 31, 2020 to $31,444 per ton for the six months ended March 31, 2021, which resulted in an increase of $75,597 in revenue from sales of other edible fungi and other agricultural products. The increase in average unit sales price was a result of increase in cost of revenue of other edible fungi and other agricultural products by which we adjusted our sales price to coincide with the increase in cost price.

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Cost of Revenues

The following table sets forth the breakdown of the Company’s cost of revenue for the six months ended March 31, 2021 and 2020, respectively:

	Six Months Ended March 31,										Variance
	2021		%			2020		%			Amount			%
Shiitake	$	8,411,636		56.8	%	$	6,292,796		54.9	%		2,118,840			33.7	%
Mu Er		6,116,022		41.3	%		4,808,473		41.9	%		1,307,549			27.2	%
Other edible fungi and other agricultural products		272,155		1.9	%		369,448		3.2	%		(97,293	)		(26.3	)%
Total	$	14,799,813		100.0	%	$	11,470,717		100.0	%		3,329,096			29.0	%

Cost of revenues increased by $3,329,096, or 29.0%, to $14,799,813 for the six months ended March 31, 2021 from $11,470,717 for the same period of last year.

Cost of revenues of Shiitake increased by $2,118,840 or 33.7%, to $8,411,636 for the six months ended March 31, 2021 from $6,292,796 for the same period of last year. The increase was primarily attributable to the increase in sales volume from 591 tons for the six months ended March 31, 2020 to 768 tons for the six months ended March 31, 2021, which resulted in an increase of $1,914,792 in cost of revenue of Shiitake. Also, the increase was caused by an increase in average unit cost of Shiitake from $10,648 per ton for the six months ended March 31, 2020 to $10,946 per ton for the six months ended March 31, 2021, which resulted in an increase of $204,048 in cost of revenue of Shiitake. The increase in average unit cost was caused by increase in the cost of raw materials.

Cost of revenue of Mu Er increased by $1,306,216 or 27.2% to $6,114,690 for the six months ended March 31, 2021 from $4,808,473 for the same period of last year. The increase was primarily attributable to the increase in sales volume from 476 tons for the six months ended March 31, 2020 to 559 tons for the six months ended March 31, 2021, which resulted in an increase of $875,392 in cost of revenue of Mu Er. The increase was also caused by an increase in average unit cost of Mu Er from $10,102 per ton for the six months ended March 31, 2020 to $10,934 per ton for the six months ended March 31, 2021, which resulted in an increase of $430,824 in cost of revenue of Mu Er. The increase in average unit cost was caused by increase in the cost of raw materials.

Cost of revenue of other edible fungi and agricultural products decreased by $97,293, or 26.3%, to $272,154 for the six months ended March 31, 2021 from $369,448 for the same period of last year. The decrease was primarily attributable to the decrease in sales volume from 18 tons for the six months ended March 31, 2020 to 11 tons for the six months ended March 31, 2021, which resulted in a decrease of $161,196 in cost of revenue of other edible fungi and agricultural products. The decrease was partially offset by an increase in average unit cost of other edible fungi and agricultural products from $20,525 per ton for the six months ended March 31, 2020 to $24,946 per ton for the six months ended March 31, 2021, which resulted in an increase of $63,903 in cost of revenue of other edible fungi and agricultural products. The increase in average unit cost was caused by increase in the cost of raw materials.

The overall increase in the cost of our raw materials is mainly due to the decrease in harvest this year as compared with last year. Additionally, the recovery of economic activities in China since the end of lockdown in April 2020 increased market demand for our products and the reduced of supply exacerbated the increase in the cost of raw materials.

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Gross Profit

The following table sets forth the breakdown of the Company’s gross profit for the six months ended March 31, 2021 and 2020, respectively:

	Six Months Ended March 31,										Variance
	2021		%			2020		%			Amount			%
Shiitake		1,692,904		56.6	%	$	1,053,378		49.9	%		639,526			60.7	%
Mu Er		1,224,115		41.0	%		954,279		45.2	%		269,836			28.3	%
Other edible fungi and other agricultural products		70,896		2.4	%		102,408		4.9	%		(31,512	)		(30.8	)%
Total		2,987,915		100.0	%	$	2,110,065		100.0	%		877,850			41.6	%

Overall gross profit increased by $877,850 or 41.6%, to $2,987,915 for the six months ended March 31, 2021 from $2,110,065 for the same period of fiscal 2020. Gross profit from sales of Shiitake increased by $639,526 or 60.7%, to $1,692,904 for the six months ended March 31, 2021 from $1,053,378 for the same period of last year. Gross profit from sales of Mu Er increased by $269,836 or 28.3% to $1,224,115 for the six months ended March 31, 2021 from $954,279 for the same period of last year. Gross profit from sales of other edible fungi and agricultural products decreased by $31,512 or 30.8%, to $70,896 for the six months ended March 31, 2021 from $102,408 for the same period of last year. The increased gross profit was caused by increased sales for the six months ended March 31, 2021, as compared to the prior period.

Overall gross margin increased by 1.3 percentage points to 16.8% for the six months ended March 31, 2021 from 15.5% for the same period of last year. Overall average unit margin increased from $1,945 per ton for the six months ended March 31, 2020 to $2,232 per ton for the six months ended March 31, 2021. The increase in overall gross margin was mainly attributed to the increased gross margin of Shiitake as a result of higher selling prices for the six months ended March 31, 2021.

Allowancefor doubtful debts

The Company adopted a prudence stand to provide full allowance for doubtful debts for accounts receivable and advances to suppliers ageing greater than 6 months and provide a 5% allowance for doubtful debts for ageing less than 6 months. Allowance for doubtful debts decreased by $331,467, or 100%, to $331,467 for the six months ended March 31, 2021 from nil for the same period of last year, primarily due to the improvement of collections from accounts receivables and utilization of advances to suppliers.

Selling and distribution expenses

Selling and distribution expenses increased by $49,683, or 34.9%, to $192,065 for the six months ended March 31, 2021 from $142,382 for the same period of last year. The increase was primarily due to an increase in shipping expenses caused by the decrease in sales volume for the six months ended March 31, 2021, as compared to the same period of last year.

General and administrative expenses

General and administrative expenses increased by $856,449, or 103.4%, to $1,684,863 for the six months ended March 31, 2021 from $828,414 for the same period of last year. The increase was primarily attributable to the share-based compensation expenses arising from restricted shares granted to certain employees.

Interest expense

Interest expense was $61,866 for the six months ended March 31, 2021, as compared to $1,290,039 for the same period of last year. The decrease in interest expense was primarily attributable to the decreased amortization of debt issuance costs and decreased interest expense incurred for the convertible notes during the six months ended March 31, 2021.

Provision for income taxes

For the six months ended March 31, 2021 and 2020, our income tax expense was $17,212 and $24,144, respectively. The income tax expenses for the six months ended March 31, 2021 was as a result of certain PRC subsidiaries that have taxable income from operations. As for the income tax expenses for the six months ended March 31, 2020, the Company is in a loss position, the tax expense was primarily attributable to certain PRC entities that have taxable income from operations, the loss position was primarily incurred by overseas entities as a result of interest expenses of convertible notes.

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A total net income of $2.4 million and $1.7 million was exempt from income tax for the six months ended March 31, 2021 and 2020, respectively. The aggregate amount of our tax savings was approximately $0.6 million and $0.4 million for the six months ended March 31, 2021 and 2020, respectively. From April 1, 2021 to December 31, 2021, we expect to enjoy the tax exemption for 95% of our taxable income. The summary is below:

	Exempted net income	Tax holiday / exempted tax
October 1, 2015 – September 30, 2016	RMB7.8 million <br>(approximately $1.2 million)	RMB1.87 million <br>(approximately $0.28 million)
October 1, 2016 – September 30, 2017	RMB23.71 million <br>(approximately $3.5 million)	RMB5.9 million <br>(approximately $0.87 million)
October 1, 2017 – September 30, 2018	RMB25.38 million <br>(approximately $3.9 million)	RMB6.3 million <br>(approximately $0.97 million)
October 1, 2018 – September 30, 2019	RMB24.72 million <br>(approximately $3.6 million)	RMB6.2 million <br>(approximately $0.90 million)
October 1, 2019 – September 30, 2020	RMB26.8 million <br>(approximately $3.8 million)	RMB6.7 million <br>(approximately $0.95 million)
October 1, 2020 – March 31, 2021	RMB15.38 million<br> (approximately $2.4 million)	RMB3.85 million<br> (approximately $0.6 million)

Net income (loss)

As a result of the factors described above, our net income was $1,361,939 for the six months ended March 31, 2021, an increase of $1,425,746 from net loss of $63,807 for the same period of fiscal year 2020.

Liquidity andCapital Resources

We are a holding company incorporated in the Cayman Islands. We may need dividends and other distributions on equity from our PRC subsidiaries to satisfy our liquidity requirements. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, our PRC subsidiaries are required to set aside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of their respective registered capital. Our PRC subsidiaries may also allocate a portion of its after-tax profits based on PRC accounting standards to employee welfare and bonus funds at their discretion. These reserves are not distributable as cash dividends.

Further, although instruments governing the current debts incurred by our PRC subsidiaries do not have restrictions on their abilities to pay dividends or make other payments to us, the lender may impose such restriction in the future. As a result, our ability to distribute dividends largely depends on earnings from our PRC subsidiaries and their ability to pay dividends out of earnings. Management believes that our current cash, cash flows provided by operating activities, and access to loans will be sufficient to meet our working capital needs for at least the next 12 months. We intend to continue to carefully execute our growth plans and manage market risk.

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As of March 31, 2021 and September 30, 2020, we had cash in the amount of $16,044,817 and $2,165,151, respectively. Total current assets as of March 31, 2021 amounted to $46,089,689, an increase of $9,069,518 compared to $37,022,171 at September 30, 2020. The increase in total current assets at March 31, 2021 compared to September 30, 2020 was mainly due to the increase in cash arising from issuance of ordinary shares. Current liabilities amounted to $7,909,336 at March 31, 2021, in comparison to $8,367,387 at September 30, 2020. This decrease of current liabilities was mainly attributable to the decrease in salaries payable and shipping expenses payable.

Although management believes that the cash generated from operations will be sufficient to meet our normal working capital needs for at least the next twelve months, our ability to repay our current obligations will depend on the future realization of our current assets. Management has considered the historical experience, the economy, trends in the agricultural product industry, the expected collectability of accounts receivable and the realization of the inventories as of March 31, 2021. Based on the above considerations, management is of the opinion that we have sufficient funds to meet our working capital requirements and debt obligations as they become due. However, there is no assurance that management will be successful in our plan. There are a number of factors that could potentially arise which might result in shortfalls to what is anticipated, such as the demand for our products, economic conditions, the competition in the industry, and our bank and suppliers being able to provide continued support. If the future cash flow from operations and other capital resources is insufficient to fund our liquidity needs, we may be forced to obtain additional debt or equity capital, or refinance all or a portion of our debt.

***Indebtedness.***As of March 31, 2021, we have $1,968,925 of short-term bank loans and $3,357,856 bank acceptance notes payable. As of May 8, 2021 and July 7, 2021, principal of RMB2.9 million ($442,627) and principal of RMB10 million (equivalent of approximately $1.53 million) were fully repaid, respectively. As of June 15, 2021, bank acceptance notes were fully paid. Beside these loans and bank acceptance notes payable, we did not have any finance leases or purchase commitments, guarantees or other material contingent liabilities.

Off-BalanceSheet Arrangements. We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholders’ equity, or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in any unconsolidated entity that we provide financing, liquidity, market risk or credit support to or engages in hedging or research and development services with us.

CapitalResources. The primary drivers and material factors impacting our liquidity and capital resources include our ability to generate sufficient cash flows from our operations and renew commercial bank loans, as well as proceeds from equity and debt financing, to ensure our future growth and expansion plans. On April 13, 2021, the Company issued and sold a total of 970,419 ordinary shares at a price to the public of $1.15 per share and the net proceeds were approximately $1.0 million. On May 3, 2021, the Company issued and sold a total of 161,000,000 ordinary shares at a price to the public of $0.30 per share and the net proceeds were approximately $43.9 million. As of March 31, 2021, we had total assets of $47.2 million, which includes cash and restricted cash of $16.0 million, short-term deposit of $2.7 million, accounts receivable of $13.4 million, advance to suppliers of $12.9 million and inventory of $0.8 million, working capital of $38.2 million, and total equity of $38.7 million.

WorkingCapital. Total working capital as of March 31, 2021 amounted to $38,180,353, compared to $28,654,784 as of September 30, 2020.

CapitalNeeds. Our capital needs include our daily working capital needs and capital needs to finance the development of our business. We have established effective collection procedures of our accounts receivable, and have been able to realize or receive the refund of the advances to suppliers in the past. Our management believes that income generated from our current operations can satisfy our daily working capital needs over the next 12 months. We may also raise additional capital through public offerings or private placements to finance our business development and to consummate any merger or acquisition, if necessary.

15

Cash flows

The following table provides detailed information about our net cash flows for the six months ended March 31, 2021 and 2020:

	For the six months ended<br> <br>March 31,
	2021			2020
Net provided by<br> operating activities	$	9,725,259		$	5,686,467
Net cash used in investing activities		(2,767,971	)		(246,726	)
Net cash provided by (used in)<br> financing activities		6,843,663			(453,757	)
Effect of exchange rate changes<br> on cash and restricted cash		78,715			(39,666	)
Net increase in cash and restricted<br> cash		13,800,951			4,946,318
Cash and<br> restricted cash, beginning of period		2,165,151			753,815
Cash<br> and restricted cash, end of period	$	16,044,817		$	5,700,133

Operating Activities

Net cash provided by operating activities was $9,725,259 for the six months ended March 31, 2021. This was an increase of $4,038,792 compared to net cash used in operating activities of $5,686,467 for the six months ended March 31, 2020. The increase in net cash provided by operating activities was primarily attributable to net income of $1,361,939 and an increase of $11,789,665 in advances to suppliers. The increase was partially offset by a decrease of $2,873,919 in accounts receivable.

Investing Activities

For the six months ended March 31, 2021, net cash used in investing activities amounted to $2,767,971 as compared to net cash used in investing activities of $246,726 for the same period of 2020. The increase of $2,521,245 was primarily due to short-term deposits of $2,751,873 placed with a bank.

Financing Activities

Net cash provided by financing activities amounted to $6,843,663 for the six months ended March 31, 2021, as compared to net cash used in financing activities of $453,757 for the same period in 2020. The increase of $7,297,420 in net cash provided by financing activities was mainly due to net proceeds of $6,709,040 arising from stock issuance.

16

Commitments and Contractual Obligations

The following table presents the Company’s material contractual obligations as of March 31, 2021:

****<br><br>Contractual Obligations	****<br><br>Total		Less<br> than <br><br> 1 year		1-2<br> <br><br> years		3-5<br> <br><br> years		More<br> than<br><br> 5 years
Short-term bank loans		1,968,925		1,968,925		-		-		-
Bank acceptance notes payable		3,357,856		3,357,856		-		-		-
Operating<br> lease obligations		831,681		189,923		176,168		192,969		275,621
Total		6,158,462		5,516,704		176,168		192,969		275,621

17

Exhibit 99.3

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Farmmi Reports First Half 2021 Financial Results

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Financial Highlights (six months ended March31, 2021 compared to March 31, 2020)

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·         31% Increase in Revenue; Shiitake Sales Increase 38%; Mu Er Sales Increase 27%

·         41.6% Increase in Gross Profit

·         Net Income Expands to $1.36 Million or $0.07 per Basic and Diluted Share from Year Ago Loss

·	Company Expects Sales Momentum to Continue in SecondHalf

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LISHUI, China, August 2, 2021 – Farmmi, Inc. (“Farmmi” or the “Company”) (NASDAQ: FAMI), an agriculture products supplier in China, today announced its financial results for the six months ended March 31, 2021.

Ms. Yefang Zhang, Farmmi’s Chairwoman and CEO, commented, "We are very pleased with our strong revenue growth and surge in profitability. We successfully worked with our supply chain and customers to meet demand levels that were moving up and down with the COVID-19 lockdowns. Our efforts paid off and we achieved impressive growth in our core Shiitake and Mu Er businesses, as we continue to leverage our competitive advantages, including premium product quality, sought after production locations and strong supplier relationships. Importantly, we significantly strengthened our balance sheet and now have the resources to support our accelerated long-term growth strategy.”

Ms. Zhang continued, “Through our continued efforts to build our e-commerce platform, expand internationally, and build upon relationship with our suppliers, we expect to expand our product lines and improve our brand awareness and customer loyalty, as we meet higher customer demand levels and drive sales growth. We are stepping up our sales and marketing activities, investing in our supply chain and laying the groundwork for our long-term success with our ongoing business transformation. We announced in May that we will be leveraging more than two decades of experience in China’s agriculture industry, as we build on Farmmi’s core business of high quality agricultural products to grow into a comprehensive service provider for the agricultural industry chain. We took additional action in June, with a major cooperation and strategic investment announcement signaling our active expansion into the distribution network of agricultural products, which we expect will further strengthen our presence in the agricultural supply chain and open additional profit improvement opportunities. Overall, we are in a strong competitive position with considerable opportunities for revenue and profit growth, as we remain focused on building shareholder value.”

Financial Highlights

	For the Six Months Ended March 31,
($ millions, except per share and percentage data)	2021			2020			Change
Revenues	$	17.79		$	13.58			31.0	%
Shiitake		10.10			7.35			37.6	%
Mu Er		7.34			5.76			27.4	%
Other edible fungi and other agricultural products		0.34			0.47			(27.3	)%
Gross profit		2.99			2.11			41.6	%
Gross margin		16.8	%		15.5	%		1.3pp*
Income from operations	$	1.44		$	1.14			26.3	%
Interest Expense		0.06			1.29			(95.3	)%
Net Income (loss) attributable to Farmmi, Inc.		1.36			(0.06	)		1.31
Basic and diluted income (loss) per share		0.07			(0.00	)		0.07

*Notes: pp represents percentage points

Revenues

Total revenues increased 31.0% to $17.79 million for the six months ended March 31, 2021, as compared to $13.58 million for the six months ended March 31, 2020. The increased sales volume is mainly attributable to the recovery of economic activities in China since the end of the COVID-19 lockdown in April 2020, which led to increased customer orders.

Revenue from sales of Shiitake increased 37.6% to $10.10million for the six months ended March 31, 2021 from $7.35 million for the six months ended March 31, 2020, led by a 29.9% increase in sales volume to 768 tons from 591 tons over the same period. Revenue from sales of Mu Er increased 27.4% to $7.34 million for the six months ended March 31, 2021 from $5.76 million for the six months ended March 31, 2020, with a 17.4% increase in sales volume to 559 tons from 476 tons over the same period. Revenue from sales of other edible fungi and other agricultural products decreased 27.3% to $0.34 million for the six months ended March 31, 2021 from $0.47 million for the first six months March 31, 2020, with a 38.8% decline in sales volume to 11 tons from 18 tons over the same period.

Cost of Revenues

Cost of revenues increased by 29.0% to $14.80 million for the six months ended March 31, 2021 from $11.47 million for the six months ended March 31, 2020, in support of the 31% increase in sales volume over the same period combined with a higher cost of raw materials.

Cost of revenues of Shiitake increased 33.7% to $8.41 million for the six months ended March 31, 2021 from $6.29 million for the six months ended March 31, 2020. Cost of revenue of Mu Er increased 27.2% to $6.11 million for the six months ended March 31, 2021 from $4.81 million for the six months ended March 31, 2020. Cost of revenue of other edible fungi and agricultural products decreased 26.3% to $0.27 million for the six months ended March 31, 2021 from $0.37 million for the six months ended March 31, 2020.

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Gross Profit

Overall gross profit increased by 41.6% to $2.99 million for the six months ended March 31, 2021 from $2.11 million for the six months ended March 31, 2020. Gross profit from sales of Shiitake increased 60.7% to $1.69 million for the six months ended March 31, 2021 from $1.05 million for the six months ended March 31, 2020. Gross profit from sales of Mu Er increased 28.3% to $1.22 million for the six months ended March 31, 2021 from $0.95 million for the six months ended March 31, 2020. Gross profit from sales of other edible fungi and agricultural products decreased 30.8% to $0.07 million for the six months ended March 31, 2021 from $0.10 million for the six months ended March 31, 2020.

Overall gross margin increased by 1.3 percentage points to 16.8% for the six months ended March 31, 2021 from 15.5% for the six months ended March 31, 2020. The increase in overall gross margin is mainly attributable to the improvement in increased gross margin of Shiitake, as a result of higher selling prices for the six months ended March 31, 2021.

Expenses

Selling and distribution expenses increased 34.9% to $0.19 million for the six months ended March 31, 2021 from $0.14 million for the six months ended March 31, 2020. The increase is primarily due to an increase in shipping expenses.

General and administrative expenses increased 103.4%, to $1.68 million for the six months ended March 31, 2021 from $0.83 million for the six months ended March 31, 2020. The increase is primarily attributable to the share-based compensation expenses arising from restricted shares granted to certain employees.

Interest expense decreased to $0.06 million for the six months ended March 31, 2021 from $1.29 million for the six months ended March 31, 2020. The decrease in interest expense is primarily attributable to the decreased amortization of debt issuance costs and decreased interest expense incurred for the convertible notes during the six months ended March 31, 2021.

Net Income (loss)

Net income attributable to common shareholders for the six months ended March 31, 2021 increased to $1.36 million for the six months ended March 31, 2021 from a net loss of $0.06 million for the six months ended March 31, 2020.

Financial Condition

As of March 31, 2021, the Company had a cash balance of $16.0 million, with total current assets of $46.1 million. Current liabilities amounted to $7.9 million at March 31, 2021.

About Farmmi, Inc.

Headquartered in Lishui, Zhejiang, Farmmi, Inc. (NASDAQ: FAMI), is an agricultural products supplier, processor and retailer of Shiitake mushrooms, Mu Er mushrooms, other edible fungi and other agricultural products. For further information about the Company, please visit: http://ir.farmmi.com.cn/.

Forward-Looking Statements

This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including the potential impact of COVID-19 on our business within and outside of China and the size of the worldwide mushroom market. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results.

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For more information, please contact InvestorRelations:

Global IR Partners

David Pasquale

New York Office Phone: +1-914-337-8801

FAMI@Globalirpartners.com