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

FORM 10-Q

[X] Quarterly report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2015

[_] Transition report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _______ to _______.

001-33960
(Commission file number)

SHINER INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

Nevada	98-0507398
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

19/F, Didu Building, Pearl River Plaza,
No. 2 North Longkun Road
Haikou, Hainan Province
China 570125
(Address of principal executive offices)

011-86-898-68581104
(Issuer’s telephone number)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X]                     No [_]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)

Yes [X]                     No [_]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

	Large accelerated filer [_]	Accelerated filer [_]
	Non-accelerated filer [_]	Smaller reporting company [X]
	(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [_]                     No [X]

The number of shares outstanding of each of the issuer’s classes of common stock, as of May 13, 2015 is as follows:

Class of Securities	Shares Outstanding
Common Stock, $0.001 par value	27,541,491

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TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	28
Item 6.	Exhibits	28

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PART I
FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

		March 31,			December 31,
		2015			2014
		(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and equivalents	$	12,449,935		$	5,710,373
Restricted cash		1,271,614			7,972,290
Accounts receivable, net		7,053,716			7,656,456
Other receivables		18,838,729			20,563,087
Advances to suppliers		26,032,994			23,529,482
Notes receivable		179,740			35,794
Inventory, net		10,983,454			9,983,143
Prepaid expenses and other current assets		190,345			238,317
Total current assets		77,000,527			75,688,942
Property and equipment, net		24,996,463			25,872,633
Construction in progress		7,244,383			7,007,576
Advance for purchase of equipment		597,700			727,764
Other non-current receivables		12,342,579			18,797,707
Intangible assets, net		1,049,853			1,051,243
TOTAL ASSETS	$	123,231,505		$	129,145,865
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable	$	9,311,907		$	8,968,199
Other payables		15,993,986			18,177,999
Unearned revenue		27,414			272,135
Accrued payroll		117,923			139,274
Short-term loans		41,422,584			38,744,022
Long-term loan, currently in default		13,072,000			19,524,000
Total current liabilities		79,945,814			85,825,629
Long-term loans		7,353,000			7,321,500
Total liabilities		87,298,814			93,147,129
Commitments and contingencies
EQUITY:
Shiner stockholders' equity:
Common stock, par value $0.001; 75,000,000 shares authorized,  27,603,336 shares issued and 27,541,491 shares outstanding		27,603			27,603
Additional paid-in capital		14,336,456			14,336,456
Treasury stock (61,845 shares)		(58,036	)		(58,036	)
Other comprehensive income		6,763,863			6,611,234
Statutory reserve		4,184,300			4,085,752
Retained earnings		10,296,898			11,229,373
Total Shiner stockholders' equity		35,551,084			36,232,382
Noncontrolling interest		381,607			(233,646	)
Total equity		35,932,691			35,998,736
TOTAL LIABILITIES AND EQUITY	$	123,231,505		$	129,145,865

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

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES

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

THREE MONTHS ENDED MARCH 31, 2015 AND 2014

(Unaudited)

		2015			2014
Net revenue	$	13,806,856		$	25,264,780
Cost of goods sold		11,479,169			21,045,850
Gross profit		2,327,687			4,218,930
Operating expenses:
Selling		1,045,384			965,305
General and administrative		1,759,842			1,316,358
Total operating expenses		2,805,226			2,281,663
Income (loss) from operations		(477,539	)		1,937,267
Non-operating income (expense):
Other income, net		201,857			(706,178	)
Interest income		733,954			6,651
Interest expense		(1,252,610	)		(538,042	)
Exchange gain (loss)		2,108			(4,030	)
Total non-operating expense		(314,691	)		(1,241,599	)
Income (loss) before income tax		(792,230	)		695,668
Income tax expense		62,609			293,342
Net income (loss)		(854,839	)		402,326
Net income (loss) attributed to noncontrolling interest		(20,912	)		3,199
Net income (loss) attributed to Shiner	$	(833,927	)	$	399,127
Comprehensive income (loss):
Net income (loss)	$	(854,839	)	$	402,326
Foreign currency translation gain (loss)		154,264			(289,428	)
Comprehensive income (loss)	$	(700,575	)	$	112,898
Weighted average shares outstanding :
Basic		27,541,491			27,541,491
Diluted		27,541,491			27,541,491
Earnings (loss) per share attributed to Shiner common stockholders:
Basic	$	(0.03	)	$	0.01
Diluted	$	(0.03	)	$	0.01

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

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2015 AND 2014

(Unaudited)

		2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(854,839	)	$	402,326
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation		999,346			924,018
Amortization		5,887			5,916
Gain on sale and write off of assets
Change in working capital components:
Accounts receivable		633,558			3,896,293
Other receivables		503,670			(2,949,357	)
Inventory		(952,145	)		(1,717,531	)
Notes receivable		(143,176	)		553,835
Advances to suppliers		(2,304,993	)		(4,310,681	)
Other assets		48,788			175,058
Accounts payable		232,382			(1,030,427	)
Unearned revenue		(269,410	)		(2,199,309	)
Other payables		(382,201	)		97,780
Accrued payroll		(21,857	)		10,772
Net cash used in operating activities		(2,504,990	)		(6,141,307	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for property and equipment		(88,446	)		(172,474	)
Decrease in restricted cash		6,706,123			(754,011	)
Increase in other payables		(1,885,225	)		-
Payment on other receivable		7,831,113			-
Net cash provided by (used in) investing activities		12,563,565			(926,485	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of short-term loans		(19,219,656	)		(8,002,015	)
Proceeds from short-term loans		21,720,765			13,607,968
Repayment of long-term loans		(6,508,000	)		-
Contribution by non-controlling interest		634,530			-
Net cash provided by (used in) financing activities		(3,372,361	)		5,605,953
Effect of exchange rate changes on cash and cash equivalents		53,348			(80,412	)
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS		6,739,562			(1,542,251	)
CASH AND EQUIVALENTS, BEGINNING BALANCE		5,710,373			9,135,988
CASH AND EQUIVALENTS, ENDING BALANCE	$	12,449,935		$	7,593,737
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	$	1,210,039		$	515,969
Income taxes paid	$	-		$	62,785

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

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014 (Unaudited)

Note 1 - Organization and Basis of Presentation

The unaudited consolidated financial statements were prepared by Shiner International, Inc. (the “Company” or “Shiner”), pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) were omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K filed with the SEC on April 20, 2015. The results for the three months ended March 31, 2015, are not necessarily indicative of the results to be expected for the year ending December 31, 2015.

Organization and Line of Business

The Company was incorporated in the State of Nevada on November 12, 2003. The Company, through its subsidiaries manufactures Biaxially Oriented Polypropylene (“BOPP”) tobacco film, coated films, color printing products, advanced film, and water based coatings selling to customers throughout the People’s Republic of China (“China” or “PRC”), Asia, Australia, Europe, the Middle East and North America. Our products are sold to companies in the following industries: food, tobacco, chemical, agribusiness, medical, pharmaceutical, personal care, electronics, automotive, construction, graphics, music and video publishing and other consumer goods.

Except as otherwise indicated by the context, all references in this report to “Shiner,” “Company,” “we,” “us” or “our” are to Shiner International, Inc. and its direct and indirect subsidiaries: (i) Hainan Shiner Industrial Co., Ltd., or “Hainan Shiner,” (ii) Hainan Shiny-Day Color Printing Packaging Co., Ltd., or “Shiny-Day,” (iii) Hainan Modern Hi-Tech Industrial Co., Ltd., or “Hainan Modern,” (iv) Zhuhai Modern Huanuo Packaging Material Co., Ltd., or “Zhuhai Modern,” (v) Shimmer Sun Ltd., or “Shimmer Sun,” (vi) Hainan Jingyue New Material Co., Ltd., or “Jingyue,” (vii) Hainan Shunhao New Material Co., Ltd., or “Shunhao,” (viii) Hainan Yongxin Environmental Co., Ltd., or “Yongxin,” (ix) Hainan Runhai Color Printing Packaging Co., or “Hainan Runhai,” (x) Hainan Saihang Photoelectric Co. Ltd., or “Hainan Saihang, ” (xi) Hainan Juneng Functional Film Co., or “Hainan Juneng” and (xii) Ningbo Neisuoer Latex Co., Ltd., or “Ningbo”.

The Company has historically advanced minimal funds to customers and other unrelated third parties that are non-interest bearing and payable upon demand. However, in 2014 the Company decided to temporarily expand its advances to unrelated third parties. On April 17, 2014, Hainan Shiner, the Company’s primary operating subsidiary, drew down entirely on a RMB120 million (approximately $19.5 million) credit facility collateralized by the common stock of Hainan Shiner, buildings and land use rights. The facility bears interest at 7.35% per annum and is due and payable on April 17, 2017. Under the terms of the credit facility agreement, the proceeds of the funds borrowed under the credit facility are to be used solely for the construction of an office building and research facility at the Hainan Xiandai Packaging Industrial Park, and for the purchase of research and development equipment. However, on April 30, 2014, the Company loaned the entire proceeds of the credit facility to unrelated third parties (see Note 3). The business purpose for these loans was for the Company to make the spread between the amount of interest it pays on the credit facility and the amount of interest it can charge. Such parties have not provided the Company with significant collateral on such loans, other than a written guarantee from each of the borrowers and an unrelated fourth party. We do not consider this practice of lending money to third parties to be a new business segment as we deem this practice to be temporary.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Shiner and its subsidiaries as follows:

		Place		Percentage
Subsidiary		Incorporated		Owned		Parent
Shiner International, Inc.		Nevada, USA				-
Hainan Shiner		China		100%		Shiner International, Inc.
Shiny-Day		China		100%		Shiner International, Inc.
Hainan Modern		China		100%		Shiny-Day/Hainan Shiner
Zhuhai Modern		China		100%		Hainan Shiner/Shiner International, Inc.
Shimmer Sun		China		100%		Shiner International, Inc.
Jingyue		China		100%		Shimmer Sun Limited
Shunhao		China		100%		Jingyue
Yongxin		China		100%		Shunhao
Hainan Runhai		China		100%		Shiny-Day
Hainan Saihang		China		100%		Hainan Shiner
Hainan Juneng		China		50%		Hainan Shiner
Ningbo		China		65%		Yongxin

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014 (Unaudited)

The accompanying consolidated financial statements were prepared in conformity with US GAAP. The Company’s functional currency is the Chinese Yuan Renminbi (“RMB”); however, the accompanying consolidated financial statements were translated and presented in United States Dollars (“$” or “USD”).

Noncontrolling Interest

On May 2, 2011, Shiner acquired 100% of the stock of Shimmer Sun Ltd. (“Shimmer Sun”) for $3.2 million. The Company paid $1.3 million in cash and the remaining $1.9 million was recorded as “other payables’ which was paid by September 30, 2011. The acquisition gave Shiner a 65% controlling interest in Shimmer Sun’s subsidiary, Ningbo. The transaction was accounted for under the acquisition method of accounting, with the purchase price allocated based on the fair value (“FV”) of the individual assets acquired and liabilities assumed.

In the fourth quarter of 2014, the Company set up a new subsidiary, Hainan Juneng, originally owned 70% by Hainan Shiner and 30% by an unrelated third party. During the quarter ended March 31, 2015 another unrelated third party purchased additional stock from Hainan for RMB 3,900,000 ($634,530. As of March 31, 2105, the Company owns 50% of Hainan Juneng and two other parties own the remaining 50%. The 50% owned by the third parties is presented as noncontrolling interest.

The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, “Consolidation,” which governs the accounting for and reporting of non-controlling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially owned consolidated subsidiary be allocated to the NCI even when such allocation might result in a deficit balance. This standard also required changes to certain presentation and disclosure requirements.

The net income attributed to the NCI is separately designated in the accompanying consolidated statements of operations and other comprehensive income (loss). Losses attributable to the NCI in a subsidiary may exceed the NCI’s interests in the subsidiary’s equity. The excess attributable to the NCI is attributed to those interests. The NCI shall continue to attribute its share of losses even if that attribution results in a deficit NCI balance.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Shiner International, Inc. and its subsidiaries. All significant intercompany transactions and balances were eliminated in consolidation.

Foreign Currency Translation

The accounts of the Company’s Chinese subsidiaries are maintained in RMB and the accounts of the US parent company are maintained in USD. The accounts of the Chinese subsidiaries are translated into USD in accordance with FASB ASC Topic 830, “Foreign Currency Matters,” with the RMB as the functional currency. According to FASB ASC Topic 830, all assets and liabilities are translated at the exchange rate on the balance sheet date, stockholders’ equity is translated at historical rates and statement of operations items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with FASB ASC Topic 220, “Comprehensive Income.” Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the consolidated statement of operations and other comprehensive income (loss).

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014 (Unaudited)

Note 2 - Summary of Significant Accounting Policies

Going Concern

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of March 31, 2015 and December 31, 2014, the Company was in violation of certain loan covenants which required the entire loan amount to be shown as a current liability. This classification of a long-term note payable as a current liability resulted in the Company having a working capital deficit at March 31, 2015 and December 31, 2014. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

On April 17, 2014, Hainan Shiner, the Company’s primary operating subsidiary, drew down entirely on a RMB120 million (approximately $19.5 million) credit facility collateralized by the common stock of Hainan Shiner, buildings and land use rights. The facility bears interest at 7.35% per annum and is due and payable on April 17, 2017. Under the terms of the credit facility agreement, the proceeds of the funds borrowed under the credit facility are to be used solely for the construction of an office building and research facility at the Hainan Xiandai Packaging Industrial Park, and for the purchase of research and development equipment. However, on April 30, 2014, the Company loaned the entire proceeds of the credit facility to unrelated third parties. Such parties have not provided the Company with significant collateral on such loans, other than a written guarantee from each of the borrowers and an unrelated fourth party. The use of the proceeds from the credit facility to provide such loans constitutes a breach under the credit facility agreement. The Company has not obtained a waiver from the lender for such use of proceeds and the lender has the right to declare a breach of the trust agreement and enforce its right to ownership of the stock, buildings and land use rights of Hainan Shiner. Furthermore, if the borrowers are unable to fulfill their obligations under the Company’s loans to them and their guarantees fail, the Company will be obligated to repay the credit facility in its entirety. If the Company is unable to repay this debt in full by the due date it could lose control of Hainan Shiner, certain buildings and land use rights. Finally, the Company’s inability to obtain a waiver for the violation of the loan agreement resulted in the amount due under this credit facility being shown as a current liability. If the lender calls the loan due to the violation of the trust agreement, the Company will attempt to negotiate a waiver from the current lender or request additional time to repay the loan to allow the Company time to collect the amounts due the from unrelated third parties, or to obtain other financing to repay this lender.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Equivalents

Cash and equivalents include cash on hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.

Restricted Cash

Restricted cash consists of monies restricted by the Company’s lenders related to its outstanding debt obligations.

Accounts Receivable, net

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. Based on historical collection activity, the Company had allowances of $1,423,789 and $1,576,952 (audited) at March 31, 2015 and December 31, 2014, respectively.

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014 (Unaudited)

Other Receivables

Other receivables consist of amounts due from customers that are non-interest bearing and payable upon demand and amounts due from other unrelated third parties that bear interest and have specific repayment dates - (See Note 3).

Advances to Suppliers

To ensure a steady supply of raw materials, the Company is required from time to time to make cash advances when placing its purchase orders. Management determined no reserve was necessary for advances to suppliers. The advances to suppliers are interest free and unsecured.

Notes Receivable

Notes receivable consist of bank notes received from customers as payment of their accounts receivable. The notes are guaranteed by banks and bear no interest. The notes are generally due within twelve months from the date of issuance.

Inventory, net

Inventory is valued at the lower of the inventory’s cost (weighted average basis) or the current market price of the inventory. Management compares the cost of inventory with its market value and an allowance is made to write down inventory to market value, if lower.

Property and Equipment, net

Property and equipment are stated at cost. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and improvements are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with estimated lives as follows:

Operating equipment	10 years
Vehicles	8 years
Office equipment	5 years
Buildings and improvements	20 years

Construction in Progress and Government Grants

Construction in progress mainly consists of amounts expended to build a manufacturing workshop in Hainan, including a product line for a BOPP tobacco line. The costs incurred and capitalized as construction in progress at March 31, 2015 and December 31, 2014 include facility and equipment. Once the project is completed, it will be transferred from “Construction in progress” to “Property and equipment.” The total cost of the new Hainan manufacturing workshop and the BOPP tobacco line is expected to be $25.1 million. The first phase of the project was completed during 2010.

In October 2009, the Company received a government grant for the above project of RMB29.1 million (or $4.3 million based on the exchange rate at December 31, 2009) from the Hainan Province Finance Bureau (“HPFB”). The Company is required to provide detailed expenses of the construction project to the HPFB. At the end of the project, the government will determine if the funds were used in accordance with the grant. At March 31, 2015 and December 31, 2014 respectively, RMB20.1 million ($3.3 million based on the exchange rate at March 31, 2015) and RMB20.8 million ($3.4 million (audited) based on the exchange rate at December 31, 2014) was recorded in “Other payables” on the accompanying consolidated financial statements (Note 7). The government grant is being amortized into other income over the useful life of the asset on the same basis used to depreciate the asset. For the three months ended March 31, 2015 and 2014, the Company amortized $118,364 and $118,946, respectively, into “Other income.”

In December 2011, the Company received a government grant of RMB14.0 million (or $2.2 million (audited) based on the exchange rate as of December 31, 2011) from the Haikou Finance Bureau (“HFB”) for the adjustment and expansion of our operations and related capital expenditures for construction and equipment purchases. The Company is required to provide detailed expenses of the construction project to HFB. At the end of the project, the government will determine if the funds were used in accordance with the grant. At March 31, 2015 and December 31, 2014, respectively, RMB9.7 million ($1.6 million based on the exchange rate at March 31, 2015) and RMB10.0 million ($1.6 million (audited) based on the exchange rate at December 31, 2014) was recorded in “Other payables” on the accompanying consolidated financial statements (Note 7). The government grant is being amortized into other income over the useful life of the asset on the same basis used to depreciate the asset. For the three months ended March 31, 2015 and 2014, the Company amortized $56,945 and $57,225, respectively, into “Other income.”

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014 (Unaudited)

In January 2012, the Company received a government grant of RMB1.8 million (or $0.3 million based on the exchange rate as of January 31, 2012) from the HFB for the adjustment and expansion of our operation and related capital expenditures for construction and equipment purchase. The Company is required to provide detailed expenses of the construction project to the HFB. At the end of the project, the government will determine if the funds were used in accordance with the grant. At March 31, 2015 and December 31, 2014, the grant was recorded in “Other payables” on the accompanying consolidated financial statements (Note 7). If the government determines the funds were used for their intended purpose, the government grant is then amortized into “Other income” over the useful life of the asset on the same basis being used to depreciate the asset.

A rollfoward of the construction in progress (“CIP”) from December 31, 2014 to March 31, 2015 is below:

CIP at December 31, 2014	$	7,007,576
Transfers to property and equipment		-
Additions during 2015		205,545
Foreign currency translation		31,262
CIP at March 31, 2015	$	7,244,383

Long-Lived Assets

The Company applies FASB ASC Topic 360, “Property, Plant, and Equipment,” which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. FASB ASC Topic 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the FV of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that FVs are reduced to recognize the cost of disposal. Based on its review, the Company believes that as of March 31, 2015 and December 31, 2014 (audited), respectively, there was no significant impairment of its long-lived assets.

Intangible Assets

Intangible assets consist of rights to use three plots of land in Haikou City granted by the Municipal Administration of China for state-owned land. For two of these plots, the Company’s rights run through January 2059 and, for the third, through October 2060. The Company also acquired a patent with the acquisition of Shimmer Sun that is being amortized over 10 years. The Company evaluates intangible assets for impairment, at least on an annual basis and whenever events or changes in circumstances indicate the carrying value may not be recoverable from its estimated future cash flows. Recoverability of intangible and other long-lived assets is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss. No impairment adjustment was required at March 31, 2015 or December 31, 2014 (audited).

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash and equivalents, restricted cash, accounts receivable, advances to suppliers, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their FVs due to their short maturities. In addition, the Company has long-term debt with financial institutions. The carrying amounts of the line of credit and other long-term liabilities approximate their FVs based on current rates of interest for instruments with similar characteristics.

FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the FV of financial instruments held by the Company. FASB ASC Topic 825, “Financial Instruments,” defines FV, and establishes a three-level valuation hierarchy for disclosures of FV measurement that enhances disclosure requirements for FV measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their FVs because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

- 8 -

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014
(Unaudited)

•	Level 1  inputs to the valuation methodology are quoted prices 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 prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
•	Level 3  inputs to the valuation methodology us one or more unobservable inputs which are significant to the FV measurement.

The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, “Distinguishing Liabilities from Equity,” and FASB ASC Topic 815, “Derivatives and Hedging.” As of March 31, 2015 and December 31, 2014 (audited), respectively, the Company did not identify any assets and liabilities required to be presented on the balance sheet at FV.

Revenue Recognition

The Company’s revenue recognition policies comply with FASB ASC Topic 605, “Revenue Recognition.” Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.

Sales revenue consists of the invoiced value of goods, which is net of value-added tax (“VAT”). All of the Company’s products sold in the PRC are subject to Chinese VAT of 17% of the gross sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing their end product. The Company recorded VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables. Sales and purchases are recorded net of VAT collected and paid. VAT taxes are not affected by the income tax holiday.

Sales returns and allowances was $0 for the three months ended March 31, 2015 and 2014. The Company does not provide unconditional right of return, price protection or any other concessions to its dealers or other customers.

Other Income

The Company recognizes other income in the period it has earned the revenue and collectability is reasonably assured. Other income for the three months ended March 31, 2015 and 2014 consists primarily of subsidy income received from Chinese Government Agencies for developing technology and research and development. The Company must manage the funds according to government requirements. The Company recognizes the income over the useful life of the asset for which the subsidy was received.

Advertising Costs

The Company expenses the cost of advertising as incurred. Advertising costs for the three months ended March 31, 2015 and 2014 were not significant.

Research and Development

The Company expenses its research and development (“R&D”) costs as incurred. R&D costs included in general and administrative expenses for the three months ended March 31, 2015 and 2014 were $752,967 and $712,251, respectively.

Stock-Based Compensation

The Company records stock-based compensation in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation.” FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at FV at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the consolidated statement of operations and other comprehensive income the grant-date FV of stock options and other equity-based compensation issued to employees and non-employees. There were 60,000 options outstanding as of March 31, 2105 and December 31, 2014 (audited).

 - 9 -

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014 (Unaudited)

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC Topic 740, “Income Taxes.” ASC Topic 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Under FASB ASC Topic 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is more than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

Basic and Diluted Earnings (Loss) Per Share

Earnings (loss) per share is calculated in accordance with FASB ASC Topic 260, “Earnings Per Share.” Basic earnings per share (“EPS”) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive convertible shares and stock warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were 60,000 options and 0 warrants outstanding as of March 31, 2015 with weighted-average exercise prices of $0.85 and $0, respectively. There were 90,000 options and 0 warrants outstanding as of March 31, 2014 with weighted-average exercise prices of $0.95 and $0, respectively. All options and warrants were excluded from the diluted loss per share for 2015 and 2014 due to the dilutive effect. The following is a reconciliation of the number of shares (denominator) used in the basic and diluted EPS computations for the three months ended March 31, 2015 and 2014:

		Three Months Ended March 31,
		2015						2014
					Per						Per
					Share						Share
		Shares			Amount			Shares			Amount
Basic earnings (loss) per share		27,541,491		$	(0.03	)		27,541,491		$	0.01
Effect of dilutive stock options and warrants		-			-			-			-
Diluted earnings (loss) per share		27,541,491		$	(0.03	)		27,541,491		$	0.01

Foreign Currency Transactions and Comprehensive Income

US GAAP requires recognized revenue, expenses, gains and losses to be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company’s Chinese subsidiaries is the RMB. Translation gains of $6,767,514 and $6,611,234 at March 31, 2015 and December 31, 2014 (audited), respectively, are classified as an item of other comprehensive income in the stockholders’ equity section of the consolidated balance sheets.

Statement of Cash Flows

In accordance with FASB ASC Topic 230, “Statement of Cash Flows,” cash flows from the Company’s operations are calculated based on the local currencies using the average translation rates. As a result, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets.

- 10 -

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014 (Unaudited)

Segment Reporting

FASB ASC Topic 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has five reportable segments. See Note 13.

Dividends

The Company's Chinese subsidiaries have restrictions on the payment of dividends to the Company. China has currency and capital transfer regulations that may require the Company's Chinese subsidiaries to comply with complex regulations for the movement of capital. These regulations include a public notice issued in October 2005 by the State Administration of Foreign Exchange (“SAFE”) requiring PRC residents, including both legal and natural persons, to register with the competent local SAFE branch before establishing or controlling any company outside of China. Although the Company believes its Chinese subsidiaries are in compliance with these regulations, should these regulations or the interpretation of them by courts or regulatory agencies change, the Company may not be able to pay dividends outside of China.

Reclassifications

Certain prior period amounts were reclassified to conform to the manner of presentation in the current period. These reclassifications had no effect on the net income or stockholders’ equity.

Note 3 – Other Receivables

Other receivables at March 31, 2015 and December 31, 2014 consisted of the following:

		March 31,			December 31,
		2015			2014
					(Audited)
Due from various unrelated customers, non-interest bearing and due upon demand		811,149			1,289,628
Due from Hainan Jinhong, an unrelated third party, with interest at 5%, due on April 30, 2015*		3,774,182			4,335,598
Due from Hainan Modern Construction Company, an unrelated third party, with interest at 10%, due on April 30, 2015*		8,024,574			7,990,197
Due from Dingfeng, an unrelated third party, with interest at 5%, due on April 30, 2015*		6,977,556			6,947,664
Due from Rixin Hotel Management, an unrelated third party, with interest at 12%, due on April 21, 2017**		2,930,742			3,015,807
Due from Xiandai Meiju, an unrelated third party, with interest at 16%, due on April 21, 2017		8,663,105			15,781,900
Total other receivables		31,181,308			39,360,794
Current portion		18,838,729			20,563,087
Non-current portion	$	12,342,579		$	18,797,707

* Subsequent to the balance sheet date, these three receivables were paid in full.
** At the time this transaction was entered into, Rixin Hotel Management was an unrelated third party; however, in the fourth quarter of 2014, the Company formed a new subsidiary, Hainan Juneng, that is owned 50% by the Company, 22% by Rixin Hotel Management and 28% by an unrelated third party.

Note 4 – Inventory, net

Inventory at March 31, 2015 and December 31, 2014 consisted of the following:

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014 (Unaudited)

		March 31,			December 31,
		2015			2014
					(Audited)
Raw Material	$	4,355,607		$	3,544,464
Work in process		1,080,271			1,220,588
Finished goods		6,246,569			5,968,467
		11,682,447			10,733,519
Less: Obsolescence reserve		(698,993	)		(750,376	)
Inventory, net	$	10,983,454		$	9,983,143

Note 5 – Property and Equipment, net

Property and equipment at March 31, 2015 and December 31, 2014 consisted of the following:

		March 31,			December 31,
		2015			2014
					(Audited)
Operating equipment	$	25,982,768		$	25,856,799
Vehicles		694,967			691,990
Office equipment		148,261			146,193
Buildings		12,755,529			12,700,884
		39,581,525			39,395,866
Less accumulated depreciation		(13,808,810	)		(13,523,233	)
Property and equipment, net	$	25,772,715		$	25,872,633

Note 6 - Intangible Assets, net

Intangible assets at March 31, 2015 and December 31, 2014 consisted of rights to use land as follows:

		March 31,			December 31,
		2015			2014
					(Audited)
Right to use land	$	1,198,164		$	1,193,031
Less: Accumulated amortization		(148,311	)		(141,788	)
Intangible assets, net	$	1,049,853		$	1,051,243

Pursuant to the regulations, the PRC government owns all land. The Company has recognized the amounts paid for the acquisition of rights to use the land as an intangible asset and amortizes such rights over the period the Company has use of the land, which range from 54 to 57 years.

Note 7 – Other Payables

Other payables at March 31, 2015 and December 31, 2014 consisted of the following:

		March 31,			December 31,
		2015			2014
					(Audited)
Government grant for Shi Zi Ling workshop	$	3,288,834		$	3,393,109
Government grant for structure and equipment		1,582,257			1,632,423
Government grant for expansion and equipment		291,669			290,420
Taxes Payable		1,985,966			1,985,966
Due to Rixin Hotel Management*		3,257,003			3,243,050
Due to Hainan Dingfeng		3,255,713			5,126,991
Miscellaneous payables		2,332,544			2,506,040
	$	15,993,986		$	18,177,999

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014 (Unaudited)

* At the time this transaction was entered into, Rixin Hotel Management was an unrelated third party; however, in the fourth quarter of 2014, the Company formed a new subsidiary, Hainan Juneng, that is owned 50% by the Company, 22% by Rixin Hotel Management and 28% by an unrelated third party.

The $3,288,834, $1,582,257 and $291,669 payables at March 31, 2015 are liabilities recorded pursuant to the funds received as part of government grants. See “Construction in Progress and Government Grants” in Note 2. Customer deposits are amounts received from customers for the purchase of products to be delivered in the future.

Note 8 - Short-term Loans

Short-term loans at March 31, 2015 and December 31, 2014 consisted of the following:

		March 31,			December 31,
		2015			2014
					(Audited)
Due February 14, 2015 with interest of 4.5%	$	-		$	332,766
Due February 20, 2015 with interest of 4.5%		-			56,635
Due March 8, 2015 with interest of 4.5%		-			499,998
Due March 28, 2015, with interest of 6.0%		-			1,627,000
Due March 28, 2015, with interest of 6.6%		-			3,254,000
Due April 28, 2015 with interest of 6.6% *		3,268,000			3,254,000
Due April 30, 2015 with interest of 6.72% *		-			2,928,600
Due April 30, 2015 with interest of 4.5% *		428,871			-
Due May 4, 2015 with interest of 4.5% *		138,868			-
Due May 30, 2015 with interest of 6.6%		1,634,000			1,627,000
Due June 2, 2015 with interest of 4.5%		70,076			-
Due June 8, 2015 with interest of 4.5%		341,637			-
Due June 9, 2015 with interest of 4.5%		99,643			-
Due June 10, 2015 with interest of 4.5%		103,662			-
Due June 14, 2015 with interest of 4.5%		43,558			-
Due June 14, 2015 with interest of 4.5%		227,421			-
Due June 25, 2015 with interest of 6.6%		1,634,000			1,627,000
Due June 25, 2015 with interest of 6.16%		-			1,545,650
Due June 30, 2015 with interest of 6.16%		-			1,301,600
Due August 28, 2015 with interest of 7.2%		3,268,000			3,254,000
Due November 25, 2015 with interest of 6.72%		-			813,500
Due November 28, 2015 with interest of 6.72%		-			3,254,000
Due December 17, 2015 with interest of 10%		4,085,000			4,067,500
Due December 19, 2015 with interest of 10%		2,451,000			2,440,500
Due December 22, 2015 with interest of 5.6%		2,941,200			2,928,600
Due February 10, 2016 with interest of 6.2%		817,000			-
Due February 15, 2016 with interest of 6.7%		4,902,000			-
Due March 10, 2016 with interest of 6.4%		3,268,000			-
Due March 13, 2016 with interest of 5.9%		817,000			-
Due March 19, 2016 with interest of 5.9%		2,451,000			-
Due March 31, 2016 with interest of 5.4%		3,104,600			-
Various bank acceptance bills payable on various dates through September 10, 2015		5,328,048			3,931,673
	$	41,422,584		$	38,744,022

* These loans were paid when due.

All short-term loans are collateralized by Company buildings and equipment.

- 13 -

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014 (Unaudited)

Note 9 - Long-term Loans

Long-term loans at March 31, 2015 and December 31, 2014 consisted of the following:

		March 31,			December 31,
		2015			2014
					(Audited)
Due January 24, 2018, with interest of 6.60%	$	7,353,000		$	7,321,500
Credit line due April 18, 2017, with interest of 7.35% (see Note 3)		13,072,000			19,524,000
		20,425,000			26,845,500
Long-term loans, currently in default		(13,072,000	)		(19,524,000	)
Long-term loans	$	7,353,000		$	7,321,500

All long-term loans are collateralized by Company buildings and land use rights. The credit line due April 18, 2017 is also collateralized by all the capital stock of Hainan Shiner, the Company’s primary operating subsidiary. Aggregate future maturities of long-term loans at March 31, 2015 are as follows:

Year ending March 31,
2015	$	-
2016		-
2017		13,072,000
2018		7,353,000
	$	20,425,000

The weighted average interest rate on long-term loans is 7.08.

On August 2, 2010, Hainan Shiner entered into a credit facility with the Hainan Branch of the Bank of China. It is a secured revolving credit facility of RMB70 million (or $11.1 million based on the exchange rate on December 31, 2010) for seven years. Under the credit facility, Hainan Shiner may only use the loan proceeds to improve the technology of its BOPP film and to purchase certain equipment necessary for this improvement. Proceeds under the facility not used for these purposes would be subject to a misappropriation penalty interest rate that is 100% of the current interest rate on the loan.

The initial interest rate on each withdrawal from the facility is the 5-year benchmark lending rate announced by the People’s Bank of China on the date of such withdrawal, and is subject to adjustment every 12 months based upon the benchmark. Additional interest is paid on an overdue loan under this credit facility at 50% of the current interest rate on the loan. Hainan Shiner and certain of its affiliates, including the Company, have provided guarantees and certain land use rights, buildings, and property as collateral under this facility.

The credit facility includes covenants that prohibit Hainan Shiner from making distributions to the Company, its sole shareholder, if (a) its after-tax net income for the fiscal year is zero or negative, (b) its after-tax net income is insufficient to make up its accumulated loss, (c) its income before tax is not utilized in paying off the capital, interest and expense of the lender, or (d) its income before tax is insufficient to pay the capital, interest and expense of the lender.

As of March 31, 2015, the outstanding balance under this credit facility was RMB45 million or $7.4 million.

The Company also has a RMB120 million (approximately $19.5 million) credit facility that it drew down in its entirety on April 17, 2014. The credit facility is collateralized by the stock of Hainan Shiner, bears interest at 7.35% per annum and is due on April 17, 2017. Under the terms of the credit facility agreement, the proceeds of the funds borrowed under this credit facility are to be used solely for the construction of an office building and research facility at the Hainan Xiandai Packaging Industrial Park and for the purchase of research and development equipment, however, the Company has loaned the entire proceeds of the credit facility to unrelated third parties who have no collateral on such loans other than a guarantee from each of the borrowers and an unrelated fourth party (See Note 3). The Company has not been able to obtain a waiver for the violation of the loan agreement, therefore the amount due under this credit facility is being shown as a current liability, as the lender will retain the right to declare a breach of the credit agreement and enforce its right to ownership of the stock, buildings and land use rights of Hainan Shiner, the Company’s primary operating subsidiary. Except as set forth above, as at March 31, 2015 and December 31, 2014, the Company is in compliance with all its obligations under the foregoing loan commitments.

- 14 -

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014
(Unaudited)

Note 10 - Stock Options

The following is a summary of the Company’s stock option activity for the nine months ended March 31, 2015:

					Weighted
					Average
					Exercise			Aggregate
		Options			Price			Intrinsic
		Outstanding			Price			Value
Outstanding at December 31, 2014		60,000		$	0.80		$	-
Granted		-
Canceled/ Expired		-
Exercised		-
Outstanding at March 31, 2015		60,000		$	0.80		$	-
Exercisable at March 31, 2015		60,000		$	0.80		$	-

The number and weighted average exercise prices of all options outstanding as of March 31, 2015, are as follows:

	Options Outstanding
										Weighted
							Weighted			Average
				Number			Average			Remaining
	Range of			Outstanding			Exercise			Contractual Life
	Exercise Price			March 31, 2015			Price			(Years)
$	0.80			60,000		$	0.80			1.69
				60,000

The number and weighted average exercise prices of all options exercisable as of March 31, 2015, are as follows:

	Options Exercisable
										Weighted
							Weighted			Average
				Number			Average			Remaining
	Range of			Outstanding			Exercise			Contractual Life
	Exercise Price			March 31, 2015			Price			(Years)
	$0.80			60,000		$	0.80			1.69
				60,000

Note 11 - Employee Welfare Plans

The expense for employee common welfare was $26,522 and $24,407 for the three months ended March 31, 2015 and 2014, respectively.

Note 12 - Statutory Common Welfare Fund

As stipulated by the Company Law of the PRC, net income after taxation can only be distributed as dividends after appropriation has been made for the following:

i.

Making up cumulative prior years’ losses, if any;

- 15 -

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014 (Unaudited)

	ii.	Allocations to the “statutory surplus reserve” of at least 10% of income after tax, as determined under PRC accounting rules and regulations, until the reserve reaches 50% of the Company’s registered capital;
	iii.	Allocations of 5% to 10% of income after tax, as determined under PRC accounting rules and regulations, to the Company’s “statutory common welfare fund,” which is established for the purpose of providing employee facilities and other collective benefits to the Company’s employees; and
	iv.	Allocations to the discretionary surplus reserve, if approved in the stockholders’ general meeting.

The Company appropriated $98,548 and $146,764 as reserve for the statutory surplus reserve and statutory common welfare fund for the three months ended March 31, 2015 and 2014, respectively.

Note 13 - Current Vulnerability Due to Certain Concentrations

There were no customers that exceeded 10% of the Company’s sales for the three months ended March 31, 2015 or 2014. One vendor provided 9% of the Company’s raw materials for the three months ended March 31, 2015, as compared to one vendor that provided 20% of the Company’s raw material purchases for the three months ended March 31, 2014. At March 31, 2015, the Company owed this vendor $0.

The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC and by the general state of the PRC’s economy. The Company’s business may be influenced 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.

Note 14 – Commitments and Contingencies

At March 31, 2015, the Company was contingently liable to banks for discounted notes receivable and to vendors for endorsed notes receivable of $924,951.

Note 15 – Segment Information

The Company has five segments: BOPP tobacco films, water-based latex, coated film, color printed packaging and advanced film. The water-based latex is one of the raw materials used in coated film to make the packaging more environmental friendly and the barrier property better.

The following tables summarize the Company’s segment information for the three months ended March 31, 2015 and 2014:

- 16 -

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014 (Unaudited)

		Three Months Ended March 31,
		2015			2014
Revenues from unrelated entities
Tobacco film	$	7,517,532		$	17,468,346
Water-based latex		130,848			105,294
Coated film		4,082,185			4,929,152
Color printing		1,103,516			1,362,905
Advanced film		972,775			1,399,083
	$	13,806,856		$	25,264,780
Intersegment revenues
Tobacco film	$	5,131		$	308,427
Water-based latex		43,387			43,600
Coated film		2,963			96,844
Color printing		801			26,777
Advanced film		706			27,488
	$	52,988		$	503,136
Total revenues
Tobacco film	$	7,522,663		$	17,776,773
Water-based latex		174,235			148,894
Coated film		4,085,148			5,025,996
Color printing		1,104,317			1,389,682
Advanced film		973,481			1,426,571
Less Intersegment revenues		(52,988	)		(503,136	)
	$	13,806,856		$	25,264,780
Income (loss) from operations
Tobacco film	$	(444,493	)	$	2,531,106
Water-based latex		43,271			23,015
Coated film		211,689			(11,276	)
Color printing		(202,879	)		(373,016	)
Advanced film		(45,464	)		(29,134	)
Holding Company		(39,663	)		(203,428	)
	$	(477,539	)	$	1,937,267
Interest income
Tobacco film	$	350,014		$	4,444
Water-based latex		6,479			30
Coated film		202,145			1,395
Color printing		54,645			386
Advanced film		48,171			396
Holding Company		72,500			-
	$	733,954		$	6,651
Interest expense
Tobacco film	$	758,142		$	325,408
Water-based latex		7,886			3,385
Coated film		300,721			129,075
Color printing		60,845			26,116
Advanced film		127,299			54,638
Holding Company		(2,283	)		(580	)
	$	1,252,610		$	538,042
Income tax expense
Tobacco film	$	33,951		$	194,776
Water-based latex		-			-
Coated film		23,143			76,774
Color printing		-			-
Advanced film		5,515			21,792
Holding Company		-			-
	$	62,609		$	293,342
Net income (loss)
Tobacco film	$	(726,522	)	$	993,035
Water-based latex		41,654			19,660
Coated film		185,588			27,388
Color printing		(210,857	)		(398,745	)
Advanced film		(107,322	)		(36,164	)
Holding Company		(37,380	)		(202,848	)
	$	(854,839	)	$	402,326
Provision for depreciation
Tobacco film	$	601,478		$	555,651
Water-based latex		10,024			10,073
Coated film		238,579			220,401
Color printing		48,271			44,594
Advanced film		100,994			93,299
Holding Company		-			-
	$	999,346		$	924,018

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SHINER INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2015 AND 2014 (Unaudited)

		As of			As of
		March 31,			December 31,
Total Assets		2015			2014
Tobacco film	$	67,710,808		$	71,293,886
Water-based latex		657,568			657,568
Coated film		26,857,825			28,279,069
Color printing		5,434,120			5,721,679
Advanced film		11,369,311			11,970,944
Holding Company		11,201,873			11,222,719
	$	123,231,505		$	129,145,865

Note 16 - Geographical Sales

The geographical distribution of Shiner’s revenue for the three months ended March 31, 2015 and 2014 is as follows:

		Three Months Ended March 31,
Geographical Areas		2015			2014
Chinese Mainland	$	12,028,509		$	23,062,976
Asia (outside Mainland China)		848,428			1,198,882
Australia		563,645			655,849
North America		184,225			186,364
Middle East		92,553			118,416
Europe		55,751			-
South America		33,745			42,293
	$	13,806,856		$	25,264,780

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; and any statements regarding future economic conditions or performance, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements. Potential risks and uncertainties include, among other things, the factors discussed in Item 1A, “Risk Factors” included in the Company annual report on Form 10-K filed on April 20, 2015.

Because the factors discussed in this report could cause our actual results or outcomes to differ materially from those expressed in any forward-looking statement made by us or on our behalf, you should not place undue reliance on any such forward-looking statement. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events, except as required by law. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor 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 statement.

Use of Terms

Except as otherwise indicated by the context, all references in this report to:

•	“Shiner,” “Company,” “we,” “us” or “our” are to Shiner International, Inc., a Nevada corporation, and its direct and indirect subsidiaries: (i) Hainan Shiner Industrial Co., Ltd., or “Hainan Shiner,” (ii) Hainan Shiny-Day Color Printing Packaging Co., Ltd., or “Shiny-Day,” (iii) Hainan Modern Hi-Tech Industrial Co., Ltd., or “Hainan Modern,” (iv) Zhuhai Modern Huanuo Packaging Material Co., Ltd., or “Zhuhai Modern,” (v) Shimmer Sun Ltd., or “Shimmer Sun,” (vi) Hainan Jingyue New Material Co., Ltd., or “Jingyue,” (vii) Hainan Shunhao New Material Co., Ltd., or “Shunhao,” (viii) Hainan Yongxin Environmental Co., Ltd., or “Yongxin,” ,” (ix) Hainan Runhai Color Printing Packaging Co., or “Hainan Runhai,” (x) Hainan Saihang Photoelectric Co. Ltd., or “Hainan Saihang, ” (xi) Hainan Juneng Functional Film Co., or “Hainan Juneng” and (xii) Ningbo Neisuoer Latex Co., Ltd., or “Ningbo”.
•	“SEC” are to the United States Securities and Exchange Commission;
•	“Securities Act” are to the Securities Act of 1933, as amended; and “Exchange Act” are to the Securities Exchange Act of 1934, as amended;
•	“RMB” are to Renminbi, the legal currency of China; and “US dollar,” “USD,” and “$” are to the legal currency of the United States; and
•	“China,” “Chinese” and “PRC” are to the People’s Republic of China.

Overview

We were incorporated in Nevada in November 2003, but since July 2007, have been headquartered in Hainan, China. Through our operating subsidiaries, Hainan Shiner, Shiny-Day, Hainan Modern, Zhuhai Modern, Shimmer Sun, and Ningbo we manufacture and sell packaging and anti-counterfeit plastic film to manufacturers and producers in China. We sell anti-counterfeit film, coated film, and color printing, in international markets through a network of distributors and converters.

Our primary business consists of the manufacture and distribution of technology driven advanced packaging film products in five business segments: bi-axially oriented polypropylene, or BOPP, film for wrapping tobacco; water-based latex; coated film; color printed packaging; and advanced film. Our products are sold to customers in the food, tobacco, chemical, medical and pharmaceutical, personal care, electronics, automotive, construction, graphics, music and video publishing industries. Our current production capacity consists of: five coated film lines with a capacity of 15,000 tons a year; two BOPP tobacco film production lines with a capacity of 13,500 tons a year; one BOPP film production line with a capacity of 7,000 tons a year; three color printing lines; four anti-counterfeit film lines with a capacity of 2,500 tons a year; and two water-based latex reaction kettles with a capacity of 3,000 tons a year.

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The table below shows the percentage of revenue by each of our business segments for the three months ended March 31, 2015 and 2014:

		Percent of Revenue
		Three Months Ended March 31,
		2015			2014
BOPP tobacco film		54.5%			69.2%
Water-based latex		0.9%			0.4%
Coated film		29.6%			19.5%
Color printing		8.0%			5.4%
Advanced film		7.0%			5.5%
		100.0%			100.0%

We have 39 patents issued by the State Intellectual Property Office of China and have 50 patent applications relating to our products and manufacturing processes pending. Although our patents and processes provide us a competitive advantage, we do not believe the loss of any single patent would have a material adverse effect on our business.

While our primary business consists of the manufacture and distribution of technology driven advanced packaging film products, we have historically advanced minimal funds to customers and other unrelated third parties that are non-interest bearing and payable upon demand. In 2014 we decided to temporarily expand our advances to unrelated third parties. On April 17, 2014, Hainan Shiner, our primary operating subsidiary, drew down entirely on a RMB120 million (approximately $19.5 million) credit facility collateralized by the common stock of Hainan Shiner, our buildings and our land use rights. The facility bears interest at 7.35% per annum and is due and payable on April 17, 2017. Under the terms of the credit facility agreement, the proceeds of the funds borrowed under the credit facility are to be used solely for the construction of an office building and research facility at the Hainan Xiandai Packaging Industrial Park, and for the purchase of research and development equipment. However, on April 30, 2014, we loaned the entire proceeds of the credit facility to unrelated third parties. The business purpose for these loans was for us to make the spread between the amount of interest we pay on the credit facility and the amount of interest we can charge. Such parties have not provided us with significant collateral on such loans, other than a written guarantee from each of the borrowers and an unrelated fourth party. We do not consider this practice of lending money to third parties to be a new business segment as we deem this practice to be temporary. See our disclosures under Liquidity and Capital Resources for more information regarding our lending activities.

Our principal executive offices are located at 19th Floor, Didu Building, Pearl River Plaza, No. 2 North Longkun Road, Haikou, Hainan Province, China 570125. Our telephone number is +86-898-68581104 and our website is www.shinerinc.com.

Principal Factors Affecting Our Financial Performance

We believe that the following factors will continue to affect our financial performance:

•	Global Economic Fragility – The ongoing turmoil in the global economy may have an impact on our business and our financial condition, and we may face challenges if economic conditions do not improve. These economic conditions impact levels of consumer spending, which have deteriorated and may remain depressed for the foreseeable future. If demand for our products fluctuates as a result of these economic conditions or otherwise, our revenue and gross margin could be harmed.
•	Fuel Prices – Significant fluctuations in fuel prices could have both a positive and negative effect on our business and operations. Significant fluctuations in world fuel prices could significantly increase the price of shipping or transporting our products which we may not be able to pass on to our customers.

Results of Operations

The following summary of our results of operations should be read in conjunction with our financial statements and the notes thereto for the three months ended March 31, 2015 and 2014 included herein. The following tables set forth key components of our results of operations for the periods indicated, both in dollars and as a percentage of sales revenue and key components of our revenue for the periods indicated in dollars and percentages.

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Comparison of Three Months Ended March 31, 2015 and 2014

The following table summarizes the results of our operations during the three months ended March 31, 2015 and 2014 and provides information regarding the dollar and percentage increase or (decrease) in such periods:

		Three Months Ended March 31,						$			%
		2015			2014			Change			Change
Revenues	$	13,806,856		$	25,264,780		$	(11,457,924	)		-45.4%
Cost of goods sold		11,479,169			21,045,850			(9,566,681	)		-45.5%
Gross profit		2,327,687			4,218,930			(1,891,243	)		-44.8%
Selling expenses		1,045,384			965,305			80,079			8.3%
General and administrative expenses		1,759,842			1,316,358			443,484			33.7%
Income (loss) from operations		(477,539	)		1,937,267			(2,414,806	)		-124.7%
Other income (expense), net		201,857			(706,178	)		908,035			-128.6%
Interest income		733,954			6,651			727,303			10935.2%
Interest expense		(1,252,610	)		(538,042	)		(714,568	)		132.8%
Exchange gain (loss)		2,108			(4,030	)		6,138			-152.3%
Income tax expense		62,609			293,342			(230,733	)		-78.7%
Net income (loss) attributed to noncontrolling interest		(20,912	)		3,199			(24,111	)		-753.7%
Net income attributed to Shiner	$	(833,927	)	$	399,127		$	(1,233,054	)		-308.9%

Revenues

Revenues for the three months ended March 31, 2015 decreased $11.5 million (or 45.4%), to $13.8 million, compared to $25.3 million in 2014. This decrease was primarily attributable to a decrease in revenues generated from the sale of BOPP tobacco, coated film, color printing and advanced film, which, was partially offset by a small increase in revenues generated from the sale of water-based index. During the three months ended March 31, 2015, revenue from BOPP tobacco decreased $10.0 million (or 57.0%) to $7.5 million, down from $17.5 million; revenue from coated film decreased $0.8 million (or 17.2%) to $4.1 million, down from $4.9 million; revenue from color printing decreased $0.3 million (or 19.0%) to $1.1 million, down from $1.4 million; revenue from advanced film decreased $0.4 million (or 30.5%) to $1.0 million, down from $1.4 million; and revenue from water-based latex increased by $25,554 (or 24.3%) to $130,848, up from $105,294. During the 2015 period, our domestic (China Mainland) sales decreased as a percentage of total sales from 91.3% in 2014 to 86.7% in 2015. The significant decrease in revenue is a direct result of a 0.4% decline in economic growth in China during the 2015 first quarter, renewed government enforcement of Chinese food safety laws, including food packaging, resulting in a decrease in our packaging products as our customers adjust their packaging needs to comply with the law, and the Chinese government’s increase in taxation of the tobacco industry, resulting in a decline in cigarette sales and a decrease in the need for tobacco packaging products. We expect revenue in the second quarter to improve over the most recent quarter once our customers are able to adjust their product structures to meet raw material needs.

Cost of Goods Sold

For the three months ended March 31, 2015, cost of goods sold (“COGS”) decreased $9.6 million (or 45.5%), from $21.0 million in the 2014 to $11.5 million in 2015. COGS for the three months ended March 31, 2015 and 2014 were 83.1% and 83.3% of our revenues, respectively. The decrease in COGS as a percentage of revenues for the three months ended March 31, 2015 compared to the three months ended March 31, 2014 was a result of a decrease in revenues as well as a decrease in the cost of raw material.

Gross Profit

Our gross profit for the three months ended March 31, 2015 was $2.3 million, with a profit margin of 16.9%, a 0.2% increase from 16.7% for the three months ended March 31, 2014. The increase in gross profit percentage was a result of lower raw material costs. Selling Expenses For the three months ended March 31, 2015, our selling expenses increased by $80,079 (or 8.3%) to $1,045,384, compared to $965,305 in 2014. The increase in selling expenses was mainly due to additional amounts spent on marketing.

General and Administrative (“G&A”) Expenses

For the three months ended March 31, 2015, our G&A expenses increased by $0.4 million (or 33.7%) to $1.8 million, compared to $1.3 million in 2014. G&A expenses include rent, management and staff salaries, insurance, accounting, legal, and R&D expenses. The increase in G&A expenses is due to an increase in R&D costs.

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Other Income, net

Other income includes government subsidies and non-operating income and expenditure. The three months ended March 31, 2015, other income increased by $0.9 million (or 128.6%), to $0.2 million, compared to other expense of $0.7 million in 2014.

Interest Income

For the three months ended March 31, 2015, interest income increased by $0.7 million (or 10,935%) to $0.7 million, compared to $6,651 in the 2014 period. The net increase in interest income is primarily due to interest we charged related to other receivables that increased significantly during the last half of 2014 due to the expansion of our temporary lending operations. During 2014, we borrowed RMB120 million, or approximately $19.5 million, at a 7.35% interest under a line of credit agreement and then lent these and other funds to unrelated third parties at interest rates ranging from 12% to 16%.

Interest Expense

For the three months ended March 31, 2015, interest expense increased by $0.7 million (or 132.8%) to $1.3 million, compared to $0.5 million in 2014. The net increase in interest expense is primarily due to the increase in the amount of short-term and long-term loans outstanding. During 2014 we borrowed RMB120 million, or approximately $19.5 million, at a 7.35% interest under a line of credit agreement and then lent the funds to unrelated third parties at interest rates ranging from 12% to 16%.

Income Tax Expense

For the three months ended March 31, 2015, we recorded a tax provision of $62,609, compared to $293,342 in the 2014 period. Our effective tax rates for 2015 and 2014 were (7.9%) and 42.2%, respectively. There was a tax expense in 2015, even though we reported a loss for the quarter due to losses incurred by certain subsidiaries. The losses incurred by some of our subsidiaries were not able to offset income generated by other subsidiaries for tax purposes. The effective rate in 2014 was higher than the statutory rate due to losses incurred by some of our subsidiaries which were not able to offset income generated by other subsidiaries for tax purposes.

Net Income (Loss)

For the three months ended March 31, 2015, we generated a net loss attributed to Shiner of $833,927 compared to net income attributed to Shiner of $399,127 in the 2104 period. The change in net loss is due to the factors explained above.

Liquidity and Capital Resources

At March 31, 2015, we had $12.4 million in cash and equivalents on hand, compared to $5.7 million at December 31, 2014. We had working capital deficit of $2.9 million at March 31, 2015, compared to $10.1 million at December 31, 2014. The primary reason for a working capital is the classification of a long-term loan, currently in default, as a current liability. Our principal demands for liquidity are: increasing capacity, purchasing raw materials, sales distribution and the possible acquisition of new subsidiaries in our industry, as well as other general corporate purposes.

Below is a tabular summary of our cash flows for the three months ended March 31, 2015 and 2014:

		Three Months Ended March 31,
		2015			2014
Net cash used in operating activities	$	(2,504,990	)	$	(6,141,307	)
Net cash provided by (used in) investing activities		12,563,565			(926,485	)
Net cash provided by (used in )financing activities		(3,372,361	)		5,605,953
Effect of exchange rate changes on cash and equivalents		53,348			(80,412	)
Net increase (decrease) in cash and equivalents		6,739,562			(1,542,251	)
Cash and equivalents at beginning of period		5,710,373			9,135,988
Cash and equivalents at end of period	$	12,449,935		$	7,593,737

Operating Activities

Net cash flow used in operating activities during the three months ended March 31, 2015 was $2.5 million, a decrease of $3.6 million, compared to $6.1 million in 2014. The decrease in cash used in operating activities during the three months ended March 31, 2015 was primarily attributable to a decrease in other receivables, inventory and advances to suppliers and an increase in accounts payable and unearned revenue; offset by an increase in accounts receivable and an increase in the net loss.

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Investing Activities

Net cash flows provided by investing activities during the three months ended March 31, 2015 was $12.6 million, an increase of $13.5 million, compared to cash used in investing activities of $0.9 million in 2014. During 2015, we received $7.8 million from the repayment of other receivables and our restricted cash requirements decreased by $6.7 million.

Financing Activities

Net cash used in financing activities for the three months ended March 31, 2015 was $3.4 million, a decrease of $9.0 million, compared to cash provided by financing activities of $5.6 million in 2014. During the 2015 period, we repaid $19.2 million of short-term loans and $6.5 million of long-term loans and borrowed an additional $21.8 million from short-term loans. During the 2014 period, we repaid $8.0 million of short-term loans and borrowed an additional $13.6 million from short-term loans.

Assets

Our total assets as of March 31, 2015 were $123.2 million, a decrease of $5.9 million, compared to $129.1 million as of December 31, 2014. The decrease was primarily due to the decrease of other receivables, current of $1.7 million, other non-current receivables of $6.5 million, restricted cash of $6.7 million, offset by an increase in cash of $6.7 million, advances to suppliers of $2.5 million, and inventory of $1.1 million. The decrease in other receivables (both current and long-term) is due to the repayment of amounts loaned in 2014. (See Note 3 to the financial statements). We have historically advanced minimal funds to customers and other unrelated third parties that are non-interest bearing and payable upon demand. However, in 2014 we decided to temporarily expand our advances to unrelated third parties. The increase in restricted cash is due to the increase in our borrowings and the lenders requirements to keep more cash in restricted accounts. The decrease in cash is due to the timing of collections of receivables and payment of payables. The decrease in advances to suppliers is due to us taking receipt of inventory for which we had previously purchased through advanced payments to our suppliers. The decrease in accounts receivable is due to the timing of the collection of customer balances. The decrease in property and equipment is due to depreciation expense.

Liabilities

Our total liabilities decreased by $5.8 million as of March 31, 2015, compared to December 31, 2014, principally due to a decrease in long-term loans of $6.5 million and other payables of $2.2 million; offset by an increase in short-term loans of $2.7 million.

The decrease in long-term loans is due to our repayment of RMB40 million (approximately $6.5 million) in funds pursuant to a Trust Agreement between Hainan Shiner, our primary operating subsidiary, and Zhongrong International Trust Co., Ltd., or Zhongrong, on April 17, 2014. The credit facility bears interest at 7.35% per annum, is due on April 17, 2017 and is collateralized by the common stock of Hainan Shiner, our buildings and our land use rights. We intend to meet our liquidity requirements under this Trust Agreement, including capital expenditures related to the purchase of equipment, purchase of raw materials, and the expansion of our business, through cash flow provided by operations, and our current credit facilities. Under the terms of the Trust Agreement, the proceeds of the funds borrowed are to be used solely for the construction of an office building and research facility at the Hainan Xiandai Packaging Industrial Park and for the purchase of research and development equipment, however, on April 30, 2014, we loaned the entire proceeds of the credit facility to unrelated third parties who have provided no collateral on such loans other than a written guarantee from each of the borrowers and an unrelated fourth party. As such, Zhongrong has the right to declare a breach of the Trust Agreement and enforce its right to ownership of the stock, buildings and land use rights of Hainan Shiner, our primary operating subsidiary. We have not been able to obtain a waiver for the violation of the use of proceeds provision of the Trust Agreement, therefore the amount due is being shown as a current liability. If Zhongrong calls the loan due to the violation of the agreement, we will attempt to negotiate a waiver, or request additional time in order to collect the amounts due from unrelated third parties or to obtain other financing to repay the loan.

The increase in long-term loans is due to our withdrawal of funds under a credit agreement discussed in more detail elsewhere herein, which we subsequently lent to unrelated third parties at higher interest rates than we are being charged. The increase in other payables is due to an increase in amounts due to two companies that we are engaged in business with. The decrease in accounts payable is due to the timing of payments to our vendors. The decrease in unearned revenue is due to shipping products to customers that had given us a deposit on their orders.

Loan Commitments

In addition to the Trust Agreement disclosed under Liabilities, on August 2, 2010, Hainan Shiner, our wholly owned subsidiary, entered into a credit facility with the Hainan Branch of the Bank of China. The credit facility is comprised of a seven-year RMB70 million, or $11.1 million, secured revolving credit facility. On each of January 24, February 10, February 16, February 17, March 25, November 30, December 23, 2011 and March 19, 2012, Hainan Shiner made withdrawals on the credit facility of $2.5 million, $2.6 million, $2.2 million, $1.2 million, $0.4 million, $0.2 million, $0.5 million and $1.1 million, respectively. Hainan Shiner may only use the loan proceeds to improve the technology of its BOPP film and to purchase certain equipment necessary for these improvements. Proceeds under the facility not used for these purposes may be subject to a misappropriation penalty interest rate of 100% of the current interest rate (6.6% at March 31, 2015) on the loan. The initial interest rate on each withdrawal from the facility is the 5-year benchmark lending rate announced by the People’s Bank of China on the date of such withdrawal, and is subject to adjustment every 12 months based upon this benchmark. Additional interest is paid on any overdue loan under this credit facility of 50% of the current interest rate on the loan. Hainan Shiner and certain of its affiliates, including the Company, provided guarantees and certain land use rights, buildings, and property as collateral under this facility. The credit facility includes financial covenants that prohibit Hainan Shiner from making distributions to its sole shareholder if (a) its after-tax net income for the fiscal year is zero or negative, (b) its after-tax net income is insufficient to make up its accumulated loss for the last several fiscal years, (c) its income before tax is not utilized in paying off the capital, interest and expense of the lender, or (d) the income before tax is insufficient to pay the capital, interest and expense of the lender. As of March 31, 2015, the outstanding balance under this credit facility was RMB 45 million or $7.4 million.

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Except as set forth above, as at March 31, 2015, the Company is in compliance with all its obligations under the foregoing loan commitments.

Dividends

Our Chinese subsidiaries have restrictions on the payment of dividends to us. China has currency and capital transfer regulations that may require our Chinese subsidiaries to comply with complex regulations for the movement of capital. These regulations include a public notice issued in October 2005 by the State Administration of Foreign Exchange (“SAFE”) requiring PRC residents, including both legal and natural persons, to register with the competent local SAFE branch before establishing or controlling any company outside of China. Although we believe our Chinese subsidiaries are in compliance with these regulations, should these regulations or the interpretation of them by courts or regulatory agencies change, we may not be able to pay dividends outside of China.

Obligations under Material Contracts

We have no material payment obligations other than the loan commitments disclosed above.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments.

Accounts Receivable, net

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis.

Inventory, net

Inventory is valued at the lower of cost (determined on a weighted average basis) or market. Management compares the cost of inventory with this market value and allowance is made to write down inventory to market value, if lower.

Revenue Recognition

The Company’s revenue recognition policies comply with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition.” Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.

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Sales revenue consists of the invoiced value of goods, which is net of value-added tax (“VAT”). All of the Company’s products are sold in the PRC and are subject to Chinese VAT of 17% of the gross sales price. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing their end product. The Company recorded VAT payable and VAT receivable net of payments in the financial statements. The VAT tax return is filed offsetting the payables against the receivables.

Sales and purchases are recorded net of VAT collected and paid. VAT taxes are not affected by the income tax holiday.

Stock-Based Compensation

The Company records stock-based compensation in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation.” ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value (“FV”) at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date FV of stock options and other equity-based compensation issued to employees and non-employees.

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC Topic 740, “Income Taxes.” ASC Topic 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Under FASB ASC Topic 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.

Basic and Diluted Earnings Per Share

Earnings per share (“EPS”) is calculated in accordance with the FASB ASC Topic 260, “Earnings Per Share.” Basic EPS is based upon the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive convertible shares and stock warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

Recent Accounting Pronouncements

In April 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-08 (ASU 2014-08), Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360). ASU 2014-08 amends the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on the Company's operations and financial results should be presented as discontinued operations. This new accounting guidance is effective for annual periods beginning after December 15, 2014. The adoption of the ASU is not expected to have a material impact on the Company's results of operations or financial condition.

In May 2014, the FASB issued ASU No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current US GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for reporting periods beginning after December 15, 2016, and early adoption is not permitted. Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. Management is currently assessing the impact the adoption of ASU 2014-09 and has not determined the effect of the standard on our ongoing financial reporting.

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In June 2014, the FASB issued ASU No. 2014-10 (ASU 2014-10), Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. ASU 2014-10 eliminates the requirement to present inception-to-date information about income statement line items, cash flows, and equity transactions, and clarifies how entities should disclosure the risks and uncertainties related to their activities. ASU 2014-10 also eliminates an exception provided to development stage entities in Consolidations (ASC Topic 810) for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The presentation and disclosure requirements in Topic 915 will no longer be required for interim and annual reporting periods beginning after December 15, 2014, and the revised consolidation standards will take effect in annual periods beginning after December 15, 2015. Early adoption is permitted. The Company adopted the provisions of ASU 2014-10 effective for its financial statements for the interim period ended June 30, 2014, and will no longer present the inception-to-date information formally required.

In August 2014, the FASB issued ASU No. 2014-15 (ASU 2014-15), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern , which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact the adoption of ASU 2014-15 on the Company’s financial statement presentation and disclosures.

In November 2014, the FASB issued ASU No. 2014-16 (ASU 2014-16), Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity . The amendments in this ASU do not change the current criteria in U.S. GAAP for determining when separation of certain embedded derivative features in a hybrid financial instrument is required. The amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of the host contract. The ASU applies to all entities that are issuers of, or investors in, hybrid financial instruments that are issued in the form of a share and is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The adoption of ASU 2014-16 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

In January 2015, the FASB issued ASU No. 2015-01 (Subtopic 225-20) - Income Statement - Extraordinary and Unusual Items. ASU 2015-01 eliminates the concept of an extraordinary item from US GAAP. As a result, an entity will no longer be required to segregate extraordinary items from the results of ordinary operations, to separately present an extraordinary item on its income statement, net of tax, after income from continuing operations or to disclose income taxes and earnings-per-share data applicable to an extraordinary item. However, ASU 2015-01 will still retain the presentation and disclosure guidance for items that are unusual in nature and occur infrequently. ASU 2015-01 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-01 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted.

In February, 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities such as limited partnerships, limited liability corporations, and securitization structures (collateralized debt obligations, collateralized loan obligations, and mortgage-backed security transactions). ASU 2015-02 is effective for periods beginning after December 15, 2015. The adoption of ASU 2015-02 is not expected to have a material effect on the Company’s consolidated financial statements. Early adoption is permitted Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

Seasonality of Our Sales

The first quarter of the calendar year is typically the slowest season of the year for us due to the Chinese New Year holiday. During this period, accounts receivable collection tends to be very slow and we also need to purchase raw materials to prepare for upcoming busier seasons.

Inflation

Inflation does not materially affect our business or the results of our operations.

Off-Balance Sheet Arrangements

As of March 31, 2015, we did not have any off-balance sheet arrangements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15(e), our management has carried out an evaluation, with the participation and under the supervision of our Chief Executive Officer, Mr. Qingtao Xing and our Interim Chief Financial Officer, Xuezhu Xu, of the effectiveness of the design and operation of our disclosure controls and procedures, as of March 31, 2015. Based upon, and as of the date of this evaluation, Mr. Xing and Mr. Xu, determined that, as of March 31, 2015, and as of the date of this report, our disclosure controls and procedures were effective.

Changes in Internal Controls over Financial Reporting

There were no changes in our internal controls over financial reporting during the three months ended March 31, 2015 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART II.
OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

ITEM 1A. RISK FACTORS

There are no material changes from the risk factors previously disclosed in Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2014.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 5. OTHER INFORMATION

We have no information to disclose that was required to be in a report on Form 8-K during the period covered by this report, but was not reported. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

ITEM 6. EXHIBITS

Exhibit	Description of Exhibit
31.1	Certification of our Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended, filed herewith
31.2	Certification of our Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended, filed herewith
32.1	Certification of our Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith
32.2	Certification of our Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith
101*	Interactive data files pursuant to Rule 405 of Regulation S-T

*	Filed with this Form 10-Q for Shiner International, Inc. Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or for purposes of Section 18 of the Securities Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) 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.

	SHINER INTERNATIONAL, INC.
May 15, 2015	By: /s/ Qingtao Xing
	Name: Qingtao Xing
	Title: President and Chief Executive Officer
	(Principal Executive Officer)
May 15, 2015	By: /s/ Xuezhu Xu
	Name: Xuezhu Xu
	Title: Interim Chief Financial Officer
	(Principal Financial and Accounting Officer)

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