Company: SISI
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006895
Chunk: 180

Company: SHINECO, INC.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 2
Chunk 180
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 our long-term cost control strategies
including establishing long-term alliances with certain suppliers to ensure adequate supply is maintained. We will carry forward the
economies of scale and advantages from our nationwide distribution network and diversified offerings.

Economic
and Political Risks

Our
operations are conducted primarily in the PRC and subject to special considerations and significant risks not typically associated with
companies operating in North America and/or Western Europe. These include risks with, among others, the political, economic and legal
environment and foreign currency exchange. Our results may be adversely affected by changes in the political and social conditions in
the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversions,
remittances abroad, and rates and methods of taxation, among other things.

Critical
Accounting Policies and Estimates

The
preparation of financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires
the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the unaudited condensed consolidated financial statements as well as the reported amounts of revenue and expenses
during the reporting period. Critical accounting policies are those accounting policies that may be material due to the levels of subjectivity
and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and that have a material
impact on financial condition or operating performance. While we base our estimates and judgments on our experience and on various other
factors that we believe to be reasonable under the circumstances, actual results may differ from these estimates under different assumptions
or conditions. We believe the following critical accounting policies used in the preparation of our unaudited condensed consolidated
financial statements require significant judgments and estimates. For additional information relating to these and other accounting policies,
see Note 3 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

Use
of Estimates

Significant
estimates required to be made by management include, but are not limited to, useful lives of property and equipment, and intangible assets,
the recoverability of long-lived assets, assessment of expected credit losses for accounts receivable and other current asset, the valuation
allowance of deferred taxes and inventory reserves. Actual results could differ from those estimates.

Credit
Losses

On
July 1, 2023, we adopted Accounting Standards Update 2016-13 “Financial Instruments – Credit Losses (Topic