Company: SISI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010889
Chunk: 188

Company: SHINECO, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 2
Chunk 188
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ligation is to facilitate third parties in fulfilling their performance obligation for specified goods or services, the revenue
should be recognized in the net amount for the amount of commission which the Company earns in exchange for arranging for the
specified goods or services to be provided by other parties. Based on the assessment, the Company concluded that there was no change
to the timing and pattern of revenue recognition for its current revenue streams in scope of Topic 606 and therefore there was no
material changes to the Company’s financial statements upon adoption of ASC 606. More specifically, revenue related to our
products and services is generally recognized as follows:

Sales of products: We recognized revenue from
the sale of products at the point in time when the goods were delivered and title to the goods passed to the customer, provided that there
were no uncertainties regarding customer acceptance; persuasive evidence of an arrangement existed; the sales price was fixed or determinable;
and collectability was deemed probable.

Revenue from provision of services: The Company
merely acts as an agent in these types of services transactions. Revenue from domestic air and overland freight forwarding services was
recognized at the point in time upon the performance of services as stipulated in the underlying contract or when commodities were being
released from the customer’s warehouse; the service price was fixed or determinable; and collectability was deemed probable.

57

Fair Value of Financial Instruments

We follow the provisions of ASC 820, “Fair Value
Measurements and Disclosures.” ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and
establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1 applies to assets or liabilities for which
there are quoted prices in active markets for identical assets or liabilities.

Level 2 applies to assets or liabilities for which
there are inputs, other than quoted prices in level, that are observable for the asset or liability such as quoted prices for similar
assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent
transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally
from, or corroborated by, observable market data.

Level 3 applies to assets or liabilities for which
there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the asset or liability.

The carrying value of financial instruments included
in current assets and liabilities approximate their fair values because