Company: SISI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010889
Chunk: 34

Company: SHINECO, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 34
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 The outstanding derivative financial assets from the
discontinued operations as of March 31, 2025 and June 30, 2024 were US$3,357 and US$6,380, respectively. Investment income (loss) from
derivative financial assets from the discontinued operations was US$1,635 and US$(2,604) for the nine and three months ended March 31,
2025, respectively, and US$4,240 and US$706 for the nine and three months ended March 31, 2024, respectively. The change in fair
value of derivative financial assets from the discontinued operations was immaterial for the nine and three
months ended March 31, 2025 and 2024, respectively.

Fair Value of Financial Instruments

The Company follows 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:

    15

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 of the short-term nature of these instruments.

Income Taxes

Deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the unaudited condensed consolidated financial statement carrying
amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that
includes the enactment date. A valuation allowance