Company: SISI
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006895
Chunk: 138

Company: SHINECO, INC.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 4
Chunk 138
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(a)
Evaluation of Controls and Procedures

We
maintain disclosure controls and procedures designed to provide reasonable assurance that material information required to be disclosed
by us in the reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and
reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that the information is accumulated
and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely
decisions regarding required disclosure.

Based
on our review, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls
and procedures were not effective at the reasonable assurance level as of the end of the period covered by this Quarterly Report due
to following material weaknesses:

    ●
    a
    lack of full-time U.S. GAAP personnel in the accounting department to monitor the recording of the transactions;

    ●
    a
    lack of segregation of duties for accounting personnel who prepared and reviewed the journal entries; and

    ●
    a lack of inadequate control procedures and policies on pre-loan preliminary
credit risk evaluation and loan approval.

In
order to address the above material weaknesses, our management has taken the following steps:

    ●
    recruiting
    sufficient qualified professionals with appropriate levels of knowledge and experience to assist in reviewing and resolving accounting
    issues in routine or complex transactions. To mitigate the reporting risks, we engaged an outside professional consulting firm to
    supplement our efforts to improve our internal control over financial reporting;

    ●
    improving
    the communication between management, board of directors, and the Chief Financial Officer; 

    ●
    obtaining
    proper approval for other significant and non-routine transactions from the board of directors; and 

    ●
    implementing stringent written documentation and information to capture the borrower’s credit risk adequately and proper controls
and policies on the company’s money lending procedures.

We
are committed to monitoring the effectiveness of these measures and making any changes that are necessary and appropriate.

(b)
Changes in Internal Control over Financial Reporting

There
were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting during the fiscal quarter ended December 31, 2024. Because of its inherent limitations,
a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements.
Further, because of changes