Company: SISI
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006895
Chunk: 16

Company: SHINECO, INC.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 16
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ively, the “VIE Agreements”),
with each one of the following entities, Ankang Longevity Pharmaceutical (Group) Co., Ltd. (“Ankang Longevity Group”), Yantai
Zhisheng International Freight Forwarding Co., Ltd. (“Zhisheng Freight”) and Qingdao Zhihesheng Agricultural Produce Services.,
Ltd. (“Qingdao Zhihesheng”). On February 24, 2014, Tenet-Jove entered into the same series of contractual agreements with
Shineco Zhisheng (Beijing) Bio-Technology Co., Ltd. (“Zhisheng Bio-Tech”), which was incorporated in 2014. Zhisheng Bio-Tech,
Zhisheng Freight and Qingdao Zhihesheng are collectively referred to herein as the “Zhisheng VIEs.”

Pursuant to the VIE Agreements, Tenet-Jove
had the exclusive right to provide to the Zhisheng VIEs and Ankang Longevity Group consulting services related to their business operations
and management. All the above contractual agreements obligated Tenet-Jove to absorb a majority of the risk of loss from the Zhisheng VIEs
and Ankang Longevity Group’s activities and entitled Tenet-Jove to receive a majority of their residual returns. In essence, Tenet-Jove
became the primary beneficiary of the operations of the Zhisheng VIEs and Ankang Longevity Group. Therefore, the Zhisheng VIEs and
Ankang Longevity Group were treated as variable interest entities (“VIEs”) under the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) 810 “Consolidation.” Accordingly, the accounts
of these entities are consolidated with those of Tenet-Jove.

Since Shineco was effectively controlled
by the majority shareholders of the Zhisheng VIEs and Ankang Longevity Group, Shineco owns 100% of Tenet-Jove. Accordingly, Shineco,
Tenet-Jove, and the VIEs, the Zhisheng VIEs and Ankang Longevity Group were effectively controlled by the same majority shareholders.
Therefore, Shineco, Tenet-Jove, and the VIEs of Tenet-Jove were considered under common control. The consolidation of Tenet-Jove and its
VIEs into Shineco was accounted for at historical cost.

On September 30, 2017, Tenet-Jove