Company: SISI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010889
Chunk: 216

Company: SHINECO, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 2
Chunk 216
---
 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 March 31, 2025. 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 in conditions,
effectiveness of internal controls over financial reporting may vary over time. Our system contains self-monitoring mechanisms, and actions
are taken to correct deficiencies as they are identified.

72

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Other than ordinary routine litigation (of which we
are not currently involved), we know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff
in any material proceeding or pending litigation, and there are no proceedings in which any of our directors, officers or affiliates,
or any registered or beneficial stockholder, is an adverse party or has a material