Company: SISI
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006895
Chunk: 27

Company: SHINECO, INC.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 27
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 performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied. The Company
has assessed the impact of the guidance by reviewing its existing customer contracts to identify differences that will result from applying
the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control,
and principal versus agent considerations. In accordance with ASC 606, the Company evaluates whether it is appropriate to record the
gross amount of product sales and related costs or the net amount earned as commissions. When the Company is a principal, that the Company
obtains control of the specified goods or services before they are transferred to the customers, the revenue should be recognized in
the gross amount of consideration to which it expects to be entitled in exchange for the specified goods or services transferred. When
the Company is an agent and its obligation 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
the Company’s products and services is generally recognized as follows:

Sales of products: The Company
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.

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Revenue from the 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.

Cash and Cash Equivalents

Cash and cash equivalents consist of
cash on hand, cash on deposit, and other highly liquid investments which are unrestricted as to withdrawal or use, and which have original
maturities of three months or less when purchased. The Company maintains cash with various