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

Company: SHINECO, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 25
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 the meetings of the board of directors or to govern the financial and operating policies of the investee pursuant to a statute
or under an agreement among the shareholders or equity holders. However, if the Company demonstrates its ability to control the VIE through
the power to govern the activities that most significantly impact the VIE’s economic performance and is obligated to absorb losses
of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant
to the VIE, then the entity is consolidated. All intercompany transactions and balances among the Company, its subsidiaries, and the VIE
have been eliminated upon consolidation.

Consolidation of Variable Interest Entities

VIEs are generally entities that lack sufficient equity
to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making
ability. All VIEs and their subsidiaries with which the Company is involved must be evaluated to determine the primary beneficiary of
the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

There are no consolidated assets of the VIEs and the
VIEs’ subsidiaries that are collateral for the obligations of the VIEs and the VIEs’ subsidiaries and can only be used to
settle the obligations of the VIEs and the VIEs’ subsidiaries.

As the VIEs are incorporated as limited liability
companies under the PRC Company Law, creditors or beneficial interest holders of the VIEs do not have recourse to the general credit of
the Company for any of the liabilities of the VIEs in normal course of business.

There are no terms in any arrangements, considering
both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to
the VIEs and the VIEs’ subsidiaries. However, if the VIEs and the VIEs’ subsidiaries ever need financial support, the Company
or its subsidiaries may, at their option and subject to statutory limits and restrictions, provide financial support to the VIEs and the
VIEs’ subsidiaries through loans to the shareholder of the VIEs and the VIEs’ subsidiaries or entrustment loans to the VIEs
and the VIEs’ subsidiaries.

The carrying amount of the VIEs and their subsidiaries’
consolidated income information held for discontinued operations were as follows:

 SCHEDULE
OF CONSOLIDATED ASSETS AND LI