Company: SISI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010889
Chunk: 30

Company: SHINECO, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 30
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ventories, which are stated at the lower of cost
or net realizable value, consist of raw materials, work-in-progress, and finished goods related to the Company’s products. Net realizable
value is the estimated selling price in the normal course of business less any costs to complete and sell products. Cost is determined
using the weighted average method. The Company periodically evaluates its inventory and records an inventory reserve for certain inventories
that may not be saleable or whose cost exceeds net realizable value. As of March 31, 2025 and June 30, 2024, the inventory reserve from
the continuing operations was nil and US$30,443, respectively. As of March 31, 2025 and June 30, 2024, the inventory reserve from
the discontinued operations was both nil.

Business Acquisitions

Business acquisitions are accounted for under the
acquisition method. The acquisition method requires the reporting entity to identify the acquirer, determine the acquisition date, recognize
and measure the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity, and recognize
and measure goodwill or a bargain gain from the purchase. The acquiree’s results are included in the Company’s consolidated
financial statements from the date of acquisition. Assets acquired and liabilities assumed are recorded at their fair values on the date
acquired and the excess of the purchase price over the amounts assigned is recorded as goodwill, or if the fair value of the net assets
acquired exceeds the purchase price consideration, a bargain purchase gain is recorded. Adjustments to fair value assessments are generally
recorded to goodwill over the measurement period (not longer than 12 months). The acquisition method also requires that acquisition-related
transaction and post-acquisition restructuring costs be charged to expense as committed, and requires the Company to recognize and measure
certain assets and liabilities, including those arising from contingencies and contingent consideration in a business combination.

Goodwill

Goodwill represents the excess of the purchase price
over the fair value of assets acquired. The goodwill impairment test compares the fair value of a reporting unit with its carrying amount,
including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill of the reporting unit would be considered
impaired. To measure the amount of the impairment loss, the implied fair value of a reporting unit’s goodwill is compared to the
carrying amount of that goodwill. The implied fair value of goodwill is determined in the same manner as the amount of