Company: SISI
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006895
Chunk: 21

Company: SHINECO, INC.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 21
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 Company’s
business segments, that were operated by Tenet-Jove and its subsidiaries, Guangyuan and Zhisheng VIEs which Tenet-Jove is the primary
beneficiary of (the “Tenet-Jove Disposal Group”), are classified as discontinued operations on the Company unaudited condensed
consolidated financial statements. These business segments are: 1) Tenet-Jove is engaged in manufacturing and selling Bluish Dogbane
and related products, also known in Chinese as “Luobuma,” including therapeutic clothing and textile products made from Luobuma;
2) Qingdao Zhihesheng and Guangyuan are engaged in planting, processing, and distributing green agricultural produce; (“Agricultural
Products”); and 3) Zhisheng Freight is providing domestic and international logistic services (“Freight Services”).

NOTE 2. GOING CONCERN

As disclosed in the Company’s unaudited
condensed consolidated financial statements, the Company had recurring net losses from continuing operations of US$4.8 million and US$8.6
million, and continuing cash outflow of US$2.7 million and US$2.5 million from operating activities for the six months ended December
31, 2024 and 2023, respectively. As of December 31, 2024 and June 30, 2024, the Company had accumulated a deficit of US$58.0 million
and US$54.3 million, and as of December 31, 2024, the Company had negative working capital of US$6.0 million. The Company’s management
believes these factors raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months.
In assessing the Company’s going concern, the Company’s management monitors and analyzes the Company’s cash on-hand
and its ability to generate sufficient revenue sources in the future to support its operating and capital expenditure commitments. The
Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations.
Direct offering and debt financing have been utilized to finance the working capital requirements of the Company. The continuation of
the Company as a going concern through the next twelve months is dependent on the continued financial support from its stockholders.

    8

Despite those negative financial trends,
as of December 31, 2024, the Company had taken the following actions to enhance the Company’s liquidity:

    1)
    On June 20,