Company: SISI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010889
Chunk: 185

Company: SHINECO, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 2
Chunk 185
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 customer demands in various markets and
providing solid foundations for our growth. As of the date of this Quarterly Report, however, we do not have any agreements, undertakings
or understandings to acquire any such entities and there can be no guarantee that we ever will.

Maintaining effective control of our costs and
expenses - Successful cost control depends upon our ability to obtain and maintain adequate material supplies as required by our
operations at competitive prices. We will focus on improving our long-term cost control strategies including establishing long-term alliances
with certain suppliers to ensure adequate supply is maintained. We will carry forward the economies of scale and advantages from our nationwide
distribution network and diversified offerings.

Economic and Political Risks

Our operations are conducted primarily in the PRC
and subject to special considerations and significant risks not typically associated with companies operating in North America and/or
Western Europe. These include risks with, among others, the political, economic and legal environment and foreign currency exchange. Our
results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies
with respect to laws and regulations, anti-inflationary measures, currency conversions, remittances abroad, and rates and methods of taxation,
among other things.

55

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity
with U.S. generally accepted accounting principles (“U.S. GAAP”) requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed
consolidated financial statements as well as the reported amounts of revenue and expenses during the reporting period. Critical accounting
policies are those accounting policies that may be material due to the levels of subjectivity and judgment necessary to account for highly
uncertain matters or the susceptibility of such matters to change, and that have a material impact on financial condition or operating
performance. While we base our estimates and judgments on our experience and on various other factors that we believe to be reasonable
under the circumstances, actual results may differ from these estimates under different assumptions or conditions. We believe the following
critical accounting policies used in the preparation of our unaudited condensed consolidated financial statements require significant
judgments and estimates. For additional information relating to these and other accounting policies, see Note 3 to our unaudited condensed
consolidated financial statements included elsewhere in this Quarterly Report.

Use of Estimates

Significant estimates required to be made by management