Company: SISI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010889
Chunk: 22

Company: SHINECO, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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 such as silk and silk fabrics as well as trading
of fresh fruit (“Other Agricultural Products”).

    8

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$5.6 million and US$8.6 million,
and continuing cash outflow of US$2.6 million and US$2.3 million from operating activities for the nine months ended March 31, 2025 and
2024, respectively. As of March 31, 2025 and June 30, 2024, the Company had accumulated a deficit of US$73.1 million and US$54.3 million,
and as of March 31, 2025, the Company had negative working capital of US$13.7 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.

Despite those negative financial trends, as of March
31, 2025, the Company had taken the following actions to enhance the Company’s liquidity:

    1)
    On June 20, 2024, the Company entered into a securities purchase agreement with certain non-U.S. investors (the “June 2024 Purchasers”), pursuant to which the Company agreed to sell, and the Purchasers agreed to purchase, severally and not jointly, an aggregate of 58,333 shares of common stock of the Company (the “June 2024 Shares”) at an offering price of US$120.00 per share for gross proceeds of up to US$7.0 million. As of June 30, 2024, proceeds of approximately US$6.4 million were received by the Company, and the remaining proceeds were fully received by the Company in July 2024, and all of the June 2024 Shares were issued on July