Company: SISI
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010889
Chunk: 221

Company: SHINECO, INC.
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 3
Chunk 221
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As
a small reporting company, we are not required to provide the information required by this item.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Controls and Procedures

We maintain disclosure controls and procedures designed
to provide reasonable assurance that material information required to be disclosed by us in the reports filed or submitted under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the Securities
and Exchange Commission rules and forms, and that the information is accumulated and communicated to our management, including our Chief
Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Based on our review, our management, including our
Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were not effective at the reasonable
assurance level as of the end of the period covered by this Quarterly Report due to following material weaknesses:

    ●
    a lack of full-time U.S. GAAP personnel in the accounting department to monitor the recording of the transactions;

    ●
    a lack of segregation of duties for accounting personnel who prepared and reviewed the journal entries; and

    ●
    a lack of inadequate control procedures and policies on pre-loan preliminary credit risk evaluation and loan approval.

In order to address the above material weaknesses,
our management has taken the following steps:

    ●
    recruiting sufficient qualified professionals with appropriate levels of knowledge and experience to assist in reviewing and resolving accounting issues in routine or complex transactions. To mitigate the reporting risks, we engaged an outside professional consulting firm to supplement our efforts to improve our internal control over financial reporting;

    ●
    improving the communication between management, board of directors, and the Chief Financial Officer; 

    ●
    obtaining proper approval for other significant and non-routine transactions from the board of directors; and 

    ●
    implementing stringent written documentation and information to capture the borrower’s credit risk adequately and proper controls and policies on the company’s money lending procedures.

We are committed to monitoring the effectiveness of
these measures and making any changes that are necessary and appropriate.

(b) Changes in Internal Control over Financial
Reporting

There were no changes in our internal control over
financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting during the fiscal quarter ended March 31, 2025. Because of its inherent limitations, a system of internal control over financial
reporting can provide only reasonable assurance