PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of loss and comprehensive loss, statements of changes in equity, and statements of cash flows, along with their accompanying notes, for the periods ended March 31, 2025, and June 30, 2024 [Condensed Consolidated Balance Sheets (unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) The company's total assets increased slightly, driven by a significant rise in current assets, particularly 'Other current assets, net' and 'Current assets held for discontinued operations'. Total liabilities also saw a substantial increase, primarily in current liabilities, leading to a decrease in total equity | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | **Assets:** | | | | | | Total Current Assets | 34,918,780 | 20,903,961 | 14,014,819 | 67.04% | | Other current assets, net | 12,132,571 | 6,916,051 | 5,216,520 | 75.43% | | Current assets held for discontinued operations | 22,363,220 | 13,497,416 | 8,865,804 | 65.69% | | Total Assets | 85,502,545 | 84,179,379 | 1,323,166 | 1.57% | | **Liabilities & Equity:** | | | | | | Total Current Liabilities | 48,602,178 | 27,562,855 | 21,039,323 | 76.33% | | Convertible note payable (current) | 9,741,322 | 4,194,841 | 5,546,481 | 132.23% | | Current liabilities held for discontinued operations | 31,099,110 | 16,925,019 | 14,174,091 | 83.74% | | Total Liabilities | 59,441,910 | 47,601,684 | 11,840,226 | 24.87% | | Total Stockholders' Equity of Shineco, Inc. | 18,164,975 | 26,000,933 | (7,835,958) | -30.14% | | Non-controlling interest | 7,895,660 | 10,576,762 | (2,681,102) | -25.35% | [Condensed Consolidated Statements of Loss and Comprehensive Loss (unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Loss%20and%20Comprehensive%20Loss%20(unaudited)) The company experienced a significant increase in net loss for both the nine and three months ended March 31, 2025, primarily driven by a substantial loss from discontinued operations and increased operating expenses from continuing operations, despite a decrease in revenue | Metric | 9 Months Ended Mar 31, 2025 (USD) | 9 Months Ended Mar 31, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | :------- | | Revenue | 259,040 | 459,572 | (200,532) | -43.63% | | Gross Income (Loss) | 122,333 | 246,439 | (124,106) | -50.36% | | Loss from Operations | (5,089,920) | (7,463,096) | 2,373,176 | -31.80% | | Net Loss from Continuing Operations | (5,584,281) | (8,613,900) | 3,029,619 | -35.17% | | Net Income (Loss) from Discontinued Operations | (15,874,674) | 4,531,193 | (20,405,867) | -450.34% | | Net Loss | (21,458,955) | (4,082,707) | (17,376,248) | 425.61% | | Net Loss Attributable to Shineco, Inc. | (18,765,879) | (2,309,993) | (16,455,886) | 712.46% | | Basic and Diluted Loss Per Common Share | (3.10) | (11.32) | 8.22 | -72.61% | | Metric | 3 Months Ended Mar 31, 2025 (USD) | 3 Months Ended Mar 31, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | :------- | | Revenue | 40,971 | 149,346 | (108,375) | -72.57% | | Gross Income (Loss) | (14,111) | 71,153 | (85,264) | -119.83% | | Loss from Operations | (3,760,651) | (1,103,289) | (2,657,362) | 240.86% | | Net Loss from Continuing Operations | (4,082,143) | (1,523,615) | (2,558,528) | 167.92% | | Net Income (Loss) from Discontinued Operations | (12,529,001) | (2,845,113) | (9,683,888) | 340.37% | | Net Loss | (16,611,144) | (4,368,728) | (12,242,416) | 280.23% | | Net Loss Attributable to Shineco, Inc. | (15,118,697) | (3,348,746) | (11,769,951) | 351.48% | | Basic and Diluted Loss Per Common Share | (0.96) | (12.51) | 11.55 | -92.33% | [Condensed Consolidated Statements of Changes in Equity (unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20(unaudited)) The statements of changes in equity show a significant increase in common stock shares and additional paid-in capital, primarily due to stock issuances and convertible note redemptions. However, this was offset by a substantial increase in accumulated deficit, leading to a decrease in total equity | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | Common Stock Shares Outstanding | 17,345,846 | 332,215 | 17,013,631 | 5120.96% | | Common Stock Amount | 17,346 | 332 | 17,014 | 5124.70% | | Additional Paid-in Capital | 123,281,225 | 69,476,805 | 53,804,420 | 77.44% | | Accumulated Deficit | (73,102,508) | (54,336,629) | (18,765,879) | 34.54% | | Total Stockholders' Equity of Shineco, Inc. | 18,164,975 | 26,000,933 | (7,835,958) | -30.14% | | Non-controlling interest | 7,895,660 | 10,576,762 | (2,681,102) | -25.35% | - The company underwent a **1-for-24 reverse stock split** effective November 12, 2024, retrospectively restating all share and per share amounts[8](index=8&type=chunk) - Significant stock issuances occurred, including **15,760,590 shares** for general purposes and **1,076,635 shares** for convertible notes redemption during the nine months ended March 31, 2025[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows (unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) The company experienced a net decrease in cash and cash equivalents, primarily due to significant cash outflows from operating and investing activities, partially offset by cash inflows from financing activities | Cash Flow Activity | 9 Months Ended Mar 31, 2025 (USD) | 9 Months Ended Mar 31, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | :------- | | Net cash used in operating activities | (3,120,216) | (3,062,020) | (58,196) | 1.90% | | Net cash used in investing activities | (2,984,442) | (13,939,717) | 10,955,275 | -78.59% | | Net cash provided by financing activities | 5,995,816 | 3,184,948 | 2,810,868 | 88.26% | | Net decrease in cash and cash equivalents | (107,906) | (13,601,276) | 13,493,370 | -99.21% | | Cash and cash equivalents - End of the period | 287,130 | 565,483 | (278,353) | -49.22% | - Investing activities saw a significant reduction in cash outflow, mainly due to the absence of a large disposal of VIEs (Tenet-Jove) which occurred in the prior year[25](index=25&type=chunk) - Financing activities provided substantially more cash, driven by proceeds from common stock issuance (**US$6.8 million**) and discontinued operations financing (**US$0.5 million**)[25](index=25&type=chunk) [Notes to the Condensed Consolidated Financial Statements (unaudited)](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) These notes provide detailed information on the company's organization, significant accounting policies, financial instrument details, acquisitions, related party transactions, debt, taxes, equity, and segment reporting, offering crucial context to the condensed consolidated financial statements [NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS](index=11&type=section&id=NOTE%201%20-%20ORGANIZATION%20AND%20NATURE%20OF%20OPERATIONS) Shineco, Inc. is a Delaware holding company focused on business opportunities in the PRC. The company has undergone several acquisitions and disposals, including the acquisition of Biowin (rapid diagnostic products) and Fuzhou Meida (healthy meals), and the reclassification of Tenet-Jove Disposal Group and Wintus (Luobuma, agricultural products, freight services, other agricultural products) as discontinued operations - Shineco, Inc. is a holding company incorporated in Delaware, primarily developing business opportunities in the People's Republic of China (PRC)[27](index=27&type=chunk) - The company's current continuing operations include Biowin (rapid diagnostic products) and Fuzhou Meida (health-oriented chain restaurant for healthy meals)[48](index=48&type=chunk) - Business segments operated by Tenet-Jove and Wintus, including Luobuma products, agricultural products, freight services, and other agricultural products, have been reclassified as discontinued operations due to the Wintus and FuWang acquisitions[48](index=48&type=chunk) - Key acquisitions include **51% of Biowin** (December 2022), **71.42% of Wintus** (May 2023), and **75% of FuWang (HK)** (March 2025), with the latter two leading to significant reclassifications[44](index=44&type=chunk)[45](index=45&type=chunk)[47](index=47&type=chunk) [NOTE 2. GOING CONCERN](index=14&type=section&id=NOTE%202.%20GOING%20CONCERN) The company's recurring net losses from continuing operations, negative cash flow from operating activities, and accumulated deficit raise substantial doubt about its ability to continue as a going concern. Management has taken steps to enhance liquidity through various stock offerings and debt financing, believing these measures will provide sufficient liquidity for the next 12 months - The company reported recurring net losses from continuing operations of **US$5.6 million** (9 months ended March 31, 2025) and **US$8.6 million** (9 months ended March 31, 2024)[50](index=50&type=chunk) - Continuing cash outflow from operating activities was **US$2.6 million** (9 months ended March 31, 2025) and **US$2.3 million** (9 months ended March 31, 2024)[50](index=50&type=chunk) - As of March 31, 2025, the company had an accumulated deficit of **US$73.1 million** and negative working capital of **US$13.7 million**[50](index=50&type=chunk) - To enhance liquidity, the company completed several stock offerings, raising gross proceeds of **US$7.0 million** (June 2024), **US$2.0 million** (July 2024), **US$8.2 million** (August 2024), and **US$32.7 million** (December 2024)[51](index=51&type=chunk) [NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=15&type=section&id=NOTE%203%20-%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the significant accounting policies, including the basis of presentation (US GAAP), principles of consolidation (including VIEs), revenue recognition (ASC 606), and valuation methods for assets like accounts receivable, inventories, and long-lived assets. It also details policies for business acquisitions, goodwill, leases, income taxes, foreign currency translation, and new accounting pronouncements - The financial statements are prepared in conformity with US GAAP for interim financial information and include the consolidation of subsidiaries and Variable Interest Entities (VIEs) where the company is the primary beneficiary[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - Revenue is recognized when performance obligations are satisfied, primarily from sales of rapid diagnostic products, healthy meals, and discontinued operations (Luobuma, agricultural products, logistic services)[61](index=61&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) - The company adopted ASC 2016-13 (CECL methodology) for credit losses on July 1, 2023, with no material impact on consolidated financial statements[70](index=70&type=chunk) - New accounting pronouncements, ASU 2023-07 (Segment Reporting), ASU 2023-09 (Income Tax Disclosures), and ASU 2024-01 (Stock Compensation), are effective for fiscal years beginning after December 15, 2024, or July 1, 2025, and the company is evaluating their impact[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) [NOTE 4 – ACCOUNTS RECEIVABLE, NET](index=24&type=section&id=NOTE%204%20%E2%80%93%20ACCOUNTS%20RECEIVABLE%2C%20NET) Accounts receivable, net, increased significantly, primarily driven by an increase in accounts receivable held for discontinued operations. The allowance for credit losses also increased, reflecting ongoing assessments of collectability | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | Accounts receivable, net | 1,677,907 | 1,215,114 | 462,793 | 38.09% | | Accounts receivable, net held for discontinued operations | 1,677,590 | 1,214,757 | 462,833 | 38.10% | | Allowance for credit losses (ending balance) | 1,533,494 | 1,356,873 | 176,621 | 13.02% | | Charge to allowance | 176,020 | 118,499 | 57,521 | 48.54% | [NOTE 5 – INVENTORIES, NET](index=25&type=section&id=NOTE%205%20%E2%80%93%20INVENTORIES%2C%20NET) Total inventories, net, decreased, with a notable reduction in work-in-process and finished goods. Inventories held for discontinued operations also decreased, while the inventory reserve for continuing operations was eliminated | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | Raw materials | 213,444 | 290,152 | (76,708) | -26.44% | | Work-in-process | 156,562 | 338,902 | (182,340) | -53.80% | | Finished goods | 860,300 | 989,914 | (129,614) | -13.09% | | Inventory reserve | - | (30,443) | 30,443 | -100.00% | | Total inventories, net | 1,230,306 | 1,588,525 | (358,219) | -22.55% | | Inventories, net, held for discontinued operations | (1,025,836) | (1,308,556) | 282,720 | -21.61% | | Inventories, net, held for continuing operations | 204,470 | 279,969 | (75,499) | -26.97% | [NOTE 6 – ADVANCES TO SUPPLIERS, NET](index=25&type=section&id=NOTE%206%20%E2%80%93%20ADVANCES%20TO%20SUPPLIERS%2C%20NET) Advances to suppliers, net, increased substantially, primarily due to a significant rise in advances to suppliers and a large charge to the allowance for doubtful accounts. The majority of these advances are held for discontinued operations | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | Advances to suppliers | 24,330,480 | 10,132,190 | 14,198,290 | 140.13% | | Allowance for doubtful accounts (ending balance) | (5,249,870) | (111,483) | (5,138,387) | 4609.12% | | Advance to suppliers, net | 19,080,610 | 10,020,707 | 9,059,903 | 90.41% | | Advance to supplier, net, held for discontinued operations | (19,079,599) | (9,986,844) | (9,092,755) | 91.05% | | Charge to allowance | 5,173,172 | 102,514 | 5,070,658 | 4946.25% | [NOTE 7 – OTHER CURRENT ASSETS, NET](index=26&type=section&id=NOTE%207%20%E2%80%93%20OTHER%20CURRENT%20ASSETS%2C%20NET) Other current assets, net, increased significantly, driven by new loans to third parties and a prepayment for business acquisition. The allowance for credit losses decreased, indicating improved collectability assessment or write-offs | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | Loans to third parties | 10,227,757 | 9,445,164 | 782,593 | 8.29% | | Other receivables | 3,755,950 | 2,464,188 | 1,291,762 | 52.42% | | Prepayment for business acquisition | 2,630,000 | - | 2,630,000 | N/A | | Total other current assets, net | 12,380,789 | 7,294,454 | 5,086,335 | 69.73% | | Allowance for credit losses (ending balance) | 4,328,478 | 4,656,522 | (328,044) | -7.04% | | Charge to (reversal of) expense | (330,080) | 2,248,574 | (2,578,654) | -114.68% | - Loans to third parties are mainly for short-term funding to external business partners or employees, with various maturity dates and interest terms. The company actively manages these loans and their associated credit loss allowances[118](index=118&type=chunk) - A significant prepayment of **US$2.63 million** was made for the FuWang Acquisition, which was completed on May 12, 2025[118](index=118&type=chunk) [NOTE 8 - PROPERTY AND EQUIPMENT, NET](index=27&type=section&id=NOTE%208%20-%20PROPERTY%20AND%20EQUIPMENT%2C%20NET) Property and equipment, net, decreased, primarily due to a significant reduction in assets held for continuing operations. Depreciation and amortization expenses were incurred for both continuing and discontinued operations | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | Total property and equipment, net | 5,251,310 | 6,279,759 | (1,028,449) | -16.38% | | Property and equipment, net held for continuing operations | 73,008 | 1,120,318 | (1,047,310) | -93.48% | | Property and equipment, net, held for discontinued operations | (5,178,302) | (5,159,441) | (18,861) | 0.37% | | Depreciation and amortization expense (9 months, continuing operations) | 44,598 | 68,041 | (23,443) | -34.45% | | Depreciation and amortization expense (9 months, discontinued operations) | 267,334 | 290,038 | (22,704) | -7.83% | - A property was pledged as collateral for a personal loan of a former chairman, Zhang Yuying. The company transferred **100% equity interest of Chongshi** to the lender as payment for the loan, with Zhang Yuying expected to pay **RMB 8.0 million (US$1.1 million)** to the company by June 30, 2025[124](index=124&type=chunk) [NOTE 9 - LAND USE RIGHTS, NET](index=28&type=section&id=NOTE%209%20-%20LAND%20USE%20RIGHTS%2C%20NET) Land use rights, net, decreased slightly, with all such rights held for discontinued operations. No amortization expense was charged to continuing operations | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | Total land use rights, net | 601,305 | 615,607 | (14,302) | -2.32% | | Land use rights, net, held for discontinued operations | (601,305) | (615,607) | 14,302 | -2.32% | | Amortization expense (9 months, discontinued operations) | 14,523 | 14,982 | (459) | -3.06% | [NOTE 10 - LEASES](index=29&type=section&id=NOTE%2010%20-%20LEASES) The company leases office space and warehouses under non-cancellable operating leases. Operating lease ROU assets and liabilities for continuing operations decreased, while discontinued operations no longer hold such assets or liabilities. The company also generates rental income from leasing out property to a third party | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | ROU lease assets (continuing operations) | 68,729 | 145,323 | (76,594) | -52.70% | | Total operating lease liabilities (continuing operations) | 312,373 | 272,787 | 39,586 | 14.51% | | ROU lease assets (discontinued operations) | - | 712 | (712) | -100.00% | | Total operating lease liabilities (discontinued operations) | - | - | 0 | 0.00% | | Total lease cost (9 months, continuing operations) | 129,008 | 56,721 | 72,287 | 127.44% | | Rental income (9 months, continuing operations) | 30,867 | 30,766 | 101 | 0.33% | - The weighted average remaining lease term for continuing operations was **0.90 years** as of March 31, 2025, with a weighted average discount rate of **4.27%**[133](index=133&type=chunk) [NOTE 11 - ACQUISITIONS](index=31&type=section&id=NOTE%2011%20-%20ACQUISITIONS) This note details the acquisitions of Guangyuan (2021), Biowin (2023), and Wintus (2023). Guangyuan and Wintus operations are now classified under discontinued operations, while Biowin's rapid diagnostic products contribute to continuing operations. Goodwill impairment was recognized for Wintus due to lower-than-expected performance - Acquisition of Guangyuan (July 5, 2021) provided entry into planting fast-growing bamboo willows and scenic greening trees, with its operating results included in discontinued operations[138](index=138&type=chunk)[139](index=139&type=chunk)[144](index=144&type=chunk) - Acquisition of Biowin (January 1, 2023) marked the company's entry into the Point-of-Care Testing industry, with its operations included in continuing operations. Goodwill of **US$6,574,743** was recognized, with an impairment loss of **US$4,555,996** recorded by June 30, 2024[145](index=145&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) - Acquisition of Wintus (July 31, 2023) involved cash, common stock, and the transfer of Tenet-Jove equity. Wintus's operations are classified as discontinued, and goodwill of **US$21,440,360** was recognized, with impairment losses totaling **US$18,219,301** by March 31, 2025[154](index=154&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) Biowin Intangible Assets (Trademarks & Patents) | Metric | March 31, 2025 (USD) | | :----------------------------------- | :------------------- | | Intangible assets | 12,683,656 | | Less: accumulated amortization | (2,853,823) | | Total intangible assets, net | 9,829,833 | | Average Useful Life | 10 years | [NOTE 12 - RELATED PARTY TRANSACTIONS](index=36&type=section&id=NOTE%2012%20-%20RELATED%20PARTY%20TRANSACTIONS) The company has various related party transactions, including amounts due from and to related parties, sales to a related party, loan guarantees provided by and to related parties, and lease agreements with related parties. These transactions are generally unsecured, non-interest bearing, and due on demand Due from Related Parties, Net | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | Total due from related parties, net | 258,681 | 383,745 | (125,064) | -32.59% | | Due from related parties, held for continuing operations | 24,456 | 24,424 | 32 | 0.13% | | Due from related parties, held for discontinued operations | (234,225) | (359,321) | 125,096 | -34.81% | Due to Related Parties | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | Total due to related parties | 2,703,404 | 2,875,384 | (171,980) | -5.98% | | Due to related parties, held for continuing operations | 254,125 | 1,160,920 | (906,795) | -78.11% | | Due to related parties, held for discontinued operations | (2,449,279) | (1,714,464) | (734,815) | 42.86% | - Sales to a related party (Chongqing Fuling District Renyi Zhilu Silk Industry Co., Ltd) from discontinued operations were **US$678,142** for the nine months ended March 31, 2025, a decrease from **US$797,506** in the prior year[170](index=170&type=chunk) - Chongqing Wintus provided a guarantee of **US$688,906** for a bank loan borrowed by Chongqing Yufan, a related party, until December 28, 2025[173](index=173&type=chunk) [NOTE 13 – LOANS](index=38&type=section&id=NOTE%2013%20%E2%80%93%20LOANS) The company has various short-term and long-term loans, primarily bank loans, with differing maturity dates and interest rates. Many of these loans are guaranteed by related parties or pledged properties. A significant portion of these loans are held for discontinued operations Short-term Loans (Continuing Operations) | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | Short-term loans from third parties | 522,002 | 509,119 | 12,883 | 2.53% | | Short-term bank loans, held for continuing operations | 1,225,702 | 1,224,089 | 1,613 | 0.13% | | Total Short-term loans (continuing operations) | 1,747,704 | 1,733,208 | 14,496 | 0.84% | | Interest expenses (9 months, continuing operations) | 65,265 | 60,164 | 5,101 | 8.48% | | Weighted average interest rate (9 months, continuing operations) | 14.5% | 15.0% | -0.5% | -3.33% | Long-term Loans (Discontinued Operations) | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | Long-term bank loans-non-current, held for discontinued operations | 1,687,821 | 1,080,159 | 607,662 | 56.26% | | Interest expenses (9 months, discontinued operations) | 432,848 | 401,673 | 31,175 | 7.76% | | Weighted average interest rate (9 months, discontinued operations) | 4.10% | 4.30% | -0.20% | -4.65% | - Several bank loans are guaranteed by individuals (e.g., former CEO, shareholders) and related entities, with some also secured by pledged patent rights or properties[181](index=181&type=chunk)[183](index=183&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) [NOTE 14 - CONVERTIBLE NOTES PAYABLE](index=42&type=section&id=NOTE%2014%20-%20CONVERTIBLE%20NOTES%20PAYABLE) The company has issued several unsecured convertible promissory notes to an institutional investor, Streeterville Capital, LLC, with principal amounts totaling over US$18 million. These notes accrue interest at 6% per annum and have been subject to multiple maturity date extensions and partial conversions into common stock or cash repayments - Three main convertible promissory notes were issued to Streeterville Capital, LLC, with original principal amounts of **US$3.17 million** (June 2021), **US$7.37 million** (July 2021), and **US$10.52 million** (August 2021)[192](index=192&type=chunk)[193](index=193&type=chunk)[195](index=195&type=chunk) - As of March 31, 2025, **US$15,258,357** of principal and interest from these notes were converted into **1,172,135 shares of common stock**, and **US$1,050,000** was repaid in cash[198](index=198&type=chunk) - The remaining notes balance was **US$9,741,322** (carrying value **US$9,908,256**) as of March 31, 2025, recorded as current convertible note payable[198](index=198&type=chunk) - Amortization of debt issuance and other costs from continuing operations decreased by **21.14%** to **US$482,664** for the nine months ended March 31, 2025, compared to **US$612,072** in the prior year[197](index=197&type=chunk) [NOTE 15 - TAXES](index=43&type=section&id=NOTE%2015%20-%20TAXES) The company is subject to corporate income taxes in the US, Hong Kong, and PRC, with varying rates and special considerations for HNTEs and small low-profit enterprises. Deferred tax liabilities are primarily related to intangible assets, while deferred tax assets are offset by a significant valuation allowance. The company also accounts for Value-Added Tax (VAT) in the PRC - Biowin, a subsidiary, enjoys a reduced corporate income tax rate of **15%** as a High and New Technology Enterprise (HNTE) through December 2025[200](index=200&type=chunk) - Certain Wintus subsidiaries in the PRC are subject to a reduced effective tax rate of **5%** on taxable income up to **RMB3 million** as small low-profit enterprises[200](index=200&type=chunk) Income Tax Provision (Benefit) | Metric | 9 Months Ended Mar 31, 2025 (USD) | 9 Months Ended Mar 31, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | :------- | | Total income tax provision (benefit) | (838,642) | (460,039) | (378,603) | 82.29% | | Income tax benefit, held for continuing operations | (187,854) | (152,646) | (35,208) | 23.07% | | Income tax provision (benefit), held for discontinued operations | 650,788 | 307,393 | 343,395 | 111.71% | Deferred Tax Liability, Net | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | Deferred tax liability, net | (8,959,583) | (9,835,306) | 875,723 | -8.90% | | Deferred tax liability, net, held for continuing operations | (1,000,597) | (1,188,718) | 188,121 | -15.82% | | Valuation allowance (total) | 4,026,576 | 1,110,668 | 2,915,908 | 262.54% | [NOTE 16 - STOCKHOLDERS' EQUITY](index=46&type=section&id=NOTE%2016%20-%20STOCKHOLDERS%27%20EQUITY) The company's stockholders' equity has been significantly impacted by multiple reverse stock splits (1-for-9 in 2020, 1-for-10 in Feb 2024, 1-for-24 in Nov 2024) and various stock issuances for financing, acquisitions, and employee incentives. Statutory reserves are maintained in accordance with PRC GAAP - The company completed a **1-for-24 reverse stock split** effective November 12, 2024, retrospectively restating all share and per share data[221](index=221&type=chunk) - Significant stock issuances include **58,333 shares for US$7.0 million** (June 2024), **77,882 shares for US$2.0 million** (July 2024), **624,375 shares for US$8.2 million** (August 2024), and **15,000,000 shares for US$32.7 million** (December 2024)[217](index=217&type=chunk)[218](index=218&type=chunk)[219](index=219&type=chunk)[222](index=222&type=chunk) - Statutory reserves of **US$4,350,297** were maintained as of March 31, 2025, and June 30, 2024, as required by PRC GAAP[210](index=210&type=chunk) [NOTE 17 - CONCENTRATIONS AND RISKS](index=48&type=section&id=NOTE%2017%20-%20CONCENTRATIONS%20AND%20RISKS) The company's operations are highly concentrated in the PRC, with almost all assets and 100% of revenue derived from its PRC subsidiaries and VIEs. There are significant customer and vendor concentrations for both continuing and discontinued operations, indicating reliance on a limited number of business partners - Almost **100% of the company's assets and 100% of its revenue** are located in or derived from the PRC[224](index=224&type=chunk) - For the nine months ended March 31, 2025, two customers accounted for approximately **40% of total sales** from continuing operations[225](index=225&type=chunk) - As of March 31, 2025, one customer accounted for approximately **100% of accounts receivable** from continuing operations[229](index=229&type=chunk) - For the nine months ended March 31, 2025, one vendor accounted for approximately **93% of total purchases** from continuing operations[231](index=231&type=chunk) [NOTE 18 - COMMITMENTS AND CONTINGENCIES](index=49&type=section&id=NOTE%2018%20-%20COMMITMENTS%20AND%20CONTINGENCIES) The company faces several legal contingencies, including a lawsuit regarding a US$3.4 million loan where Life Science is a defendant, and two lawsuits against its subsidiary Biowin for outstanding trade payables and a defaulted bank loan. These legal actions could result in significant financial liabilities - Life Science is a defendant in a civil complaint for an outstanding loan of RMB 25.0 million (**US$3.4 million**) with a **30.0% interest rate**, where a business partner allegedly withheld funds[240](index=240&type=chunk) - Biowin faces a lawsuit from Zhejiang Shijin Packaging Co., Ltd. for RMB 121,447 (**US$16,733**) in outstanding trade payables plus interest and litigation fees[241](index=241&type=chunk) - Bank of Jiangsu commenced a lawsuit against Biowin for a defaulted loan of RMB2,946,000 (**US$405,904**) plus interests and penalty interests, due to Biowin's failure to make monthly interest payments[242](index=242&type=chunk) - A prior legal case regarding unpaid restricted shares was settled in December 2023, resulting in the waiver of **US$3,024,000** in subscription receivable[238](index=238&type=chunk) [NOTE 19 - SEGMENT REPORTING](index=50&type=section&id=NOTE%2019%20-%20SEGMENT%20REPORTING) The company operates two continuing business segments: Rapid Diagnostic and Other Products (Biowin) and Healthy Meals Products (Fuzhou Meida). Discontinued operations include Luobuma products, Other Agricultural Products (Qingdao Zhihesheng, Guangyuan, Wintus), and Freight Services (Zhisheng Freight) - Continuing operations include 'Rapid diagnostic and other products' (Biowin, Jiangsu Province) and 'Healthy meals products' (Fuzhou Meida, Fuzhou City)[246](index=246&type=chunk) - Discontinued operations comprise 'Luobuma products' (Tenet-Jove, Beijing, Tianjin, Xinjiang), 'Other agricultural products' (Qingdao Zhihesheng, Guangyuan, Wintus, Shandong, Shanxi, Chongqing), and 'Freight services' (Zhisheng Freight)[244](index=244&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk) Segment Revenue (9 Months Ended March 31, 2025) | Segment | Revenue (USD) | Gross Profit (USD) | Gross Profit % | | :----------------------------------- | :------------ | :----------------- | :------------- | | Rapid diagnostic and other products | 258,091 | 121,633 | 47.1% | | Healthy meals products | 949 | 700 | 73.8% | | Other agricultural products (discontinued) | 7,633,705 | 330,093 | 4.3% | | Luobuma products (discontinued) | - | - | - | | Total | 7,892,745 | 452,426 | 5.7% | Total Assets by Segment (March 31, 2025) | Segment | Total Assets (USD) | | :----------------------------------- | :------------------- | | Other agricultural products | 72,905,256 | | Rapid diagnostic and other products | 12,562,560 | | Healthy meals products | 34,729 | | Total assets, held for continuing operations | 24,565,932 | | Total assets, held for discontinued operations | (60,936,613) | [NOTE 20 - DISCONTINUED OPERATIONS](index=53&type=section&id=NOTE%2020%20-%20DISCONTINUED%20OPERATIONS) The Tenet-Jove Disposal Group and Wintus business segments have been reclassified as discontinued operations following the Wintus and FuWang acquisitions. This reclassification reflects a strategic shift with a major effect on the company's operations and financial results, leading to separate reporting of their assets, liabilities, and operating results - The Wintus Acquisition (May 29, 2023) and FuWang Acquisition (March 20, 2025) led to the reclassification of Tenet-Jove Disposal Group and Wintus as discontinued operations[250](index=250&type=chunk)[251](index=251&type=chunk)[253](index=253&type=chunk) Assets and Liabilities of Discontinued Operations | Metric | March 31, 2025 (USD) | June 30, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :------------------- | :------------------ | :----------- | :------- | | Total current assets of discontinued operation | 22,363,220 | 13,497,416 | 8,865,804 | 65.69% | | Total assets of discontinued operation | 60,936,613 | 62,678,986 | (1,742,373) | -2.78% | | Total current liabilities of discontinued operation | 31,099,110 | 16,925,019 | 14,174,091 | 83.74% | | Total liabilities of discontinued operation | 40,745,917 | 26,651,766 | 14,094,151 | 52.88% | Operating Results of Discontinued Operations | Metric | 9 Months Ended Mar 31, 2025 (USD) | 9 Months Ended Mar 31, 2024 (USD) | Change (USD) | % Change | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | :------- | | Revenue | 7,633,705 | 4,849,026 | 2,784,679 | 57.43% | | Gross Profit | 330,093 | 356,757 | (26,664) | -7.47% | | Loss from Operations | (8,349,515) | (4,450,932) | (3,898,583) | 87.59% | | Impairment loss on goodwill | (7,950,478) | - | (7,950,478) | N/A | | Net Income (Loss) from Discontinued Operations | (15,874,674) | 4,531,193 | (20,405,867) | -450.34% | [NOTE 21 - SUBSEQUENT EVENTS](index=55&type=section&id=NOTE%2021%20-%20SUBSEQUENT%20EVENTS) Subsequent to the reporting period, Shineco Life entered into a share purchase agreement to acquire 51% of InfiniClone Limited for US$19,895,600 in cash and 3,450,000 shares of common stock, with the acquisition expected to close in May 2025 - On April 22, 2025, Shineco Life agreed to acquire **51% of InfiniClone Limited** for **US$19,895,600 cash** and **3,450,000 shares of common stock**[256](index=256&type=chunk) - The InfiniClone acquisition is expected to be completed in May 2025[256](index=256&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the company's financial performance, including revenue, expenses, and net loss, for the nine and three months ended March 31, 2025 and 2024. It also discusses financing activities, factors affecting financial performance, critical accounting policies, liquidity, and capital resources, highlighting the significant impact of discontinued operations and ongoing efforts to manage liquidity - The company's net loss significantly increased for both the nine and three months ended March 31, 2025, primarily due to increased net loss from discontinued operations[318](index=318&type=chunk)[339](index=339&type=chunk) - Revenue from continuing operations decreased by **43.63%** for the nine months and **72.57%** for the three months ended March 31, 2025, mainly due to declining orders for rapid diagnostic products and the temporary suspension of healthy meal products business[300](index=300&type=chunk)[301](index=301&type=chunk)[323](index=323&type=chunk)[324](index=324&type=chunk) - General and administrative expenses decreased by **32.17%** for the nine months ended March 31, 2025, primarily due to the forgiveness of subscription receivable and decreased acquisition-related professional fees, partially offset by increased compensation expense related to a legal case[308](index=308&type=chunk) - The company continues to finance operations through short-term loans, convertible notes, and common stock sales, with recent offerings raising substantial gross proceeds to support working capital and M&A activities[272](index=272&type=chunk)[276](index=276&type=chunk)[277](index=277&type=chunk)[279](index=279&type=chunk)[280](index=280&type=chunk) - Working capital decreased by **US$7,024,504 (105.5%)** as of March 31, 2025, primarily due to increased current liabilities from discontinued operations and convertible notes[359](index=359&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=77&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Shineco, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[379](index=379&type=chunk) [Item 4. Controls and Procedures](index=77&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025, due to material weaknesses including a lack of full-time U.S. GAAP personnel, inadequate segregation of duties, and insufficient control procedures for loan evaluations. The company is implementing measures to address these weaknesses - Disclosure controls and procedures were **not effective** as of March 31, 2025[381](index=381&type=chunk) - Material weaknesses identified include a lack of full-time U.S. GAAP personnel, insufficient segregation of duties for accounting personnel, and inadequate control procedures for pre-loan credit risk evaluation and loan approval[381](index=381&type=chunk) - Remedial actions include recruiting qualified professionals, improving communication, obtaining proper approval for significant transactions, and implementing stringent documentation and controls for money lending procedures[383](index=383&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=78&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings other than ordinary routine litigation, nor is it a plaintiff in any material proceeding, except as previously disclosed - No material, existing or pending legal proceedings against the company, nor is the company involved as a plaintiff in any material proceeding or pending litigation, other than ordinary routine litigation[385](index=385&type=chunk) [Item 1A. Risk Factors](index=78&type=section&id=Item%201A.%20Risk%20Factors) As a 'smaller reporting company,' Shineco, Inc. is not required to provide the information regarding risk factors - As a 'smaller reporting company,' the company is not required to provide risk factor information[386](index=386&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=78&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of the company's equity securities during the nine months ended March 31, 2025, that were not previously disclosed - No unregistered sales of equity securities occurred during the nine months ended March 31, 2025, that were not previously disclosed[387](index=387&type=chunk) [Item 3. Defaults Upon Senior Securities](index=78&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There were no defaults upon senior securities[388](index=388&type=chunk) [Item 4. Mine Safety Disclosures](index=78&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable[389](index=389&type=chunk) [Item 5. Other Information](index=78&type=section&id=Item%205.%20Other%20Information) No other information is reported in this section - No other information is reported[390](index=390&type=chunk) [Item 6. Exhibits](index=79&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, convertible promissory note amendments, equity incentive plans, distribution agreements, underwriting agreements, securities purchase agreements, director offer letters, and certifications - Exhibits include Amended and Restated Certificate of Incorporation, Second Amended and Restated Bylaws, Specimen Common Stock Share Certificate, and various amendments to Convertible Promissory Notes[391](index=391&type=chunk) - Equity Incentive Plans (2016, 2022, 2023, 2024, 2025) are filed as exhibits[391](index=391&type=chunk) - Recent agreements such as the Distribution Agreement (July 9, 2024), Underwriting Agreement (July 11, 2024), and Securities Purchase Agreements (August 22, 2024, December 24, 2024, March 20, 2025, April 22, 2025) are included[391](index=391&type=chunk) - Certifications of Principal Executive Officer and Principal Financial Officer (pursuant to Rule 13a-14(a)/15d-14(a) and 18 U.S.C. § 1350) are filed[391](index=391&type=chunk) [SIGNATURES](index=80&type=section&id=SIGNATURES) The report is duly signed on behalf of SHINECO, INC. by Jennifer Zhan, Chief Executive Officer, and Sai (Sam) Wang, Chief Financial Officer, on May 15, 2025 - The report was signed by Jennifer Zhan, Chief Executive Officer, and Sai (Sam) Wang, Chief Financial Officer, on May 15, 2025[396](index=396&type=chunk)

Core Insights - Shineco, Inc. has launched a Southeast Asian market expansion strategy through its subsidiary InfiniClone, which has entered a distribution agreement with Total World Marketing (TWM) to promote and sell its molecular detection kits and health products [1] - The Southeast Asian healthcare consumer market is experiencing significant growth, with sales of healthcare products on major e-commerce platforms reaching $1.57 billion in 2023, marking a year-over-year increase of over 25% [2] - InfiniClone's molecular detection kit utilizes iPSC technology to analyze genetic mutations related to various diseases, aiming to provide personalized health management solutions [3] Company Developments - InfiniClone's product lines include molecular detection kits and Purelix health products, which are designed to create a "detection-intervention" closed-loop system for consumers [3] - TWM has initiated a pilot sale of InfiniClone's Purelix products in Thailand and plans to expand into pharmacies, clinics, and e-commerce platforms following regulatory approval [4] - Shineco's CEO emphasized that the acquisition of InfiniClone enhances the company's competitive positioning and supports the development of an integrated network focused on Southeast Asia [5] Market Context - The economic recovery and increased consumer purchasing power in Southeast Asia are driving demand for healthcare products, particularly in the post-epidemic era [2] - InfiniClone is exploring clinical applications of its molecular detection kits in early disease screening and treatment monitoring in collaboration with medical institutions in Southeast Asia [4] - The integration of TWM's distribution channels with InfiniClone's R&D capabilities is expected to enable rapid responses to market demands in the region [5]

Core Viewpoint - Shineco, Inc. has announced the acquisition of a 51% equity interest in InfiniClone Limited, a biotechnology company specializing in regenerative medicine, marking a significant step into the stem cell technology sector [2][3][6]. Company Overview - Shineco, Inc. focuses on providing innovative diagnostic medical products and related medical devices, aiming to improve quality of life through safe and efficient health solutions [7]. - The company has developed 33 types of in vitro diagnostic reagents and related medical devices, alongside producing and selling healthy foods [7]. Acquisition Details - The acquisition involves a payment of $19,895,600 in cash and the issuance of 3,450,000 shares of common stock to the seller, Dr. Lim Kah Meng [3]. - InfiniClone holds 29 global patents, including five invention patents, which cover major markets such as the US, Europe, and Asia, providing a competitive edge in stem cell technology [4]. InfiniClone's Technology - InfiniClone's core technologies include cell reprogramming, stem cell culture using microcarrier technology, and the management of induced pluripotent stem cell (iPSC) libraries, which can enhance cell expansion throughput by three to ten times compared to existing methods [4]. - The technology is expected to reduce production costs per cell by over 60% and significantly shorten the time required for clinical applications, such as treating Parkinson's and Alzheimer's diseases [4]. Leadership and Expertise - Dr. Lim Kah Meng, the founder of InfiniClone, has over 20 years of experience in molecular research related to stem cell and regenerative medicine, and has founded several biotechnology companies [5]. - Shineco's CEO, Jennifer Zhan, emphasized the acquisition as a key milestone for entering the regenerative medicine field and highlighted the potential for transforming InfiniClone's technology from laboratory to clinical applications [6].

Core Viewpoint - Shineco, Inc. has announced the acquisition of a 75% equity interest in FuWang (HK) International Company Limited, which is expected to create immediate synergies with Shineco's existing medical device business [1][4]. Acquisition Details - Shineco Life Science Group Hong Kong Co., Limited will pay approximately US$ 8.8 million in cash, issue 3,400,000 shares of common stock, and transfer a 71.42% equity interest in Dream Partner Limited to the Seller as part of the acquisition [2]. Company Profile of FuWang - FuWang Company specializes in the R&D, production, and commercialization of Class II and III medical devices, including biochemical analyzers and patient monitors, and has a strong market presence in several Chinese provinces [3]. - The company plans to expand into integrated health management, utilizing cloud computing and AI technologies to enhance critical care networks [3]. Financial Projections - FuWang Company is projected to achieve revenues of US$11.03 million in 2025, US$13.79 million in 2026, and US$17.24 million in 2027, with corresponding net profits of US$1.10 million, US$1.38 million, and US$1.72 million respectively [3]. Strategic Importance - The CEO of Shineco emphasized the strategic positioning of FuWang in the medical devices sector and its potential to enhance Shineco's overall financial performance through synergies [4].

Acquisitions and Investments - Shineco Life acquired 51% of Changzhou Biowin Pharmaceutical Co., Ltd. for US$9,000,000 in cash and 13,583 shares of common stock[250]. - On September 19, 2023, Shineco Life closed the acquisition of 71.42% equity interest in Chongqing Wintus Group for US$2,000,000 and 41,667 shares of common stock[251]. - The company has divested its equity interest in Tenet-Jove, terminating its VIE structure[251]. - The company entered into a securities purchase agreement for the sale of 624,375 shares at $13.20 per share, totaling approximately $8.24 million, with $4.7 million received by December 31, 2024[263]. - A separate agreement was made to sell 15,000,000 shares at $2.18 per share, generating gross proceeds of $32.7 million, with shares issued on January 10, 2025[264]. Business Segments - The company operates three main business segments: rapid diagnostic products, agricultural products, and healthy meals, with products sold in multiple countries including Germany, Spain, and the United States[252][254][255]. - The Company has three major business segments: rapid diagnostic products, silk products, and healthy meals for metabolic health recovery[288]. - The company specializes in producing, processing, and distributing agricultural products, including silk and fresh fruits, with operations located in Chongqing, China[254]. - The company’s rapid diagnostic products are developed and distributed through its subsidiary Biowin, with operations based in Jiangsu Province[252]. Financial Performance - Revenue for the six months ended December 31, 2024, was $5,223,456, representing a 32.15% increase from $3,952,759 in the same period of 2023[287]. - Cost of revenue increased by 35.82% to $4,810,155, up from $3,541,486, resulting in a gross profit of $413,301, a slight increase of 0.49%[287]. - General and administrative expenses decreased by 40.12% to $5,300,198 from $8,851,375, contributing to a loss from operations of $5,028,988, a 41.65% improvement from the previous year[287]. - The Company reported a net loss from continuing operations of $4,847,811, a 43.43% reduction compared to $8,569,226 in the prior year[287]. - The net loss for the six months ended December 31, 2024, was US$4,847,811, compared to a net income of US$286,021 for the same period in 2023, indicating a significant decline in performance[315]. - Comprehensive loss for the six months ended December 31, 2024, was US$4,853,397, an increase of US$5,277,773 from a comprehensive income of US$424,376 for the same period in 2023[316]. Revenue Breakdown - Revenue from other agricultural products increased by $1,362,854, or 37.42%, reaching $5,005,387 in 2024, primarily due to increased sales of fresh fruits[291]. - Revenue from rapid diagnostic and other products decreased by $82,002, or 27.41%, totaling $217,120 in 2024, attributed to a decline in customer orders[289]. - Revenue from healthy meal products decreased by $10,155, or 91.45%, to $949 in 2024, due to low market acceptance and high maintenance costs[292]. - Revenue for the three months ended December 31, 2024, was US$3,049,171, representing an increase of US$742,269 or 32.18% compared to US$2,306,902 in 2023[318]. - Revenue from sales of other agricultural products increased by US$822,113 or 38.56% to US$2,953,916 for the three months ended December 31, 2024, due to increased sales of fresh fruits[322]. - Revenue from sales of rapid diagnostic and other products decreased by US$68,740 or 41.92% to US$95,255 for the three months ended December 31, 2024, primarily due to a decline in customer orders[320]. Expenses and Losses - General and administrative expenses decreased by US$2,928,287 or 52.37% to US$2,663,623 for the three months ended December 31, 2024, mainly due to the forgiveness of a subscription receivable[332]. - The loss from operations for the three months ended December 31, 2024, was US$2,638,595, a reduction of US$2,747,577 or 51.01% compared to US$5,386,172 in 2023[318]. - Net interest expenses decreased to US$185,524 in Q4 2024, down US$266,566, or 58.96%, from US$452,090 in Q4 2023[339]. - The benefit for income taxes was US$242,475 in Q4 2024, a decrease of US$464,087, or 65.68%, compared to US$706,562 in Q4 2023[340]. - Net loss from continuing operations was US$2,289,683 for Q4 2024, a decrease of US$2,766,420, or 54.71%, from US$5,056,103 in Q4 2023[341]. Cash Flow and Financing - Net cash used in operating activities for the six months ended December 31, 2024 was approximately US$2.7 million, with a net loss from continuing operations of US$4.8 million[371]. - Net cash used in investing activities for the six months ended December 31, 2024 was US$2.8 million, mainly due to prepayment for business acquisition of US$2.6 million[373]. - Net cash provided by financing activities for the six months ended December 31, 2024 amounted to approximately US$5.8 million, driven by proceeds from issuance of common stock of US$6.8 million[375]. - The Company had current assets of US$36.2 million and current liabilities of US$42.2 million as of December 31, 2024[362]. - The Company’s management believes that current access to loans and equity financing will be sufficient to meet working capital needs for at least the next 12 months[361]. Other Financial Information - As of December 31, 2024, the company had approximately US$14.0 million in short-term bank loans and US$1.7 million in long-term bank loans outstanding[349]. - The Company reported recurring net losses from continuing operations of US$4.8 million and US$8.6 million for the six months ended December 31, 2024 and 2023, respectively[361]. - As of December 31, 2024, the Company had accumulated a deficit of US$58.0 million and negative working capital of US$6.0 million[361]. - Working capital decreased by US$697,410, or 10.5%, from June 30, 2024 to December 31, 2024, primarily due to an increase in contract liabilities[362]. - The Company has no long-term fixed contractual obligations other than leases disclosed in the financial statements[365]. - The Company’s subsidiary provided a guarantee of US$685,076 for a bank loan borrowed by a related party until December 28, 2025[367].

Acquisitions and Divestitures - Shineco, Inc. acquired 51% of Changzhou Biowin Pharmaceutical Co., Ltd. for US$9,000,000 in cash and 13,583 shares of common stock[114]. - On September 19, 2023, Shineco Life closed the acquisition of 71.42% equity interest in Chongqing Wintus Group for US$2,000,000 and 41,667 shares of restricted common stock[114]. - The company divested its equity interest in Tenet-Jove, terminating its VIE structure, and reclassified its operations as discontinued[115]. Business Segments - The company operates three main business segments: Rapid Diagnostic Products, Agricultural Products, and Healthy Meals, with products sold in multiple countries including Germany, Spain, and the United States[115]. - The Rapid Diagnostic segment focuses on innovative products for common diseases, with operations based in Jiangsu Province, China[114]. - The Agricultural Products segment includes silk and fresh fruit distribution, with operations in Chongqing and sales in regions such as Southeast Asia and Europe[115]. - Fuzhou Meida opened a health-oriented restaurant in Fuzhou, aiming to expand to key cities like Beijing and Shanghai[115]. - The company plans to gradually establish additional branches of its restaurant chain across major cities in China[115]. Financial Performance - Revenue for the three months ended September 30, 2024, was $2,174,285, representing an increase of $528,428 or 32.11% compared to $1,645,857 in the same period of 2023[127]. - Revenue from other agricultural products increased by $540,741 or 35.79%, totaling $2,051,471 for the three months ended September 30, 2024, due to three months of revenue following the acquisition of Wintus[129]. - Gross profit for the three months ended September 30, 2024, was $291,841, an increase of $192,886 or 194.92% compared to $98,955 in the same period of 2023[131]. - The company reported a net income of $5,342,124 for the three months ended September 30, 2024, a decrease of $7,900,252 or 147.89% compared to the same period in 2023[127]. - Comprehensive loss was US$2,370,422 for the three months ended September 30, 2024, an increase of US$7,810,511 from a comprehensive income of US$5,440,089 for the same period in 2023[140]. Expenses and Cost Management - General and administrative expenses decreased by $622,890 or 19.11%, totaling $2,636,575 for the three months ended September 30, 2024, primarily due to reduced professional service fees[133]. - Selling expenses decreased by $15,592 or 32.60%, amounting to $32,241 for the three months ended September 30, 2024, as a result of cost control measures[134]. - Research and development expenses decreased by $10,280 or 43.38%, totaling $13,418 for the three months ended September 30, 2024, due to reduced product development activities[135]. - The Company aims to maintain effective cost control through long-term supplier alliances and leveraging economies of scale from its distribution network[118]. Cash Flow and Financing Activities - Net cash used in operating activities for the three months ended September 30, 2024 was approximately US$2.1 million, compared to US$1.5 million for the same period in 2023[149]. - Net cash used in investing activities for the three months ended September 30, 2024 was US$3.1 million, significantly lower than US$12.9 million in the same period of 2023[150]. - Net cash provided by financing activities for the three months ended September 30, 2024 amounted to approximately US$5.1 million, compared to US$0.9 million in the same period of 2023[151]. Debt and Liabilities - As of September 30, 2024, the company had approximately US$13.7 million in short-term bank loans and US$1.8 million in long-term bank loans outstanding[142]. - The company had accumulated a deficit of US$56.4 million as of September 30, 2024, and negative working capital of US$7.3 million[145]. - Current liabilities increased to US$38,993,149 as of September 30, 2024, from US$27,562,855 as of June 30, 2024[146]. - The company intends to continue executing its growth plans and managing market risk while relying on financial support from shareholders to meet working capital needs[145]. Inventory and Asset Management - As of September 30, 2024, the inventory reserve was nil, indicating effective inventory management[123]. - Current assets increased to US$31,687,558 as of September 30, 2024, from US$20,903,961 as of June 30, 2024[146]. - The cash, cash equivalents, and restricted cash at the end of the period was US$258,714, down from US$875,026 at the end of the same period in 2023[148]. - The company experienced a net decrease in cash and cash equivalents of US$136,322 for the three months ended September 30, 2024[148]. Regulatory and Methodological Changes - The adoption of the CECL methodology for credit losses on July 1, 2023, had no material impact on the consolidated financial statements[122]. - The company operates primarily in the PRC, facing unique political, economic, and legal risks that could adversely affect financial performance[119].

Acquisitions and Investments - Shineco Life acquired 51% of Changzhou Biowin Pharmaceutical Co., Ltd. for US$9,000,000 in cash and 326,000 shares of common stock[161]. - On September 19, 2023, Shineco Life closed the acquisition of 71.42% equity interest in Chongqing Wintus Group for US$2,000,000 and 1,000,000 shares of common stock[162]. - The acquisition of Biowin allows the company to enter the Point-of-Care Testing industry, focusing on rapid diagnostic products[163]. - The company has divested its equity interest in Tenet-Jove, terminating its VIE structure[162]. - The company completed a capital injection of RMB 4.8 million (approximately US$0.70 million) for a 32% equity interest in Gaojing Private Fund, and plans to transfer this interest by March 31, 2025[211]. Business Segments and Operations - The company operates three main business segments: Rapid Diagnostic Products, Agricultural Products, and Healthy Meals, with products sold in multiple countries including China, Germany, and the United States[163][165][166]. - The company’s agricultural segment includes silk and fresh fruit distribution, with operations in Chongqing and sales in various international markets[165]. - The company plans to expand its health-oriented restaurant chain, Fuzhou Meida, into key cities across China[166]. Financial Performance - Revenue for the year ended June 30, 2024, was $9,801,856, representing an increase of $9,251,380 or 1,680.61% compared to $550,476 in 2023[195]. - Cost of revenue for the year ended June 30, 2024, was $8,919,688, an increase of $8,495,397 or 2,002.26% compared to $424,291 in 2023[199]. - Gross profit for the year ended June 30, 2024, was $882,168, an increase of $755,983 or 599.11% compared to $126,185 in 2023[195]. - General and administrative expenses for the year ended June 30, 2024, were $17,522,624, an increase of $8,912,032 or 103.50% compared to $8,610,592 in 2023[206]. - Selling expenses for the year ended June 30, 2024, were $311,989, an increase of $174,602 or 127.09% compared to $137,387 in 2023[207]. - Research and development expenses for the year ended June 30, 2024, were $113,426, a decrease of $22,423 or 16.51% compared to $135,849 in 2023[207]. - Net loss for the year ended June 30, 2024, was $24,352,735, an increase of $10,396,704 or 74.50% compared to $13,956,031 in 2023[195]. - The company recorded a net loss from continuing operations of US$33,207,982 for the year ended June 30, 2024, an increase of 210.03% from the previous year's loss of US$10,711,168[217]. - The company reported a net loss of US$24,352,735 for the year ended June 30, 2024, a 74.50% increase from the net loss of US$13,956,031 in 2023[219]. Revenue Recognition and Accounting Policies - Revenue is primarily generated from sales of Luobuma products and other services, recognized when goods are delivered and collectability is probable[189]. - The adoption of ASC 606 did not result in material changes to the timing and pattern of revenue recognition for the Company's current revenue streams[190]. - The Company adopted the CECL methodology for credit losses on July 1, 2023, with no material impact on consolidated financial statements[185]. Cash Flow and Financing Activities - The company raised approximately US$6.4 million from a securities purchase agreement for 1,400,000 shares at US$5.00 per share, with the remaining proceeds received in July 2024[172]. - The Company completed a public offering of 1,869,160 shares at a price of US$1.07 per share, raising approximately US$2.0 million in gross proceeds, with net proceeds of about US$1.6 million after expenses[173]. - A securities purchase agreement was entered into for the sale of 14,985,000 shares at US$0.55 per share, generating gross proceeds of US$8,241,750, closing on September 10, 2024[175]. - The Company generated approximately US$11.0 million in net cash from financing activities for the year ended June 30, 2024, driven by proceeds from common stock issuance and short-term loans[251]. Economic and Operational Risks - The Company faces economic and political risks primarily in the PRC, which could adversely affect financial performance due to changes in governmental policies and economic conditions[178]. - The COVID-19 pandemic has caused significant disruptions, impacting product delivery and customer payments, with ongoing uncertainty regarding future economic conditions[179]. Inventory and Working Capital Management - As of June 30, 2024, the inventory reserve from continuing operations was US$30,443, down from US$56,655 in 2023, indicating improved inventory management[188]. - As of June 30, 2024, the Company had a working capital deficit of US$6.7 million, a significant decrease of US$35.6 million or 123.0% from US$28.9 million in working capital as of June 30, 2023[237]. - The Company has negative working capital and relies on financial support from shareholders to continue operations over the next twelve months[235]. Interest Expenses and Debt - The company recorded an increase in net interest expenses of 78.52% to US$1,622,346 for the year ended June 30, 2024, compared to US$908,759 in 2023, mainly due to new acquisitions[214]. - The company had approximately US$13.5 million in short-term bank loans and US$1.7 million in long-term bank loans outstanding as of June 30, 2024[224]. - The company expects to renew all existing bank loans upon maturity based on past experience and outstanding credit history[224]. Impairment and Other Income - Impairment loss on goodwill amounted to US$14,824,819 for the year ended June 30, 2024, due to lower-than-expected revenue and profit[212]. - Net other income increased by 22.84% to US$222,910 for the year ended June 30, 2024, compared to US$181,471 in the same period in 2023, primarily due to increased government subsidies[212].

Core Viewpoint - Shineco, Inc. has successfully closed its underwritten public offering of 1,869,160 shares at a price of $1.07 per share, raising approximately $2 million in gross proceeds before expenses [1]. Group 1: Offering Details - The public offering consisted of 1,869,160 shares of common stock priced at $1.07 per share, resulting in gross proceeds of about $2 million [1]. - The underwriters have a 45-day option to purchase an additional 280,374 shares at the public offering price to cover over-allotments [1]. - EF Hutton LLC served as the sole book-running manager for this offering [1]. Group 2: Regulatory Information - The common stock was offered under an effective shelf registration statement on Form S3, filed with the SEC and declared effective on June 10, 2022 [2]. - A prospectus supplement detailing the terms of the public offering was filed with the SEC on July 15, 2024 [2]. Group 3: Company Overview - Shineco, Inc. focuses on providing safe, efficient, and high-quality health and medical products and services, aiming to improve the quality of life [4]. - The company has developed 33 vitro diagnostic reagents and related medical devices and also produces and sells healthy and nutritious foods [4].

Group 1 - Shineco announced a public offering of 1,869,160 shares at a price of $1.07 each, with an additional option for underwriters to acquire 280,374 shares [1] - The company expects to raise $2 million in gross proceeds from this offering, managed by EF Hutton LLC [1] - Following the announcement, SISI stock fell by 53.8%, contrasting with a year-to-date increase of 76.7% prior to the market close on Thursday [2] Group 2 - The public offering dilutes the stakes of current investors, contributing to the decline in stock price [2] - The offering price of $1.07 is below the previous closing price of $2.12, which likely displeased traders [2]

Core Viewpoint - Shineco, Inc. has announced a public offering of 1,869,160 shares of common stock at a price of $1.07 per share, aiming for gross proceeds of approximately $2 million before expenses [1]. Group 1: Offering Details - The public offering consists of 1,869,160 shares priced at $1.07 each, with total gross proceeds expected to be around $2 million [1]. - Underwriters have a 45-day option to purchase an additional 280,374 shares at the same public offering price [1]. - The offering is anticipated to close on July 15, 2024, pending customary closing conditions [1]. Group 2: Underwriting and Registration - EF Hutton LLC is serving as the sole book-running manager for the offering [2]. - The shares are being offered under an effective shelf registration statement filed with the SEC, which was declared effective on June 10, 2022 [2]. - A prospectus supplement detailing the terms of the offering will be filed with the SEC [2]. Group 3: Company Overview - Shineco, Inc. focuses on providing innovative diagnostic medical products and related medical devices, aiming to enhance the quality of life [4]. - The company has developed 33 vitro diagnostic reagents and related medical devices and also produces healthy and nutritious foods [4].