SISI Shineco Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES AND EXCHANGE ACT OF 1934

 

Date of report (date of earliest event reported): July 9, 2024

 

SHINECO, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		001-37776		52-2175898
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

T1, South Tower, Jiazhaoye Square, Chaoyang District,
Beijing, People’s Republic of China 100022

(Address of principal executive offices)

 

Registrant’s telephone number, including area code: (+86) 10-87227366

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each Class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		SISI		The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On July 9, 2024, Shineco, Inc.’s (the “Company”) subsidiary, Fuzhou Meida Health Management Co., Ltd. (“Fuzhou Meida”) entered into distribution agreements (the “Agreements”) with four distributors, Harbin Liaotongtang Chinese Medicine and Health Research Institute, Three Minutes (Zhejiang) Information Service Co., Hangzhou Misimao Science and Technology Co., Ltd., and Wu Qiang (each, the “Distributor”), respectively.

 

Pursuant to the Agreements, Harbin Liaotongtang Chinese Medicine and Health Research Institute, Three Minutes (Zhejiang) Information Service Co., Hangzhou Misimao Science and Technology Co., Ltd., and Wu Qiang agreed to distribute Fuzhou Meida’s water-soluble phospholipid concentrate health food beverage (the “Food Beverage”) with an annual projected goal of approximately $1,374,420, $1,209,490, $7,256,934 and $2,418,980, respectively, in sales on a “best-effort” basis, for a term of three years.

 

The price of the Food Beverage is set by the Company. Under the terms of the Agreements, the Distributors shall sell the Food Beverage in the directly-operated stores and franchises owned by such Distributors, and not through any other channels, including e-commerce platforms, without prior authorization from the Company.

 

The foregoing description of the Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Form of the Agreements, a copy of which is filed herewith as Exhibit 10.1 and is incorporated by reference herein.

 

Item 8.01 Other Events.

 

On July 10, 2024, the Company issued a press release to announce the entry into the Agreements. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit No.		Description
10.1		Form of Distribution Agreement by and between Fuzhou Meida and the Distributor
99.1		Press Release dated July 10, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document and included as Exhibit 101).

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	Shineco Inc.
Date: July 11, 2024	By:	/s/ Jennifer Zhan
		Jennifer Zhan, Chief Executive Officer

 

 

Exhibit 10.1

 

 

JOYWISH

 

Water-Soluble Phospholipid Concentrate Health Food

Beverage Distribution Agreement

 

Contract No.：_______________________________

 

Party A：Fuzhou Meida Health Management Co., Ltd.

 

Party B：

 

Time of signing：

 

Place of signing：

 

Contact No.：

 

 

Party A：	Fuzhou Meida Health Management Co., Ltd.
	(hereinafter referred to as Party A)

 

Party B：

 

(hereinafter referred to as Party B)

 

In order to further develop the market and protect the legitimate rights and interests of Party A and Party B, in accordance with the Food Safety Law of the People’s Republic of China, the Civil Code of the People’s Republic of China and other relevant legal norms, and in line with the principle of mutual benefit and common development, the two parties, through friendly consultation, hereby enter into this agreement：

 

Article I. Authorization for Distribution

 

Party A authorizes Party B to be Party A’s authorized distributor, and authorizes Party A’s product JOYWISH water-soluble phospholipid concentrate health food beverage to be sold in Party B’s directly-managed stores and franchised stores.

 

Article II. Term of the Distribution Agreement

 

Term of validity of the agreement: from July 9, 2024 to July 8, 2027.

 

Article III. Price

 

1、Retail price

 

Name		Spec (Box)		Uniform retail price (Per Box)				Minimum discounted retail price (Per Box)
JOYWISH water-soluble phospholipid concentrate health food beverage		10mLx30 Bags		$	___			$	___

 

2、Special distribution price：$___/ box (including tax).

 

3、Price changes: If due to market changes or rising prices of raw materials and other objective factors need to adjust the special distribution price and related retail prices, Party A will notify Party B in writing seven days in advance, confirmed by Party B in accordance with the implementation of the new price。

 

 

Article IV.

 

Distribution Goal and Payment

 

1、Party B’s Distribution Goal

 

Party B’s annual distribution goal：__ Boxes (Total Price: $_____)。

 

2、Payment

 

Within 3 days after the signing of this agreement, Party B shall prepay Party A $____ for the products. The payment for the products shall be deducted from Party B’s prepayment. After Party B’s prepayment is fully deducted, Party B needs to pay for the products in advance。

 

Party A bank account information：

 

Account Name：

 

Account Number：

 

Bank：Minsheng Bank Fuzhou Branch

 

3、Issuance of invoices: Party A will issue sales invoices before 25th of each month according to the order list of Party B and the amount of actual payment.

 

Article V. Market Deposit

 

1、Within three days after the signing of this agreement, Party A shall pay a market deposit of $___ as a form of economic deposit to keep the agreement and to maintain the market discipline and common value.

 

2、After Party A receives the market deposit, Party A will issue a receipt for the market deposit to Party B as a proof of payment or refund, and this receipt will be kept by Party B.

 

3、The market deposit is non-interest-bearing, and Party A will return the market deposit to Party B with the market deposit receipt if Party B completes the performance of the agreement in accordance with the provisions of the agreement after the termination of the distribution agreement.

 

 

Article VI. Market Management and Covenant

 

1、Party B can only supply sales to Party B’s directly-operated stores and franchises, and shall not supply to other channels. Otherwise, Party B will be deemed to have infringed the distribution right. If Party B has infringed the distribution right, Party A shall have the right to impose a fine of two times of the total amount of the products being sold (calculated on the basis of the special distribution price), and shall have the right to stop the supply of the products or to terminate the agreement.

 

2、Party B shall not source product from channels other than Party A. Otherwise, Party B will be deemed to have infringed the distribution right.

 

3、Party B shall strictly be in accordance with the price set by Party A to sell products, shall not lower the price of sales, yet can, at its discretion, raise the price by up to 10% of the price set by Party A. If Party B and its directly-operated stores or franchisees sell in accordiance with the price set by Party A, Party A shall have the right to take punitive measures such as warnings, fines, suspension of supply, and termination of the agreement.

 

4、When Party B plans to develop composite distribution channels, it shall submit an application to Party A in advance, and the development of composite distribution channels can only be carried out after Party A has given its written consent. Otherwise, Party B will be deemed to have infringed the distribution right.

 

5、Without Party A’s written authorization, Party B and Party B’s directly-operated stores or franchises are not allowed to distribute Party A’s products in the e-commerce platform (including, but not limited to, Tmall, Taobao, Jingdong, Pinduoduo, Douyin, Xiaohongshu, Kuaishou, and other platforms).

 

Article VII, Delivery

 

1、Party B can, based on market demand, submit product orders to Party A seven days in advance. Party A will deliver the product within 7 days after receiving Party B’s product order and payment.

 

2、Party A will deliver the product from Party A’s factory or the nearest warehouse.

 

3、Party B shall bear all the transportation costs incurred from the place where Party A delivers the product to the destination.

 

Article VIII. Inspection

 

1、Party A must fully and accurately inspect the packaging, quality, specification and quantity of the products before delivery and notify Party B in advance in writing.

 

2、After the products arrived at the destination, Party B will inspect the packaging, quality, specification and quantity of the products. If it is found that the packaging of the products is damaged, the quality, specification or quantity is not in accordance with the orders, Party B should notify Party A in writing within 2 days, and Party A should confirm that Party B can replenish the defective products or replace the defective ones, and Party A should bear the cost incurred by the defective ones and the replacement of the products.

 

 

Article IV. Replacement

 

Party A grants Party B 2% of the annual delivery goal amount of the replacement quota. Replacement products must be valid for more than three months, with intact packaging, without affecting Party A’s re-sale. The transportation cost of the replacement product shall be borne by Party B. If within the warranty period, and non-human factors resulting in product quality problems, Party A will unconditionally grant the replacement of products, and the cost of the replacement of products incurred will be borne by Party A.

 

Article X, Party A’s Rights and Obligations

 

1、Party A has the right to consult Party B’s sales, the right to know and the right to market inspection.

 

2、Party A has the right to supervise, inquire and question Party B’s product sales and inventory information.

 

3、Party A has the right to know and suggest Party B’s monthly marketing and promotion work.

 

4、Party A has the obligation to protect the legitimate rights and interests of Party B in accordance with the agreement.

 

5、Party A is obliged to supply on time, and ensure that the quality of products meets the product quality standards.

 

6、Party A is obliged to provide Party B with the information required for the sales of the product and related product approvals, production and testing reports, etc., to facilitate Party B’s business activities.

 

7、Party A is obliged to provide Party B with sales service support, including but not limited to personnel training, product knowledge training, after-sales service.

 

Article XI, Party B’s Rights and Obligations

 

1、Party B has the right to operate independently within the scope of the agreement.

 

2、Party B has the obligation of confidentiality for Party A’s product management, market expansion and other information.

 

3、Party B shall not sell counterfeit and infringing products. If Party B finds that there are counterfeit and infringing products on sale in the market, it has the obligation to notify Party A at the first time and actively assist Party A to deal with the counterfeit and infringing behaviors.

 

 

4、Within the agreement term, Party B shall not distribute other similar products.

 

5、Party B must engage in product sales activities in accordance with national policies and relevant laws.

 

6、Party B is strictly prohibited to use Party A’s relevant documents to carry out illegal activities, and Party B shall bear full responsibility for all disputes arising therefrom.

 

7、Party B shall actively feedback market information to Party A and submit the next month’s order plan of products to Party A before 25th of each month, so as to facilitate Party A’s reasonable arrangement of related work.

 

Article XII, Default and Confidentiality

 

Party A and Party B shall strictly perform in accordance with the terms of this agreement, either party shall be liable for breach of the agreement. Neither party shall disclose the other party’s business information to the third party without authorization, and the party in breach shall be liable for any damages arising from such disclosure.

 

Article XIII, Force majeure

 

In the event of force majeure (e.g. war, civil war, lockdown, earthquake, fire, flood, etc.) and any unforeseen accidents not foreseen by both parties that impede or interfere with the performance of this agreement, the party experiencing force majeure shall, within _____ days from the date of the end of the event, deliver to the other party a certificate of force majeure issued by the relevant authorities of the country, which shall provide proof of exemption from liability, and the two parties shall discuss matters of suspension or continuation of the performance of the agreement.

 

Article XIV, Appendices

 

1、Any matters not covered in this agreement may be supplemented by a written agreement signed by Party A and Party B after negotiation.

 

2、This agreement shall be signed in counterpart, both original copies, one for each party. This agreement shall come into effect from the date of signature and seal of both parties.

 

3、If there are any disputes between the two parties, they shall be solved in the manners of friendly negotiation. If the negotiation cannot solve the dispute, it can be brought to the People’s Court for litigation.

 

Party A：

Representative：

Tel：

 

Party B：

Representative：

Tel：

 

Date：

 

 

Exhibit 99.1

 

Shineco Announces New Distribution Agreements for up to $38 Million in Sales for its New Health Food Beverage

 

The Company believes that its Advanced Proprietary Production Technology
Provides it with a Competitive Advantage in the Sector

 

BEIJING, July 10, 2024 (GLOBE NEWSWIRE) — Shineco, Inc. (“Shineco” or the “Company”; NASDAQ: SISI), a provider of innovative diagnostic medical products and related medical devices, announced today that its subsidiary, Fuzhou Meida Health Management Co., Ltd. (“Fuzhou Meida”), has entered into Distribution Agreements (the “Agreements”) for its water-soluble phospholipid concentrate health food beverage with a projected goal of $38 million in sales with six distribution companies, for a term of three years.

 

Mrs. Jennifer Zhan, CEO of Shineco, said, “The Company’s sustained research and development efforts have developed a production process that is expected to open up a potentially vast new market for our health food beverage. We believe that our technologically advanced production process provides a competitive advantage in the marketplace since it achieves a pure physical separation and extraction of the naturally active phospholipids.”

 

“We have commenced mass production of phospholipids that addresses the current shortage of supply to meet the expected higher demand for this health food beverage, and we are intent upon expanding the market for this uniquely healthy product. Our strategic plan is to develop products and services in the healthcare and medical sectors that will generate a diversified revenue stream with the goal of maximizing shareholder returns,” CEO Ms. Zhan concluded.

 

Phospholipids are organic compounds which are utilized in numerous ways in food and other industries. Further, phospholipids are a key component of cell membranes, forming a bilayer that acts as a barrier that allows some molecules to pass through while blocking others. Phospholipids have important health effects and are an important element in cell growth and other physiological processes.

 

The Company has developed and patented a technologically advanced process utilizing pure physical extraction technology for this highly important organic material. Its water solvent large column chromatography ultrafiltration membrane protects the natural structure and activity of phospholipids, as no chemical solvent is involved in the process. Through precise parameter design and regulation, the Company’s ultrafiltration membrane structure process restores the natural bilayer of phospholipid molecules and achieves a precise separation and extraction of phospholipid molecules. This patented technologically advanced process results in extraction efficiency, minimizing costs and maximizing yield.

 

 

Shineco plans to continue to research and develop the application of the naturally active water-soluble phospholipids in the medical, food, beauty and other fields. According to the market research firm www.factmr.com, the global phospholipids market was valued at $3.7 billion in 2021, and with a projected CAGR of 7.3% over ten years, this market is likely to reach a valuation of $7.3 billion by the end of 2032.

 

Shineco also plans to continue to develop new high value-added products to meet the changing needs of the healthcare and medical sectors. In addition, it intends to optimize its global sales network to develop and expand the overseas markets for its products. Through continuous innovation and the development of high-quality products, the Company expects to foster a brighter and healthier future for people around the globe.

 

About Shineco, Inc.

 

Shineco Inc. (“Shineco” or the “Company”) aims to ‘care for a healthy life and improve the quality of life’, by providing safe, efficient and high-quality health and medical products and services to society. Shineco, operating through subsidiaries, has researched and developed 33 vitro diagnostic reagents and related medical devices to date, and the Company also produces and sells healthy and nutritious foods. For more information about Shineco, please visit www.biosisi.com/.

 

Forward-Looking Statements

 

This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by terminology such as “may”, “will”, “should”, “could”, “intend”, “expect”, “plan”, “budget”, “forecast”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue”, “evaluating” or similar words. Forward-looking statements should not be relied upon because they are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Examples of forward-looking statements include, among others, statements we make regarding the innovativeness and market position of our products and services, our competitive strengths, and our expectations of product sales by our subsidiaries. You are cautioned not to rely on any forward-looking statements. Actual results may differ materially from historical results or those indicated by the forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with the Company’s ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the ability to obtain all necessary regulatory approvals in the jurisdictions where it intends to market and sell its products the successful integration of acquired companies, technologies and assets into its portfolio of products and services, marketing and other business development initiatives, competition in the industry, general government regulations, economic conditions, the impact of the COVID-19 pandemic, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property. Shineco encourages you to review other factors that may affect its future results in its filings with the Securities and Exchange Commission. The forward-looking statements in this press release are based only on information currently available to us and speak only as of the date of this press release, and Shineco assumes no obligation to update any forward-looking statements except as required by the applicable rules and regulations.

 

For more information, please contact:

 

Shineco,Inc.
secretary@shineco.tech
Mobile: +86-010-68130220

 

Precept Investor Relations LLC

David J. Rudnick

david.rudnick@preceptir.com

Mobile: +1-646-694-8538

 

v3.24.2

Cover	Jul. 09, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 09, 2024
Entity File Number	001-37776
Entity Registrant Name	SHINECO, INC.
Entity Central Index Key	0001300734
Entity Tax Identification Number	52-2175898
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	T1, South Tower
Entity Address, Address Line Two	Jiazhaoye Square
Entity Address, Address Line Three	Chaoyang District
Entity Address, City or Town	Beijing
Entity Address, Country	CN
Entity Address, Postal Zip Code	100022
City Area Code	+86
Local Phone Number	10-87227366
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	SISI
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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