Company: SISI
Filing Date: 2025-01-14
Form Type: S-3
Source: 0001493152-25-002134
Chunk: 15

Company: SHINECO, INC.
Filing Date: 2025-01-14
Form: S-3
Chunk 15
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 that accrued to Shineco because of the VIEs were limited to, and subject to conditions we had satisfied for consolidation of the VIEs under U.S. GAAP. The VIEs were consolidated for accounting purposes but none of them was an entity in which Shineco owned equity. Prior to the Wintus Acquisition and the termination of the VIE structure, Shineco did not conduct any active operations and was the primary beneficiary of the VIEs for accounting purposes. The common stock offered in this prospectus is the capital stock of Shineco, the Delaware holding company, instead of its operating subsidiaries in China. You are not investing in any of Shineco’s subsidiaries and you may never directly hold equity interests in any of Shineco’s Chinese operating subsidiaries.

In addition, prior to the Wintus Acquisition and the termination of the VIE structure, the contractual agreements with each of the four VIEs had not been tested in court in China and this structure involves unique risks to investors. For example, the PRC government could disallow the VIE arrangements, which would likely result in a material change in Shineco’s structure and significant change in the value of the securities Shineco was registering for sale, including that it could cause the value of such securities to significantly decline or become worthless.

Because of Shineco’s corporate structure, the Company is subject to the risks due to uncertainty of the interpretation and the application of the PRC laws and regulations. As of the date of this prospectus, there are no laws, regulations or other rules that require the China based operating entities to obtain permission or approvals from any Chinese authorities to list or continue listing Shineco’s securities on U.S. stock exchanges, and nor does Shineco have received or was denied such permission. However, there is no guarantee that Shineco will receive or not be denied permission from Chinese authorities to continue listing on U.S. exchanges in the future.

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The majority of our operations are in China, which would expose us to legal and operational risks because of the PRC government’s regulatory actions.

We are subject to the legal and operational risks associated with being based in and having the majority of our operations in China. These risks could result in material changes in operations, or a complete hindrance of Shineco’s ability to offer or continue to offer its securities to investors, and could cause the value of Shineco’s securities to significantly decline or become worthless. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in