Company: SISI
Filing Date: 2025-02-18
Form Type: S-1
Source: 0001493152-25-007187
Chunk: 20

Company: SHINECO, INC.
Filing Date: 2025-02-18
Form: S-1
Chunk 20
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 dividends. Holders of outstanding shares of common stock are entitled to receive dividends and other distributions (payable in cash, property or our capital stock) when, as and if declared thereon by our board of directors from time to time out of any assets or funds legally available therefor and shall share equally on a per share basis in such dividends and distributions.

We are a Delaware holding company. We may rely on dividends from our subsidiaries in China for our cash requirements, including any payment of dividends to our stockholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us, and as a holding company, we will be dependent on receipt of funds from our Hong Kong subsidiary, Shineco Life.

Current PRC regulations permit our indirect PRC subsidiaries to pay dividends to Shineco Life only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.

The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in complying with the administrative requirements necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the revenue from our operations, we may be unable to pay dividends on our shares of common stock.

Cash dividends, if any, on our shares of common stock will be paid in U.S. dollars. Shineco Life may be considered a non-resident enterprise for tax purposes, so that any dividends our PRC subsidiaries pay to Shineco Life may be regarded as China-sourced income and