Company: SISI
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006895
Chunk: 78

Company: SHINECO, INC.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 78
---
’s total purchases from the continuing operations, respectively.
For the three months ended December 31, 2023, one vendor accounted for approximately 32% of the Company’s total purchases
from the continuing operations, respectively.

NOTE 18 - COMMITMENTS AND CONTINGENCIES

Lease commitments

The Company leases offices for operation
under operating leases. Future minimum lease payments of US$311,710 under non-cancellable operating leases with initial terms in excess
of one year were included in Note 10.

Legal Contingencies

On November 26, 2021, the Company filed
a complaint in the Supreme Court of the State of New York, New York County against Lei Zhang and Yan Li, as defendants, and Transhare
Corporation (“Transhare”), as a nominal defendant, asserting that defendants had not paid for certain restricted shares of
the Company’s common stock pursuant to stock purchase agreements they executed with the Company. In December, defendants filed
an answer and counterclaim against the Company, which they amended on January 27, 2022 after the Company moved to dismiss their counterclaims.
They brought claims for, among others, breach of contract, breach of the covenant of good faith and fair dealing, and fraud, asserting
that the Company made false and materially misleading statements, specifically regarding the sale of such shares to Lei Zhang and Yan
Li and the removal of their restrictive legends. Defendants are seeking money damages of at least US$9 million, punitive damages of US$10
million, plus interest, costs, and fees. In April 2022, the Court granted the Company’s motion for a preliminary injunction to
restrain the Company’s transfer agent from removing the restrictive legends on the shares, provided that the Company posts a bond,
which the Company declined to do. On June 13, 2022, the restriction imposed on the shares were lifted.

Nominal defendant Transhare Corporation
moved to dismiss the defendants’ counterclaim against it for wrongful refusal to remove restrictions pursuant to 6 Del. C. §
8-401, and its motion was fully submitted in April 2022. On September 9, 2022, the Court granted Transhare Corporation’s motion
to dismiss defendants’ counterclaim for wrongful refusal to remove restrictions. Defendants have appealed the Court’s September
9, 2022 order dismissing defendants’ counterclaim for wrongful refusal to remove restrictions. On October 3, 2022, the parties
submitted a stipulation dismissing defendants’ outstanding counter