10-Q 1 form10-q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number: 001-37776

SHINECO, INC.

(Exact name of registrant as specified in its charter)

Delaware

52-2175898

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

Room 1001, Building T5, DaZu Square,

Daxing District, Beijing

People’s Republic of China 100176

(Address of principal executive offices) (Zip Code)

(+86) 10-87227366

(Registrant’s telephone number, including area code)

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, par value $0.001 per share		TYHT		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[X]	Smaller reporting company	[X]
		Emerging growth company	[X]

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. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of May 14, 2021, there were 4,009,288 shares of common stock, par value $0.001 per share, outstanding.

TABLE OF CONTENTS

		Page Number

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Condensed Consolidated Balance Sheets (unaudited)	1

	Condensed Consolidated Statements of Income and Comprehensive Income (unaudited)	2

	Condensed Consolidated Statements of Changes in Equity (unaudited)	3

	Condensed Consolidated Statements of Cash Flows (unaudited)	5

	Notes to the Condensed Consolidated Financial Statements (unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44

Item 4.	Controls and Procedures	44

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	45

Item 1A.	Risk Factors	45

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45

Item 3.	Defaults Upon Senior Securities	45

Item 4.	Mine Safety Disclosures	45

Item 5.	Other Information	45

Item 6.	Exhibits	45

SIGNATURES		46

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SHINECO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			June 30,
	2021			2020
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	25,848,597		$	32,371,372
Accounts receivable, net		5,087,539			11,008,485
Due from related parties		130,407			120,939
Inventories, net		2,363,050			1,799,876
Advances to suppliers, net		16,743,140			13,313,946
Other current assets		5,847,512			905,380
TOTAL CURRENT ASSETS		56,020,245			59,519,998

Property and equipment, net		6,058,925			9,489,484
Land use right, net of accumulated amortization		1,263,683			1,195,943
Investments		-			4,515,124
Distribution rights		1,125,603			1,043,887
Long-term deposit and other noncurrent assets		100,343			96,280
Right of use assets		3,022,178			3,227,895
TOTAL ASSETS	$	67,590,977		$	79,088,611

LIABILITIES AND EQUITY

CURRENT LIABILITIES:
Short-term loans	$	1,830,249		$	2,333,894
Accounts payable		278,633			148,209
Advances from customers		6,820			6,324
Due to related parties		1,131,376			1,355,919
Other payables and accrued expenses		7,776,146			4,018,684
Operating lease liabilities - current		97,560			97,633
Taxes payable		3,329,182			3,386,662
TOTAL CURRENT LIABILITIES		14,449,966			11,347,325

Income tax payable - noncurrent portion		566,022			566,022
Operating lease liabilities - non-current		449,162			401,891
Deferred tax liability		281,401			260,972
TOTAL LIABILITIES		15,746,551			12,576,210

Commitments and contingencies		-			-

EQUITY:
Common stock; par value $0.001, 100,000,000 shares authorized; 4,009,288 and 3,039,943 shares issued and outstanding at March 31, 2021 and June 30, 2020*		4,009			3,040
Additional paid-in capital		30,037,504			27,302,051
Statutory reserve		4,198,107			4,198,107
Retained earnings		18,522,830			40,106,518
Accumulated other comprehensive loss		(1,451,386	)		(6,283,835	)
Total Stockholders’ equity of Shineco, Inc.		51,311,064			65,325,881
Non-controlling interest		533,362			1,186,520
TOTAL EQUITY		51,844,426			66,512,401

TOTAL LIABILITIES AND EQUITY	$	67,590,977		$	79,088,611

* Retrospectively restated for effect of stock split on August 14, 2020.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

SHINECO, INC.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(UNAUDITED)

	For the Nine Months Ended March 31,				For the Three Months Ended March 31,
	2021		2020		2021		2020

REVENUE	$	9,197,101	$	18,649,715	$	1,990,737	$	3,734,322

SEC Form 10-Q filed by Shineco, Inc.