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STOCKHOLDERS’ EQUITY
 3 Months Ended
Sep. 30, 2024
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 16 - STOCKHOLDERS’ EQUITY

 

Initial Public Offering

 

On September 28, 2016, the Company completed its initial public offering of 1,713,190 shares of the Common Stock (before the effect of the reverse stock splits mentioned below) at a price of US$4.50 per share for gross proceeds of US$7.7 million and net proceeds of approximately US$5.4 million. The Company’s common shares began trading on September 28, 2016 on the NASDAQ Capital Market under the symbol “TYHT”.

 

Statutory Reserve

 

The Company is required to make appropriations to reserve funds, comprising the statutory surplus reserve and discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”).

 

Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entities’ registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the board of directors. As of September 30, 2024 and June 30, 2024, the balance of the required statutory reserves was US$4,350,297 and US$4,350,297, respectively.

 

 

On July 10, 2020, the Company’s stockholders approved a 1-for-9 reverse stock split of the Company’s common stock, par value US$0.001 per share, with a market effective date of August 14, 2020 (the “2020 Reverse Stock Split”). As a result of the 2020 Reverse Stock Split, each nine pre-split shares of common stock outstanding automatically combined and converted to one issued and outstanding share of common stock without any action on the part of stockholders. No fractional shares of common stock were issued to any stockholders in connection with the 2020 Reverse Stock Split. Each stockholder was entitled to receive one share of common stock in lieu of the fractional share that would have resulted from the 2020 Reverse Stock Split. The number of the Company’s authorized common stock remained at 100,000,000 shares, and the par value of the common stock following the 2020 Reverse Stock Split remained at US$0.001 per share. As a result of the 2020 Reverse Stock Split, the Company’s shares and per share data as reflected in the unaudited condensed consolidated financial statements were retroactively restated as if the transaction occurred at the beginning of the periods presented.

 

On April 10, 2021, the Company issued 16,134 shares of common stock to selected investors at a price of US$768.00 per share. The Company received net proceeds of US$7,981,204 and US$3,024,000 was waived by the Company during the year ended June 30, 2024. See Note 18.

 

On August 30, 2023, the Board of Directors of the Company approved the issuance of shares of common stock pursuant to the Company’s 2023 Equity Incentive Plan (the “2023 Plan”) in the aggregate amount of 15,854 shares (the “Shares”) to its non-officer employees. The fair value of the Shares was US$540,310 based on the fair value of share price US$34.08 at August 30, 2023. The Shares were issued in September 2023.

 

On May 29, 2023, Shineco Life entered into a stock purchase agreement with Dream Partner, Wintus and the Wintus Sellers, pursuant to which Shineco Life shall acquire 71.42% equity interest in Wintus. As the consideration for the Acquisition, the Company (a) paid the Wintus Sellers an aggregate cash consideration of US$2,000,000; (b) issued certain shareholders, as listed in the agreement, an aggregate of 41,667 shares of the Company’s restricted Common Stock; and (c) transferred and sold to the Sellers 100% of the Company’s equity interest in Tenet-Jove. (Note 11).

 

On December 22, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain non-US investors (the “Investors”). Under the Purchase Agreement, the Company agreed to sell to the Investors up to 50,000 shares (the “Shares”) of its common stock at a per share purchase price of US$28.80 for gross proceeds of up to US$1,440,000. The Company has received gross proceeds in full from the Investors, and all of the Shares were issued on December 28, 2023.

 

On February 1, 2024, the Company’s stockholders approved a 1-for-10 reverse stock split of the shares of the Company’s common stock, with a par value of US$0.001 per share, which became effective on February 16, 2024 (the “First 2024 Reverse Stock Split”). As a result of the First 2024 Reverse Stock Split, each of the ten pre-split shares of common stock outstanding automatically combined and converted to one issued and outstanding share of common stock without any action on the part of the stockholders. No fractional shares of common stock were issued to any shareholders in connection with the First 2024 Reverse Stock Split. Each shareholder received one share of common stock in lieu of the fractional share that would have resulted from the First 2024 Reverse Stock Split. The number of the Company’s authorized common stock also increased to 150,000,000 shares, and the par value of the common stock following the First 2024 Reverse Stock Split remained at US$0.001 per share. As a result of the First 2024 Reverse Stock Split, the Company’s shares and per share data as reflected in the unaudited condensed consolidated financial statements have been retroactively restated as if the transaction occurred at the beginning of the periods presented.

 

On June 18, 2024, the Board of Directors of the Company approved the issuance of shares of common stock pursuant to the Company’s 2024 Equity Incentive Plan (the “2024 Plan”) in the aggregate amount of 30,650 shares (the “Shares”) to its non-officer employees. The fair value of the Shares was US$2,331,852 based on the fair value of the share price of US$76.08 on June 18, 2024. The Shares were issued on June 18, 2024

 

 

On June 20, 2024, the Company entered into a securities purchase agreement with certain non-U.S. investors (the “Purchasers”), pursuant to which the Company agreed to sell, and the Purchasers agreed to purchase, severally and not jointly, an aggregate of 58,333 shares of common stock of the Company (the “Shares”) at an offering price of US$120.00 per share for gross proceeds of up to US$7.0 million. In reliance on the Purchasers’ representations to the Company, the Shares issued in this offering were not subject to the registration requirements of the Securities Act, pursuant to Regulation S promulgated thereunder. As of June 30, 2024, proceeds of approximately US$6.4 million were received, and the remaining proceeds were fully received in July 2024, and all of the Shares were issued on July 8, 2024.

 

On July 11, 2024, the Company entered into an Underwriting Agreement with EF Hutton LLC, as the representative for several underwriters, relating to the underwritten public offering (the “Offering”) of 77,882 shares of the Common Stock at a public offering price of US$25.68 per share, for aggregate gross proceeds of approximately US$2.0 million, prior to deducting underwriting discounts and other offering expenses. In addition, the Company granted the underwriters a 45-day option to purchase up to an additional 11,683 shares of the Common Stock at the public offering price per share, less the underwriting discounts to cover over-allotments, if any. The Offering closed on July 15, 2024, and the 45-day option expired on August 30, 2024. The net proceeds from the offering were approximately US$1.7 million, after deducting the estimated underwriting discounts and commissions and estimated offering expenses. The Company intends to use approximately 50% of the net proceeds from the Offering for mergers and acquisitions, approximately 25% for repaying outstanding convertible notes, and 25% for general corporate purposes.

 

On August 22, 2024, the Company entered into a securities purchase agreement (the “SPA”) with 22 purchasers, each an unrelated third party to the Company (collectively, the “Purchasers”). Pursuant to the SPA, the Purchasers agree to purchase, and the Company agreed to issue and sell to the Purchasers, an aggregate of 624,375 shares of the Company’s common stock, par value US$0.001 per share (the “Shares”), at a purchase price of US$13.20 per share, and for an aggregate purchase price of US$8,241,750 (the “Offering”). The SPA, the transaction contemplated thereby, and the issuance of the Shares have been approved by the Company’s board of directors. The closing of the transaction contemplated by the SPA took place on September 10, 2024. As of September 30, 2024, proceeds of approximately US$4.4 million were received, and the remaining proceeds are expected to be fully received by December 31, 2024.

 

On October 21, 2024, the Company’s stockholders approved a 1-for-24 reverse stock split of the shares of the Company’s common stock, with a par value of US$0.001 per share, which became effective on November 12, 2024 (the “Second 2024 Reverse Stock Split”). As a result of the Second 2024 Reverse Stock Split, each of the twenty-four pre-split shares of common stock outstanding automatically combined and converted to one issued and outstanding share of common stock without any action on the part of the stockholders. No fractional shares of common stock were issued to any shareholders in connection with the Second 2024 Reverse Stock Split. Each shareholder received one share of common stock in lieu of the fractional share that would have resulted from the Second 2024 Reverse Stock Split. As a result of the Second 2024 Reverse Stock Split, the Company’s shares and per share data as reflected in the unaudited condensed consolidated financial statements have been retroactively restated as if the transaction occurred at the beginning of the periods presented.