Form 8-K SHINECO, INC. For: May 05

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 5, 2021

 

SHINECO, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		001-37776		52-2175898
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

Room 1001, Building T5, DaZu Square, Daxing District, Beijing, People’s Republic of China		100022
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (+86) 10-87227366

 

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ]

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

[  ]

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

[  ]

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

[  ]

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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		TYHT		The NASDAQ Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§ 240.12b–2 of this chapter).

 

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. [  ]

 

 

 

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Resignation of Mr. Guocong Zhou

 

On May 5, 2021, Mr. Guocong Zhou notified Shineco, Inc. (the “Company”) of his resignation as Chief Executive Officer of the Company, effective May 5, 2021. Mr. Zhou’s resignation was due to personal reasons and not due to any disagreement with the Company on any matter related to the operations, policies, or practices of the Company.

 

Appointment of Ms. Ou Yang

 

To fill in the vacancy created by Mr. Zhou’s resignation and considering the business development needs of the Company, on May 6, 2021, the Nominating Committee of the board of directors recommended, and the board of directors appointed Ms. Ou Yang as Chief Executive Officer of the Company.

 

Ms. Ou Yang, age 38, has served as a partner of Wuhan Sinopharm Optical Valley Capital Management Co., Ltd., a subsidiary of China National Pharmaceutical Group Corporation and an equity investment institution focusing on the medical and healthcare field, since January 2020 and has been responsible for the investment and post-investment management of the funds managed by the company. From May 2014 to December 2019, Ms. Yang worked at multiple fund management companies and investment companies under Northeast Securities Co., Ltd (SHE: 000686), in various roles, including general manager, deputy general manager, director, and member of investment committee, and was in charge of or participated in the investment of buyout funds in the United States and Europe. Ms. Yang obtained her bachelor’s degree and master’s degree in Finance from Jilin University School of Economics in 2006 and 2008, respectively.

 

On May 6, 2021, the Company and Ms. Yang entered into an Employment Agreement (the “Employment Agreement”), pursuant to which Ms. Yang will be compensated at a rate of $120,000 per annum, paid in periodic instalments in accordance with the company’s regular payroll practices commencing on the date hereof, subject to annual review and approval of Compensation Committee of the Board of directors. The Employment Agreement provides for an initial term of employment of 12 months and shall automatically renew unless it is earlier terminated by the Company or Ms. Yang. The Company may terminate the Employment Agreement (i) at any time for cause or (ii) with 30 days’ written notice without cause. At any time after the initial term, Ms. Yang may terminate the Employment Agreement upon 30 days’ prior written notice to the Company. The Employment Agreement contains customary confidentiality, non-solicitation, and mutual indemnification provisions. The foregoing summary of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the Employment Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K.

 

There are no family relationships between Ms. Yang and any director or executive officer of the Company. To the best knowledge of the Company, neither Ms. Yang nor any of her immediate family members is a party to any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

 

Item 8.01

Other Events.

 

On May 7, 2021, the Company issued a press release announcing the appointment of Ms. Yang as Chief Executive Officer, which is filed as Exhibit 99.1 to this Current Report on Form 8-K.

 

Item 9.01

Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit Number		Exhibit
10.1		Employment Agreement dated May 6, 2021 by and between Shineco, Inc. and Ou Yang
99.1		Press Release dated May 7, 2021

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	SHINECO, INC.
May 7, 2021	By:	/s/ Ou Yang
		Ou Yang
		Chief Executive Officer

 

 

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is made as of May 6th, 2021 (the “Effective Date”) between Shineco, Inc., with an address of Room 1001, Building T5, DaZu Square, Daxing District, Beijing, People’s Republic of China 100176 (“Company”), and Ou Yang, with an address at [**] (“Employee”) (Company and Employee are each a “Party” and collectively the “Parties”).

 

Whereas, Employee is experienced in general management, including finance, investment, strategic planning, and corporate governance; and

 

Whereas, Company desires to retain Employee to provide general management services and Employee agrees to provide such services, in accordance with the terms and conditions set forth in this Agreement;

 

Now, Therefore, in consideration of the premises, mutual covenants, terms, and conditions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

 

1. Services. Employee shall serve as an executive officer and her title shall be Chief Executive Officer. Employee will provide general management services to Company, as further described in Attachment A - (the “Services”). Employee shall provide such services as Company may reasonably request.

 

2. Appointment; Term. Company hereby appoints Employee and Employee hereby accepts appointment as Chief Executive Officer, subject to the terms and conditions of this Agreement. The term of this Agreement shall commence on the Effective Date and shall continue for twelve (12) months (the “Term”).

 

3. Use of Company Facilities, Equipment. Employee shall have a dedicated workspace or equipment at Company offices and shall not have set hours for the performance of the Services. Company may authorize use of certain Company facilities and services, including, but not limited to, use of temporary office space and Company equipment related to authorized projects, as long as such use does not interfere with the day-to-day operations of Company.

 

4. Ownership of Work Product. All work product developed by Employee, in whole or in part, either alone or jointly with others, during the Term and any subsequent renewal term, which may relate in any manner to the actual or anticipated business, work, research, or development of Company, or which result, to any extent, from the Services performed by Employee for Company, or use of Company’s Confidential Information (as defined below), will be the sole property of Company.

 

5. Compensation. As consideration for the Services, Company shall pay Employee a base salary of USD$120,000 per annum (before tax), paid in periodic installments in accordance with the Company’s regular payroll practices commencing on the date hereof, subject to annual review and approval of Compensation Committee of the Board of directors.

 

6. Expenses. Company shall promptly reimbursement Employee for all reasonable and approved expenses incurred in the ordinary course of providing services outlined in this Agreement. Reimbursable expenses shall not be limited to but shall include reasonable costs of airfare, hotels, business meals when traveling, and mileage reimbursement. Employee shall provide a formal accounting of all expenses including receipts on a monthly basis for approval and payment.

 

7. Termination. This Agreement shall automatically renew unless terminated by either Party. This Agreement may be terminated upon mutual written consent of the Employee and Company. At any time after the twelve (12) months hereof, Employee may terminate this Agreement upon thirty (30) days’ prior written notice to Company. Company may terminate this Agreement (i) without prior notice and without further obligation for reasons of just cause (e.g., fraud, theft, conviction of a felony, improper or dishonest action or significant acts of misconduct) on the part of Employee or any of Employee’s agents providing services to Company, and (ii) without just cause upon thirty (30) days’ written notice to Employee. This Agreement shall automatically terminate upon the death of Employee. In the event of the termination of this Agreement, Company shall pay Employee the base salary through the date of termination and compensate Employee according to the laws of China, if applicable.

 

 

8. Notices. Any notice or other communication required or which may be given hereunder shall be in writing and shall be delivered personally, electronically, telecopied or sent by certified, registered or express mail, postage prepaid, to the Parties at the following addresses or at such other addresses as shall be specified by the Parties by like notice, and shall be deemed given when so delivered personally, electronically, telecopied or if mailed, five (5) days after the date of mailing, as follows:

 

If to Company:

 

[**]

Or through electronic mail at [**]

Attn: Yuying Zhang

 

If to Employee:

 

Ou Yang

[**]

Or through electronic mail at [**]

 

9. Confidentiality; Non-Solicitation.

 

A. Employee shall keep secret and retain the confidential nature of all Confidential Information (as defined herein) belonging to Company and take such other precautions with respect thereto as Company, in its sole discretion, may reasonably request. Employee shall not at any time, whether before or after the termination of this Agreement, use, copy, disclose or make available any Confidential Information (as defined herein) to any corporation, governmental body, individual, partnership, trust or other entity (a “Person”); except that Employee may use, copy or disclose to any Person any Confidential Information (as defined herein) (i) to the extent required in the performance of the Services, (ii) to the extent it becomes publicly available through no fault of Employee, and (iii) to the extent Employee is required to do so pursuant to applicable law or court order.

 

B. For purposes of this Agreement, “Confidential Information” shall mean all information pertaining to the affairs and operations of Company that is not generally available to the public and that Company desires to keep confidential, including, but not limited to, trade secrets, inventions, financial information, information as to customers, clients or patients, and suppliers, sales and marketing information, and all documents and other tangible items relating to or containing any such information. Employee acknowledges that the Confidential Information is vital, sensitive, confidential and proprietary to Company.

 

C. All Confidential Information disclosed or made available by Company to Employee shall at all times remain the personal property of Company and all documents, lists, plans, proposals, records, electronic media or devices and other tangible items supplied to Employee that constitute or contain Confidential Information shall, together with all copies thereof, and all other property of Company, be returned to Company immediately upon termination of this Agreement for whatever reason or sooner upon demand.

 

D. Notwithstanding the foregoing, nothing in this Agreement shall (i) prohibit Employee from making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of state or federal law or regulation, or (ii) require notification or prior approval by Company of any reporting described in clause (i).

 

E. Pursuant to The Defend Trade Secrets Act (18 USC § 1833(b)), Employee may not be held criminally or civilly liable under any federal or state trade secret law for disclosure of a trade secret: (i) made in confidence to a government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law; and/or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, Employee, if suing Company for retaliation based on the reporting of a suspected violation of law, may disclose a trade secret to her attorney and use the trade secret information in the court proceeding, so long as any document containing the trade secret is filed under seal and Employee does not disclose the trade secret except pursuant to court order.

 

 

F. Employee acknowledges that a breach of the provisions of this Section 9 shall cause irreparable harm to Company for which it will have no adequate remedy at law. Employee agrees that Company may, in its sole discretion, obtain from a court of competent jurisdiction an injunction, restraining order or other equitable relief in favor of itself restraining Employee from committing or continuing any such violation. Any right to obtain an injunction, restraining order or other equitable relief hereunder will not be deemed a waiver of any right to assert any other remedy which Company may have in law or in equity.

 

G. Additionally, during the Term, Employee shall not induce or solicit Company’s employees, agents, Employees, contractors, clients, and customers away from Company on its behalf or on behalf of any other company or person. Employee agrees that this Section 9, the scope of the territory covered, the actions restricted thereby, and the duration of such covenant are reasonable and necessary to protect the legitimate business interests of Company.

 

H. The confidentiality and non-solicit obligations set forth herein shall survive for a period of twelve (12) months after the termination or expiration of this Agreement.

 

10. Indemnification. Employee and Company shall mutually indemnify, defend (with counsel chosen by Company), and hold each other harmless from and against any and all claims, losses, damages, liabilities, actions, costs and expenses, including, but not limited to, reasonable legal fees and expenses, paid or incurred by the other party and arising directly and indirectly out of: (i) any breach of this Agreement by either party, (ii) any breach by either party of written policies or standards for Company or (iii) any other act or omission of either party.

 

11. Miscellaneous.

 

A. Tax Withholding. Company may withhold from Employee any amounts payable under this Agreement such federal, state, or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

 

B. Governing Law; Jurisdiction and Venue. This Agreement shall be governed and controlled as to validity, enforcement, interpretation, construction, effect, and in all other respects by the laws of China. In the event that any legal proceedings are commenced in any court with respect to any matter arising under this Agreement, Employee and Company hereto specifically consent and agree that the venue of any such action shall be in the courts of Beijing and each of Employee and Company hereby waive any claim that such venue is an inconvenient forum for the resolution of such proceeding.

 

C. Entire Agreement. This Agreement constitutes the entire agreement of the Parties hereto and supersedes any prior agreement or understanding, whether oral or written, between the Parties hereto with respect to the subject matter hereof.

 

D. Waivers and Amendments. This Agreement may not be amended or modified otherwise than by a written agreement executed by the Parties. No delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any Party of any right, power or privilege hereunder, nor any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

 

E. Assignment. This Agreement may not be assigned by either Party without the prior written consent of a duly authorized officer of the other Party. The merger or consolidation of a Party, or the sale of all or substantially all of the assets or shares of a Party hereto, shall not be deemed an assignment of this Agreement.

 

F. Headings. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

 

G. Severability. If any term, provision, covenant or restriction of this Agreement, or any part thereof, is held by a court of competent jurisdiction of any foreign, federal, state, county or local government or any other governmental, regulatory or administrative agency or authority to be invalid, void, unenforceable or against public policy for any reason, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

H. Counterparts. This Agreement may be executed in one or more counterparts, including by means of facsimile or email, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

 

[Signature page follows.]

 

 

In Witness Whereof, the Parties have entered into this Employment Agreement as of the Effective Date set forth above.

 

	Shineco, Inc.
	By:	/s/ Yuying Zhang
	Name:	Yuying Zhang
	Title:	Chairman of the Board
	Employee
		/s/ Ou Yang
	Name:	Ou Yang

 

 

Exhibit A – Services

 

●	General Management of Company
●	Oversee daily operation
●	Strategic planning and execution of plans
●	Monitoring performance
●	Communicate with Board of Directors
●	Work with Company team and consultant on investor relation.

 

 

Exhibit 99.1

 

Shineco, Inc. Announces Appointment of New CEO

 

BEIJING, May 7, 2021 (GLOBE NEWSWIRE) — Shineco, Inc. (“Shineco” or the “Company”; NASDAQ: TYHT), a producer and distributor of Chinese herbal medicines, organic agricultural and hemp products, today announced that Mr. Guocong Zhou had step down as CEO of the Company, effective May 5, 2021. He was succeeded by Ms. Ou Yang, who has extensive experience in the capital market and the healthcare industry, on May 6, 2021.

 

Ms. Ou Yang has served as a partner of Wuhan Sinopharm Optical Valley Capital Management Co., Ltd., a subsidiary of China National Pharmaceutical Group Corporation and an equity investment institution focusing on the medical and healthcare field, since January 2020 and has been responsible for the investment and post-investment management of the funds managed by the company. From May 2014 to December 2019, Ms. Yang worked at multiple fund management companies and investment companies under Northeast Securities Co., Ltd (SHE: 000686), in various roles, including general manager, deputy general manager, director, and member of investment committee, and was in charge of or participated in the investment of buyout funds in the United States and Europe. Ms. Yang obtained her bachelor’s degree and master’s degree in Finance from Jilin University School of Economics in 2006 and 2008, respectively.

 

Mr. Yuying Zhang, Chairman of Shineco, commented, “We want to extend our heartfelt gratitude to Mr. Guocong Zhou for his contribution to our company and we welcome Ms. Ou Yang to join us. The change we make at this moment is significant to the growth of Shineco. We believe that Ms. Yang will bring the Company new opportunities for its future development.”

 

Ms. Ou Yang, CEO of Shineco, stated, “I am very grateful for this opportunity. I look forward to building on the great foundation and the growth potential of Shineco’s business and working with the team. Looking forward, we will focus on the extension, transformation and upgrade of our industry chain, and investing in certain business segments with higher R&D capabilities and industry value to create value for our shareholders.”

 

 

About Shineco, Inc.

 

Incorporated in Delaware in August 1997 and headquartered in Beijing, China, Shineco is a holding company. Through its subsidiaries and variable interest entities, Shineco undertakes vertically- and horizontally-integrated production, distribution, and sales channels to provide health and well-being focused plant-based products in China. Utilizing modern engineering technologies and biotechnologies, Shineco produces, among other products, Chinese herbal medicines, organic agricultural produce, and specialized textiles. For more information about Shineco, please visit http://tianyiluobuma.com.

 

Forward-Looking Statements

 

This press release contains information about Shineco’s view of its future expectations, plans and prospects that constitute forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the successful integration of acquired companies, technologies and assets into its portfolio of products and services, marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions, the impact of the COVID-19 pandemic, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property. Shineco encourages you to review other factors that may affect its future results in its registration statement and in its other filings with the Securities and Exchange Commission, including the risks described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in its annual report on Form 10-K for the fiscal year ended June 30, 2020. The forward-looking statements in this press release are based on current expectations and Shineco assumes no obligation to update these forward-looking statements.

 

For more information, please contact:

 

Tina Xiao
Ascent Investor Relations LLC
Phone: +1-917-609-0333
Email: [email protected]

 

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