UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by the Registrant [X]
Filed
by a Party other than the Registrant [ ]
Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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[X]
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Definitive
Proxy Statement
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[ ]
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Definitive
Additional Materials
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[ ]
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Soliciting
Material under §240.14a-12
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Shineco,
Inc.
(Name
of Registrant as Specified in its Charter)
(Name
of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
[ ]
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title
of each class of securities to which transaction applies:
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Aggregate
number of securities to which transaction applies:
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Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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Total
fee paid:
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Fee
paid previously with preliminary materials:
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date
of its filing.
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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Filing
Party:
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Date
Filed:
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SHINECO,
INC.
Room
1001, Building T5, DaZu Square,
Daxing
District, Beijing,
People’s
Republic of China
NOTICE
OF SPECIAL MEETING OF
STOCKHOLDERS
To
Be Held on July 9, 2020
To
our Stockholders:
NOTICE
IS HEREBY GIVEN that a special meeting of stockholders (the “Special Meeting”) of Shineco, Inc. (the “Company”)
will be held on Thursday, July 9, 2020 at 9 p.m., Eastern Time, at Room 3106, Building B, Jianwai SOHO, Chaoyang District,
Beijing City, People’s Republic of China. At the Special Meeting, stockholders will consider and vote on the following matters:
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1.
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To
approve an amendment to our certificate of incorporation to effect, at the discretion of our Board of Directors (“Board”),
a reverse stock split of our common stock at a ratio of not less than 1-for-2 and not greater than 1-for-25, subject to our
Board’s authority to abandon such amendment (the “Reverse Stock Split Proposal”); and
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2.
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To
approve an adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes
at the time of the Special Meeting to approve the Reverse Stock Split Proposal (the “Adjournment Proposal”).
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Stockholders
of record at the close of business on May 20, 2020 will be entitled to vote at the meeting or any continuation, postponement
or adjournment thereof.
The
Board unanimously believes that each of the Reverse Stock Split Proposal and the Adjournment Proposal is in the best interests
of the company and our stockholders. Accordingly, our Board recommends a vote “FOR” each of the Reverse Stock
Split Proposal and the Adjournment Proposal, as outlined in the attached proxy statement.
We
encourage all stockholders to attend the Special Meeting in person. Whether or not you plan to attend the Special Meeting in person,
we encourage you to read this proxy statement and submit your proxy or voting instructions as soon as possible. Please review
the instructions on each of your voting options described in the proxy statement.
Thank
you for your ongoing support and continued interest in Shineco, Inc.
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By
Order of the Board of Directors,
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/s/
YuYing Zhang
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YuYing
Zhang
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Chief
Executive Officer and Director
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May
22, 2020
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Important
Notice Regarding the Availability of Proxy Materials for the Special Meeting of Stockholders to be Held on July 9, 2020:
This notice of the Special Meeting and the accompanying proxy statement are available on our website at http://www.tianyiluobuma.com/index.php/English/New/index.html
under “http://www.tianyiluobuma.com/index.php/English/Index/index.html”
Table
of Contents
Shineco,
Inc.
Room
1001, Building T5,
DaZu
Square, Daxing District,
Beijing,
People’s Republic of China
PROXY
STATEMENT
FOR
THE SPECIAL MEETING OF STOCKHOLDERS
To
Be Held on July 9, 2020
This proxy statement and the enclosed
proxy card are being furnished in connection with the solicitation of proxies by the Board of Directors (“Board”)
of Shineco, Inc. (“Shineco” the “Company,” “we,” “us,” and “our”)
for use at a special meeting of stockholders of Shineco (the “Special Meeting”) to be held on Thursday, July 9,
2020 at 9p.m., Eastern time, at Room 3106, Building B, Jianwai SOHO, Chaoyang District, Beijing City, People’s Republic
of China, and at any continuation, postponement or adjournment thereof. References to our website are inactive textual references
only and the contents of our website should not be deemed to be incorporated by reference into this proxy statement.
This proxy statement and proxy card are first being made available
to stockholders on or about May 22, 2020.
Important
Notice Regarding the Availability of Proxy Materials for
the Special Meeting of Stockholders to be Held on July 9, 2020:
The
notice of the Special Meeting and this proxy statement are
available
on our website at www.http://www.tianyiluobuma.com/index.php/English/New/index.html under “http://www.tianyiluobuma.com/index.php/English/Index/index.html.”
QUESTIONS
AND ANSWERS ABOUT THE SPECIAL MEETING AND VOTING
Q.
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Why
did I receive these proxy materials?
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A.
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Our Board has sent these materials to you in connection
with the solicitation of proxies for use at our Special Meeting to be held at Room 3106, Building B, Jianwai SOHO, Chaoyang
District, Beijing City, People’s Republic of China, on Thursday, July 9, 2020 at 9p.m., Eastern Time. As a holder
of record of common stock as of the close of business on May 20, 2020, you are invited to attend the Special Meeting
and are requested to vote on the proposals described in this proxy statement.
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Q.
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What
is the purpose of the Special Meeting?
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A.
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At
the Special Meeting, stockholders will consider and vote on the following matters:
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1.
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To
approve an amendment to our certificate of incorporation (the “Charter”) to effect, at the discretion of our Board,
a reverse stock split of our common stock at a ratio of not less than 1-for-2 and not greater than 1-for-25, subject to our
Board’s authority to abandon such amendment (the “Reverse Stock Split Proposal”); and
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2.
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To
approve the adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes
at the time of the Special Meeting to approve the Reverse Stock Split Proposal (the “Adjournment Proposal”).
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Q.
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Who
can vote at the Special Meeting?
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A.
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To
be entitled to vote, you must have been a stockholder of record at the close of business on May 20, 2020, the record
date for our Special Meeting. As of the record date, there were 27,333,428 shares of our common stock outstanding and entitled
to vote at the Special Meeting.
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Q.
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How
many votes do I have?
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A.
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Each
share of our common stock that you own as of the record date will entitle you to one vote on each matter considered at the
Special Meeting.
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Q.
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How
do I vote?
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A.
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If
you are the “record holder” of your shares, meaning that your shares are registered in your name in the records
of our transfer agent, Transhare Corporation, you may vote your shares at the meeting in person or by proxy as follows:
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(1)
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Over
the Internet: To vote over the Internet, please go to the following website: www.proxyvote.com, and follow the
instructions at that site for submitting your proxy electronically. You will be asked to provide the Company control number
from the enclosed proxy card. Your vote must be received by 11:59 p.m. (Eastern Time) on July 8, 2020 to be counted.
If you vote over the Internet, you do not need to complete and mail your proxy card or vote your proxy by telephone.
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(2)
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By
Telephone: To vote by telephone, please call (86) 010-58693193 using a touch-tone phone and follow the recorded instructions.
You will be asked to provide the Company’s control number from the enclosed proxy card. Your vote must be received by
11:59 p.m. (Eastern Time) on July 8, 2020 to be counted. If you vote by telephone, you do not need to complete and
mail your proxy card or vote your proxy over the Internet.
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(3)
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By
Mail: To vote by mail, you must mark, sign and date the enclosed proxy card and then mail the proxy card in accordance
with the instructions on the enclosed proxy card. If you vote by mail, you do not need to vote over the Internet or by telephone.
If you return your proxy card but do not specify how you want your shares voted on the proposal, they will be voted in accordance
with the recommendations of our Board.
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(4)
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In
Person at the Meeting: If you attend the Special Meeting, you may deliver your completed proxy card in person or you may
vote by completing a ballot, which we will provide to you at the meeting.
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If
your shares are held in “street name,” meaning they are held for your account by an intermediary, such as a broker,
then you are deemed to be the beneficial owner of your shares and the broker that actually holds the shares for you is the record
holder and is required to vote the shares it holds on your behalf according to your instructions. The proxy materials, as well
as voting and revocation instructions, should have been forwarded to you by the broker that holds your shares. In order to vote
your shares, you will need to follow the instructions that your broker provides you. Many brokers solicit voting instructions
over the Internet or by telephone.
If
you do not give instructions to your broker, your broker will still be able to vote your shares with respect to certain “discretionary”
items. The Reverse Stock Split Proposal and the Adjournment Proposal are discretionary items. Accordingly, your broker may vote
your shares in its discretion with respect to each of the Reverse Stock Split Proposal and the Adjournment Proposal even if you
do not give instructions.
A
“broker non-vote” occurs when shares held by a broker are not voted with respect to a particular proposal because
the broker does not have or did not exercise discretionary authority to vote on the matter and has not received voting instructions
from its clients.
Regardless
of whether your shares are held in street name, you are welcome to attend the Special Meeting. You may not vote shares held in
street name in person at the meeting, however, unless you obtain a proxy, executed in your favor, from the holder of record (i.e.,
your broker).
Q.
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Can
I change my vote?
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A.
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If
your shares are registered directly in your name, you may revoke your proxy and change your vote at any time before the
vote is taken at the Special Meeting. To do so, you must do one of the following:
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(1)
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Vote
over the Internet or by telephone as instructed above. Only your latest Internet or telephone vote will be counted.
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(2)
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Sign
and return a new proxy card. Only your latest dated proxy card will be counted.
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(3)
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Attend
the Special Meeting and vote in person as instructed above. Attending the Special Meeting will not alone revoke your Internet
vote, telephone vote or proxy card submitted by mail, as the case may be.
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(4)
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Give
our corporate secretary written notice before or at the meeting that you want to revoke your proxy.
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If
your shares are held in “street name,” you may submit new voting instructions with a later date by contacting
your broker.
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Q.
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How
many shares must be represented to have a quorum and hold the Special Meeting?
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A.
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The
presence (in person or by proxy) of holders of a majority in voting power of our outstanding capital stock entitled to vote
at the Special Meeting constitutes a quorum for purposes of transacting business at the Special Meeting. For purposes of determining
whether a quorum exists, we count as present any shares that are voted over the Internet, by telephone or by submitting a
proxy card or that are represented in person at the meeting. We do not count broker non-votes as “present” or
“entitled to vote” for purposes of a quorum, unless your bank, broker or nominee uses its discretion to vote your
uninstructed shares on the proposals, in which case we will count such a discretionary vote for purposes of determining the
existence of a quorum and the vote on that proposal. If a quorum is not present, we expect to adjourn the Special Meeting
until we obtain a quorum.
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What
vote is required to approve each proposal and how are votes counted?
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A.
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Reverse
Stock Split Proposal: The affirmative vote of a majority of the issued and outstanding shares of our common stock entitled
to vote is required to approve the Reverse Stock Split Proposal. Shares which abstain from voting and “broker non-votes”
with respect to the Reverse Stock Split Proposal will have the same practical effect as votes against the proposal.
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Adjournment
Proposal: The affirmative vote of a majority of the votes cast is required to approve the Adjournment Proposal. Shares which
abstain from voting and “broker non-votes” with respect to the Adjournment Proposal will have no effect on the proposal.
Q.
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Who
will count the vote?
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A.
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The
votes will be counted, tabulated and certified by Broadridge Financial Solutions, Inc.
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Q.
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How
does the Board recommend that I vote on the proposals?
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A.
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Our
Board recommends that you vote FOR the Reverse Stock Split Proposal and the Adjournment Proposal.
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Q.
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Are
there other matters to be voted on at the Special Meeting?
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A.
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No.
The only matters to be voted on at the Special Meeting are Proposals 1 and 2. Under Section 1.4of our Amended and Restated
Bylaws, only the matters indicated in the notice of meeting accompanying this proxy statement may be transacted at the Special
Meeting.
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Q.
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Where
can I find the voting results?
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A.
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We
plan to announce preliminary voting results at the Special Meeting and will report final voting results in a Current Report
on Form 8-K filed with the SEC within four business days following the conclusion of our Special Meeting.
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Q.
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What
are the costs of soliciting these proxies?
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A.
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We
will bear the cost of soliciting proxies. In addition to solicitation by mail, our directors, officers and employees may solicit
proxies by telephone, e-mail, facsimile and in person without additional compensation. We may reimburse brokers or persons
holding stock in their names, or in the names of their nominees, for their expenses in sending proxies and proxy material
to beneficial owners.
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If
you have any questions or need assistance voting your shares of common stock, please contact the Company’s transfer
agent: Island Stock Transfer, LLC, by calling (727) 289-0010, or by forwarding a written request addressed to Island Stock Transfer,
LLC, 15500 Roosevelt Blvd. Suite 301, Clearwater, FL 33760.
Stockholders
Sharing the Same Address
The
SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for
proxy materials with respect to two or more stockholders sharing the same address by delivering a single set of proxy materials
addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means
extra convenience for stockholders and cost savings for companies.
One
set of proxy materials will be delivered to multiple stockholders sharing an address unless the affected stockholders have submitted
contrary instructions. Once you have received notice from your broker that they will be “householding” communications
to your address, “householding” will continue until you are notified otherwise or until you revoke your consent. If
you no longer wish to participate in “householding” and would prefer to receive a separate set of proxy materials,
please notify your broker or us. Stockholders who currently receive multiple copies of the proxy materials at their addresses
and would like to request “householding” of their communications should contact their brokers or us. Please direct
your written request in this regard to our Secretary at Room 3106, Building B, Jianwai SOHO, Chaoyang District, Beijing City,
People’s Republic of China.
PROPOSAL
1
APPROVAL
OF AN AMENDMENT TO OUR CHARTER TO EFFECT A REVERSE STOCK SPLIT
General
On
March 23, 2020, our Board of Directors (“Board”) approved, subject to stockholder approval, a certificate of amendment
to our Charter (the “Charter Amendment”) to effect a reverse stock split of our outstanding common stock at a ratio
of not less than 1-for-2 and not more than 1-for-25, with the exact ratio to be set within this range by our Board in its sole
discretion (the “Reverse Stock Split”). Our Board may alternatively elect to abandon such proposed Charter Amendment
and not effect the Reverse Stock Split authorized by stockholders, in its sole discretion.
The
form of the proposed Charter Amendment to effect the Reverse Stock Split is attached as Appendix A to this proxy statement.
The Charter Amendment that will be filed to effect the Reverse Stock Split will include the Reverse Stock Split ratio fixed by
our Board, within the range approved by our stockholders.
If
the Reverse Stock Split Proposal is approved by our stockholders, our Board would have the sole discretion to effect the Reverse
Stock Split, and to fix the specific ratio for the Reverse Stock Split, provided that the ratio would be not less than 1-for-2
and not more than 1-for-25. We believe that enabling our Board to fix the specific ratio of the Reverse Stock Split within the
stated range will provide us with the flexibility to implement the split in a manner designed to maximize the anticipated benefits
to us and our stockholders, as described below. The determination of the ratio of the Reverse Stock Split will be based on a number
of factors, described further below under the heading “— Criteria to be Used for Decision to Apply the Reverse
Stock Split.”
If
the Reverse Stock Split Proposal is approved by our stockholders, the Reverse Stock Split would become effective upon the time
specified in the Charter Amendment as filed with the Secretary of State of the State of Delaware. (We refer to this date as the
“Effective Date.”) The exact timing of the filing of the Charter Amendment and the Reverse Stock Split will be determined
by our Board based on its evaluation as to when such action will be the most advantageous to us and our stockholders. Assuming
that our stockholders now approve the Charter Amendment, we intend for the Effective Date to occur shortly following the Special
Meeting. By approving the Reverse Stock Split Proposal, our stockholders are also authorizing us to make any changes to the Charter
Amendment that the Secretary of State of the State of Delaware requires or that our Board or management deems necessary and advisable
to effect the Reverse Stock Split, so long as those changes do not alter the Reverse Stock Split ratio. In addition, our Board
reserves the right, notwithstanding stockholder approval and without further action by our stockholders, to abandon the Charter
Amendment and the Reverse Stock Split if, at any time prior to the filing of the Charter Amendment with the Secretary of State,
our Board, in its sole discretion, determines that it is no longer in our best interest and the best interests of our stockholders
to proceed.
The
primary purpose for effecting the Reverse Stock Split is to increase the per-share trading price of our common stock so as to:
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maintain
the listing of our common stock on the Nasdaq Stock Market (“Nasdaq”) and avoid a delisting of our common stock
from Nasdaq in the future on the basis of the Bid Price Rule (as defined below);
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broaden
the pool of investors that may be interested in investing in our company by attracting new investors who would prefer not
to invest in shares that trade at lower share prices; and
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make
our common stock a more attractive investment to institutional investors.
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In
evaluating the Reverse Stock Split, our Board has taken, and will take, into consideration negative factors associated with reverse
stock splits. These factors include the negative perception of reverse stock splits held by many investors, analysts and other
stock market participants, as well as the fact that the stock price of some companies that have effected reverse stock splits
has subsequently declined back to pre-reverse stock split levels. In recommending the Reverse Stock Split Proposal, our Board
determined that these potential negative factors were significantly outweighed by the potential benefits.
Criteria
to be Used for Decision to Apply the Reverse Stock Split
If
our stockholders approve the Reverse Stock Split Proposal, our Board will be authorized to proceed with the Reverse Stock Split.
The exact ratio of the Reverse Stock Split, within the 1-for-2 to 1-for-25 range, would be determined by our Board and publicly
announced by us prior to the effective time of the Reverse Stock Split. In determining whether to proceed with the Reverse Stock
Split and setting the appropriate ratio for the Reverse Stock Split, our Board will consider, among other things, factors such
as:
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Nasdaq’s
minimum price-per-share requirements;
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the
historical trading prices and trading volume of our common stock;
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the
number of shares of our common stock that would be outstanding following the Reverse Stock Split;
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the
then-prevailing and expected trading prices and trading volume of our common stock and the anticipated impact of the Reverse
Stock Split on the trading market for our common stock;
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the
anticipated impact of a particular ratio on our ability to reduce administrative and transactional costs;
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business
developments affecting us; and
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prevailing
general market and economic conditions.
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Reasons
for the Reverse Stock Split
Our
Board is seeking authority to effect the Reverse Stock Split with the primary intent of increasing the price of our common stock
in order to meet the price criteria for continued listing on Nasdaq. Our common stock is publicly traded and listed on The Nasdaq
Capital Market under the symbol “TYHT.” Our Board believes that, in addition to increasing the price of our common
stock to meet the price criteria for continued listing on Nasdaq, the Reverse Stock Split would also make our common stock more
attractive to a broader range of institutional and other investors. Accordingly, for these and other reasons discussed below,
we believe that effecting the Reverse Stock Split is in our and our stockholders’ best interests.
Our
common stock has been trading below $1.00 since May 13th, 2019. On June 26th, 2019, we received a letter from the Listing Qualifications
Department (the “Staff”) of Nasdaq, indicating that, based on the closing bid price of our common stock for the 30
trading days prior to our receipt of the letter, we no longer met Nasdaq’s minimum $1.00 bid price requirement per share
for continued listing on The Nasdaq Capital Market (the “Bid Price Rule”). We had 180 calendar days from the date
of the notice, or until December 23rd, 2019, in which to regain compliance. We did not regain compliance with the Bid Price Rule
by December 23rd, 2019 and, as a result, on December 24th , 2019, we received a second notice from Nasdaq that, based upon our
continued noncompliance with the Bid Price Rule. On December 24th, 2019, we received an extension from the date of the second
notice to June 22nd, 2020 in which to regain compliance. On April 20, 2020, Nasdaq determined to toll the compliance periods
for bid price requirements through June 30, 2020. Accordingly, we have until September 4, 2020 to regain compliance. By effecting
the Reverse Stock Split, we believe that we can increase our stock price and bring it within Nasdaq’s minimum bid requirement
pursuant to Nasdaq’s listing rules.
In
the event we are delisted from Nasdaq, the only established trading market for our common stock would be eliminated and we would
be forced to list our shares on the OTC Markets or another quotation medium, depending on our ability to meet the specific listing
requirements of those quotation systems. As a result, an investor would likely find it more difficult to trade, or to obtain accurate
price quotations for, our shares. Delisting would likely also reduce the visibility, liquidity and value of our common stock,
including as a result of reduced institutional investor interest in our company, and may increase the volatility of our common
stock. Delisting could also cause a loss of confidence of current and potential industry partners, customers, vendors, lenders
and employees, which could further harm our business and our future prospects. We believe that effecting the Reverse Stock Split
may help us avoid delisting from Nasdaq and any resulting consequences.
In
addition, our Board believes that an expected increased stock price could encourage investor interest and improve the marketability
of our common stock to a broader range of investors, and thus enhance our liquidity. Because of the trading volatility often associated
with low-priced stocks, many brokerage firms and institutional investors have internal policies and practices that either prohibit
them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their
customers. Additionally, because brokers’ commissions on low-priced stocks generally represent a higher percentage of the
stock price than commissions on higher-priced stocks, the current share price of our common stock may result in an investor paying
transaction costs that represent a higher percentage of total share value than would be the case if our share price were higher.
Our Board believes that the higher share price that may result from the Reverse Stock Split could enable institutional investors
and brokerage firms with such policies and practices to invest in our common stock.
Although
we expect that the Reverse Stock Split will result in an increase in the per share market price of our common stock, the Reverse
Stock Split may not result in a permanent increase in the market price of our common stock, which would be dependent on many factors,
including general economic, market and industry conditions and other factors detailed from time to time in the reports we file
with the SEC.
Certain
Risks Associated with the Reverse Stock Split
There
can be no assurance that the total market capitalization of our common stock after the implementation of the Reverse Stock Split
will be equal to or greater than the total market capitalization before the Reverse Stock Split or that the per share market price
of our common stock following the Reverse Stock Split will increase in proportion to the reduction in the number of shares of
our common stock outstanding in connection with the Reverse Stock Split. Also, we cannot assure you that the Reverse Stock Split
would lead to a sustained increase in the trading price of our common stock. The trading price of our common stock may change
due to a variety of other factors, including our ability to successfully accomplish our business goals, market conditions and
the market perception of our business. You should also keep in mind that the implementation of the Reverse Stock Split does not
have an effect on the actual or intrinsic value of our business or a stockholder’s proportional ownership in our company
(subject to the treatment of fractional shares). However, should the overall value of our common stock decline after the proposed
Reverse Stock Split, then the actual or intrinsic value of the shares of our common stock held by you will also proportionately
decrease as a result of the overall decline in value.
Further,
the liquidity of our common stock may be harmed by the proposed Reverse Stock Split given the reduced number of shares that would
be outstanding after the Reverse Stock Split, particularly if the expected increase in stock price as a result of the Reverse
Stock Split is not sustained. For instance, the proposed Reverse Stock Split may increase the number of stockholders who own odd
lots (less than 100 shares) of our common stock, creating the potential for such stockholders to experience an increase in the
cost of selling their shares and greater difficulty effecting sales. If we effect the Reverse Stock Split, the resulting per-share
stock price may nevertheless fail to attract institutional investors and may not satisfy the investing guidelines of such investors
and, consequently, the trading liquidity of our common stock may not improve.
While
our Board has proposed the Reverse Stock Split to bring the price of our common stock back above $1.00 per share in order to meet
the requirements of the Bid Price Rule, there is no guarantee that the price of our common stock will not decrease in the future,
or that our common stock will remain in compliance with Nasdaq listing standards. Additionally, there can be no guarantee that
the closing bid price of our common stock will remain at or above $1.00 for 10 consecutive trading days, whether following the
Reverse Stock Split or otherwise, which is required to cure our current Nasdaq listing standard deficiency.
Effect
of the Reverse Stock Split
If
the Reverse Stock Split Proposal is approved by our stockholders and our Board elects to effect the Reverse Stock Split, the number
of outstanding shares of common stock will be reduced in proportion to the ratio of the split chosen by our Board. As of the Effective
Date of the Reverse Stock Split, we would also adjust and proportionately decrease the number of shares of our common stock reserved
for issuance upon exercise of, and adjust and proportionately increase the exercise price of, all options and other rights to
acquire our common stock. In addition, as of the Effective Date of the Reverse Stock Split, we would adjust and proportionately
decrease the total number of shares of our common stock that may be the subject of future grants under our stock plans.
Because
the Reverse Stock Split will decrease the number of outstanding shares of our common stock, it would result in a relative increase
in the number of authorized and unissued shares of our common stock. The effect of the relative increase in the amount of authorized
and unissued shares of our common stock would allow our Company to issue additional shares of common stock in connection with
future financings, employee and director benefit programs and other desirable corporate activities, without requiring our Company’s
stockholders to approve an increase in the authorized number of shares of common stock each time such an action is contemplated.
The
Reverse Stock Split would be effected simultaneously for all outstanding shares of our common stock. The Reverse Stock Split would
affect all of our stockholders uniformly and would not change any stockholder’s percentage ownership interest in our company,
except to the extent that the Reverse Stock Split results in any of our stockholders owning fractional shares. We will not issue
any fractional shares as a result of the Reverse Stock Split and in lieu thereof any stockholders that would otherwise be entitled
to receive a fractional share will be entitled to a cash payment (which we describe below under “Fractional Shares”).
The Reverse Stock Split would not change the terms of our common stock. The Reverse Stock Split is not intended as, and would
not have the effect of, a “going private transaction” covered by Rule 13e-3 under the Securities Exchange Act of 1934
(the “Exchange Act”). Following the Reverse Stock Split, we would continue to be subject to the periodic reporting
requirements of the Exchange Act.
After
the Effective Date of the Reverse Stock Split, our common stock will have a new Committee on Uniform Securities Identification
Procedures (“CUSIP”) number, which is a number used to identify our equity securities, and stock certificates with
the older CUSIP numbers will need to be exchanged for stock certificates with the new CUSIP numbers by following the procedures
described below.
The
following table contains approximate information, based on share information as of May 20, 2020, relating to our outstanding
common stock assuming Reverse Stock Split ratios of 1-for-2, 1-for-10, 1-for-15, 1-for-20 and 1-for-25, which reflect the range
that our stockholders are being asked to approve. In addition, the following table sets forth (i) the number of shares of our
common stock that would be issued and outstanding and (ii) the number of shares of our common stock that would be authorized and
issued under our 2016 Share Incentive Plan (the “Plan”).
Number of Shares Before Reverse Stock Split
|
|
Reverse
Stock Split
Ratio of
1-for-2
|
|
|
Reverse
Stock Split
Ratio of
1-for-10
|
|
|
Reverse
Stock Split
Ratio of
1-for-15
|
|
|
Reverse
Stock Split
Ratio of
1-for-20
|
|
|
Reverse
Stock Split
Ratio of
1-for-25
|
|
Number of Shares of Common Stock Issued and Outstanding
|
|
|
13,666,714
|
|
|
|
2,733,342
|
|
|
|
1,822,228
|
|
|
|
1,366,671
|
|
|
|
1,093,337
|
|
Number
of Shares of Common Stock Authorized and Issued under our Plan
|
●
|
The
per-share exercise price of our outstanding stock options would increase proportionately based on the Reverse Stock Split
ratio, and the number of shares of our common stock issuable upon the exercise of those options would be reduced proportionately,
in accordance with the Plan. Similarly, the number of shares underlying all of our other outstanding equity-based awards (e.g.,
our restricted stock units (“RSUs”) and performance-based stock units (“PSUs”) held by our directors
and employees) would be reduced proportionately, in accordance with the Plan. All warrants will be adjusted in accordance
with the applicable warrant agreement.
|
|
●
|
The
exercise, exchange or conversion price of our other outstanding securities that are exercisable or exchangeable for, or convertible
into, shares of our common stock would be proportionately adjusted, and the number of shares of common stock issuable upon
that exercise, exchange or conversion would be proportionately adjusted.
|
|
●
|
The
Reverse Stock Split will likely increase the number of our stockholders who own “odd lots” (i.e., lots
with less than 100 shares). Odd-lot shares may be more difficult to sell, and brokerage commissions and other transaction
costs on odd-lots shares are generally higher than for “round lots” (i.e., lots with even multiples of
100 shares).
|
The
Reverse Stock Split will not, however, affect the total number of shares of all classes of our capital stock that we are authorized
to issue, including the total number of authorized shares of our common stock, non-voting common stock and preferred stock.
Further,
the Reverse Stock Split will not affect the par value or any of the other terms of our common stock. After the Reverse Stock Split:
|
●
|
All
shares of our common stock will have the same voting, dividend and distribution rights as immediately before the Reverse Stock
Split.
|
|
●
|
We
will continue to be subject to the same periodic reporting and other requirements relating to our securities under the Exchange
Act, as immediately before the Reverse Stock Split.
|
|
●
|
We
will continue to list our common stock on Nasdaq under the symbol “TYHT”, as immediately before the Reverse Stock
Split.
|
In
addition, the Reverse Stock Split will not itself immediately affect our overall market capitalization, i.e., our market
capitalization immediately before the Reverse Stock Split will be the same as immediately after the Reverse Stock Split, except
as a result of any “fractional shares” that we cash out as described below. However, if our trading price increases
or declines over time following the Reverse Stock Split, we will have a higher or lower market capitalization depending on that
trading price.
Procedure
for Effecting a Reverse Stock Split and Exchange of Stock Certificates
If
stockholders approve the Reverse Stock Split Proposal, and if our Board determines to effect the Reverse Stock Split (with the
ratio to be determined in the discretion of the Board within the parameters described), we will file the Charter Amendment with
the Secretary of State of the State of Delaware and certain regulatory bodies reflecting the designated ratio. The Reverse Stock
Split will become effective at the time and on the date of filing of, or at such later time as is specified in, the Charter Amendment,
which we refer to as the “Effective Time” and the “Effective Date,” respectively. The Effective Time of
the Charter Amendment shall be determined in the discretion of our Board and in accordance with applicable law. As discussed above
under the heading “—Effect of the Reverse Stock Split”, after the Charter Amendment becomes effective,
the shares of our common stock will have a new Committee on Uniform Securities Identification Procedures (CUSIP) number, which
is a number used to identify our common stock. As soon as practicable after the Effective Date, stockholders will be notified
that the Reverse Stock Split has been effected.
Stockholder
of Record
Certain
of our stockholders hold some or all of their shares electronically in book-entry form with our transfer agent, Island Stock Transfer,
LLC. These stockholders do not hold physical stock certificates evidencing their ownership of our common stock. However, they
are provided with a statement reflecting the number of shares of our common stock registered in their accounts. If a stockholder
holds registered shares in book-entry form with our transfer agent, no action needs to be taken to receive post-Reverse Stock
Split shares. If a stockholder is entitled to post-Reverse Stock Split shares, a transaction statement will automatically be sent
to the stockholder’s address of record indicating the number of shares of our common stock held following the Reverse Stock
Split.
Beneficial
Owner
Upon
the implementation of the Reverse Stock Split, we intend to treat shares held by stockholders in “street name” through
a broker, bank or other nominee in the same manner as stockholders of record whose shares are registered in their names. Brokers,
banks and other nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding our common
stock in “street name.” However, these brokers, banks and other nominees may have different procedures than stockholders
of record for processing the Reverse Stock Split. If a stockholder holds shares of our common stock with a broker, bank or other
nominee and has any questions about the Reverse Stock Split, the stockholder is encouraged to contact its nominee.
Holders
of Certificated Shares of Common Stock
As
of the date of this proxy statement, certain of our shares of common stock were held in certificated form. Stockholders of record
at the time of the Reverse Stock Split who hold shares of our common stock in certificated form will be sent a transmittal letter
by our transfer agent after the effective time that will contain the necessary materials and instructions on how a stockholder
should surrender its certificates representing shares of our common stock to the transfer agent. Stockholders should not destroy
any stock certificate(s) and should not submit any certificate(s) until requested to do so.
Fractional
Shares
To
avoid having any fractional shares of our common stock (i.e., less than one full share of common stock) outstanding as
a result of the Reverse Stock Split, we will “cash out” any fractional shares. This means that our stockholders of
record who would hold any fractional shares as a result of the Reverse Stock Split will receive cash (without interest) equal
to (x) the fraction of a share of common stock to which such holder would otherwise be entitled multiplied by (y) the per-share
closing stock price (for a whole share) of the Company’s common stock on the trading date immediately preceding the Reverse
Stock Split. For example, if the closing stock price is $2.00 per share and a stockholder would receive 0.75 shares of our common
stock as a result of the Reverse Stock Split, then that stockholder would receive $1.50 for those fractional shares.
No
Appraisal Rights
No
action is proposed herein for which the laws of the State of Delaware, or our Charter or bylaws, provide a right to our stockholders
to dissent and obtain appraisal of, or payment for, such stockholders’ capital stock.
Accounting
Matters
The
Reverse Stock Split would not affect the par value of our common stock per share, which would remain $0.001 par value per share,
while the number of outstanding shares of common stock would decrease in accordance with the Reverse Stock Split ratio. As a result,
as of the Effective Date of the Reverse Stock Split, the stated capital attributable to common stock on our balance sheet would
decrease and the additional paid-in capital account on our balance sheet would increase by an offsetting amount. In addition,
following the Reverse Stock Split, reported per-share net income or loss would be higher because there would be fewer shares of
common stock outstanding and we would adjust historical per share amounts set forth in our future financial statements.
Reservation
of Right to Abandon the Amendment to our Certificate of Incorporation
Our
Board reserves the right to abandon the amendment to our Charter described in this Reverse Stock Split Proposal without further
action by our stockholders at any time before the effective time, even if stockholders approve such amendment at the Special Meeting.
By voting in favor of the Charter Amendment, stockholders are also expressly authorizing the Board to determine not to proceed
with, and abandon, the Reverse Stock Split if it should so decide.
Material
U.S. Federal Income Tax Consequences of the Reverse Stock Split
The
following discussion is a summary of the material U.S. federal income tax consequences of the proposed Reverse Stock Split to
us and to U.S. Holders (as defined below) that hold shares of our common stock as capital assets for U.S. federal income tax purposes
(generally, property held for investment). This discussion is based on the Internal Revenue Code of 1986, as amended, which we
refer to as the Code, U.S. Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative
pronouncements of the U.S. Internal Revenue Service, which we refer to as the IRS, in each case in effect as of the date of this
proxy statement. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation
may be applied retroactively in a manner that could adversely affect a U.S. Holder. We have not sought and will not seek any rulings
from the IRS regarding the matters discussed below and there can be no assurance the IRS or a court will not take a contrary position
to that discussed below regarding the tax consequences of the proposed Reverse Stock Split.
For
purposes of this discussion, a “U.S. Holder” is a beneficial owner of our common stock that, for U.S. federal income
tax purposes, is or is treated as (i) an individual who is a citizen or resident of the United States; (ii) a corporation (or
any other entity or arrangement treated as a corporation) created or organized under the laws of the United States, any state
thereof, or the District of Columbia; (iii) an estate, the income of which is subject to U.S. federal income tax regardless of
its source; or (iv) a trust if (1) its administration is subject to the primary supervision of a court within the United States
and all of its substantial decisions are subject to the control of one or more “United States persons” (within the
meaning of Section 7701(a)(30) of the Code ), or (2) it has a valid election in effect under applicable U.S. Treasury regulations
to be treated as a United States person.
This
discussion does not address all U.S. federal income tax consequences relevant to the particular circumstances of a U.S. Holder,
including the impact of the Medicare contribution tax on net investment income.
In
addition, it does not address consequences relevant to U.S. Holders that are subject to special rules, including, without limitation,
financial institutions, insurance companies, real estate investment trusts, regulated investment companies, grantor trusts, tax-exempt
organizations, dealers or traders in securities, commodities or currencies, stockholders who hold our common stock as part of
a position in a straddle or as part of a hedging, conversion or integrated transaction for U.S. federal income tax purposes, persons
whose functional currency is not the U.S. dollar, or U.S. Holders who actually or constructively own 10% or more of our voting
stock.
If
a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is the beneficial owner of our common
stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner
and the activities of the partnership. Accordingly, partnerships (and other entities treated as partnerships for U.S. federal
income tax purposes) holding our common stock and the partners in such entities should consult their own tax advisors regarding
the U.S. federal income tax consequences of the proposed Reverse Stock Split to them.
In
addition, the following discussion does not address the U.S. federal estate and gift tax, alternative minimum tax, or state, local
and non-U.S. tax law consequences of the proposed Reverse Stock Split. Furthermore, the following discussion does not address
any tax consequences of transactions effectuated before, after or at the same time as the proposed Reverse Stock Split, whether
or not they are in connection with the proposed Reverse Stock Split. This discussion should not be considered as tax or investment
advice, and the tax consequences of the proposed Reverse Stock Split may not be the same for all stockholders.
Each
stockholder should consult his, her or its own tax advisors concerning the particular U.S. federal tax consequences of the Reverse
Stock Split, as well as the consequences arising under the laws of any other taxing jurisdiction, including any state, local or
foreign tax consequences.
Tax
Consequences to the Company. The proposed Reverse Stock Split is intended to be treated as a “recapitalization”
pursuant to Section 368(a)(1)(E) of the Code. As a result, we should not recognize taxable income, gain or loss in connection
with the proposed Reverse Stock Split.
Tax
Consequences to U.S. Holders. A U.S. Holder generally should not recognize gain or loss upon the proposed Reverse Stock
Split for U.S. federal income tax purposes, except with respect to cash received in lieu of a fractional share of our common stock,
as discussed below. A U.S. Holder’s aggregate adjusted tax basis in the shares of our common stock received pursuant to
the proposed Reverse Stock Split should equal the aggregate adjusted tax basis of the shares of our common stock exchanged therefor
(reduced by the amount of such basis that is allocated to any fractional share of our common stock). The U.S. Holder’s holding
period in the shares of our common stock received pursuant to the proposed Reverse Stock Split should include the holding period
in the shares of our common stock exchanged therefor. U.S. Treasury Regulations provide detailed rules for allocating the tax
basis and holding period of shares of common stock surrendered in a recapitalization to shares received in the recapitalization.
U.S. Holders of shares of our common stock acquired on different dates and at different prices should consult their tax advisors
regarding the allocation of the tax basis and holding period of such shares A U.S. Holder that, pursuant to the proposed Reverse
Stock Split, receives cash in lieu of a fractional share of our common stock should recognize capital gain or loss in an amount
equal to the difference, if any, between the amount of cash received and the portion of the U.S. Holder’s aggregate adjusted
tax basis in the shares of our common stock surrendered that is allocated to such fractional share. Such capital gain or loss
will be short term if the pre-Reverse Stock Split shares were held for one year or less at the Effective Date of the Reverse Stock
Split and long term if held for more than one year. No gain or loss will be recognized by us as a result of the proposed Reverse
Stock Split.
A
U.S. Holder of our common stock may be subject to information reporting and backup withholding on cash paid in lieu of a fractional
share in connection with the proposed Reverse Stock Split. A U.S. Holder of our common stock will be subject to backup withholding
if such U.S. Holder is not otherwise exempt and such U.S. Holder does not provide its taxpayer identification number in the manner
required or otherwise fails to comply with applicable backup withholding tax rules. Backup withholding is not an additional tax.
Any amounts withheld under the backup withholding rules may be refunded or allowed as a credit against a U.S. Holder’s federal
income tax liability, if any, provided the required information is timely furnished to the IRS. U.S. Holders of our common stock
should consult their own tax advisors regarding their qualification for an exemption from backup withholding and the procedures
for obtaining such an exemption.
The
U.S. federal income tax discussion set forth above does not discuss all aspects of U.S. federal income taxation that may be relevant
to a particular stockholder in light of such stockholder’s circumstances and income tax situation. Accordingly, we urge
you to consult with your own tax advisor with respect to all of the potential U.S. federal, state, local and foreign tax consequences
to you of the Reverse Stock Split.
Required
Vote
In
order to be approved, this Proposal must receive the affirmative vote of a majority of our outstanding shares of common stock
entitled to vote on this Proposal, i.e., the number of shares cast “FOR” this Proposal must constitute more
than 50% of our outstanding shares of common stock. Shares represented by executed proxies (but with no marking indicating “FOR,”
“AGAINST” or “ABSTAIN”) will be voted “FOR” the approval of this Proposal. Votes to “ABSTAIN”
and broker non-votes are considered shares “entitled to vote,” and so these votes will have the same effect as a vote
“AGAINST” this Proposal. Similarly, shares that do not vote will have the same effect as a vote “AGAINST”
this Proposal.
Board
Recommendation
|
OUR
BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL OF AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE
STOCK SPLIT
|
PROPOSAL
2
APPROVAL
OF AN ADJOURNMENT OF THE SPECIAL MEETING
General
Our
stockholders are being asked to consider and vote upon an adjournment of the Special Meeting, if necessary, to solicit additional
proxies if there are not sufficient votes at the time of the Special Meeting to approve the Reverse Stock Split Proposal.
Required
Vote
In
order to be approved, this Proposal must receive the affirmative vote of a majority of the votes cast on this Proposal, i.e.,
the number of shares cast “FOR” this Proposal must constitute more than the number of shares cast “AGAINST”
this Proposal. Shares represented by executed proxies (but with no marking indicating “FOR,” “AGAINST”
or “ABSTAIN”) will be voted “FOR” the approval of this Proposal. Votes to “ABSTAIN” and broker
non-votes are not considered “votes cast” and so will have no effect this Proposal. Similarly, shares that do not
vote will have no effect on this Proposal.
Board
Recommendation
|
OUR
BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE ADJOURNMENT OF THE SPECIAL MEETING
|
OWNERSHIP
OF OUR COMMON STOCK
Unless
otherwise provided below, the following table sets forth information regarding beneficial ownership of our common stock as of
the record date, May 20, 2020 (the “Beneficial Ownership Table Date”), by:
|
●
|
each
person who is known to us to be the beneficial owner of 5% or more of the outstanding shares of our common stock;
|
|
●
|
each
of our current directors;
|
|
●
|
each
of our named executive officers; and
|
|
●
|
all
of our directors and executive officers as a group.
|
We
report the amounts and percentages of shares beneficially owned on the basis of SEC regulations governing the determination of
beneficial ownership of securities. SEC rules deem a person to be a “beneficial owner” of a security if that person
has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security.
SEC rules also deem a person to be a beneficial owner of any securities of which that person has a right to acquire beneficial
ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person’s
ownership percentage, but not for purposes of computing any other person’s percentage. Under these rules, more than one
person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities
as to which such person has no economic interest.
Beneficial
ownership of our common stock is based on 27,333,428 shares of our common stock issued and outstanding as of May 20, 2020.
Except
as otherwise indicated in the footnotes to the table below, each of the beneficial owners listed has, to our knowledge, sole voting
and investment power with respect to the indicated shares of our common stock. Unless otherwise indicated, the address of each
individual in the following table is c/o Shineco,, Room 3106, Building B, Jianwai SOHO, Chaoyang District, Beijing City, People’s
Republic of China. Addresses for the other beneficial owners are set forth in the footnotes to the table.
|
|
Number
of
Shares
of
Common
Stock(1)
|
|
|
|
|
|
|
|
Amount
and
Nature
of
|
|
|
Percent
of
Outstanding
Common
Stock
|
|
Name
and Address of Beneficial Owner
|
|
Title
|
|
Beneficial
|
|
|
Percent
(%)
|
|
Name
and Address
|
|
of
Class
|
|
Ownership
|
|
|
of
Class
|
|
Yuying
Zhang
|
|
common
|
|
|
1,143,140
|
|
|
|
4.18
|
%
|
Sai
(Sam) Wang
|
|
common
|
|
|
749,645
|
|
|
|
2.74
|
%
|
Baolin
Li
|
|
common
|
|
|
1,000,000
|
|
|
|
3.66
|
%
|
Harry
Edelson
|
|
common
|
|
|
—
|
|
|
|
—
|
|
Yanzeng
An
|
|
common
|
|
|
—
|
|
|
|
—
|
|
He
Cen
|
|
common
|
|
|
—
|
|
|
|
—
|
|
Ning
Chen
|
|
common
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
All
Officers and Directors as a Group (7 total)
|
|
common
|
|
|
2,892,785
|
|
|
|
10.58
|
%
|
|
|
|
|
|
|
|
|
|
|
|
5%
Shareholders Not Mentioned Above:
|
|
|
|
|
|
|
|
|
|
|
Jiping
Chen
|
|
common
|
|
|
2,194,115
|
|
|
|
8.03
|
%
|
OTHER
INFORMATION
Other
Matters
The
only matters to be voted on at the Special Meeting are Proposals 1 and 2. Under Section 1.4 of our Amended and Restated Bylaws,
only the matters indicated in the notice of meeting accompanying this proxy statement may be transacted at the Special Meeting.
Stockholder
Proposals for the 2020 Annual Meeting
For
any proposal to be considered for inclusion in our proxy statement and form of proxy for submission to the stockholders at our
2020 Annual Meeting of Stockholders, it must be submitted in writing and comply with the requirements of Rule 14a-8 of the Exchange
Act. Such proposals must be received by the Company at its offices at Room 3106, Building B, Jianwai SOHO, Chaoyang District,
Beijing City, People’s Republic of China, Attention: Chief Executive Officer, no later than January 31, 2020
If
we are not notified of a stockholder proposal a reasonable time prior to the time we send our proxy statement for our 2020 annual
meeting, then our Board will have discretionary authority to vote on the stockholder proposal, even though the stockholder proposal
is not discussed in the proxy statement. In order to curtail any controversy as to the date on which a stockholder proposal was
received by us, it is suggested that stockholder proposals be submitted by certified mail, return receipt requested, and be addressed
to Shineco, Inc., Room 3106, Building B, Jianwai SOHO, Chaoyang District, Beijing City, People’s Republic of China, Attention:
Chief Executive Officer. Notwithstanding, the foregoing shall not affect any rights of stockholders to request inclusion of proposals
in our proxy statement pursuant to Rule 14a-8 under the Exchange Act nor grant any stockholder a right to have any nominee included
in our proxy statement.
Any
proposals, notices or information about proposed director candidates should be sent to:
Shineco
Inc.Room 3106, Building B, Jianwai SOHO, Chaoyang District, Beijing City, People’s Republic of China, Attention: Corporate
Secretary
APPENDIX
A
Charter
Amendment
See
attached
CERTIFICATE
OF AMENDMENT
TO
CERTIFICATE
OF INCORPORATION
OF
SHINECO, INC.
Shineco,
Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”),
does hereby certify as follows:
ONE:
That the name of the Corporation is Shineco, Inc. The original Certificate of Incorporation of the Corporation was filed with
the Secretary of State of the State of Delaware on August 20, 1997 (the “Certificate of Incorporation”).
TWO:
That, at a meeting of the Board of Directors of the Corporation, resolutions were duly adopted recommending and declaring advisable
that the Certificate of Incorporation be amended and that such amendment be submitted to the stockholders of the Corporation for
their consideration, as follows:
RESOLVED,
that Paragraph (c) of Article Fourth of the Certificate of Incorporation be amended and restated in its entirety to read as follows:
“Section
4.1 Reverse Stock Split and Authorized Capital Stock. Effective [ ], 2020 (the “Effective Time”),
a [ ]-for-[ ] reverse stock split of the shares of the Corporation’s common stock, par value $0.0001 per share (the “Common
Stock”), shall become effective, pursuant to which each [ ] shares of Common Stock outstanding and held of record
by each stockholder of the Corporation (including treasury shares) immediately prior to the Effective Time shall be reclassified
and combined into one validly issued, fully paid and nonassessable share of Common Stock, automatically and without any action
on the part of the Corporation or the respective holders thereof upon the Effective Time, and shall thereupon represent one share
of Common Stock from and after the Effective Time (such reclassification and combination of shares, the “Reverse Stock
Split”). The par value of the Common Stock following the Reverse Stock Split shall remain at $0.001 per share.
The
total number of shares of all classes of capital stock which the Corporation is authorized to issue is [105,000,000] shares, consisting
of[100,000,000] shares of Common Stock, par value $0.001 per share (the “Common Stock”), and 5,000,000
shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”).
THREE:
That at a special meeting of stockholders of the Corporation held on [July 9], 2020, the aforesaid amendment was duly adopted
by the stockholders of the Corporation.
FOUR:
That this Certificate of Amendment was duly adopted in accordance with Section 242 of the General Corporation Law of the State
of Delaware.
***
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its duly authorized officer this [ ]
day of [ ], 2020, and the foregoing facts stated herein are true and correct.
|
SHINECO,
INC.
|
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
SHINECO,
INC.
ATTN:
Yuying Zhang
_Room
3106, Building B, Jianwai SOHO, Chaoyang District, Beijing City, People’s Republic of China
Telephone:___86-010-58693193
_Email:__secretary@shineco.tech
TO
VOTE ONLINE: www.proxyandprinting.com
Click
on Vote Your Proxy
Enter
Your Control Number
TO
VOTE BY EMAIL: akotlova@islandstocktransfer.com
TO
VOTE BY FAX: Please fax this proxy card to 1.727.289.0069
TO
VOTE BY MAIL: Please sign, date and mail to
Anna
Kotlova
15500
Roosevelt Blvd, Suite 301
Clearwater,
FL 33760
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DETACH
AND RETURN THIS PORTION ONLY
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THIS
PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
SHINECO,
INC.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
1.
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To
approve an amendment to our certificate of incorporation to effect, at the discretion of our Board of Directors, a reverse
stock split of our common stock at a ratio of not less than 1-for-2 and not greater than 1-for-25, subject to our Board of
Directors’ authority to abandon such amendment (the “Reverse Stock Split Proposal”).
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For
☐
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Against
☐
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Abstain
☐
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2.
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To
approve an adjournment of the Special Meeting, if necessary, to solicit additional proxies if there are not sufficient votes
at the time of the Special Meeting to approve the Reverse Stock Split Proposal.
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For
☐
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Against
☐
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Abstain
☐
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Yes
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No
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Please
indicate if you plan to attend this meeting.
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☐
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☐
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Please
sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give
full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign
in full corporate or partnership name by authorized officer.
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Signature
[PLEASE SIGN WITHIN BOX] Date
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Signature
(Joint Owners) Date
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Important
Notice Regarding the Availability of Proxy Materials for the Special Meeting of Stockholders
to
be held on July 9, 2020:
The
Notice of Special Meeting is available on our website at
http://www.tianyiluobuma.com/index.php/English/New/index.html
under
“http://www.tianyiluobuma.com/index.php/English/Index/index.html.”
E90982-S97044
SHINECO,
INC.
Special
Meeting of Stockholders
July 9, 2020 9:00 PM Eastern
Time
This
proxy is solicited by the Board of Directors
The
stockholders hereby appoint Yuying Zhang,Chief Executive Officer, and Sai Wang, the Chief Financial Officer, or any of them, as
proxies, each with full power of substitution, and hereby authorizes each of them to represent and to vote, as designated on the
reverse side of this ballot, all of the shares of Common Stock of SHINECO, INC. that the stockholders are entitled to vote at
the Special Meeting of Stockholders to be held at 9:00 PM Eastern Time on July 9, 2020, at Room 3106, Building B, Jianwai
SOHO, Chaoyang District, Beijing City, People’s Republic of China, and any adjournment or postponement thereof.
This
proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted
in accordance with the Board of Directors’ recommendations.
Continued
and to be signed on reverse side
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