SecProbe.io

CORRESP
1
filename1.htm

May
30, 2023

Securities
and Exchange Commission

Division
of Corporate Finance

100
F Street, NE

Washington,
D.C. 20549

Attn:
Ms. Jessica Ansart and Ms. Celeste Murphy

Re:
Shineco, Inc.

Form
10-K for Fiscal Year Ended June 30, 2022

Submitted
on September 28, 2022

File
No. 001-37776

Dear
Ms. Jessica Ansart and Ms. Celeste Murphy:

Please
find below our responses to the questions raised by the staff (the “Staff”) of the Securities and Exchange Commission
(the “Commission”) in its letter of comments dated May 17, 2023 (the “Comment Letter”) relating
to the annual report on Form 10-K for the year ended June 30, 2022, which was submitted to the Commission by Shineco, Inc. (the “Company”
or “we”) on September 28, 2022.

The
Company’s responses are numbered to correspond to the Staff’s comments. For your convenience, each of the Staff’s comments
contained in the Comment Letter has been restated.

In
addition, we hereby submit our proposed amended disclosures, substantially in the form as Exhibit A attached hereto. Once the
Staff’s satisfied with the proposed disclosures, we will incorporate such
disclosures into our annual report for the fiscal year ended June 30, 2023.

Form
10-K for the Year Ended June 30, 2022

Consolidation
of Variable Interest Entities, page 23

1. We
                                            note that the consolidated VIEs constitute a material part of your consolidated financial
                                            statements. Please provide in tabular form a condensed consolidating schedule that disaggregates
                                            the operations and depicts the financial position, cash flows, and results of operations
                                            as of the same dates and for the same periods for which audited consolidated financial statements
                                            are required. The schedule should present major line items, such as revenue and cost of goods/services,
                                            and subtotals and disaggregated intercompany amounts, such as separate line items for intercompany
                                            receivables and investment in subsidiary. The schedule should also disaggregate the parent
                                            company, the VIEs and its consolidated subsidiaries, the WFOEs that are the primary beneficiary
                                            of the VIEs, and an aggregation of other entities that are consolidated. The objective of
                                            this disclosure is to allow an investor to evaluate the nature of assets held by, and the
                                            operations of, entities apart from the VIE, as well as the nature and amounts associated
                                            with intercompany transactions. Any intercompany amounts should be presented on a gross basis
                                            and when necessary, additional disclosure about such amounts should be included in order
                                            to make the information presented not misleading.

RESPONSE: We note the Staff’s comment, and
in response hereto, respectfully advise the Staff that we have added a summary consolidated financial data in tabular form. Please see
page 8 of the Exhibit A attached hereto for further details.

Note
3 - Summary of Significant Accounting Policies

Consolidation of Variable Interest Entities, page F-12

2. Pursuant
                                            to ASC 810-10-50-3 please disclose the following:

 ● Please
                                            provide qualitative information about the relationships between the VIE’s assets and
                                            liabilities that are consolidated. For example, if the VIE’s assets can be used only
                                            to settle obligations of the VIE, please disclose qualitative information about the nature
                                            of the restrictions on those assets;

 ● Please
                                            address whether creditors or beneficial interest holders of the VIE have no recourse to the
                                            general credit of the primary beneficiary; and

 ● Please
                                            disclose the terms of any arrangements, if applicable, that could require you to provide
                                            financial support.

RESPONSE:
We note the Staff’s comment, and in response hereto, respectfully advise the Staff that we have revised the Consolidation of Variable
Interest Entities in the Note 3 — Summary of Significant Accounting Policies. Please see page F-12 of the Exhibit A attached hereto
for further details.

3. Pursuant
                                            to ASC 810-10-45, please present each of the following separately on the face of the statement
                                            of financial position:

 ● Assets
                                            of a consolidated VIEs that can be used only to settle obligations of the consolidated VIE;
                                            and

 ● Liabilities
                                            of a consolidated VIE for which creditors or beneficial interest holders do not have recourse
                                            to the general credit of the primary beneficiary.

RESPONSE:
We note the Staff’s comment, and in response hereto, respectfully advise the Staff that there are no consolidated assets of
the VIEs and the VIEs’ subsidiaries that are collateral for the obligations of the VIEs and the VIEs’ subsidiaries and can
only be used to settle the obligations of the VIEs and the VIEs’ subsidiaries. And as the VIEs are incorporated as limited liability
companies under the PRC Company Law, creditors or beneficial interest holders of the VIEs do not have recourse to the general credit
of the Company for any of the liabilities of the VIEs in normal course of business.

Note
20 - Commitments and Contingencies

Legal
Contingencies, page F-36

4. If
                                            it is reasonably possible that a loss or an additional loss in excess of the amount accrued
                                            may have been incurred, please disclose an estimated range; otherwise, provide a statement
                                            that such an estimate of the possible loss or range of loss cannot be made, if true. Refer
                                            to ASC 450-20-50-3 and 50-4.

RESPONSE: We note the Staff’s comment, and
in response hereto, because of the uncertainty associated with any litigation, we respectfully submit that at this point, the
Company is unable to form a conclusion as to whether an unfavorable outcome is either probable or remote, and therefore cannot provide
an estimate for the amount or range of potential loss should the outcome of the litigation be unfavorable.

General

5. Please
                                            conform the disclosures in your Form 10-K, related to your operations in China, with the
                                            disclosures in your amended Form S-3 (File No. 333-261229), taking into consideration comments
                                            1 to 16 from our letter dated November 29, 2021 and comment 1 from our letter dated May 20,
                                            2022, as applicable. Disclosures presented in the forepart/prospectus of Form S-3 should
                                            be disclosed at the onset of Item 1. Business in your Form 10-K. Please confirm your understanding
                                            of this matter and that you will comply with the requisite disclosures in your Form 10-K,
                                            as applicable, in your response to us.

RESPONSE:
We note the Staff’s comment, and in response hereto, respectfully advise the Staff that we have revised the Annual report to include
the requisite disclosures. Please see pages 5, 7, and 17 of the Exhibit A attached hereto for further details.

Should
you have any questions regarding the foregoing, please do not hesitate to contact the Company’s counsel, Huan Lou, Esq. and David
Manno, Esq. of Sichenzia Ross Ference LLP at (212) 930-9700.

    Very
    truly yours,

    By:
    /s/
    Huan Lou

    Name:
    Huan
    Lou

    On
    behalf of Shineco, Inc.

1185
Avenue of the Americas | 31st Floor | New York, NY | 10036

T
(212) 930 9700 | F (212) 930 9725 | WWW.SRF.LAW

Exhibit A

UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

WASHINGTON,
DC 20549

FORM
10-K

☒
annual report pursuant to Section 13 or 15(d) of the Securities Exchange

Act
of 1934

For
the fiscal year ended June 30, 2022

or

☐
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange

Act
of 1934

For
the transition period from _________ to _________

Commission
File Number: 001-37776

    SHINECO,
    INC.

    (Exact
    name of issuer as specified in its charter)

    Delaware

    52-2175898

    (State
    or other jurisdiction of

    (I.R.S.
    employer

    incorporation
    or organization)

    identification
    number)

    RM
3D-1603 New World Center Apartment,

    Chong
Wen Men Wai Blvd,

    Beijing,
    People’s Republic of China

    100062

    (Address
    of principal executive offices)

    (Zip
    Code)

Registrant’s
telephone number, including area code (+86) 10-68130220

Securities
registered pursuant to Section 12(b) of the Act:

    Title
    of each class

    Ticker Symbol

    Name
    of each exchange on which registered

    Common
    stock, $0.001 par value

    SISI

    NASDAQ
    Capital Market

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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

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

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

    Large
    accelerated filer
    ☐

    Accelerated
    filer
    ☐

    Non-accelerated
    filer
    ☒

    Smaller
    reporting company
    ☒

    Emerging
    growth company
    ☐

If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐

If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

The aggregate market value of the voting and
non-voting common equity stock held by non-affiliates of the registrant was approximately $61,230,076.1
as of December 31, 2021, the last business day of the registrant’s most recently completed second fiscal quarter, based on the
closing price of the registrant’s common stock on such date of $6.64 per share, as reported on the Nasdaq Capital Market.

As of September 27, 2022, the registrant had 16,397,356 shares of common
stock outstanding.

TABLE
OF CONTENTS

TO
ANNUAL REPORT ON FORM 10-K

FOR
YEAR ENDED JUNE 30, 2022

    Part I

    4

    Item
    1.
    Business
    4

    Item
    1A.
    Risk Factors
    17

    Item
    1B.
    Unresolved Staff Comments
    19

    Item
    2.
    Properties
    20

    Item
    3.
    Legal Proceedings
    21

    Item
    4.
    Mine Safety Disclosures
    21

    Part II

    22

    Item
    5.
    Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities
    22

    Item
    6.
    [Reserved]
    23

    Item
    7.
    Management’s Discussion and Analysis of Financial Conditions and Results of Operations
    24

    Item
    7A.
    Quantitative and Qualitative Disclosures About Market Risk
    40

    Item
    8.
    Financial Statements and Supplementary Data
    40

    Item
    9.
    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
    41

    Item
    9A.
    Controls and Procedures
    41

    Item
    9B.
    Other Information
    43

    Item
    9C.
    Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
    43

    Part III

    44

    Item
    10.
    Directors, Executive Officers and Corporate Governance
    44

    Item
    11.
    Executive Compensation
    48

    Item
    12.
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    49

    Item
    13.
    Certain Relationships and Related Transactions, and Director Independence
    50

    Item
    14.
    Principal Accounting Fees and Services
    51

    Part IV

    52

    Item
    15.
    Exhibits and Financial Statement Schedules
    52

    Item
    16.
    Form 10-K Summary
    57

All
references to “we,” “us,” “our,” “SISI,” “Company,” “registrant”
or similar terms used in this report refer to Shineco, Inc., a Delaware corporation (“SISI”), including the variable interest
entities (“VIEs”) and its consolidated subsidiaries, unless the context otherwise indicates. In the context of describing
our business, “we,” “us,” “our,” “SISI,” “Company,” or “registrant”
refers to the VIEs and their subsidiaries, unless the context otherwise indicates.

Our
reporting currency is the US$. The functional currency of our entities located in China is the RMB. For the entities whose functional
currency is the RMB, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities
are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result,
amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the
corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating th