Shineco, Inc. (“Shineco” or the “Company”; NASDAQ: SISI), a
producer and distributor of Chinese herbal medicines, organic
agricultural products and other biotech products, announced today
that on January 13, 2023, the Company entered into a non-binding
framework agreement (the “LOI”) with certain shareholders of Dream
Partner Limited (“Dream Ltd.”) to acquire 80% equity interests of
Dream Ltd., which indirectly owns 100% equity interests of
Chongqing Wintus Group (“Wintus”), which is a private company based
in China that produces specialized antiviral silk fabric materials
that can be widely used in the medical, hygiene, pharmaceutical and
personal health fields.
According to the LOI, the total purchase price
of the acquisition is estimated to be approximately $40 million
which is expected to consist of cash and the Company’s common
stock. The LOI represents terms for a proposed transaction and will
be subject to legal and financial due diligence, which includes a
third-party audit and evaluation, Shineco’s shareholder’s approval
and definitive documentation.
Ms. Jennifer Zhan, CEO of Shineco, commented,
“We are excited about the prospect of the potential transaction
with Wintus, which we believe is an excellent fit for our current
business and complements our R&D achievements in the medical
and healthcare fields. In addition to its antibacterial and
antiviral fabrics, Wintus’s innovations in the field of medical
materials align with our R&D focus. Further, we believe that
the potential synergies with our prior acquisition of Changzhou
Biowin Pharmaceutical Co., Ltd. is compelling as it will further
advance the exploration of animal fiber biodegradable medical
devices as well as open up new fields of discovery.”
CEO Jennifer Zhan continued, “We believe that
the potential acquisitions will accelerate the formation of a
vertically integrated R&D, production and sales platform across
an array of medical and healthcare products that will enable us to
achieve critical mass and an enlarged footprint and greater
commercial development opportunities.”
Ms. Lisa Wang, Chairperson of Wintus, commented,
“In recent years, we have increased our investment in R&D which
led to our developing antibacterial and antiviral fabrics that we
believe could play an important role in preventing and inhibiting
the growth and spread of Covid-19. The LOI with Shineco, which has
strong R&D capabilities and international distribution
channels, could help bring our technological advances to market
faster and jointly we believe could achieve a qualitative leap in
the fields of textile manufacturing, medical care and personal
health.”
About Chongqing
Wintus Group
Chongqing Wintus Group (“Wintus”) produces a
leading antibacterial and antiviral fabrics which can be widely
used in the medical, hygiene, and pharmaceutical fields as well as
for personal health protection. Wintus also uses silk animal fibers
as raw materials for cardiac stents, controllable degradable bone
nails, the preservation of biological specimens, facial masks,
environmental protection appliances and other life science fields.
Wintus believes that its antibacterial and antiviral fabrics could
play an important role in preventing and inhibiting the growth and
spread of Covid-19, which could be an area of substantial growth.
Wintus was established in 1997 and has been focusing on the silk
industry for more than 20 years.
About Shineco,
Inc.
Shineco, Inc. (“Shineco” or the “Company”)
utilizes modern engineering technologies and biotechnology systems
to develop and produce Chinese herbal medicines, organic
agricultural produce and specialized textiles, among other
products. The Company also plans to develop innovative drugs and
medical devices as well as diagnostic devices and a treatment
platform for cancer patients. Shineco was incorporated in Delaware
in August 1997 and is headquartered in Beijing, China. For more
information, please visit www.biosisi.com.
Forward-Looking Statements
This news release contains “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. These forward-looking statements can be
identified by terminology such as “may”, “will”, “should”, “could”,
“intend”, “expect”, “plan”, “budget”, “forecast”, “anticipate”,
“believe”, “estimate”, “predict”, “potential”, “continue”,
“evaluating” or similar words. Forward-looking statements should
not be relied upon because they are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Examples of forward-looking statements include, among
others, statements we make regarding the use of Wintus’s
antibacterial and antiviral fabrics, the results and potential
synergies or benefits of the combination of Shineco and Wintus’s
businesses and their future growth potential; the proposed terms
and conditions of any binding definitive agreement with Wintus and
the receipt of any necessary approvals and satisfaction of all
closing conditions for the completion of the transaction, amongst
others. You are cautioned not to rely on any forward-looking
statements. Actual results may differ materially from historical
results or those indicated by the forward-looking statements as a
result of a variety of factors including, but not limited to, risks
and uncertainties associated with the Company’s 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 ability to obtain all necessary
regulatory approvals in the jurisdictions where it intends to
market and sell its products 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 regulations,
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 filings with the
Securities and Exchange Commission. The forward-looking statements
in this press release are based only on information currently
available to us and speak only as of the date of this press
release, and Shineco assumes no obligation to update any
forward-looking statements except as required by the applicable
rules and regulations.
No Offer or Solicitation
This announcement is for informational purposes
only and is neither an offer to purchase, nor a solicitation of an
offer to sell, any securities or the solicitation of any vote in
any jurisdiction pursuant to the proposed transactions or
otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law.
No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended.
Additional Information about the
Transaction and Where to Find It
The Company intends to file a preliminary proxy
statement with the SEC in connection with the transaction described
in the press release if, and after the parties enter into a
definitive agreement, and will thereafter mail a definitive proxy
statement and other relevant documents to its stockholders. This
press release does not contain all the information that should be
considered concerning the transaction, and it is not intended to
provide the basis for any investment decision or any other decision
in respect to the transaction. The Company’s stockholders and other
interested persons are advised to read, when available, the
preliminary proxy statement, the amendments thereto, and the
definitive proxy statement in connection with the Company’s
solicitation of proxies for the special meeting to be held to
approve the transaction, as these materials will contain important
information about the Company and the transaction. The definitive
proxy statement will be mailed to the Company’s stockholders as of
a record date to be established for voting on the transaction. Such
stockholders will also be able to obtain copies of the proxy
statement, without charge, once available, at the SEC’s website at
http://www.sec.gov, or by directing a request to: Xiqiao Liu,
Executive Director, RM 3D-1603 New World Center Apartment, Chong
Wen Men Wai Blvd, Beijing 100062, People’s Republic of China or by
telephone on (+86) 10- 67084339.
Participants in the
Solicitation
The Company and its directors and officers may
be deemed participants in the solicitation of proxies of the
Company’s stockholders in connection with the proposed transaction.
The Company’s stockholders and other interested persons may obtain,
without charge, more detailed information regarding the directors
and officers of the Company in the Company’s most recent Annual
Report on Form 10-K filed with the SEC and in the Company’s other
SEC filings. Information regarding the persons who may, under SEC
rules, be deemed participants in the solicitation of proxies to the
Company’s stockholders in connection with the proposed transaction
will be set forth in the proxy statement for the proposed
transaction when available. Additional information regarding the
interests of participants in the solicitation of proxies in
connection with the proposed transaction will be included in the
proxy statement that the Company intends to file with the SEC.
For more information, please
contact:
David RudnickPrecept Investor Relations
LLC+1 646-694-8538david.rudnick@preceptir.com
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