PART I [Item 3. Key Information](index=8&type=section&id=Item%203.%20KEY%20INFORMATION) This section outlines significant operational, market, and governance risks, particularly those related to its China presence, supply chain, and dual-class share structure [Risks Relating to Doing Business in China](index=8&type=section&id=Risks%20Relating%20to%20Doing%20Business%20in%20China) The company faces substantial risks from its PRC operations, including political, economic, and legal uncertainties, evolving regulations, HFCAA, and tax liabilities - The company's business is significantly influenced by China's political, economic, and social conditions, with a substantial amount of assets and manufacturing conducted through its PRC subsidiary, CCSC Interconnect DG[28](index=28&type=chunk) - There is uncertainty regarding the enforcement of PRC laws, which can change with little notice. The CSRC's Trial Measures, effective March 31, 2023, may impose additional compliance requirements for overseas listings, although the CSRC notified the company in November 2023 that it did not fall within the scope of filing requirements at that time[32](index=32&type=chunk)[34](index=34&type=chunk)[43](index=43&type=chunk) - The Holding Foreign Companies Accountable Act (HFCAA) poses a risk. If the PCAOB is unable to inspect the company's auditor for two consecutive years, its securities could be delisted from Nasdaq. While the PCAOB vacated its previous negative determination in December 2022, the risk remains if access is obstructed in the future[53](index=53&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk) - The PRC subsidiary has not made adequate social insurance and housing fund contributions for all employees, creating a potential liability for back payments, late fees, and fines[72](index=72&type=chunk)[74](index=74&type=chunk) Outstanding Social Insurance and Housing Fund Contributions (USD) | Fiscal Year End | Outstanding Social Insurance | Outstanding Housing Funds | | :--- | :--- | :--- | | March 31, 2023 | $165,772 | $133,229 | | March 31, 2024 | $167,141 | $116,942 | | March 31, 2025 | $141,068 | $115,668 | [Risks Relating to Our Business](index=25&type=section&id=Risks%20Relating%20to%20Our%20Business) The company faces risks from intense competition, U.S.-China trade tensions, supplier/customer concentration, raw material price volatility, and AI integration challenges - The company faces significant customer concentration risk. For the fiscal year ended March 31, 2025, three customers accounted for **14.5%**, **11.9%**, and **10.4%** of total revenue[115](index=115&type=chunk) - The cost of components, particularly copper, represents over **65%** of the total cost of sales, making the company's margins sensitive to raw material price fluctuations and supply chain disruptions[111](index=111&type=chunk)[116](index=116&type=chunk) - The company's PRC subsidiary, CCSC Interconnect DG, benefits from a reduced **15%** income tax rate as a High and New-Technology Enterprise (HNTE). Failure to renew this accreditation, which is currently in process for 2025-2027, would result in a higher **25%** tax rate, potentially harming operating results[138](index=138&type=chunk) - The company entered into a strategic cooperation framework agreement with Innogetic International Limited on May 22, 2024, to explore applying AI in manufacturing, which introduces new operational, ethical, and regulatory risks[139](index=139&type=chunk)[142](index=142&type=chunk) [Risks Relating to Our Class A Ordinary Shares](index=32&type=section&id=Risks%20Relating%20to%20Our%20Class%20A%20Ordinary%20Shares) Investment in Class A shares carries risks from the dual-class structure, chairman's control, material weaknesses in internal controls, and foreign private issuer exemptions - The company has a dual-class share structure where Class B shares have **50 votes per share** versus one vote for Class A shares. The chairman, Dr. Chi Sing Chiu, controls approximately **98.72%** of the total voting power, giving him significant influence over corporate matters[148](index=148&type=chunk)[179](index=179&type=chunk) - Material weaknesses in internal control over financial reporting have been identified, specifically a lack of accounting staff and resources with appropriate knowledge of U.S. GAAP and SEC reporting requirements. Remediation measures are planned but their effectiveness is not guaranteed[149](index=149&type=chunk)[596](index=596&type=chunk) - As a foreign private issuer, the company is exempt from certain U.S. securities laws, including proxy rules and Section 16 "short-swing" profit recovery provisions, which may result in less publicly available information for shareholders[152](index=152&type=chunk)[153](index=153&type=chunk) [Item 4. Information on the Company](index=39&type=section&id=Item%204.%20INFORMATION%20ON%20THE%20COMPANY) This section details the company's history, global interconnect product operations, competitive strengths, growth strategies, and the regulatory environment in PRC and Hong Kong [History and Development of the Company](index=39&type=section&id=History%20and%20Development%20of%20the%20Company) The company was incorporated in Cayman Islands, completed its Nasdaq IPO in January 2024, and implemented a dual-class share structure in September 2024 - The company completed its Initial Public Offering (IPO) on January 22, 2024, listing its Class A Ordinary Shares on the Nasdaq Capital Market under the symbol "CCTG"[185](index=185&type=chunk) - On September 10, 2024, the company implemented a dual-class share structure, re-designating its shares into Class A Ordinary Shares (**1 vote per share**) and Class B Ordinary Shares (**50 votes per share**)[186](index=186&type=chunk)[193](index=193&type=chunk)[179](index=179&type=chunk) [Business Overview](index=40&type=section&id=Business%20Overview) The company designs and manufactures customized interconnect products globally, leveraging strengths in quality and integration, with growth strategies focused on facility upgrades, market expansion, and R&D Financial Performance Snapshot (USD) | Fiscal Year Ended | Revenue | Net (Loss)/Income | | :--- | :--- | :--- | | March 31, 2025 | $17,631,489 | $(1,410,465) | | March 31, 2024 | $14,748,551 | $(1,295,163) | | March 31, 2023 | $24,059,556 | $2,208,152 | Revenue by Geographic Region (FY2025) | Region | Revenue (USD) | % of Total | | :--- | :--- | :--- | | Northern Europe | 8,547,915 | 48.4% | | ASEAN | 2,025,688 | 11.5% | | Hong Kong | 1,670,446 | 9.5% | | Mainland China | 1,636,832 | 9.3% | | North America | 1,299,799 | 7.4% | | Other | 2,347,849 | 13.9% | | **Total** | **17,631,489** | **100.0%** | - The company holds **71 patents** registered with the PRC intellectual property agency and its PRC subsidiary, CCSC Interconnect DG, has been certified as a High and New-Technology Enterprise (HNTE) since 2016[196](index=196&type=chunk) - Growth strategies include upgrading facilities to increase automation, expanding the customer base in Europe and other regions, accelerating sales and marketing efforts, and pursuing strategic acquisitions[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[207](index=207&type=chunk) [Regulations](index=51&type=section&id=Regulations) The company's operations are subject to complex regulations in the PRC, covering foreign investment, labor, IP, and taxation, as well as Hong Kong's business, trade, and employment laws - PRC regulations on foreign investment, governed by the Foreign Investment Law and a "Negative List," permit the company's interconnect product business as it does not fall into restricted or prohibited categories[246](index=246&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk) - The company is subject to PRC labor laws requiring contributions to social insurance and housing provident funds. The report notes that the PRC subsidiary has not made adequate contributions for all employees[277](index=277&type=chunk)[278](index=278&type=chunk)[279](index=279&type=chunk) - The CSRC's Trial Measures, effective March 31, 2023, require PRC domestic companies seeking overseas listings to file with the CSRC. The company submitted its IPO materials and was informed it did not fall within the scope of filing requirements at that time[311](index=311&type=chunk)[313](index=313&type=chunk) [Item 5. Operating and Financial Review and Prospects](index=66&type=section&id=Item%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes FY2025 financial performance, noting revenue growth to **$17.6 million** but a widened net loss of **$1.4 million** due to increased operating expenses, with liquidity supported by cash and IPO proceeds [Results of Operations](index=68&type=section&id=Results%20of%20Operations) FY2025 revenue increased **19.5%** to **$17.63 million** with improved gross margin, while net loss widened to **$1.41 million**, contrasting with FY2024's **38.7%** revenue decrease and net loss Consolidated Results of Operations Comparison (FY2025 vs. FY2024) | Metric | FY 2025 (USD) | FY 2024 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Net Revenue | 17,631,489 | 14,748,551 | 19.5% | | Gross Profit | 4,984,202 | 3,922,608 | 27.1% | | Operating Expenses | (6,950,893) | (5,768,797) | 20.5% | | Net Loss | (1,410,465) | (1,295,163) | 8.9% | - The **19.5%** revenue increase in FY2025 was driven by a **37.1%** rise in sales volume, as customers replenished inventories. This was partially offset by a **12.8%** decrease in the average selling price[356](index=356&type=chunk) Consolidated Results of Operations Comparison (FY2024 vs. FY2023) | Metric | FY 2024 (USD) | FY 2023 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Net Revenue | 14,748,551 | 24,059,556 | (38.7)% | | Gross Profit | 3,922,608 | 7,868,571 | (50.1)% | | Operating Expenses | (5,768,797) | (6,080,163) | (5.1)% | | Net (Loss)/Income | (1,295,163) | 2,208,152 | (158.7)% | - The **38.7%** revenue decrease in FY2024 was attributed to a **44.1%** drop in sales volume, as customers who had purchased in advance in prior periods reduced new orders amid a stagnant global economy[395](index=395&type=chunk)[398](index=398&type=chunk) [Liquidity and Capital Resources](index=80&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company held **$3.69 million** in cash and **$5.18 million** working capital, with operations financed by cash flow and IPO proceeds, showing improved operating cash usage in FY2025 Cash Flow Summary (USD) | Cash Flow Activity | FY 2025 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | | Net Cash (Used in)/Provided by Operating Activities | (1,018,153) | (2,528,503) | 3,463,635 | | Net Cash Used in Investing Activities | (890,490) | (3,825,787) | (206,882) | | Net Cash Provided by/(Used in) Financing Activities | - | 4,626,269 | (752,620) | - As of March 31, 2025, the company had working capital of **$5.18 million**, down from **$7.54 million** a year prior. Management believes current cash and anticipated cash flows are sufficient for the next 12 months[436](index=436&type=chunk) - Capital expenditures were **$0.89 million** in FY2025, a significant decrease from **$3.80 million** in FY2024, which included a large prepayment for long-term equipment[444](index=444&type=chunk) [Item 6. Directors, Senior Management and Employees](index=85&type=section&id=Item%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details the company's board structure, key leadership, **$1.08 million** aggregate compensation, share incentive plan, and potential 'controlled company' status due to the chairman's voting power - The board is led by founder Dr. Chi Sing Chiu (Chairman) and his son Mr. Kung Lok Chiu (CEO). The board consists of **seven directors** in total[461](index=461&type=chunk)[474](index=474&type=chunk)[488](index=488&type=chunk) - For the fiscal year ended March 31, 2025, the aggregate cash compensation paid to executive officers and directors was approximately **$1,075,676**[477](index=477&type=chunk) - The company adopted the 2024 Performance Incentive Plan on September 10, 2024, authorizing up to **2,200,000 Class A Ordinary Shares** for awards. As of the report date, no awards have been issued under this plan[480](index=480&type=chunk)[481](index=481&type=chunk) - Dr. Chi Sing Chiu holds approximately **98.72%** of the aggregate voting power, making the company a potential "controlled company" under Nasdaq listing standards, which would allow exemptions from certain corporate governance requirements[476](index=476&type=chunk)[504](index=504&type=chunk) [Item 7. Major Shareholders and Related Party Transactions](index=92&type=section&id=Item%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details major shareholders and related party transactions, noting the repayment of personal guarantees and a loan to the chairman, with no recent goods transactions and audit committee oversight - The company provided a loan of **$433,689** to its controlling shareholder and chairman, Dr. Chi Sing Chiu, which was unsecured, interest-free, and fully repaid in May 2022[512](index=512&type=chunk) - Dr. Chi Sing Chiu and his wife provided personal guarantees for bank loans and credit facilities. These guarantees were released upon full repayment in June 2023 or cessation of the facilities in May 2024[514](index=514&type=chunk)[515](index=515&type=chunk) [Item 8. Financial Information](index=93&type=section&id=Item%208.%20FINANCIAL%20INFORMATION) This section includes consolidated financial statements and outlines the company's dividend policy of retaining earnings for expansion, with future dividends subject to PRC subsidiary regulations and withholding taxes - The company has no present plan to pay cash dividends and intends to retain future earnings to finance operations and expansion[519](index=519&type=chunk) - Dividend distributions from the PRC subsidiary are subject to PRC regulations, including setting aside statutory reserves and a potential **10%** withholding tax (or **5%** under the Hong Kong-Mainland tax arrangement)[520](index=520&type=chunk)[521](index=521&type=chunk) [Item 10. Additional Information](index=94&type=section&id=Item%2010.%20ADDITIONAL%20INFORMATION) This section details share capital changes, including the September 2024 dual-class structure, and outlines taxation across Cayman Islands, Hong Kong, PRC (HNTE rate), and U.S. federal income tax, including PFIC risk - On September 10, 2024, the company increased its authorized share capital to **500 million shares** and implemented a dual-class structure with **495 million Class A shares** and **5 million Class B shares**[525](index=525&type=chunk)[532](index=532&type=chunk) - The company is not subject to income tax in the Cayman Islands. Its PRC subsidiary is subject to a **25%** EIT rate but currently enjoys a preferential **15%** rate as a certified High and New Technology Enterprise (HNTE)[530](index=530&type=chunk)[534](index=534&type=chunk)[764](index=764&type=chunk) - There is a risk that the company could be classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, which could result in adverse tax consequences for U.S. shareholders. The company does not expect to be a PFIC but makes this determination annually[556](index=556&type=chunk) [Item 11. Quantitative and Qualitative Disclosures About Market Risk](index=104&type=section&id=Item%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section details market risks, including significant customer concentration (three customers accounting for **36.8%** of FY2025 revenue), liquidity management, and currency risk from international operations - The company has significant customer concentration risk. In FY2025, three customers accounted for **36.8%** of total revenue (**14.5%**, **11.9%**, and **10.4%** respectively)[577](index=577&type=chunk) - The company is exposed to currency risk as its subsidiaries operate using HKD, RMB, and EUR, while its reporting currency is USD. This resulted in a foreign currency translation loss of **$161,106** in FY2025[581](index=581&type=chunk)[648](index=648&type=chunk) PART II [Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds](index=106&type=section&id=Item%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS) This section details the **$6.325 million** gross IPO proceeds, with **$3.62 million** net proceeds fully utilized for facility upgrades, marketing, R&D, and general working capital IPO Proceeds and Utilization (USD) | Item | Amount | | :--- | :--- | | Gross Proceeds (incl. over-allotment) | $6,325,000 | | Underwriting Discounts & Expenses | ~$2,710,000 | | Net Proceeds | ~$3,620,000 | | **Status** | **Fully Utilized** | [Item 15. Controls and Procedures](index=107&type=section&id=Item%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were ineffective as of March 31, 2025, due to material weaknesses in U.S. GAAP and SEC reporting expertise, with remediation plans underway - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025[594](index=594&type=chunk) - A material weakness was identified related to a lack of accounting staff and resources with appropriate knowledge of U.S. GAAP and SEC reporting and compliance requirements[596](index=596&type=chunk) - Remediation plans include hiring more qualified accounting personnel, implementing U.S. GAAP training, and establishing an internal audit function[596](index=596&type=chunk)[597](index=597&type=chunk) [Item 16. Corporate Governance and Other Matters](index=108&type=section&id=Item%2016.%20Corporate%20Governance%20and%20Other%20Matters) This section covers corporate governance, including the audit committee financial expert, code of ethics, auditor change to Enrome LLP, foreign private issuer exemptions, and cybersecurity risk management - On November 1, 2024, the company dismissed MarcumAsia and appointed Enrome LLP as its new independent registered public accounting firm[606](index=606&type=chunk) - As a foreign private issuer, the company follows Cayman Islands practices for certain governance matters, exempting it from some Nasdaq rules, such as the requirement for shareholder approval for certain equity issuances[608](index=608&type=chunk)[611](index=611&type=chunk) - The company has a cybersecurity risk management program overseen by the board of directors and managed by the IT department. No material cybersecurity threats were identified during the fiscal year ended March 31, 2025[616](index=616&type=chunk)[618](index=618&type=chunk)[619](index=619&type=chunk) PART III [Item 18. Financial Statements](index=111&type=section&id=Item%2018.%20FINANCIAL%20STATEMENTS) This section presents audited consolidated financial statements for FY2023-2025, prepared under U.S. GAAP, including balance sheets, income, equity, and cash flows, with opinions from Enrome LLP and Marcum Asia CPAs LLP Consolidated Balance Sheet Highlights (As of March 31) | Metric (USD) | 2025 | 2024 | | :--- | :--- | :--- | | **Total Assets** | **15,325,082** | **17,938,031** | | Total Current Assets | 9,017,669 | 11,982,822 | | **Total Liabilities** | **4,598,986** | **5,640,364** | | Total Current Liabilities | 3,837,903 | 4,442,599 | | **Total Shareholders' Equity** | **10,726,096** | **12,297,667** | Consolidated Statement of Operations Highlights (Year Ended March 31) | Metric (USD) | 2025 | 2024 | 2023 | | :--- | :--- | :--- | :--- | | Net Revenue | 17,631,489 | 14,748,551 | 24,059,556 | | Gross Profit | 4,984,202 | 3,922,608 | 7,868,571 | | (Loss)/Income from Operations | (1,966,691) | (1,846,189) | 1,788,408 | | Net (Loss)/Income | (1,410,465) | (1,295,163) | 2,208,152 | | Basic and Diluted (LPS)/EPS | (0.12) | (0.13) | 0.22 |

Core Viewpoint - CCSC Technology International Holdings Limited reported a year of growth and global expansion for the fiscal year ended March 31, 2025, with total revenue increasing by 19.5% year-over-year to $17.6 million, driven by strong demand for cable and wire harness products [2][4]. Financial Performance - Total revenue for the fiscal year ended March 31, 2025, was $17.6 million, up from $14.7 million in the previous year, marking a 19.5% increase [4][6]. - Gross profit increased by 27.1% to $5.0 million, with gross margin improving to 28.3% from 26.6% [6][13]. - Net loss for the fiscal year was $1.4 million, compared to a net loss of $1.3 million in the prior year, with basic and diluted loss per share at $0.12 [6][18][17]. Revenue Breakdown - Revenue from cable and wire harness products was $16.4 million, a 20.2% increase from $13.6 million [4][6]. - Revenue from connectors rose by 11.1% to $1.2 million [4]. - Revenue by region showed Europe generating $11.0 million (62.3% of total revenue), a 29.0% increase, while Asia contributed $5.3 million (30.3%), up 10.2%. The Americas saw a decrease of 5.7% to $1.3 million [7][8][9]. Cost Structure - Cost of revenue increased by 16.8% to $12.6 million, aligning with the revenue growth [10]. - Inventory costs rose to $8.6 million, driven by a 37.1% increase in sales volume, despite a decrease in inventory cost per unit [11]. - Labor costs increased to $3.1 million, reflecting higher production volumes [12]. Operating Expenses - Operating expenses increased by 20.5% to $7.0 million, primarily due to higher selling, general and administrative expenses, and research and development costs [14]. Cash Flow and Financial Condition - As of March 31, 2025, cash was $3.7 million, down from $5.5 million the previous year. Net cash used in operating activities was $1.0 million, an improvement from $2.5 million in the prior year [19][20].

Unaudited Condensed Consolidated Financial Statements [Condensed Consolidated Balance Sheets](index=2&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Total assets decreased to **$17.43 million** as of September 30, 2024, from **$17.94 million** on March 31, 2024, driven by reduced cash and a net loss impacting shareholders' equity Condensed Consolidated Balance Sheets (As of Sep 30, 2024 vs. Mar 31, 2024) | Financial Item | As of Sep 30, 2024 (Unaudited) | As of Mar 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $10,961,393 | $11,982,822 | | **Total Non-current Assets** | $6,463,881 | $5,955,209 | | **TOTAL ASSETS** | **$17,425,274** | **$17,938,031** | | **Total Current Liabilities** | $4,603,029 | $4,442,599 | | **Total Non-current Liabilities** | $973,704 | $1,197,765 | | **TOTAL LIABILITIES** | **$5,576,733** | **$5,640,364** | | **Total Shareholders' Equity** | $11,848,541 | $12,297,667 | | **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | **$17,425,274** | **$17,938,031** | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=3&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20LOSS) For the six months ended September 30, 2024, the company reported a **net loss of $744,320**, a reversal from prior-year net income, despite **22.8% revenue growth** Statement of Operations Highlights (For the six months ended Sep 30) | Metric | 2024 (Unaudited) | 2023 (Unaudited) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net Revenue | $9,218,459 | $7,503,520 | +22.8% | | Gross Profit | $2,747,744 | $2,280,361 | +20.5% | | Loss from Operations | ($805,753) | ($284,492) | +183.2% | | Net (Loss)/Income | ($744,320) | $413,614 | N/A | | Basic and Diluted (Loss)/Earnings Per Share | ($0.06) | $0.04 | N/A | [Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity](index=4&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20SHAREHOLDERS%27%20EQUITY) Total shareholders' equity decreased from **$12.30 million** to **$11.85 million** due to a **net loss of $744,320**, partially offset by foreign currency translation Reconciliation of Shareholders' Equity (For the six months ended Sep 30, 2024) | Item | Amount (USD) | | :--- | :--- | | **Balance as of March 31, 2024** | **$12,297,667** | | Net loss | ($744,320) | | Foreign currency translation | $295,194 | | **Balance as of September 30, 2024** | **$11,848,541** | [Unaudited Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash used in operating activities was **$1.12 million**, a reversal from prior-year cash generation, leading to a **$1.74 million** decrease in total cash and restricted cash Cash Flow Summary (For the six months ended Sep 30) | Cash Flow Activity | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Net cash (used in)/provided by operating activities | ($1,121,034) | $197,804 | | Net cash used in investing activities | ($666,865) | ($71,242) | | Net cash used in financing activities | $0 | ($400,911) | | **Net change in cash and restricted cash** | **($1,735,319)** | **($338,019)** | | **Cash and restricted cash, end of the period** | **$3,999,428** | **$7,379,596** | - A significant use of cash in investing activities was the purchase of land for **$539,513**[11](index=11&type=chunk) Notes to Unaudited Condensed Consolidated Financial Statements [Note 1: Organization and Principal Activities](index=7&type=section&id=1.%20ORGANIZATION%20AND%20PRINCIPAL%20ACTIVITIES) CCSC Technology International Holdings Limited manufactures and sells interconnect products globally, with a new subsidiary established in Serbia for electrical equipment manufacturing - The company's main business is the manufacturing and sale of **interconnect products** (connectors, cables, wire harnesses) for OEM and ODM clients[13](index=13&type=chunk) - A new subsidiary, **CCSC Technology Serbia**, was incorporated on February 27, 2024, in Serbia to manufacture other electrical equipment[15](index=15&type=chunk)[20](index=20&type=chunk) Company Structure | Entity | Place of Incorporation | Major business activities | | :--- | :--- | :--- | | CCSC Cayman | Cayman Islands | Investment holding (Parent) | | CCSC Group | BVI | Investment holding | | CCSC Technology Group | Hong Kong | Sale of interconnect products | | CCSC Interconnect HK | Hong Kong | Sale of interconnect products | | CCSC Interconnect DG | Mainland China | Manufacturing of interconnect products | | CCSC Interconnect NL | Netherlands | Purchase of components | | CCSC Technology Serbia | Serbia | Manufacture of other electrical equipment | [Note 2: Summary of Significant Accounting Policies](index=8&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The company prepares financial statements under U.S. GAAP, recognizing revenue upon delivery, and faces significant customer concentration and geopolitical risks due to its China operations - The company recognizes revenue from product sales at a point in time when control transfers to the customer, which is generally upon **delivery**[49](index=49&type=chunk) - For the six months ended September 30, 2024, **three customers accounted for 10.0%, 14.7%, and 11.7% of total revenue**, indicating significant customer concentration[81](index=81&type=chunk) - The company's operations are substantially in **China**, exposing it to political, economic, and legal risks, with geopolitical events potentially impacting supply chains[88](index=88&type=chunk)[90](index=90&type=chunk) [Note 3: Accounts Receivable](index=19&type=section&id=3.%20ACCOUNTS%20RECEIVABLE) Accounts receivable increased to **$3.26 million** as of September 30, 2024, with **96.7%** collected subsequently and no allowance for credit losses recorded Accounts Receivable Aging and Subsequent Collection (as of Sep 30, 2024) | Aging Bucket | Balance (Unaudited) | Subsequent Collection | % of Subsequent Collection | | :--- | :--- | :--- | :--- | | Overdue | $671,953 | $670,188 | 99.7% | | Not yet due | $2,584,734 | $2,478,978 | 95.9% | | **Total gross accounts receivable** | **$3,256,687** | **$3,149,166** | **96.7%** | [Note 4: Inventories](index=20&type=section&id=4.%20INVENTORIES) Inventories slightly decreased to **$1.97 million** as of September 30, 2024, with a shift in composition and increased inventory write-downs to **$108,257** Inventory Composition | Category | Sep 30, 2024 (Unaudited) | Mar 31, 2024 | | :--- | :--- | :--- | | Raw materials | $1,048,039 | $1,374,648 | | Work in process | $113,537 | $235,194 | | Finished goods | $226,465 | $77,310 | | Inventory in transit | $579,783 | $336,304 | | **Total Inventories** | **$1,967,824** | **$2,023,456** | - Inventory write-downs increased to **$108,257** for the six months ended Sep 30, 2024, compared to **$73,643** for the same period in 2023[30](index=30&type=chunk) [Note 6: Property, Plant and Equipment, Net](index=21&type=section&id=6.%20PROPERTY%2C%20PLANT%20AND%20EQUIPMENT%2C%20NET) Net property, plant, and equipment increased substantially to **$681,342** as of September 30, 2024, primarily due to the acquisition of agricultural land in Serbia - In June 2024, the company's Serbian subsidiary signed an agreement to purchase **4 lots of agricultural land in Serbia**[99](index=99&type=chunk) Property, Plant and Equipment, Net | Category | Sep 30, 2024 (Unaudited) | Mar 31, 2024 | | :--- | :--- | :--- | | Subtotal | $4,074,075 | $3,424,768 | | Less: accumulated depreciation | ($3,392,733) | ($3,225,867) | | **Property, plant and equipment, net** | **$681,342** | **$198,901** | [Note 10: Leases](index=22&type=section&id=10.%20LEASES) As of September 30, 2024, the company held operating leases with **$1.44 million** in ROU assets and **$1.48 million** in liabilities, with a weighted average remaining term of **2.83 years** Lease Balances (as of Sep 30, 2024) | Lease Type | ROU Assets, Net | Lease Liabilities (Current + Non-current) | | :--- | :--- | :--- | | Operating Lease | $1,441,593 | $1,479,950 | | Finance Lease | $15,915 | $16,421 | Maturity of Lease Liabilities (as of Sep 30, 2024) | Twelve months ending September 30, | Operating lease | Finance lease | | :--- | :--- | :--- | | 2025 | $294,148 | $2,648 | | 2026 | $551,533 | $5,296 | | 2027 | $517,393 | $5,296 | | 2028 | $215,580 | $4,414 | | **Total lease payments** | **$1,578,654** | **$17,654** | [Note 11: Bank Loan and Loan Facilities](index=24&type=section&id=11.%20BANK%20LOAN%20and%20LOAN%20FACILITIES) The company had **no outstanding bank loans or credit facility balances** as of September 30, 2024, having ceased their use post-Nasdaq listing - The company had **no outstanding loan balances** as of September 30, 2024, and March 31, 2024[113](index=113&type=chunk)[114](index=114&type=chunk) - The company ceased using its Bank of China (HK) line of credit facilities in **May 2024** after its Nasdaq listing[115](index=115&type=chunk) [Note 12: Taxation](index=24&type=section&id=12.%20TAXATION) The company recorded an income tax benefit of **$191,820**, benefiting from a preferential PRC tax rate and holding significant net operating loss carryforwards in China and Hong Kong - The PRC subsidiary, CCSC Interconnect DG, qualifies as an HNTE, enjoying a **15% preferential tax rate** through 2024, resulting in a tax saving of **$83,039**[122](index=122&type=chunk) - As of September 30, 2024, the company had net operating loss carryforwards of **$1.41 million** in PRC and **$1.92 million** in Hong Kong subsidiaries[127](index=127&type=chunk) - A valuation allowance of **$114,764** was recorded against deferred tax assets of the CCSC Technology Group subsidiary in Hong Kong due to a history of net operating losses[126](index=126&type=chunk) [Note 14: Equity](index=28&type=section&id=14.%20EQUITY) The company completed its Nasdaq IPO in January 2024, raising **$3.6 million** in net proceeds, and subsequently adopted a dual-class share structure in September 2024 - The company completed its IPO on the Nasdaq Capital Market on **January 17, 2024**, with net proceeds of **$3.6 million** after expenses[141](index=141&type=chunk) - On **September 10, 2024**, the company adopted a **dual-class share structure**, creating Class A and Class B Ordinary Shares[142](index=142&type=chunk) [Note 15: Restricted Net Assets](index=28&type=section&id=15.%20RESTRICTED%20NET%20ASSETS) As of September 30, 2024, **$2.41 million** of the company's net assets, or **20%** of total consolidated net assets, were restricted by PRC regulations - As of September 30, 2024, net assets of the PRC subsidiary restricted from transfer were approximately **$2,411,781**, or **20%** of the company's total net assets[145](index=145&type=chunk) [Note 16: Segment Information](index=29&type=section&id=16.%20SEGMENT%20INFORMATION) Operating as a single segment, the company's revenue for the six months ended September 30, 2024, was primarily from **'Cable and wire harness' products ($8.60 million)**, with **Europe as the largest market (61%)** Revenue by Product (Six months ended Sep 30) | Product | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Cable and wire harness | $8,604,502 | $6,887,303 | | Connectors | $613,957 | $616,217 | | **Total** | **$9,218,459** | **$7,503,520** | Revenue by Geographic Area (Six months ended Sep 30) | Region | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Europe | $5,626,272 | $4,336,284 | | Asia | $2,736,289 | $2,388,511 | | Americas | $855,847 | $778,725 | | **Total** | **$9,218,459** | **$7,503,520** | [Note 17: Revision](index=30&type=section&id=17.%20REVISION) The company revised prior period financial statements to correct an immaterial VAT accounting error, reducing prepaid assets and retained earnings by **$427,746** without impacting operations or cash flows - A revision was made to correct a **$427,746 overstatement** of prepaid and other current assets and a corresponding overstatement of retained earnings from prior periods due to improper VAT accounting[150](index=150&type=chunk)[151](index=151&type=chunk) [Note 18: Subsequent Events](index=30&type=section&id=18.%20SUBSEQUENT%20EVENTS) On October 15, 2024, the company registered **2,200,000 Class A ordinary shares** for issuance under its 2024 Performance Incentive Plan - On **October 15, 2024**, the Company registered **2,200,000 Class A ordinary shares** issuable pursuant to the 2024 Performance Incentive Plan[155](index=155&type=chunk)

Core Viewpoint - CCSC Technology International Holdings Limited reported a 22.9% increase in revenue for the first six months of fiscal year 2025, despite a net loss of $0.74 million, highlighting growth in sales volume and strategic expansion plans [21][22][23]. Revenue Performance - Total revenue reached $9.2 million for the six months ended September 30, 2024, up from $7.5 million for the same period last year, driven by increased sales volume [24][26]. - Revenue from cables and wire harnesses increased by 24.9% to $8.6 million, while revenue from connectors remained stable [25][26]. Regional Revenue Breakdown - Revenue from Europe increased by 29.7% to $5.6 million, primarily due to sales growth in Denmark and Bulgaria [27]. - Revenue from Asia rose by 14.6% to $2.7 million, with notable increases in Hong Kong and ASEAN regions [28]. - Revenue from the Americas grew by 9.9% to $0.9 million, mainly attributed to sales increases in Northern America [21][27]. Cost and Profit Analysis - Cost of revenue increased by 23.9% to $6.5 million, aligning with the revenue growth [3]. - Gross profit rose by 20.5% to $2.7 million, with a gross profit margin of 29.8%, slightly down from 30.4% the previous year [6][7][23]. Operating Expenses - Operating expenses surged by 38.5% to $3.6 million, driven by increased selling and administrative expenses, including costs related to market expansion and compliance following the IPO [8]. Net Income and Loss - The company reported a net loss of $0.7 million for the six months ended September 30, 2024, compared to a net income of $0.4 million for the same period last year [11][23]. Future Outlook - The company plans to establish a new supply chain management center in Serbia to enhance operations in Europe, with completion expected by Q4 2025 [22].

Core Viewpoint - CCSC Technology International Holdings Limited reported a significant decline in financial performance for the fiscal year ended March 31, 2024, with total revenue dropping by 38.7% compared to the previous year, primarily due to decreased sales volume and average selling prices of products. Revenue Performance - Total revenue was $14.7 million for fiscal year 2024, down from $24.1 million in fiscal year 2023, representing a decrease of 38.7% [3][15]. - Revenue from cables and wire harnesses decreased by 38.7% to $13.6 million, while revenue from connectors fell by 39.3% to $1.1 million [16]. - Revenue by region showed a decline: Europe decreased by 43.3% to $8.5 million, Asia decreased by 34.9% to $4.8 million, and the Americas decreased by 12.4% to $1.4 million [7][17][18]. Profitability Metrics - Loss from operations was $1.8 million for fiscal year 2024, compared to income from operations of $1.8 million in fiscal year 2023 [4]. - Gross profit decreased by 50.1% to $3.9 million, with a gross profit margin of 26.6%, down from 32.7% in the previous year [9][20]. - Net loss was $1.3 million for fiscal year 2024, a significant decline from net income of $2.2 million in fiscal year 2023 [10][14]. Cost Structure - Cost of revenue decreased by 33.1% to $10.8 million, aligning with the decrease in total revenue [29]. - Labor costs amounted to $2.5 million, down from $2.9 million, primarily due to a reduction in manufacturing employees [8]. - Operating expenses decreased by 5.1% to $5.8 million, mainly due to declines in selling and research and development expenses [21]. Strategic Initiatives - The company is focused on adopting advanced technologies and enhancing client services, with plans for market expansion and product innovation [2]. - A strategic cooperation framework agreement with Innogetic International Limited was established in May 2024, aiming to explore AI applications in manufacturing [13]. - CCSC plans to commence construction of a new European supply chain management center in Serbia in the second half of 2024 [13].

PART I This section provides a comprehensive overview of the company's business, risks, financial performance, governance, and market exposures [Item 3. Key Information](index=10&type=section&id=Item%203.%20KEY%20INFORMATION) This section details the primary risks associated with the company's operations, business, and share ownership [Risks Relating to Doing Business in China](index=10&type=section&id=D.%20Risk%20Factors%20-%20Risks%20Relating%20to%20Doing%20Business%20in%20China) The company faces significant risks from operating in China, including potential adverse effects from changes in economic, political, or social conditions and government policies - The company's PRC subsidiary, CCSC Interconnect DG, conducts manufacturing in China, making its business highly susceptible to Chinese political, economic, and social conditions[32](index=32&type=chunk) - The company was informed by the CSRC in writing on November 6, 2023, that it does not fall within the scope of filing requirements under the Trial Measures at this time, but this could change with new regulations[47](index=47&type=chunk)[320](index=320&type=chunk) - The PCAOB has secured access to inspect audit firms in mainland China and Hong Kong as of December 15, 2022, mitigating immediate delisting risk under the HFCAA However, this access could be revoked in the future[66](index=66&type=chunk) Outstanding Social Insurance and Housing Fund Contributions (USD) | Fiscal Year End | Outstanding Social Insurance | Outstanding Housing Funds | | :--- | :--- | :--- | | March 31, 2022 | $140,042 | $179,235 | | March 31, 2023 | $165,772 | $133,229 | | March 31, 2024 | $167,141 | $116,942 | - The company relies on dividends from its PRC subsidiary, which are subject to PRC regulations requiring funds to be set aside for statutory reserves before distribution and a potential **10%** withholding tax[83](index=83&type=chunk)[84](index=84&type=chunk) [Risks Relating to Our Business](index=28&type=section&id=D.%20Risk%20Factors%20-%20Risks%20Relating%20to%20Our%20Business) The company operates in the highly competitive interconnect products industry and faces risks from competitors with greater resources Major Customer Revenue Contribution | Fiscal Year End | Number of Major Customers (>10%) | % of Total Revenue from Major Customers | | :--- | :--- | :--- | | March 31, 2022 | 1 | 15.5% | | March 31, 2023 | 3 | 12.0%, 10.6%, 10.5% | | March 31, 2024 | 2 | 17.4%, 12.7% | - Copper is a principal raw material, and its price volatility could materially affect business results The company attempts to mitigate this by adjusting selling prices[121](index=121&type=chunk)[122](index=122&type=chunk) - For fiscal year 2024, one supplier accounted for **12.1%** of total purchases, indicating a degree of supplier concentration risk[124](index=124&type=chunk) - The company's PRC subsidiary, CCSC Interconnect DG, holds a National High Tech Enterprise (HNTE) status, entitling it to a reduced **15%** income tax rate through 2024 Loss of this status would increase its tax rate to **25%**[145](index=145&type=chunk) - The company entered into a strategic agreement with Innogetic International Limited on May 22, 2024, to explore using AI in manufacturing, which introduces new operational, ethical, and regulatory risks[146](index=146&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) [Risks Relating to Our Ordinary Shares](index=37&type=section&id=D.%20Risk%20Factors%20-%20Risks%20Relating%20to%20Our%20Ordinary%20Shares) Shareholder risks include significant control by the chairman, Dr Chi Sing Chiu, who holds approximately **72.58%** of the voting power, allowing him to control director elections and corporate transactions - Dr Chi Sing Chiu, the chairman, controls approximately **72.58%** of the total voting power, giving him significant influence over corporate decisions[156](index=156&type=chunk) - Material weaknesses in internal control over financial reporting have been identified, including a lack of accounting staff with U.S GAAP/SEC knowledge and inadequate IT access and change management controls[158](index=158&type=chunk) - As a foreign private issuer, the company is exempt from certain SEC reporting requirements (e.g., quarterly 10-Q reports, proxy rules) and Nasdaq governance standards, potentially limiting publicly available information[162](index=162&type=chunk)[163](index=163&type=chunk) - The company does not intend to pay dividends in the foreseeable future, retaining earnings to finance business operations and expansion[166](index=166&type=chunk) [Item 4. Information on the Company](index=45&type=section&id=Item%204.%20INFORMATION%20ON%20THE%20COMPANY) This section provides a comprehensive overview of the company, including its corporate history, business operations, products, and regulatory environment [History and Development of the Company](index=45&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) CCSC Technology International Holdings Limited was incorporated in the Cayman Islands in October 2021 - The company was incorporated in the Cayman Islands on October 19, 2021, and completed a corporate reorganization on March 17, 2022, to become the ultimate holding company[189](index=189&type=chunk)[192](index=192&type=chunk) - The company closed its initial public offering on the Nasdaq Capital Market on January 22, 2024, issuing 1,375,000 Ordinary Shares The underwriters fully exercised their over-allotment option for an additional 206,250 shares on February 8, 2024[193](index=193&type=chunk) [Business Overview](index=46&type=section&id=B.%20Business%20Overview) The company designs and manufactures customized interconnect products like connectors, cables, and wire harnesses for diverse industries including industrial, automotive, and medical - The company specializes in customized OEM and ODM interconnect products for a diversified set of industries, with a global customer base in over 25 countries[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) Key Financial Performance (USD) | Fiscal Year End | Revenue | Net (Loss)/Income | | :--- | :--- | :--- | | March 31, 2022 | $27,169,935 | $2,289,158 | | March 31, 2023 | $24,059,556 | $2,208,152 | | March 31, 2024 | $14,748,551 | ($1,295,163) | - The company holds 71 patents registered in the PRC and its subsidiary CCSC Interconnect DG is certified as a High and New-Technology Enterprise (HNTE)[201](index=201&type=chunk)[243](index=243&type=chunk) Revenue by Geographic Region (FY2024) | Region | Revenue (USD) | % of Total | | :--- | :--- | :--- | | Northern Europe | 6,402,388 | 43.4% | | Hong Kong | 1,895,230 | 12.9% | | ASEAN | 1,570,519 | 10.6% | | Mainland China | 1,372,966 | 9.3% | | North America | 1,377,541 | 9.3% | | Other | 2,129,917 | 14.5% | | **Total** | **14,748,551** | **100%** | - As of the report date, the company had 274 employees, with 136 in manufacturing[248](index=248&type=chunk) [Regulations](index=59&type=section&id=Regulations) The company's operations are subject to a complex set of regulations, primarily in the PRC and Hong Kong - The company's PRC operations are governed by the Foreign Investment Law and are not in industries on the 'Negative List', which restricts or prohibits foreign investment[255](index=255&type=chunk)[256](index=256&type=chunk)[260](index=260&type=chunk) - The company's PRC subsidiary must comply with environmental laws and has completed its pollutant discharge registration, valid until April 2030[266](index=266&type=chunk)[268](index=268&type=chunk) - Under PRC labor laws, the company is required to make social insurance and housing provident fund contributions for its employees, but has not made them in full[285](index=285&type=chunk)[286](index=286&type=chunk)[287](index=287&type=chunk) - The M&A Rules and the CSRC's Trial Measures (effective March 31, 2023) establish procedures for overseas listings by PRC domestic companies The company submitted filing materials and was informed it did not fall within the scope of requirements at that time[316](index=316&type=chunk)[318](index=318&type=chunk)[320](index=320&type=chunk) [Item 5. Operating and Financial Review and Prospects](index=73&type=section&id=Item%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes the company's financial performance and condition, highlighting a significant revenue decrease and net loss in fiscal year 2024 [Operating Results](index=73&type=section&id=A.%20Operating%20Results) The company's operating results show a significant downturn in fiscal year 2024, with revenue falling **38.7%** to **$14.75 million** and a resulting net loss of **$1.30 million** Comparison of Results of Operations (FY2024 vs. FY2023) | Metric | FY 2024 (USD) | FY 2023 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Net Revenue | 14,748,551 | 24,059,556 | (38.7)% | | Gross Profit | 3,922,608 | 7,868,571 | (50.1)% | | (Loss)/Income from Operations | (1,846,189) | 1,788,408 | (203.2)% | | Net (Loss)/Income | (1,295,163) | 2,208,152 | (158.7)% | - The revenue decrease in FY2024 was primarily due to a **44.1%** drop in total sales volume, as customers had purchased inventory in advance in prior periods and shifted to just-in-time procurement amid a stagnant global economy[359](index=359&type=chunk)[363](index=363&type=chunk)[364](index=364&type=chunk) - Gross profit margin decreased from **32.7%** in FY2023 to **26.6%** in FY2024, mainly due to the increase in fixed cost per unit resulting from the significant decrease in sales volume[374](index=374&type=chunk) Comparison of Results of Operations (FY2023 vs. FY2022) | Metric | FY 2023 (USD) | FY 2022 (USD) | Change (%) | | :--- | :--- | :--- | :--- | | Net Revenue | 24,059,556 | 27,169,935 | (11.4)% | | Gross Profit | 7,868,571 | 7,475,904 | 5.3% | | Income from Operations | 1,788,408 | 2,461,929 | (27.4)% | | Net Income | 2,208,152 | 2,289,158 | (3.5)% | - In FY2023, despite an **11.4%** revenue decline, gross profit margin increased to **32.7%** from **27.5%** in FY2022 This was because the **19.8%** increase in average selling price outpaced the **15.5%** increase in average unit cost[417](index=417&type=chunk)[351](index=351&type=chunk) [Liquidity and Capital Resources](index=89&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) As of March 31, 2024, the company had **$5.73 million** in cash and restricted cash and working capital of **$7.54 million** - As of March 31, 2024, the company held **$5.73 million** in cash and restricted cash and had working capital of **$7.54 million**[438](index=438&type=chunk)[445](index=445&type=chunk) - The company raised net proceeds of approximately **$3.62 million** from its initial public offering in January/February 2024[592](index=592&type=chunk) Summary of Cash Flows (USD) | Cash Flow Activity | FY 2024 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | | Net Cash (Used in)/Provided by Operating Activities | (2,528,503) | 3,463,635 | 2,921,616 | | Net Cash Used in Investing Activities | (3,825,787) | (206,882) | (177,639) | | Net Cash Provided by/(Used in) Financing Activities | 4,626,269 | (752,620) | (157,402) | - Capital expenditures were **$3.80 million**, **$0.15 million**, and **$0.38 million** for the fiscal years ended March 31, 2024, 2023, and 2022, respectively[455](index=455&type=chunk) [Item 6. Directors, Senior Management and Employees](index=94&type=section&id=Item%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section provides information on the company's leadership and governance structure - The board of directors consists of seven members: Chi Sing Chiu (Chairman), Kung Lok Chiu (CEO), Sin Ting Chiu, and four independent directors (Wai Chun Tsang, Tsz Fai Shiu, Kenneth Wang, Pak Keung Chan)[469](index=469&type=chunk)[489](index=489&type=chunk) - Dr Chi Sing Chiu, the Chairman, is the controlling shareholder, beneficially owning approximately **72.58%** of the company's voting power through CCSC Investment Limited[486](index=486&type=chunk)[504](index=504&type=chunk) - For the fiscal year ended March 31, 2024, the aggregate cash compensation paid to executive officers and directors was approximately **$1.13 million**[488](index=488&type=chunk) - The board has established an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee, with independent directors chairing each committee[494](index=494&type=chunk)[495](index=495&type=chunk)[496](index=496&type=chunk)[497](index=497&type=chunk) [Item 7. Major Shareholders and Related Party Transactions](index=100&type=section&id=Item%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details the company's major shareholders and transactions with related parties - The company's controlling shareholder, Dr Chi Sing Chiu, and his spouse, Woon Bing Yeung, provided personal guarantees for a bank loan, which was fully repaid in June 2023, and for other credit facilities, which were released in May 2024[514](index=514&type=chunk)[515](index=515&type=chunk) - The company had a loan receivable from Dr Chi Sing Chiu of **$430,582** as of March 31, 2022, which was fully repaid in May 2022[512](index=512&type=chunk) - The company had a loan payable to Woon Bing Yeung (spouse of Dr Chiu) of **$215,619** as of March 31, 2022, which was fully repaid in May 2022[513](index=513&type=chunk) [Item 8. Financial Information](index=102&type=section&id=Item%208.%20FINANCIAL%20INFORMATION) This section confirms that the full consolidated financial statements are appended to the report - The company has no present plan to pay any cash dividends on its Ordinary Shares in the foreseeable future, intending to retain earnings for business operations and expansion[519](index=519&type=chunk) - Dividends from the PRC subsidiary are subject to PRC regulations, including setting aside at least **10%** of after-tax profits for a statutory reserve until it reaches **50%** of registered capital[520](index=520&type=chunk) [Item 10. Additional Information](index=103&type=section&id=Item%2010.%20ADDITIONAL%20INFORMATION) This section covers supplementary corporate information, including a reference to the company's memorandum and articles of association - The Cayman Islands, where the company is incorporated, does not levy taxes on profits, income, gains, or appreciation[532](index=532&type=chunk) - The company's PRC subsidiary is subject to a **25%** Enterprise Income Tax (EIT), but as a qualified High and New Technology Enterprise (HNTE), it enjoys a preferential rate of **15%**[535](index=535&type=chunk)[765](index=765&type=chunk) - The company does not expect to be treated as a Passive Foreign Investment Company (PFIC) for U.S federal income tax purposes for the current taxable year or the foreseeable future, but notes that this status is determined annually and is subject to uncertainty[558](index=558&type=chunk) [Item 11. Quantitative and Qualitative Disclosures About Market Risk](index=111&type=section&id=Item%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section outlines the company's exposure to various market risks - The company has significant customer concentration risk In FY2024, two customers accounted for **17.4%** and **12.7%** of total revenue In FY2023, three customers accounted for **12.0%**, **10.6%**, and **10.5%** of total revenue[579](index=579&type=chunk) - The company is exposed to currency risk as its subsidiaries operate using HKD, RMB, and EUR as functional currencies, while financial statements are reported in USD This exposure led to a foreign currency translation loss of **$523,250** in FY2024 and **$728,399** in FY2023[583](index=583&type=chunk)[584](index=584&type=chunk)[645](index=645&type=chunk) PART II This section details the company's IPO proceeds, internal controls, and cybersecurity risk management practices [Item 14. Use of Proceeds](index=113&type=section&id=Item%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS) The company completed its initial public offering in January 2024, with the underwriters exercising their over-allotment option in February 2024 Initial Public Offering Proceeds (USD) | Item | Amount | | :--- | :--- | | Gross Proceeds | $6,325,000 | | Underwriting Discounts & Expenses | ~$2,710,000 | | **Net Proceeds** | **~$3,620,000** | [Item 15. Controls and Procedures](index=113&type=section&id=Item%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded that as of March 31, 2024, the company's disclosure controls and procedures were not effective - Management concluded that disclosure controls and procedures were not effective as of March 31, 2024, due to identified material weaknesses[594](index=594&type=chunk) - The identified material weaknesses are: (i) a lack of accounting staff with appropriate knowledge of U.S GAAP and SEC reporting, and (ii) a lack of proper IT controls over the financial reporting system[596](index=596&type=chunk) - Remedial actions planned include hiring more qualified accounting personnel, implementing continuous U.S GAAP training, and establishing an internal audit function[596](index=596&type=chunk)[597](index=597&type=chunk) [Item 16K. Cybersecurity](index=117&type=section&id=Item%2016K.%20CYBERSECURITY) The company has established a cybersecurity risk management program overseen by the board of directors and managed by the executive team and IT department - The company's board of directors has primary responsibility for overseeing cybersecurity risk management, with the IT department handling regular monitoring and reporting to executive management[618](index=618&type=chunk)[619](index=619&type=chunk) - The cybersecurity program includes threat monitoring, vulnerability assessments, firewall implementation, and employee training to safeguard against unauthorized access and data breaches[615](index=615&type=chunk)[616](index=616&type=chunk) - During the fiscal year ended March 31, 2024, no cybersecurity threats were identified that had a material effect on the company's business or financial condition[617](index=617&type=chunk) PART III This section presents the company's audited consolidated financial statements and accompanying detailed notes [Item 18. Financial Statements](index=118&type=section&id=Item%2018.%20FINANCIAL%20STATEMENTS) This section contains the company's audited consolidated financial statements for the fiscal years ended March 31, 2024, 2023, and 2022 [Notes to Consolidated Financial Statements](index=128&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed information supplementing the consolidated financial statements - The company has one operating segment and reports revenue disaggregated by product category (Cables/Wire Harnesses and Connectors) and geographic region (Europe, Asia, Americas)[791](index=791&type=chunk)[792](index=792&type=chunk) - The company's PRC subsidiary is restricted from transferring a portion of its net assets to the parent company due to statutory reserve requirements As of March 31, 2024, restricted net assets were approximately **$1.94 million**, or **16%** of the company's total net assets[788](index=788&type=chunk)[790](index=790&type=chunk) - A revision was made to prior period financial statements to correct an immaterial error in VAT accounting This resulted in a reduction of prepaid and other current assets and retained earnings by **$427,746** as of March 31, 2023, 2022, and 2021[795](index=795&type=chunk)[796](index=796&type=chunk)[798](index=798&type=chunk) - In June 2024, the company's Serbian subsidiary purchased four lots of agricultural land in Serbia for **EUR 482,372** (approximately **$524,965**)[802](index=802&type=chunk)