
PART I Item 3. Key Information This section details the company's complex Variable Interest Entity (VIE) structure, its financial impact, and significant regulatory risks, including new PRC rules for overseas listings - The company operates through a VIE structure in China, where VIEs are crucial for business operations, contributing 71.2% of total net revenues for the fiscal year ended March 31, 2024. This structure poses unique risks to investors due to PRC regulations on foreign investment2021 VIE Contribution to Total Net Revenues | Fiscal Year Ended March 31 | VIE Revenue as % of Total Net Revenues | | :--- | :--- | | 2022 | 78.7% | | 2023 | 79.9% | | 2024 | 71.2% | - The company faces significant risks related to its business operations, including a history of net losses, working capital requirements, and intense competition. Structural risks are centered on the enforceability of its VIE agreements under PRC law. Furthermore, operating in China exposes the company to risks from the PRC legal system, data security regulations, and potential government intervention808691 - Recent regulatory developments in China, such as the Revised Cybersecurity Review Measures and the CSRC's Overseas Listing Trial Measures, impose new compliance requirements. The company must now complete filing procedures with the CSRC for any future offshore offerings, which introduces uncertainty and potential for sanctions if non-compliant717576 Item 4. Information on the Company Details Boqii's business as a leading pet-focused platform in China, covering its history, one-stop destination model, monetization, supply chain, and regulatory licenses Key Financial and Operational Metrics (Fiscal Years 2022-2024) | Metric | FY 2022 | FY 2023 | FY 2024 | | :--- | :--- | :--- | :--- | | Total Net Revenues | RMB 1,186.4 million | RMB 1,092.1 million | RMB 709.4 million | | Net Loss | RMB 132.8 million | RMB 106.0 million | RMB 68.9 million | | Active Buyers | N/A | N/A | 5.3 Million | - Boqii operates a comprehensive pet ecosystem, combining e-commerce with a content-driven community. As of March 31, 2024, it offered approximately 19,842 SKUs and had cooperated with over 15,000 physical pet stores and hospitals408411 GMV Breakdown by Product Type (FY 2022-2024) | Product Type | FY 2022 (RMB million) | FY 2023 (RMB million) | FY 2024 (RMB million) | | :--- | :--- | :--- | :--- | | Branded Products | 2,490.8 (85.7%) | 2,121.7 (82.7%) | 1,195.3 (75.1%) | | Private Label Products | 416.4 (14.3%) | 442.3 (17.3%) | 396.5 (24.9%) | | Total | 2,907.2 | 2,564.0 | 1,591.8 | Net Revenue Breakdown by Sales Channel (FY 2022-2024) | Sales Channel | FY 2022 (RMB thousands) | FY 2023 (RMB thousands) | FY 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | | Boqii Mall | 433,573 (38.1%) | 433,983 (41.4%) | 276,992 (40.7%) | | Third-party e-commerce | 703,756 (61.9%) | 614,508 (58.6%) | 403,151 (59.3%) | | Total | 1,137,329 | 1,048,491 | 680,143 | Item 5. Operating and Financial Review and Prospects Analyzes the company's financial performance, highlighting a strategic shift to profitability in fiscal year 2024, with decreased revenues but narrowed operating loss due to cost reductions, and discusses critical accounting estimates Fiscal Year 2024 vs. 2023 Performance Summary | Metric | FY 2023 (RMB million) | FY 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Net Revenues | 1,092.1 | 709.4 | -35.0% | | Gross Profit | 233.5 | 140.7 | -39.7% | | Gross Margin | 21.4% | 19.8% | -1.6pp | | Operating Expenses | 296.9 | 203.9 | -31.3% | | Loss from Operations | (103.8) | (60.2) | +42.0% | | Net Loss | (106.0) | (68.9) | +35.0% | - The decrease in net revenues in FY2024 was a result of a deliberate business strategy to focus on increasing profitability rather than sales volume616 - Operating expenses saw a significant reduction, primarily driven by a 52.9% decrease in fulfillment expenses and a 31.4% decrease in sales and marketing expenses, reflecting cost-saving efforts and operational efficiencies619620 Cash Flow Summary (FY 2022-2024) | Cash Flow Activity (RMB million) | FY 2022 | FY 2023 | FY 2024 | | :--- | :--- | :--- | :--- | | Operating Activities | (147.5) | (54.1) | (25.4) | | Investing Activities | 21.1 | 46.5 | 47.8 | | Financing Activities | 2.0 | (76.7) | (33.1) | Item 6. Directors, Senior Management and Employees Details the company's leadership, compensation, board structure, and employee count, highlighting key executives and concentrated share ownership - The company's leadership team includes Hao (Louis) Liang as Chairman and CEO, and Yingzhi (Lisa) Tang as Director, co-CEO, and CFO672673 - For the fiscal year ended March 31, 2024, the aggregate cash compensation paid to executive officers was approximately RMB 1.3 million677 - As of March 31, 2024, the number of full-time employees was 241, a decrease from 256 in the previous year. The majority of employees are in sales and marketing704705 - As of October 23, 2024, key executives Hao (Louis) Liang and Yingzhi (Lisa) Tang beneficially owned shares representing 40.9% and 21.4% of the aggregate voting power, respectively, primarily through their holdings in Merchant Tycoon Limited713717718 Item 7. Major Shareholders and Related Party Transactions Discloses major shareholder information and related party transactions, including significant purchases from a former equity investee and an advance payment balance with a shareholder - In fiscal year 2024, the company purchased goods totaling approximately RMB 3.89 million from Jiangsu Nanjing Agricultural University Animal Pharmaceutical Co., Ltd., a former equity investee723 - An advance payment for goods was made to shareholder Superb Origin International Limited in January 2023, with a remaining balance of RMB 4.1 million as of March 31, 2024724 Item 8. Financial Information Confirms the appended consolidated financial statements, states no material legal proceedings, and reiterates the company's dividend policy of retaining earnings for business expansion - The company has no plan to declare or pay any dividends in the near future, intending to retain earnings to operate and expand the business728 - As of the report date, the company was not involved in any material litigation, arbitration, or administrative proceedings727 Item 10. Additional Information Provides supplementary corporate information, including memorandum, material contracts, exchange controls, and a detailed analysis of taxation implications, particularly the uncertain PFIC status for U.S. Holders - The company's PFIC status for the fiscal year ended March 31, 2024, is uncertain. If classified as a PFIC, U.S. Holders would face adverse U.S. federal income tax consequences, including increased tax liability on gains and excess distributions389390391 - If the company is classified as a PRC resident enterprise for tax purposes, it could be subject to a 25% tax on its worldwide income, and dividends paid to non-PRC shareholders could be subject to a 10% withholding tax328330 Item 11. Quantitative and Qualitative Disclosures About Market Risk Details the company's exposure to various market risks, including foreign currency exchange, interest rate, and significant concentration risks with customers and suppliers - The company is exposed to foreign currency exchange risk, as a 10% depreciation of the RMB against the U.S. dollar would result in a decrease of approximately US$0.4 million in cash and cash equivalents as of March 31, 2024778 - Significant concentration risk exists with both customers and suppliers. In fiscal year 2024, one customer, Zhejiang HaoChao Network Technology Co., Ltd, accounted for 11.4% of total revenues. One supplier, Royal Canin China Co., Ltd., accounted for 26% of total purchases782 PART II Item 15. Controls and Procedures Management concluded that disclosure controls and procedures were not effective as of March 31, 2024, due to identified material weaknesses in internal control over financial reporting - Management concluded that disclosure controls and procedures were not effective as of March 31, 2024, due to outstanding material weaknesses792 - The identified material weaknesses are: (i) lack of sufficient financial reporting and accounting personnel with appropriate U.S. GAAP and SEC knowledge; (ii) lack of sufficient documented financial closing policies and procedures; and (iii) lack of adequate loan approval requirements and process793 Item 16.F. Change in Registrant's Certifying Accountant Details the change in the company's certifying accountant from PwC to Assentsure PAC, following PwC's concerns over the substance of approximately US$6 million in payments - The company changed its independent registered public accounting firm on July 26, 2024, dismissing PwC and appointing Assentsure PAC807 - The change was preceded by PwC identifying "reportable events" concerning the substance of payments totaling approximately US$6 million made to financial advisors and an individual, prompting PwC to recommend an investigation811812813 Item 16.G. Corporate Governance As a foreign private issuer, Boqii follows Cayman Islands corporate governance practices, differing from NYSE American standards in board independence, committee composition, and shareholder approval requirements - The company follows Cayman Islands corporate governance practices, which differ from NYSE American standards. This includes not having a majority-independent board and having committees that are not fully independent817819 - The audit committee consists of only two members, whereas NYSE American standards require a minimum of three820 - The company has opted out of NYSE American rules requiring shareholder approval for establishing or materially amending stock option plans and for holding an annual shareholder meeting821823 Item 16.K. Cybersecurity Details the company's comprehensive cybersecurity risk management system, board oversight, and management responsibilities, noting no material incidents as of the report date - The Board of Directors is responsible for overseeing cybersecurity risk management, with quarterly updates from management833 - The company has implemented a cybersecurity threat defense system and utilizes third-party service providers for risk assessment830 - As of the date of the annual report, no material cybersecurity incidents have been identified that are reasonably likely to materially affect the company's financial condition or results of operations832 PART III Item 18. Financial Statements Contains the audited consolidated financial statements for fiscal years 2022-2024, prepared under U.S. GAAP, with an unqualified opinion from Assentsure PAC Consolidated Balance Sheet Summary (as of March 31, 2024) | Account | Amount (RMB thousands) | | :--- | :--- | | Total Current Assets | 278,251 | | Total Assets | 383,215 | | Total Current Liabilities | 72,044 | | Total Liabilities | 122,334 | | Total Shareholders' Equity | 252,918 | Consolidated Statement of Operations Summary (Year Ended March 31, 2024) | Account | Amount (RMB thousands) | | :--- | :--- | | Total Net Revenues | 709,352 | | Gross Profit | 140,737 | | Loss from Operations | (60,159) | | Net Loss | (68,898) | | Net Loss per Share (Basic & Diluted) | (0.64) | Consolidated Statement of Cash Flows Summary (Year Ended March 31, 2024) | Account | Amount (RMB thousands) | | :--- | :--- | | Net Cash Used in Operating Activities | (25,428) | | Net Cash Generated from Investing Activities | 47,814 | | Net Cash Used in Financing Activities | (33,132) | | Cash and Cash Equivalents at End of Period | 72,722 |