PART I Financial Statements The company reported a narrowed net loss for the nine months ended March 31, 2025, driven by reduced expenses, with $162.9 million in assets and $70.9 million in liabilities, while facing going concern doubts Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (as of March 31, 2025 vs. June 30, 2024) | Account | March 31, 2025 ($) | June 30, 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Assets | | | | | Cash and cash equivalents | 48,792,729 | 58,772,587 | -17.0% | | Accounts receivable, net | 22,429,490 | 16,493,068 | +36.0% | | Inventories, net | 32,800,755 | 37,826,456 | -13.3% | | Total current assets | 124,770,422 | 127,685,890 | -2.3% | | Total assets | 162,867,992 | 163,246,683 | -0.2% | | Liabilities & Equity | | | | | Total current liabilities | 63,963,646 | 61,291,253 | +4.4% | | Long-term loans | 6,957,290 | 1,856,250 | +274.8% | | Total liabilities | 70,920,936 | 63,147,503 | +12.3% | | Total stockholders' equity | 91,947,056 | 100,099,180 | -8.1% | - As of March 31, 2025, the company held no digital assets (Bitcoin), compared to $53,693 as of June 30, 202417 Condensed Consolidated Statements of Operations and Comprehensive Loss Statement of Operations Highlights (Nine Months Ended March 31) | Metric | 2025 ($) | 2024 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Net sales | 56,498,794 | 73,136,293 | -22.7% | | Gross profit | 12,412,652 | 14,319,251 | -13.3% | | General and administrative expenses | 14,111,497 | 26,961,424 | -47.7% | | Loss from operations | (7,156,853) | (18,147,376) | +60.6% | | Net loss | (7,850,097) | (18,055,480) | +56.5% | | Basic net loss per share | (0.53) | (1.32) | +59.8% | Condensed Consolidated Statements of Cash Flows Cash Flow Summary (Nine Months Ended March 31) | Activity | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (7,339,968) | (7,316,276) | | Net cash used in investing activities | (5,743,345) | (4,101,010) | | Net cash provided by financing activities | 3,242,621 | 1,330,251 | | Net decrease in cash and cash equivalents | (9,979,858) | (9,546,431) | Notes to Condensed Consolidated Financial Statements Key disclosures detail the company's PRC VIE structure, going concern doubts, Bitcoin mining venture, share repurchases, related party loans, cryptocurrency litigation, and subsequent leadership changes for blockchain expansion - The company's business primarily involves fertilizer and agricultural products in the PRC, with recent expansion into Bitcoin mining in the U.S. via its Antaeus subsidiary2429 - Recurring operating losses and negative cash flows raise substantial doubt about the company's ability to continue as a going concern51 - As of March 31, 2025, the company held no digital assets, having mined $181,377 and disposed of $245,607 during the period, realizing a $10,536 gain6364 - A share repurchase program authorized in January 2025 allows for up to 2 million shares, with 345,980 shares repurchased for $398,526 during the nine-month period9091 - A lawsuit filed in May 2024 against the company and its former co-CEO alleges misuse of funds for cryptocurrency mining site purchases97 - Subsequent to the period, Jian Huang was appointed Co-CEO in June 2025 to lead the company's expansion into the blockchain and cryptocurrency sectors119 Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the 22.7% revenue decrease to lower fertilizer sales, with a narrowed net loss driven by reduced G&A expenses, while liquidity tightened and strategic expansion into Bitcoin mining continues amid PRC operational risks Results of Operations Net sales for the nine months ended March 31, 2025, decreased 22.7% to $56.5 million due to lower fertilizer sales, while the net loss narrowed 56.5% to $7.9 million, primarily from a 47.7% reduction in G&A expenses Results of Operations Comparison (Nine Months Ended March 31, 2025 vs 2024) | Metric | 2025 ($) | 2024 ($) | Change (%) | Commentary | | :--- | :--- | :--- | :--- | :--- | | Net Sales | 56,498,794 | 73,136,293 | -22.7% | Decrease driven by lower sales in Jinong and Gufeng fertilizer segments | | Gross Profit | 12,412,652 | 14,319,251 | -13.3% | Gross margin improved to 22.0% from 19.6% | | G&A Expenses | 14,111,497 | 26,961,424 | -47.7% | Main driver of improved bottom line | | Net Loss | (7,850,097) | (18,055,480) | +56.5% | Significantly narrowed loss due to lower operating expenses | Fertilizer Sales Volume (Nine Months Ended March 31) | Segment | 2025 (metric tons) | 2024 (metric tons) | Change (%) | | :--- | :--- | :--- | :--- | | Jinong | 28,271 | 21,087 | +34.1% | | Gufeng | 58,581 | 83,184 | -29.6% | | Total | 86,852 | 104,271 | -16.7% | - The Antaeus (Bitcoin) segment's net sales decreased by 82.9% to $181,746 for the nine-month period, attributed to a strategic adjustment187 Liquidity and Capital Resources As of March 31, 2025, cash and cash equivalents decreased 17.0% to $48.8 million, driven by cash used in operating and investing activities, partially offset by financing, with total loans payable increasing to $12.6 million - Cash and cash equivalents decreased by $9,979,858, or 17.0%, to $48,792,729 as of March 31, 2025216 - Net cash used in operating activities totaled $7.3 million, primarily due to net loss, partially offset by non-cash charges including $7.1 million for accounts receivable losses and $2.2 million for inventory impairment23219 - Net cash provided by financing activities increased to $3.2 million, primarily from $7.1 million in new loans, offset by $3.8 million in loan repayments and $0.4 million in share repurchases23221 Risks Related to Doing Business in the PRC The company faces significant risks in its PRC operations, including legal system uncertainties, potential government intervention, and the untested nature of its VIE structure, alongside recent regulatory actions impacting businesses in China - Operating through a VIE structure in China poses unique risks, as Chinese regulatory authorities could disallow it, potentially causing a material adverse change in operations and stock value145 - The PRC government maintains significant oversight and intervention power, with recent regulatory actions creating uncertainty for all businesses operating in China148149 Quantitative and Qualitative Disclosures About Market Risk The company is exposed to market risks including foreign currency fluctuations (RMB to USD), interest rate changes on short-term loans, heightened credit risk due to COVID-19 impacts, and general inflation affecting operating costs - Substantially all revenues and expenses are in RMB, creating foreign currency risk, with an accumulated other comprehensive loss from currency translation of $26 million as of March 31, 2025239240 - Heightened credit risk stems from increased overdue accounts receivable due to the COVID-19 pandemic's impact on PRC customers243 - Interest rate risk primarily relates to $5.6 million in short-term bank loans, with fixed rates subject to change upon renewal241 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025249 - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2025250 PART II – OTHER INFORMATION Legal Proceedings The company faces a pending lawsuit filed in May 2024 in Texas state court, alleging misuse of funds for cryptocurrency mining site purchases, with a motion to dismiss currently pending - A lawsuit filed in Texas state court on May 28, 2024, against the Company and its former co-CEO alleges misuse of funds for cryptocurrency mining site purchases, with a motion to dismiss pending252 Other Information This section incorporates by reference two June 2025 Form 8-K filings detailing the termination of the Lonestar acquisition and the appointment of a new Co-Chief Executive Officer - The company incorporates by reference its Form 8-K filings from June 13, 2025, regarding the Lonestar acquisition termination, and June 23, 2025, regarding the Co-CEO appointment257
CGA(CGA) - 2025 Q4 - Annual Report