Financing and Investments - The company raised a total of $46.908 million from various financings between 2015 and 2025, in addition to $17.5 million raised during its IPO in April 2010[30]. - Following the Restructuring Transactions, the company expects to make equity investments in its subsidiaries rather than providing loans[31]. - The total amount invested in and lent to subsidiaries and historical VIEs is approximately $27.5 million and $8.7 million, respectively[30]. - The company relies on dividends from its consolidated PRC operating entities for cash requirements, and any limitations on these dividends could materially affect its operations[91]. - Dividends from subsidiaries in China may be subject to a withholding tax of up to 10%, which could adversely affect net income and the amount available for distribution to shareholders[112]. Revenue and Sales - Jiuxin Medicine's annual purchases from Jiuzhou Pharmacy ranged from approximately $70 million to $90 million over the last three fiscal years, with specific amounts of $87,124,074 in Fiscal 2023, $76,989,329 in Fiscal 2024, and $75,322,378 for the eleven months ended February 28, 2025[32]. - The company has signed a three-year supply agreement with Jiuzhou Pharmacy, expecting Jiuxin Medicine to serve as a major supplier during this period[33]. - Sales to Jiuzhou Pharmacy currently account for over 60% of the company's revenue, and any disruption in this relationship could materially affect financial results[68]. - For the fiscal year ended March 31, 2025, total revenue decreased by approximately $4.02 million, or 3.2%, compared to the previous year[72]. - Revenue from the offline wholesale business was approximately $118.9 million for the year ended March 31, 2025, representing a decrease of $5.1 million, or 4.3%, compared to the prior year[73]. - Revenue from the online platform segment was approximately $1.1 million for the year ended March 31, 2025, reflecting contributions from Allright, which was acquired in the same period[74]. Regulatory and Compliance Risks - The company is subject to significant legal and operational risks due to the regulatory environment in China, which may impact its ability to conduct business and accept foreign investments[24]. - The PRC government imposes controls on the convertibility of RMB into foreign currencies, which may restrict the company's ability to pay dividends or satisfy foreign currency obligations[34]. - The Holding Foreign Companies Accountable Act requires foreign companies to certify they are not owned or controlled by a foreign government, with potential consequences for non-compliance[29]. - Compliance with China's new Data Security Law and other regulations may entail significant expenses and could materially affect business operations[47]. - The interpretation and enforcement of new regulations regarding pharmaceutical wholesale and online sales in China involve significant uncertainty, which may disrupt the company's business[95]. - Compliance with privacy, data protection, and cybersecurity laws may result in significant costs and could adversely affect the company's reputation and financial condition[81]. - Non-compliance with cybersecurity regulations may lead to penalties, including fines or suspension of operations, potentially resulting in delisting from the U.S. stock market[101]. - The Personal Information Protection Law effective from November 1, 2021, imposes significant data privacy and protection requirements, including potential fines of up to RMB 50 million or 5% of annual revenues for serious violations[102]. Operational Challenges - The company faces challenges in maintaining optimal inventory levels, which could lead to increased holding costs or lost sales, impacting financial performance[45]. - The company relies on a limited number of key customers, and the loss of any of these customers could adversely affect operating results[45]. - The company may not effectively grow its wholesale business organically and may not realize all anticipated benefits from acquisitions[45]. - The company faces significant challenges in growing its wholesale business, including limited bargaining power and pricing volatility, which may negatively impact gross margins[69]. - The transition away from the retail pharmacy business may cause short-term operational inefficiencies and affect brand recognition, potentially impacting investor confidence[71]. - The company is heavily dependent on third-party electronic platforms for online sales, and any limitations or disruptions could materially impact revenue generation[76]. - The company may face difficulties in recovering accounts receivable from Jiuzhou Pharmacy and associated clinics, which are expected to generate substantial revenue in the near term[45]. Market and Economic Conditions - The pharmaceutical distribution industry in China is highly competitive, with significant competition from both regional and national players, which may adversely affect revenue and profitability[50]. - The company may be adversely affected by changes in economic conditions and consumer confidence in China, which could influence the pharmaceutical industry[49]. - The ongoing trade tensions between the U.S. and China could adversely affect consumer confidence and decision-making, potentially harming the company's business operations[116]. - Political instability and military conflicts, such as the Russia-Ukraine war and the Israel-Hamas conflict, may disrupt the global economy, leading to rising commodity prices and increased interest costs[118]. - The company's PRC subsidiaries may face limited access to new business opportunities due to trade relations affecting global economic stability, which could negatively impact their financial performance[119]. Corporate Structure and Changes - The company completed the acquisition of Ridgeline and its subsidiary Allright on February 28, 2025, transitioning its focus to wholesale distribution and changing its name to Ridgetech, Inc.[59]. - The company no longer has any VIE within its corporate structure following the Restructuring Transactions completed on February 28, 2025[18]. - The restructuring transactions were approved by shareholders on February 25, 2025, and closed on February 28, 2025[160]. - The Company changed its name from "China Jo-Jo Drugstores, Inc." to "Ridgetech, Inc." effective February 28, 2025, and its trading symbol on Nasdaq from "CJJD" to "RDGT" effective March 4, 2025[160]. - The Company completed a strategic restructuring in Q1 2025, transitioning from a high-cost retail segment to a wholesale-focused model through the acquisition of Allright and divestiture of its retail drugstores business[154]. Human Resources and Labor - As of March 31, 2025, the company had a total of 61 employees, with 55.7% in offline wholesale and 31.2% in the online platform[187]. - The tightening labor market may result in fewer qualified applicants and increased labor costs, negatively impacting financial results[135]. - The PRC's labor laws may restrict the company's ability to reduce its workforce during economic downturns, potentially increasing production costs[127]. Currency and Financial Risks - Fluctuations in the Renminbi's value against the U.S. dollar could materially affect the company's financial results, as most revenues are received in RMB[128]. - The Renminbi has experienced significant depreciation against the U.S. dollar, with declines of 7.8% in 2022 and 2.9% in 2023, raising concerns about future currency stability[129]. - The company has not entered into any hedging transactions to mitigate foreign exchange rate fluctuations, which may expose it to additional financial risks[132]. - The company has not paid any cash dividends and does not anticipate doing so in the foreseeable future, intending to retain all earnings for operations[137]. - The market price for the company's stock may be volatile, which could subject it to securities litigation[49]. - The company was notified by Nasdaq for failing to maintain a minimum bid price of $1.00 per share for 30 consecutive trading days, receiving a 180-day extension until December 12, 2023, to regain compliance[138]. - The closing price of the company's ordinary shares ranged from a low of $0.80 to a high of $2.80 over the past 52 weeks, indicating significant price volatility[143].
China Jo-Jo Drugstores(CJJD) - 2025 Q4 - Annual Report