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]. Revenue and Sales - Jiuxin Medicine's purchases from Jiuzhou Pharmacy ranged from approximately $70 million to $90 million annually over the last three fiscal years, with specific amounts of $87.12 million for Fiscal 2023, $76.99 million for Fiscal 2024, and $75.32 million 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 following its acquisition[74]. Regulatory and Compliance Risks - The company is subject to significant regulatory risks in China, which may affect 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 delisting from U.S. exchanges if compliance is not met[29]. - The company is subject to significant regulatory scrutiny in China, which could increase compliance costs and affect business operations[47]. - 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]. - The company is required to maintain various permits and licenses, including a Drug Distribution Permit and GSP certification, which are subject to periodic renewal and reassessment by PRC governmental authorities[80]. - Compliance with China's new Data Security Law and Cyber Security Law may entail significant expenses and affect the company's business operations[98][99]. - The Cyberspace Administration of China has initiated actions against companies for alleged national security risks, which could impact the company's ability to operate and list securities abroad[100]. Competition and Market Conditions - The company faces significant competition in the pharmaceutical distribution industry in China, which is expected to intensify, potentially affecting revenue and profitability[50]. - The company may struggle to effectively grow its wholesale business organically and may not realize all anticipated benefits from acquisitions[45]. - The company is heavily dependent on third-party electronic platforms for online sales, which may restrict growth and affect financial performance[45]. - The wholesale pharmaceutical distribution industry in China is highly competitive, with significant competition from both regional and national distributors[186]. Operational Challenges - The company faces significant challenges in growing its wholesale business, including limited bargaining power and pricing volatility, which may negatively affect gross margins[69]. - The transition away from the retail pharmacy business may cause short-term operational inefficiencies and impact brand recognition, potentially affecting investor confidence[71]. - The company may face challenges in recovering accounts receivable from Jiuzhou Pharmacy and maintaining supply relationships, which are expected to generate substantial revenue in the near term[45]. - The company has not entered into any hedging transactions to mitigate foreign exchange rate fluctuations, which may expose it to additional risks[132]. 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[18]. - The company divested Jiuxin Investment and its controlled entities on February 28, 2025, eliminating the VIE structure from its corporate framework[200]. - The restructuring transactions were approved by shareholders on February 25, 2025, and closed on February 28, 2025[160]. Shareholder and Financial Information - The company has not paid any cash dividends to date and does not plan to distribute any in the foreseeable future[49]. - The company’s Chairman owns a substantial portion of outstanding shares, which may lead to conflicts of interest with other shareholders[49]. - The company was notified by Nasdaq for failing to maintain a minimum bid price of $1.00 per share, 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]. - The accumulated losses of the company's consolidated PRC entities amounted to $25.94 million as of March 31, 2025[189]. Economic and Geopolitical Factors - The company is significantly affected by international trade policies and disputes, particularly between the U.S. and China, which could harm its business and financial condition[116]. - Political and trade controversies may lead to a reduction in the price of the company's ordinary shares, with recent U.S. tariffs on imports potentially impacting operations[117]. - The ongoing geopolitical conflicts, such as the Russia-Ukraine war and tensions in the Middle East, could disrupt the global economy and affect the company's performance[118]. - The company's PRC subsidiaries may face limited access to new business opportunities due to trade relations, which could adversely impact their operations and financial performance[119].
Ridgetech(RDGT) - 2025 Q4 - Annual Report