Financial Performance - Net sales for the three months ended September 30, 2025, were $14,460,511, a decrease of 16.4% compared to $17,364,939 for the same period in 2024[20] - Gross profit for the quarter was $3,455,932, down from $3,986,570 in the prior year, reflecting a gross margin of approximately 23.9%[20] - The company reported a net income of $1,087,797 for the quarter, compared to a net loss of $1,842,225 in the same quarter of 2024[20] - For the three months ended September 30, 2025, consolidated revenues were $14,460,511, a decrease of 16.4% from $17,364,939 in the same period of 2024[99] - The company achieved a net income of $1,087,797 for the three months ended September 30, 2025, compared to a net loss of $1,842,225 in the same period of 2024[99] - The effective tax rate for the three months ended September 30, 2025, was approximately 0.0%, compared to 2.1% for the same period in 2024[84] - Net income for Q3 2025 was $1,087,797, an increase of $2,930,022 or 159% compared to a net loss of $(1,842,225) in Q3 2024[180] Operating Expenses - Operating expenses decreased significantly to $2,268,333 from $5,751,594, primarily due to lower selling and administrative expenses[20] - Selling expenses decreased by $870,322 or 45.2% to $1,054,106, representing 7.3% of net sales in Q3 2025 compared to 11.1% in Q3 2024[173] - General and administrative expenses were $1,214,227, a decrease of $2,612,677 or 68.3% from $3,826,904 in Q3 2024, primarily due to lower expenses at Gufeng[175] Cash Flow and Liquidity - Cash and cash equivalents increased to $53,253,117 as of September 30, 2025, from $52,519,418 at the end of the previous quarter[23] - Cash used in operating activities was $1,318,192, an improvement from $2,553,911 in the same period last year[23] - Net cash used in operating activities was $1,318,192 for the three months ended September 30, 2025, a decrease of $1,235,719, or 48.4%, from $2,553,911 in the same period in 2024[191] - Net cash used in investing activities was $12,952 for the three months ended September 30, 2025, compared to $8,544,101 in the same period in 2024[192] Assets and Liabilities - Total liabilities decreased to $68,814,150 from $73,577,378, indicating improved financial stability[18] - Stockholders' equity increased to $88,215,675 as of September 30, 2025, up from $84,119,670 at the end of June 2025[18] - Total identifiable assets as of September 30, 2025, were $157,029,825, a slight decrease from $157,697,048 as of June 30, 2025[101] - Total loans payable as of September 30, 2025, amounted to $12,175,073, a slight decrease from $12,610,561 as of June 30, 2025[194] Inventory and Receivables - Accounts receivable as of September 30, 2025, totaled $20,678,903, net of an allowance for doubtful accounts of $30,744,907[43] - Inventories increased by $903,670, or 2.4%, to $37,878,957 as of September 30, 2025, from $36,975,287 as of June 30, 2025[197] - Customer deposits decreased to $3,441,483 as of September 30, 2025, down from $4,526,024 as of June 30, 2025[200] Business Operations - Enlightify Inc. continues to focus on the development and distribution of various types of fertilizers, indicating ongoing commitment to its core business[24] - The fertilizer business generated approximately 83.1% of total revenues for the three months ended September 30, 2025, down from 85.6% in the same period of 2024[128] - Jinong segment reported revenues of $6,796,657, down from $7,421,659, while Gufeng segment revenues decreased from $7,439,542 to $5,213,257[99] - Jinong sold approximately 8,962 metric tons of fertilizer, a decrease of 26.9% from 12,262 metric tons in the same period of 2024[130] - Gufeng sold approximately 10,505 metric tons of fertilizer, down 29.7% from 14,940 metric tons in the same period of 2024[130] - The company has a total of 114 different fertilizer products developed and produced, with 76 by Jinong and 38 by Gufeng as of September 30, 2025[129] Market and Regulatory Environment - The Company was notified by NYSE of its determination to commence proceedings to delist its common stock, which raises substantial doubt about its ability to continue as a going concern[51] - The company is facing delisting from the NYSE due to falling below the market capitalization requirement of $15,000,000[116] - Following the delisting, the company's common stock is expected to be quoted on the OTC Markets Group Inc. under the symbol "ENFY"[118] - The company has raised substantial doubt about its ability to continue as a going concern due to the delisting and its financial condition[126] Foreign Exchange and Risk Management - The accumulated other comprehensive loss was $25 million due to foreign exchange risk exposure[213] - The RMB appreciated by a cumulative 0.7% against the U.S. dollar between July 1, 2025, and September 30, 2025[213] - The company has not entered any hedging transactions to mitigate foreign exchange or interest rate risks[213][215] - Credit risk has increased since 2020, with overdue accounts receivable rising significantly due to the COVID-19 pandemic[216] - Accounts receivables are mainly derived from customers in the PRC, primarily individuals and SMEs, which may have weak cash flows[216]
CGA(CGA) - 2026 Q1 - Quarterly Report