Bon Natural Life (US:BON)2026-01-22 22:51Financial Performance - Revenue for the year ended September 30, 2025, was $18,670,684, a decrease of 21.3% from $23,844,556 in 2024 and a 36.8% decline from $29,522,353 in 2023[47]. - Gross profit for 2025 was $3,878,821, down 45.5% from $7,110,009 in 2024 and a 56.2% decrease from $8,840,027 in 2023[47]. - The net loss for 2025 was $2,049,431, compared to a net income of $345,248 in 2024, marking a significant decline[47]. - Basic loss per share for 2025 was $(0.72), a sharp drop from earnings of $4.17 per share in 2024[47]. - The weighted average ordinary shares outstanding increased dramatically to 2,755,232 in 2025 from 95,513 in 2024[47]. Assets and Liabilities - As of September 30, 2025, total assets increased to $85,185,615 from $61,765,432 in 2024, representing a growth of approximately 37.8%[46]. - Current assets rose to $45,760,451 in 2025, up from $39,793,857 in 2024, indicating an increase of about 15.4%[46]. - Total equity increased to $57,997,739 in 2025, compared to $44,349,539 in 2024, reflecting a growth of approximately 30.9%[46]. - Current liabilities grew to $26,308,460 in 2025 from $16,445,832 in 2024, marking an increase of about 60.5%[46]. - Total liabilities rose to $27,187,876 in 2025, up from $17,415,893 in 2024, which is an increase of approximately 56.5%[46]. Cash Management and Dividends - The company has not made any dividends or distributions to shareholders and intends to retain future earnings for business expansion[36]. - As of September 30, 2025, the accumulated profits available for dividends were $16,626,207, compared to $18,741,685 as of September 30, 2024, indicating a decrease of approximately 11.9% year-over-year[112]. - The withholding tax rate applicable to dividends payable by Chinese companies to non-PRC-resident enterprises is 10%, which may be reduced to 5% under certain conditions for Hong Kong enterprises[114]. - The company relies on dividends from its PRC subsidiary for cash requirements, and any limitations on these distributions could materially affect growth and investment capabilities[112]. Regulatory Environment - The company is subject to the Holding Foreign Companies Accountable Act, which could impact its ability to trade on U.S. exchanges if its auditor is not inspected by the PCAOB for two consecutive years[28]. - The company has obtained all material licenses and permits from PRC government authorities for its operations, but future compliance remains uncertain[39]. - The company is subject to the complex and rapidly evolving laws and regulations in China, which may impact its operations and the value of its ordinary shares[77]. - Recent regulations require companies controlling personal information of over one million users to undergo cybersecurity reviews before listing in foreign markets, which could affect the company's ability to offer securities[80]. - The company faces uncertainties regarding future regulatory approvals for overseas listings, which could significantly limit its ability to offer securities[88]. Competition and Market Conditions - The company faces increased competition from firms with greater capital resources, which could impact market share and profitability[65]. - The Chinese economy has shown uneven growth, with a slowing rate since 2012, which could adversely affect the company's demand for services[93]. - Disruptions at the company's factories or suppliers could materially affect business operations, especially due to natural disasters or regulatory compliance issues[98]. Internal Controls and Governance - The company has identified several material weaknesses in its internal control over financial reporting as of September 30, 2025, which could impair the accuracy of financial statements[170]. - Remedial measures have been initiated, including hiring qualified accounting personnel and implementing training programs to strengthen financial reporting[172]. - The company's corporate governance practices differ significantly from those required for U.S. domestic issuers, potentially affording less protection to shareholders[164]. - The company is a foreign private issuer and is exempt from certain provisions applicable to U.S. domestic public companies, which may limit the information available to shareholders[166]. Future Plans and Investments - The company plans to invest in expanding its direct sales force and distribution channels to meet increasing product demand[60]. - The company estimates a capital need of approximately $30 million for expansion, including investments in research and development and marketing[66]. - The company plans to use the net proceeds from the public offering for sales network expansion, research and development, production capacity expansion, and working capital[195]. Shareholder Rights and Market Activity - Shareholders have limited rights under Cayman Islands law to inspect corporate records, which may hinder their ability to obtain necessary information for shareholder actions[162]. - The trading price of the company's shares on the Nasdaq Capital Market may fluctuate significantly due to various factors, including market conditions and company performance[153]. - The company does not expect to pay dividends in the foreseeable future, relying instead on price appreciation for returns on investment[159].