Regulatory Environment - The company submitted filing materials to the CSRC on May 11, 2023, and obtained approval on July 24, 2023, but the approval has since lapsed[26]. - The company re-submitted the filing to the CSRC on October 9, 2024, and received new approval on March 13, 2025[26]. - The company is not currently subject to CAC review for its registered public offering in the U.S., but uncertainties exist regarding future regulatory changes in China[27]. - The company may face significant penalties or operational changes if found non-compliant with evolving PRC cybersecurity and data protection laws[39]. - The PRC government may exert more oversight over foreign securities offerings, which could impact the company's ability to offer shares[25]. - Recent regulatory developments indicate a trend towards stricter compliance requirements for companies operating in China, potentially affecting operational costs and business practices[37]. - The company faces significant uncertainty regarding the enactment and interpretation of regulatory requirements related to overseas listings[41]. - The company has not been involved in any cybersecurity investigations or received any regulatory inquiries as of the report date[40]. Financial Performance - Revenue from the top five customers accounted for 91% and 86% of total revenue for the years ended September 30, 2025 and 2024, respectively[74]. - As of September 30, 2025, net current liabilities were RMB 10,266,365 (US$ 1,462,943) and total deficits were RMB 7,188,181 (US$ 1,024,306) as of September 30, 2024[81]. - The company recorded a net loss for the years ended September 30, 2025 and 2024, and anticipates needing additional financing to support operations[80]. - Operating cash outflow was recorded for the year ended September 30, 2024, with expectations of increased operating and capital expenditures in the coming years[79]. - The company does not anticipate paying dividends in the foreseeable future, opting to reinvest earnings to expand product offerings and cover operating costs[118]. Operational Risks - The company faces risks related to creditworthiness of customers, which may adversely affect working capital if major customers fail to settle outstanding amounts[76]. - The company relies on third-party suppliers for raw materials and manufacturing, which may lead to increased costs and supply chain disruptions[85]. - Competition in the apparel SCM industry is intense, with many players leading to pricing pressure and potential loss of orders[90]. - The company is dependent on key executives and personnel, and loss of these individuals could negatively impact business operations[91]. - The company has identified material weaknesses in internal controls over financial reporting, which could lead to misstatements in financial results[102]. Market Conditions - The company’s operations and revenue are entirely generated in China, making it vulnerable to economic conditions and regulatory changes in the region[47]. - Political and economic developments in China may adversely impact the company's business and demand for its services[57]. - Seasonal fluctuations in sales are expected, with the highest sales occurring from August to December[84]. - The apparel SCM market in China is large and fragmented, with competition based on product design, price, quality control, and delivery[196]. Corporate Structure and Governance - The company was incorporated on November 3, 2021, and issued 10,351,125 shares to Action Holdings Limited as part of its reorganization for listing[140]. - Controlling shareholders hold 85.1% of shares, which may lead to conflicts of interest and affect decisions that could benefit other shareholders[114]. - Nasdaq may apply additional criteria for listing due to the company's small public offering and significant insider ownership, potentially impacting liquidity[115]. - The company is classified as an "emerging growth company" under the JOBS Act, which may hinder its ability to raise capital when needed[129]. Supply Chain and Production - The company offers a full suite of SCM services, including market trend analysis, product design, raw material sourcing, production, and logistics management, tailored to customer needs[161][166]. - The company sources raw materials primarily from third-party vendors in China, with a focus on cashmere and non-cashmere products[173]. - The company maintains a fashion showroom that is regularly updated to reflect the latest fashion trends, serving as a marketing tool[168]. - The company has stringent quality control procedures throughout the supply chain, ensuring finished goods meet customer specifications[177]. Strategic Initiatives - The company aims to broaden its customer base beyond China to key markets such as the United States and Europe, enhancing its design and development capabilities to attract new customers[156]. - The company plans to enhance the quality of apparel products and production efficiency by investing in technology infrastructure and improving collaboration with suppliers[159]. - Sustainability is a key focus, with plans to integrate sustainable practices into product sourcing and environmental marketing, including exploring eco-friendly raw materials[160].
Majestic Ideal(MJID) - 2025 Q4 - Annual Report