Akso Health (US:AHG)2023-02-15 16:00Financial Performance - Net revenues for the six months ended September 30, 2022, were $11,872,421, compared to $245,924 for the same period in 2021, representing a significant increase[6]. - Gross profit for the six months ended September 30, 2022, was $1,141,220, compared to $245,924 in 2021, indicating a substantial improvement[6]. - The net income attributable to Akso's shareholders for the six months ended September 30, 2022, was $810,338, a significant turnaround from a loss of $8,916,114 in 2021[6]. - For the six months ended September 30, 2022, the net income was $826,436 compared to a net loss of $8,916,114 for the same period in 2021[12]. - The company reported a comprehensive loss of $2,371,626 for the six months ended September 30, 2022, compared to a loss of $8,128,145 in 2021, showing improvement[6]. - The Company reported net revenues of $11,876,023 for the six months ended September 30, 2022, a decrease from $246,552 in the same period of 2021[57]. - The Company generated $11,858,313 in revenue from medical devices for the six months ended September 30, 2022, with no revenue reported in the same period of 2021[57]. - For the six months ended September 30, 2022, three customers accounted for 84.4% of total revenues, indicating a significant customer concentration risk[107]. Expenses and Liabilities - Total operating expenses decreased from $8,715,752 in 2021 to $2,191,410 in 2022, a reduction of approximately 74.9%[6]. - Total current liabilities decreased from $38,394,202 to $10,977,240, a reduction of approximately 71.4%[1]. - Cash flows from operating activities resulted in a net cash used of $1,334,116, a significant decrease from the net cash provided of $824,655 in the prior year[12]. - The net cash used in financing activities was $27,513,849, contrasting with net cash provided of $9,340,265 in the same period last year[12]. - Total current liabilities decreased to $48,044 as of September 30, 2022, from $89,205 as of March 31, 2022, representing a reduction of approximately 46%[36]. - Total shareholders' equity decreased from $12,283,606 to $9,930,054, a decline of approximately 19.2%[4]. Cash and Assets - Cash and cash equivalents decreased from $21,925,322 to $9,990,561, a drop of approximately 54.4%[3]. - As of September 30, 2022, cash and cash equivalents at the end of the year were $9,990,561, down from $15,456,824 at the end of the previous year[12]. - Cash and cash equivalents decreased to $674,477 as of September 30, 2022, down from $2,394,869 as of March 31, 2022[36]. - Total current assets decreased from $50,624,351 to $20,870,986, a decline of approximately 58.8%[3]. - Total assets as of September 30, 2022, amounted to $20,907,294, a decrease from $50,679,784 as of March 31, 2021[180]. - Inventory value decreased to USD 899,555 as of September 30, 2022, from USD 7.80 million as of March 31, 2022[119]. - Accounts receivable increased significantly to USD 7.99 million as of September 30, 2022, compared to USD 85,386 as of March 31, 2022[113]. Business Operations and Strategy - The company is developing a new business as a cancer therapy and radiotherapy oncology service provider, planning to open 2 vaccine research centers and 100 radiation oncology centers on the U.S. east coast[16]. - In January 2022, the company established three centers in the U.S. and began sales of medical devices in the U.S. market, expanding its operational footprint[16]. - The company has ceased its P2P business and micro-lending operations since 2019, marking a strategic shift in its business model[15]. - The company plans to continue its market expansion in China with the sales of medical devices starting in April 2022[16]. - The company began its business in the US market for the sale of medical devices in February 2022, expanding its market presence[43]. Legal and Compliance - The company relies on the legal enforceability of its VIE structure, which poses risks if found non-compliant with PRC laws[30]. - The company initiated legal proceedings against Jiuzheng Company for defaults, with an allowance for uncollectible other receivables changing to US$4.1 million as of September 30, 2022[122]. - The company has a loan agreement with Webao Limited for US$2.0 million at a 0% interest rate, with a balance of US$2.0 million due as of March 31, 2022[136]. Shareholder Information - The company has 69,763,933 shares outstanding as of September 30, 2022, unchanged from March 31, 2022[4]. - The company has a total authorized number of ordinary shares of 500,000,000, with a par value of $0.0001 each[149]. - The company completed a private placement on September 17, 2021, raising approximately $10.02 million by selling 6,340,000 units at $1.58 per unit[150]. - As of September 30, 2022, there were 6,340,000 warrants outstanding, each with a weighted average exercise price of $3.00 and a remaining contractual life of 4 years[152]. - The company authorized a share repurchase program of up to $25 million, having repurchased 1,165,883 ADSs for a total consideration of $3,988,370[170]. Tax and Regulatory Matters - The company’s subsidiaries in the U.S. are subject to federal and state income taxes, with a federal tax rate of 21% and a state tax rate of 6.5% for New York[141]. - The company has a full valuation allowance on net deferred tax assets for the years ended March 31, 2022, 2021, and 2020, indicating uncertainty regarding realization[90]. Risks and Challenges - The ongoing COVID-19 pandemic continues to adversely affect the company's business and financial results, with uncertainty regarding its future impact[108]. - The company experienced a foreign currency translation adjustment due to the RMB's exchange rate, which was 7.1135 as of September 30, 2022, compared to 6.4434 as of September 30, 2021[100]. - The company has a vendor concentration risk, with one vendor accounting for 100% of the purchases in the medical devices business started in April 2022[107].