Financial Performance - Total revenue for the six months ended March 31, 2023, was $18,467,186, a decrease of 23.5% compared to $24,202,340 for the same period in 2022[4] - Gross profit for the six months ended March 31, 2023, was $6,128,142, down from $13,756,434 in the prior year, reflecting a gross margin decline[4] - The net loss for the six months ended March 31, 2023, was $715,427, contrasting with a net income of $1,731,735 for the same period in 2022[4] - Earnings per share for the six months ended March 31, 2023, was $(0.20), down from $0.48 in the same period of 2022[4] - Net income for the quarter ended March 31, 2023, was a loss of $715,427 compared to a net income of $1,731,735 for the same period in 2022[12] - Net income for the six months ended March 31, 2023, was $(715,427), compared to $1,731,735 for the same period in 2022[141] Expenses and Costs - Operating expenses totaled $5,978,896 for the six months ended March 31, 2023, compared to $11,055,155 in the same period of 2022, indicating a reduction in costs[4] - Total research and development expenses for the six months ended March 31, 2023, were approximately $2,268,335, a significant increase from $144,461 in the same period of 2022[53] - Advertising expenses for the six months ended March 31, 2023, amounted to $1,340,368, compared to $8,219,488 for the same period in 2022, reflecting a decrease in marketing expenditure[55] - The company recorded total interest expense of $90,044 for the six months ended March 31, 2023, compared to $103,765 for the same period in 2022[99] Assets and Liabilities - Total current assets increased to $52,515,213 as of March 31, 2023, from $41,505,680 as of September 30, 2022, representing a growth of 26.5%[2] - Total liabilities increased to $23,241,660 as of March 31, 2023, compared to $13,097,552 as of September 30, 2022, reflecting a rise of 77.5%[2] - Shareholders' equity rose to $47,126,671 as of March 31, 2023, up from $46,442,323 as of September 30, 2022, indicating a slight increase of 1.5%[2] - Cash and short-term investments totaled $26,269,418 as of March 31, 2023, compared to $18,860,052 as of September 30, 2022, reflecting an increase of 39.0%[2] - The company recorded an allowance for uncollectible accounts of $820,177 as of March 31, 2023, up from $791,827 in the previous period[28] - The allowance for doubtful accounts increased to $820,177 as of March 31, 2023, from $791,827 as of September 30, 2022, reflecting a rise of approximately 3.6%[75] Cash Flow - Net cash provided by operating activities was $4,798,702, a decrease from $6,118,203 in the prior year[12] - Net cash used in operating activities was $(116,938) compared to $(358,026) in the previous year[143] - Cash repayment from subsidiaries provided $105,058 in financing activities, down from $299,592 in the prior year[143] - Cash at the end of the period was $12,954,516, down from $14,236,300 at the end of the previous year[12] - Cash at the end of the period decreased to $17,157 from $51,585 a year earlier[143] Revenue Recognition and Sales - The Company recognizes revenue when goods are transferred to customers, with no right of return, ensuring revenue is reported net of all value-added taxes[49] - There were no contract assets or liabilities reported as of March 31, 2023, indicating a straightforward revenue recognition process[50] - Sales of the Guben Yanling Pill represented 30.4% of total revenue for the six months ended March 31, 2023, down from 43.6% in the same period of 2022[109] - Sales of TCMD products manufactured by the Company decreased to $9,374,312, down 38.8% from $15,354,635 in the prior year[126] - Sales of third-party products increased to $9,092,874, up 2.8% from $8,847,705 in the previous year[126] Investments and Acquisitions - The company established a new subsidiary, Guangzhou Universe Hanhe Medical Research Co., Ltd., for R&D of new pharmaceutical products[19] - The prepayment for acquisition of Yunnan Faxi Pharmaceuticals Co., Ltd. is recorded at approximately $3.6 million, with the total acquisition price set at RMB72 million (approximately $10.5 million)[79] - The company has made a prepayment of approximately RMB69.2 million (approximately $10.1 million) for the construction of manufacturing facilities, with completion expected by December 2024[88] - The Company’s investment in Jiangxi Jian Rural Commercial Bank was valued at $728,055 as of March 31, 2023, compared to $702,890 as of September 30, 2022[46] Shareholder Information - A share consolidation of 6 ordinary shares into 1 was completed on July 27, 2023, affecting the company's share capital[20] - The company completed a share consolidation on July 27, 2023, converting six ordinary shares into one ordinary share, resulting in 3,625,000 shares issued and outstanding as of March 31, 2023[113] - The company has not declared or paid dividends during the six months ended March 31, 2023, and may not choose to make additional distributions in the future[116][117] Market and Customer Concentration - One customer accounted for 14.1% of total revenue for the six months ended March 31, 2023, compared to no single customer exceeding 10% in the same period of 2022[108] - As of March 31, 2023, three suppliers accounted for 59.4%, 22.5%, and 12.5% of total advance to supplier balance, indicating a significant concentration risk[109] Foreign Currency and Translation - The company reported a foreign currency translation adjustment of $1,399,775 for the six months ended March 31, 2023, compared to $492,194 in the prior year[4] - The effect of changes in foreign exchange rates on cash was $120, contrasting with $(374) in the previous year[143]
Universe Pharmaceuticals(UPC) - 2023 Q2 - Quarterly Report