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What changed in Ridgetech Inc.'s 20-F — 2024 vs 2025

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Paragraph-level year-over-year comparison of Ridgetech Inc.'s 2024 and 2025 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+511 added−526 removedSource: 20-F (2025-07-28) vs 20-F (2024-07-30)

Top changes in Ridgetech Inc.'s 2025 20-F

511 paragraphs added · 526 removed · 215 edited across 6 sections

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 2. Offer Statistics and Expected Timetable 1 Item 3. Key Information 1 A. [Reserved] 7 B. Capitalization and Indebtedness 7 C. Reasons for the Offer and Use of Proceeds 7 D. Risk Factors 8 Item 4. Information on the Company 36 A. History and Development of the Company 36 B. Business Overview 38 C. Organizational Structure 43 D.
Biggest changeItem 2. Offer Statistics and Expected Timetable 1 Item 3. Key Information 1 A. [Reserved] 7 B. Capitalization and Indebtedness 7 C. Reasons for the Offer and Use of Proceeds 7 D. Risk Factors 7 Item 4. Information on the Company 31 A. History and Development of the Company 31 B. Business Overview 33 C. Organizational Structure 42 D.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

126 edited+81 added−149 removed180 unchanged
Biggest changeRisks Related to Our Online Sales ● We rely on computer software and hardware systems in managing our online sales, the capacity of which may restrict our growth and the failure of which could adversely affect our business, financial condition and results of operations. ● If our online business fails to obtain and maintain the requisite assets, licenses, qualified personnel and approvals required under the complex regulatory environment for Internet-based businesses in China, the business prospects for such business may be materially and adversely affected. ● The operation results of our online business fluctuates and we cannot assure our efforts for alternative vendors will result in the stable increase in revenues from online pharmacy in the coming years. ● Our IT system may not perform as anticipated and is vulnerable to damage and interruption, which may lead to leakage of personal data of the employees of our end-users and our seconded employees. ● Failure to comply with privacy, data protection and cyber security laws and regulations could have a materially adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences.
Biggest changeThe loss of this relationship could have a material adverse effect on our business, financial condition, and results of operations. ● We face significant challenges in growing and sustaining our wholesale business, including limited bargaining power, pricing volatility, and the need for ongoing investment in platforms, customer acquisition, and management. ● The operating results of our wholesale business have fluctuated, and we cannot assure that our strategic initiatives will lead to sustained revenue growth or profitability in the coming years. ● We heavily depend on third-party electronic platforms for our online sales, the capacity of which may restrict our growth and the failure of which could adversely affect our business, financial condition and results of operations. ● If our online business fails to obtain and maintain the requisite assets, licenses, qualified personnel and approvals required under the complex regulatory environment for Internet-based businesses in China, the business prospects for such business may be materially and adversely affected. ● We depend substantially on the continuing efforts of the key personnel, and our business and prospects may be disrupted if we lose their services. ● Our operations require a number of permits and licenses in order to carry on their business. ● Failure to comply with privacy, data protection and cyber security laws and regulations could have a materially adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences. ● Our brand names, trade secrets and other intellectual property are valuable assets.
If any of the consolidated operating entities incurs debt in its own name in the future, the instruments governing the debt may restrict dividends or other distributions on our equity interest to us.
If any of our consolidated operating entities incurs debt in its own name in the future, the instruments governing the debt may restrict dividends or other distributions on our equity interest to us.
In addition, we may be subject to industry-wide regulations that may be adopted by the relevant PRC authorities, which may have the effect of limiting our service offerings, restricting the scope of our operations in China, or causing the suspension or termination of our business operations in China entirely, all of which will materially and adversely affect our business, financial condition and results of operations.
In addition, we may be subject to industry-wide regulations that may be adopted by the relevant PRC authorities, which may have the effect of limiting our service offerings, restricting the scope of our operations in China, or causing the suspension or termination of our business operations in China entirely, all of which will materially and adversely affect our business, financial condition and results of operations.
On August 1, 2021, the China Securities Regulatory Commission (the “CSRC”) stated in a statement that it had taken note of the new disclosure requirements announced by the SEC regarding the listings of Chinese companies and the recent regulatory development in China, and that both countries should strengthen communications on regulating China-related issuers.
On August 1, 2021, the China Securities Regulatory Commission (the “CSRC”) stated in a statement that it had taken note of the new disclosure requirements announced by the SEC regarding the listings of Chinese companies and the recent regulatory development in China, and that both countries should strengthen communications on regulating China-related issuers.
The December 15, 2022 Determination Report cautions, however, that authorities in the PRC might take positions at any time that would prevent the PCAOB from continuing to inspect or investigate completely.
The December 15, 2022 Determination Report cautions, however, that authorities in the PRC might take positions at any time that would prevent the PCAOB from continuing to inspect or investigate completely.
As required by the HFCAA, if in the future the PCAOB determines it no longer can inspect or investigate completely because of a position taken by an authority in the PRC, the PCAOB will act expeditiously to consider whether it should issue a new determination.
As required by the HFCAA, if in the future the PCAOB determines it no longer can inspect or investigate completely because of a position taken by an authority in the PRC, the PCAOB will act expeditiously to consider whether it should issue a new determination.
A. [Reserved.] B. CAPITALIZATION AND INDEBTEDNESS. Not applicable. C. REASONS FOR THE OFFER AND USE OF PROCEEDS. Not applicable. 7 D. RISK FACTORS. You should carefully consider the risks described below together with all of the other information included in this report before making an investment decision with regard to our securities.
A. [Reserved.] B. CAPITALIZATION AND INDEBTEDNESS. Not applicable. C. REASONS FOR THE OFFER AND USE OF PROCEEDS. Not applicable. D. RISK FACTORS. You should carefully consider the risks described below together with all of the other information included in this report before making an investment decision with regard to our securities.
It is difficult to predict how market forces, international relations especially the trade tensions between U.S. and China, or government policies of PRC or U.S. may impact the exchange rate between the Renminbi and the U.S. dollar in the future. Fluctuations in the value of RMB may have a material adverse effect on your investment.
It is difficult to predict how market forces, international relations especially the trade tensions between U.S. and China, or government policies of PRC or U.S. may impact the exchange rate between the Renminbi and the U.S. dollar in the future. 26 Fluctuations in the value of RMB may have a material adverse effect on your investment.
In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention. It may be difficult for U.S. regulators, such as the Department of Justice, the SEC, and other authorities, to conduct investigation or collect evidence within China.
In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention. 21 It may be difficult for U.S. regulators, such as the Department of Justice, the SEC, and other authorities, to conduct investigation or collect evidence within China.
Potential war or terrorist attacks may also cause uncertainty and cause our business to suffer in ways that we cannot currently predict. 25 Failure to comply with the U.S. Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences.
Potential war or terrorist attacks may also cause uncertainty and cause our business to suffer in ways that we cannot currently predict. Failure to comply with the U.S. Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences.
In addition, uncertainties with respect to the PRC legal system could adversely affect us. The recent regulatory developments in China, in particular with respect to restrictions on China-based companies raising capital offshore, may lead to additional regulatory review in China over our financing and capital raising activities in the United States.
In addition, uncertainties with respect to the PRC legal system could adversely affect us. 3 The recent regulatory developments in China, in particular with respect to restrictions on China-based companies raising capital offshore, may lead to additional regulatory review in China over our financing and capital raising activities in the United States.
Our auditor, the independent registered public accounting firm that issues the audit report for the year ended March 31, 2024 included elsewhere in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
Our auditor, the independent registered public accounting firm that issues the audit report for the year ended March 31, 2025 included elsewhere in this annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
The Company will need to file accordingly with the CSRC within 3 working days after any future offering is completed. “Item 3. Key Information - D.
The Company will need to file accordingly with the CSRC within 3 working days after any future offering is completed. See “Item 3. Key Information - D.
Any failure on our part to comply with such law or regulations or any other obligations relating to privacy, data protection or information security, or any compromise of security that results in unauthorized access, use or release of personally identifiable information or other data, or the perception or allegation that any of the foregoing types of failure or compromise has occurred, could damage our reputation, discourage new and existing counterparties from contracting with us or result in investigations, fines, suspension or other penalties by Chinese government authorities and private claims or litigation, any of which could materially adversely affect our business, financial condition and results of operations.
Any failure on our part, or on our business partners’ or services providers’ part, to comply with such law or regulations or any other obligations relating to privacy, data protection or information security, or any compromise of security that results in unauthorized access, use or release of personally identifiable information or other data, or the perception or allegation that any of the foregoing types of failure or compromise has occurred, could damage our reputation, discourage new and existing counterparties from contracting with us or result in investigations, fines, suspension or other penalties by Chinese government authorities and private claims or litigation, any of which could materially adversely affect our business, financial condition and results of operations.
See “ Risks Related to Doing Business in China - You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China based on United States or other foreign laws against us or our management. ” Our retail and wholesale operations require a number of permits and licenses in order to carry on their business.
See “ Risks Related to Doing Business in China - You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China against us or our management based on United States or other foreign laws. ” Our operations require a number of permits and licenses in order to carry on their business.
Failure to maintain optimal inventory levels could increase our inventory holding costs or cause us to lose sales, either of which could have a material adverse effect on our business, financial condition and results of operations. We need to maintain sufficient inventory levels to operate both of our retail and wholesale businesses successfully as well as meet customer expectations.
Failure to maintain optimal inventory levels could increase our inventory holding costs or cause us to lose sales, either of which could have a material adverse effect on our business, financial condition and results of operations. We need to maintain sufficient inventory levels to operate our wholesale businesses successfully as well as meet customer expectations.
Risks Related to Doing Business in China ● Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business that we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition. ● We may be adversely affected by complexity, uncertainties and changes in Chinese regulation of drugstores and the practice of medicine. ● Compliance with China’s new Data Security Law, Measures on Cybersecurity Review, Personal Information Protection Law (second draft for consultation), regulations and guidelines relating to the multi-level protection scheme and any other future laws and regulations may entail significant expenses and could materially affect our business. ● Adverse regulatory developments in China may subject us to additional regulatory review, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC in response to risks related to recent regulatory developments in China may impose additional compliance requirements for companies like us with significant China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements.
Risks Related to Doing Business in China ● Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business that we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition. ● We may be adversely affected by complexity, uncertainties and changes in Chinese regulation of pharmaceutical wholesale business. ● Compliance with China’s new Data Security Law, Measures on Cybersecurity Review, Personal Information Protection Law (second draft for consultation), regulations and guidelines relating to the multi-level protection scheme and any other future laws and regulations may entail significant expenses and could materially affect our business. ● Adverse regulatory developments in China may subject us to additional regulatory review, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC in response to risks related to recent regulatory developments in China may impose additional compliance requirements for companies like us with significant China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements.
In particular, as we focus on our expansion of pharmacies in metropolitan markets, where living standards and consumer purchasing power are relatively high, we are especially susceptible to changes in economic conditions, consumer confidence and customer preferences of the urban Chinese population.
In particular, as we focus on our expansion of our sales in metropolitan markets, where living standards and consumer purchasing power are relatively high, we are especially susceptible to changes in economic conditions, consumer confidence and customer preferences of the urban Chinese population.
Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
In recent years, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
The majority of the VIEs’ and their subsidiaries’ income is received in RMB and shortages in foreign currencies may restrict our ability to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any.
The majority of the Company’s Chinese subsidiaries’ and historically the VIEs’ and their subsidiaries’ income is received in RMB and shortages in foreign currencies may restrict our ability to pay dividends or other payments, or otherwise satisfy our foreign currency denominated obligations, if any.
The market price for our stock may be volatile and, when compared to seasoned issuers, subject to wide fluctuations in response to various factors, many of which are beyond our control, including the following: ● actual or anticipated fluctuations in our quarterly operating results; ● changes in financial estimates by securities research analysts; ● conditions in the retail pharmacy markets; ● changes in the economic performance or market valuations of other retail pharmacy operators; ● announcements by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital commitments; ● addition or departure of key personnel; ● fluctuations of exchange rates between RMB and the U.S. dollar; ● intellectual property litigation; and ● general economic or political conditions in China.
The market price for our stock may be volatile and, when compared to seasoned issuers, subject to wide fluctuations in response to various factors, many of which are beyond our control, including the following: ● actual or anticipated fluctuations in our quarterly operating results; ● changes in financial estimates by securities research analysts; ● conditions in the pharmaceutical wholesale and online sales markets; ● changes in the economic performance or market valuations of other pharmaceutical wholesalers and online sales platforms; ● announcements by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital commitments; ● addition or departure of key personnel; ● fluctuations of exchange rates between RMB and the U.S. dollar; ● intellectual property litigation; and ● general economic or political conditions in China.
It may also be difficult for you to enforce in U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against our company and its officers and directors. We have appointed Pryor Cashman LLP as our agent to receive service of process in the United States.
It may also be difficult for you to enforce in U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against our company and its officers and directors. We have appointed CT Corporation as our agent to receive service of process in the United States.
The HFCAA states if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit our shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
The HFCAA, as amended, states if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for two consecutive years, the SEC shall prohibit our shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
Our business and revenue growth primarily depend on the size of the pharmaceutical market in China. As a result, our revenue and profitability may be negatively affected by changes in national, regional or local economic conditions and consumer confidence in China.
Changes in economic conditions and consumer confidence in China may influence the pharmaceutical industry, consumer preferences and spending patterns. Our business and revenue growth primarily depend on the size of the pharmaceutical market in China. As a result, our revenue and profitability may be negatively affected by changes in national, regional or local economic conditions and consumer confidence in China.
Nasdaq may delist our ordinary shares from trading on the Nasdaq Capital Market for failing to maintain a minimum bid price of $1.00, which could limit investors’ ability to effect transactions in our ordinary shares and subject us to additional trading restrictions.
Nasdaq may delist our ordinary shares from trading on the Nasdaq Capital Market for failing to maintain a minimum bid price of $1.00 or for other noncompliance with Nasdaq listing requirements, which could limit investors’ ability to effect transactions in our ordinary shares and subject us to additional trading restrictions.
In addition, uncertainties with respect to the PRC legal system could adversely affect us ” for more details. On May 20, 2020 and on December 2, 2020, the U.S. Senate passed and the U.S.
In addition, uncertainties with respect to the PRC legal system could adversely affect us ” for more details. Holding Foreign Companies Accountable Act On May 20, 2020 and on December 2, 2020, the U.S. Senate passed and the U.S.
As an illustration of such volatility, the closing price of our ordinary shares during the fifty two (52) weeks preceding the date of this report ranged from a low of $2.65 to a high of $95.40.
As an illustration of such volatility, the closing price of our ordinary shares during the fifty two (52) weeks preceding the date of this report ranged from a low of $0.80 to a high of $2.80.
If we are unable to receive all of the revenues from our operations through these contractual arrangements, we may be unable to pay dividends on our ordinary shares. Dividends we receive from our subsidiaries located in the PRC may be subject to PRC withholding tax.
If we are unable to receive all of the revenues from our operations, we may be unable to pay dividends on our ordinary shares. 22 Dividends we receive from our subsidiaries located in the PRC may be subject to PRC withholding tax.
In addition, uncertainties with respect to the PRC legal system could adversely affect us. ● It may be difficult for U.S. regulators, such as the Department of Justice, the SEC, and other authorities, to conduct investigation or collect evidence within China. ● You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China against us or our management based on United States or other foreign laws. ● The advent of recent healthcare reform directives from China’s central government may increase both competition and our cost of doing business. ● Our management will have broad discretion over the use of the proceeds we receive from our financing activities and might not apply the proceeds in ways that increase the value of your investment. 10 ● HJ Group is subject to restrictions on making payments to us. ● Dividends we receive from our subsidiaries located in the PRC may be subject to PRC withholding tax. ● We face risks related to disease epidemics and other outbreaks. ● Failure to comply with the U.S.
In addition, uncertainties with respect to the PRC legal system could adversely affect us. ● It may be difficult for U.S. regulators, such as the Department of Justice, the SEC, and other authorities, to conduct investigation or collect evidence within China. ● You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China against us or our management based on United States or other foreign laws. ● Our management will have broad discretion over the use of the proceeds we receive from our financing activities and might not apply the proceeds in ways that increase the value of your investment. ● Our subsidiaries are subject to restrictions on making payments to us. ● Dividends we receive from our subsidiaries located in the PRC may be subject to PRC withholding tax. ● We face risks related to disease epidemics and other outbreaks. ● Failure to comply with the U.S.
If we fail to obtain or maintain any of the required assets, licenses or approvals, our Internet business may be subject to various penalties, such as confiscation of income, fines, and/or the discontinuation or restriction of its operations. Any such disruption may materially and adversely affect the prospects of our online business.
If we fail to obtain or maintain any of the required assets, licenses or approvals, our Internet business may be subject to various penalties, such as confiscation of income, fines, and/or the discontinuation or restriction of its operations.
We raised capital of $17.5 million in our IPO in April 2010. In addition, we raised capital for a total amount of $39.863 million from 2015 to 2024 through various financings. Renovation Investment (HK) Co., Ltd. (“Renovation”), our Hong Kong intermediate holding subsidiary, received funds from our investors in these financings.
We raised capital of $17.5 million in our IPO in April 2010. In addition, we raised capital for a total amount of $46.908 million from 2015 to 2025 through various financings. Renovation Investment (Hong Kong) Co., Ltd. (“Renovation”), our Hong Kong intermediate holding subsidiary, received funds from our investors in these financings.
If we fail to accurately anticipate either the market for our products or customers’ purchasing habits or fail to respond to customers’ changing preferences promptly and effectively, we may not be able to adapt our product selection to customer preferences or make appropriate adjustments to our inventory positions, which could significantly reduce our revenue and have a material adverse effect on our business, financial condition and results of operations.
If we fail to accurately anticipate either the market for our products or customers’ purchasing habits or fail to respond to customers’ changing preferences promptly and effectively, we may not be able to adapt our product selection to customer preferences or make appropriate adjustments to our inventory positions, which could significantly reduce our revenue and have a material adverse effect on our business, financial condition and results of operations. 11 Our success depends on our ability to establish effective advertising, marketing and promotional programs.
Dollar by 7.8% and 2.9%, respectively, in 2022 and 2023.With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system and we cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future.
With the development of the foreign exchange market and progress towards interest rate liberalization and Renminbi internationalization, the PRC government may in the future announce further changes to the exchange rate system and we cannot assure you that the Renminbi will not appreciate or depreciate significantly in value against the U.S. dollar in the future.
To date, we have not entered into any hedging transactions. While we may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not be able to successfully hedge our exposure at all. The economy of China had experienced unprecedented growth.
To date, we have not entered into any hedging transactions. While we may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not be able to successfully hedge our exposure at all.
The Holding Foreign Companies Accountable Act, or the HFCAA, was enacted on December 18, 2020.
The Holding Foreign Companies Accountable Act, or the HFCAA, was enacted on December 18, 2020 and was subsequently amended.
The change in value of the Renminbi against the U.S. dollar is affected by, among other things, changes in PRC’s political and economic conditions. We receive substantially all of our revenues in RMB. Under our current structure, our income is primarily derived from payments from the three (3) HJ Group companies.
The change in value of the Renminbi against the U.S. dollar is affected by, among other things, changes in PRC’s political and economic conditions. We receive substantially all of our revenues in RMB. Under our current structure, our income is primarily derived from payments from the PRC operating entities.
We are required to comply with the United States Foreign Corrupt Practices Act, which generally prohibits United States companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business.
We are required to comply with the United States Foreign Corrupt Practices Act, which generally prohibits United States companies, including publicly traded companies whose securities are registered with the SEC, from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business.
We are a holding company and rely principally on dividends paid by the consolidated PRC operating entities for cash requirements, including the funds required to service any debt we may incur, which are passed on to us through Jiuxin Management.
We are a holding company and rely principally on dividends and other distributions paid by the consolidated PRC operating entities for cash requirements, including the funds required to service any debt we may incur, which are passed on to us through Renovation, and prior to the Restructuring Transactions, through Jiuxin Investment.
To the extent that our independent registered public accounting firm’s audit documentation related to their audit reports for our company become located in China, the PCAOB may not be able inspect such audit documentation and, as such, you may be deprived of the benefits of such inspection and our ordinary shares could be delisted from the stock exchange pursuant to the Holding Foreign Companies Accountable Act ” for more details. 2 The following diagram illustrates our current corporate structure as of July 30, 2024: 3 Cash Transfer Our holding company, subsidiaries and the consolidated VIEs usually operate independently and transfer funds upon capital raising.
To the extent that our independent registered public accounting firm’s audit documentation related to their audit reports for our company become located in China, the PCAOB may not be able inspect such audit documentation and, as such, you may be deprived of the benefits of such inspection and our ordinary shares could be delisted from the stock exchange pursuant to the Holding Foreign Companies Accountable Act ” for more details. 4 Cash Transfer Our holding company, subsidiaries, and prior to the Restructuring Transactions, the consolidated VIEs, usually operate independently and transfer funds upon capital raising.
Also, dividends cannot be distributed before any previous year’s loss has been offset. As a result, our consolidated PRC entities are restricted in their ability to transfer a portion of their net income to us whether in the form of dividends, loans or advances. As of March 31, 2024, our restricted reserves totaled $1,309,109 (RMB 9,513,278).
Also, dividends cannot be distributed before any previous year’s loss has been offset. As a result, our consolidated PRC entities are restricted in their ability to transfer a portion of their net income to us whether in the form of dividends, loans or advances. As of March 31, 2025, our restricted reserves totaled $0.
Our online business is operated by one of the VIEs, Jiuzhou Pharmacy, which is required to obtain and maintain certain assets relevant to its business, such as computers and other electrical equipment, as well as applicable licenses or approvals from different regulatory authorities.
Our online distribution business is operated by Allright, which is required to obtain and maintain certain assets relevant to its business, such as computers and other electrical equipment, as well as applicable licenses or approvals from different regulatory authorities.
Some of our larger competitors may enjoy competitive advantages, such as: ● greater financial and other resources; ● larger variety of products; ● more extensive and advanced supply chain management systems; 11 ● greater pricing flexibility; ● larger economies of scale and purchasing power; ● more extensive advertising and marketing efforts; ● greater knowledge of local market conditions; ● stronger brand recognition; and ● larger sales and distribution networks.
Some of our larger competitors may enjoy competitive advantages, such as: ● greater financial and other resources; ● larger variety of products; ● stronger relations with large pharmaceutical manufacturers; ● greater pricing flexibility; ● larger economies of scale and purchasing power; ● more extensive advertising and marketing efforts; ● greater knowledge of local market conditions; ● stronger brand recognition; and ● larger sales and distribution networks.
In addition, a majority of our directors and officers, namely, Lei Liu, Chief Executive Officer and Chairman of the Board of Directors; Ming Zhao, Chief Financial Officer of the Company; Li Qi, Caroline Wang, Jiangliang He, Genghua Gu, Pingfan Wu, all of whom are directors of the Company, are nationals or residents of jurisdictions other than the United States and all or a substantial portion of their assets are located outside the United States.
In addition, a majority of our directors and officers, namely, Lingtao Kong, Chairman of the Board of Directors, Ming Zhao, Interim Chief Executive Officer and Chief Financial Officer of the Company, and Caroline Wang, Jiangliang He and Genghua Gu, each a director of the Company, are nationals or residents of jurisdictions other than the United States and all or a substantial portion of their assets are located outside the United States.
Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is given by a foreign court of competent jurisdiction, (b) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (c) is final, (d) is not in respect of taxes, a fine or a penalty, € is not inconsistent with a Cayman Islands judgement of the same matter, (f) is not impeachable on grounds of fraud, and (g) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.
There is uncertainty as to whether the courts of the Cayman Islands would (1) recognize or enforce judgments of U.S. courts obtained against our company or its directors or officers, predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (2) entertain original actions brought in the Cayman Islands against our company or its directors or officers, predicated upon the securities laws of the United States or any state in the United States. 6 Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is given by a foreign court of competent jurisdiction, (b) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (c) is final, (d) is not in respect of taxes, a fine or a penalty, (e) is not inconsistent with a Cayman Islands judgement of the same matter, (f) is not impeachable on grounds of fraud, and (g) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.
According to the official announcement, the action was initiated based on the National Security Law, the Cyber Security Law and the Measures on Cybersecurity Review, which are aimed at “preventing national data security risks, maintaining national security and safeguarding public interests.” On July 10, 2021, the Cyberspace Administration of China published a revised draft of the Measures on Cybersecurity Review, expanding the cybersecurity review to data processing operators in possession of personal information of over 1 million users if the operators intend to list their securities in a foreign country.
According to the official announcement, the action was initiated based on the National Security Law, the Cyber Security Law and the Measures on Cybersecurity Review, which are aimed at “preventing national data security risks, maintaining national security and safeguarding public interests.” On July 10, 2021, the Cyberspace Administration of China published a revised draft of the Measures on Cybersecurity Review, expanding the cybersecurity review to data processing operators in possession of personal information of over 1 million users if the operators intend to list their securities in a foreign country. 19 It is unclear at the present time how widespread the cybersecurity review requirement and the enforcement action will be and what effect they will have on our business.
However, our marketing and promotional activities may be less successful than we anticipate, and may not be effective at building our brand awareness and customer base. In addition, the government may impose restrictions on how marketing and promotional activities can be conducted.
We expect to incur substantial expenses in our marketing and promotional efforts to both attract and retain customers. However, our marketing and promotional activities may be less successful than we anticipate, and may not be effective at building our brand awareness and customer base. In addition, the government may impose restrictions on how marketing and promotional activities can be conducted.
Furthermore, an adverse determination in any such litigation or proceeding to which we may become a party could cause us to: ● pay damage awards; ● seek licenses from third parties; ● pay ongoing royalties; ● redesign our product offerings; or ● be restricted by injunctions, Each of which could effectively prevent us from pursuing some or all of our business and result in our customers or potential customers deferring or limiting their purchase from our stores, which could have a material adverse effect on our financial condition and results of operations.
Furthermore, an adverse determination in any such litigation or proceeding to which we may become a party could cause us to: ● pay damage awards; ● seek licenses from third parties; ● pay ongoing royalties; ● redesign our product offerings; or ● be restricted by injunctions, Each of which could effectively prevent us from pursuing some or all of our business and result in our customers or potential customers deferring or limiting their purchase from our stores, which could have a material adverse effect on our financial condition and results of operations. 17 Risks Related to Our Corporate Structure We rely principally on dividends paid by our consolidated operating entities to fund any cash and financing requirements we may have, and any limitation on the ability of our consolidated PRC entities to pay dividends to us could have a material adverse effect on our ability to conduct our business.
You should be aware that in light of the relative freedom to operate that such persons enjoy – oftentimes blogging from outside the U.S. with little or no assets or identity requirements – should we be targeted for such an attack and the rumors not dismissed by market participants, our stock will likely suffer from a temporary, or possibly long term, decline in market price. 30 Other General Risk Factors Changes in economic conditions and consumer confidence in China may influence the drugstore industry, consumer preferences and spending patterns.
You should be aware that in light of the relative freedom to operate that such persons enjoy - oftentimes blogging from outside the U.S. with little or no assets or identity requirements - should we be targeted for such an attack and the rumors not dismissed by market participants, our stock will likely suffer from a temporary, or possibly long term, decline in market price.
Counterfeit products have continued to make their way into the Chinese pharmaceutical market. Counterfeit products are generally sold at lower prices compared to their authentic counterparts due to their low production costs, and in some cases may be very similar in appearance to their authentic counterparts.
Counterfeit products are generally sold at lower prices compared to their authentic counterparts due to their low production costs, and in some cases may be very similar in appearance to their authentic counterparts.
Our wholesale business has experienced significant growth in recent years compared with other businesses; however, to maintain our position in this very competitive market, we need to grow even faster and grab more market share. We may decide that we need to grow wholesale business through acquisitions, which can be expensive and time consuming.
Our wholesale business has experienced significant growth in recent years compared with other businesses; however, to maintain our position in this very competitive market, we need to grow even faster and grab more market share.
All these efforts require heavy investment in funding, resources and time of the senior management and there is no guarantee that such efforts would be successful. If these efforts are not successful, our wholesale business may suffer.
The efforts to develop our wholesale business require heavy investment in funding, resources and time of the senior management and there is no guarantee that such efforts would be successful.
In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.
In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation.
Any adverse changes in Chinese laws and regulations and the Chinese government’s significant oversight and discretion over the conduct of our business could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.
Any adverse changes in Chinese laws and regulations and the Chinese government’s significant oversight and discretion over the conduct of our business could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless. 18 We may be adversely affected by complexity, uncertainties and changes in Chinese regulation of pharmaceutical wholesale and online sales business.
In turn, this could compromise enforceability of related contractual arrangements, or have other harmful effects on us. 21 Compliance with China’s new Data Security Law, Measures on Cybersecurity Review, Personal Information Protection Law (second draft for consultation), regulations and guidelines relating to the multi-level protection scheme and any other future laws and regulations may entail significant expenses and could materially affect our business.
Compliance with China’s new Data Security Law, Measures on Cybersecurity Review, Personal Information Protection Law (second draft for consultation), regulations and guidelines relating to the multi-level protection scheme and any other future laws and regulations may entail significant expenses and could materially affect our business.
According to a statement released by the PCAOB, the Statement of Protocol (i) provides the PCAOB with sole discretion to select the firms, audit engagements and potential violations it inspects and investigates without consultation with, nor input from, Chinese authorities, (ii) puts procedures in place for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed and (iii) provides the PCAOB with direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates.
The Protocol provides the PCAOB with: (1) sole discretion to select the firms, audit engagements and potential violations it inspects and investigates, without any involvement of Chinese authorities; (2) procedures for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; (3) direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates.
Our failure to successfully compete could materially and adversely affect our business, financial condition, results of operation, and prospects. The continued penetration of counterfeit products into the pharmaceutical market in China may damage our reputation and have a material adverse effect on our business, financial condition, results of operations and prospects.
The continued penetration of counterfeit products into the pharmaceutical market in China may damage our reputation and have a material adverse effect on our business, financial condition, results of operations and prospects. Counterfeit products have continued to make their way into the Chinese pharmaceutical market.
Therefore, we cannot assure you that we will be able to complete the filings for our future offering and fully comply with the relevant new rules on a timely basis, if at all.
Therefore, we cannot assure you that we will be able to complete the filings for our future offering and fully comply with the relevant new rules on a timely basis, if at all. In addition, we cannot guarantee that we will not be subject to tightened regulatory review and we could be exposed to government interference in China.
Our success depends on our ability to establish effective advertising, marketing and promotional programs. Our success depends on our ability to establish effective advertising, marketing and promotional programs, including pricing strategies implemented in response to competitive pressures and/or to drive demand for our products.
Our success depends on our ability to establish effective advertising, marketing and promotional programs, including pricing strategies implemented in response to competitive pressures and/or to drive demand for our products. Our advertisements are designed to promote our brand, our corporate image and the prices of products available for sale.
As a result, our public shareholders may face substantially more difficulty in protecting their interests through actions against our management or directors than would shareholders of a corporation with assets and management located in the United States. The advent of recent healthcare reform directives from China’s central government may increase both competition and our cost of doing business.
As a result, our public shareholders may face substantially more difficulty in protecting their interests through actions against our management or directors than would shareholders of a corporation with assets and management located in the United States.
ITEM 3. KEY INFORMATION. China Jo-Jo Drugstores, Inc. (“CJJD”, the “Company”, “we”, “our”, or “us”) is not a Chinese operating company but a holding company incorporated in the Cayman Islands. The Cayman Islands holding company has no material operations of its own. The operations are conducted through our operating entities established in the PRC, including the VIEs.
ITEM 3. KEY INFORMATION. Our Holding Corporate Structure Ridgetech, Inc., formerly known as China Jo-Jo Drugstores, Inc. (“Ridgetech”, the “Company”, “we”, “our”, or “us”) is not a Chinese operating company but a holding company incorporated in the Cayman Islands. The Cayman Islands holding company has no material operations of its own.
We do not have any equity ownership in the business of the VIEs. Instead, we receive the economic benefits of the VIEs, are the primary beneficiary for accounting purposes, and consolidate VIEs’ financial statements through the VIE Agreements to the extent we have satisfied the conditions for consolidation of the VIEs under U.S. GAAP..
Instead, we received the economic benefits of the VIEs, were the primary beneficiary for accounting purposes, and consolidated VIEs’ financial statements through the VIE Agreements to the extent we satisfied the conditions for consolidation of the VIEs under U.S. GAAP.
The pharmaceutical industry in China is rapidly evolving and is subject to rapidly changing customer preferences that are difficult to predict. Our success depends on our ability to anticipate and identify customer preferences, and adapt our product selection to meet these preferences. In particular, we must optimize our product selection and inventory positions based on sales trends.
Our success depends on our ability to anticipate and identify customer preferences, and adapt our product selection to meet these preferences. In particular, we must optimize our product selection and inventory positions based on sales trends.
Our success depends, in large part, on our ability to use our proprietary information and know-how without infringing third party intellectual property rights. As litigation becomes more common in China, we face a higher risk of being the subject of claims for intellectual property infringement, invalidity or indemnification relating to other parties’ proprietary rights.
As litigation becomes more common in China, we face a higher risk of being the subject of claims for intellectual property infringement, invalidity or indemnification relating to other parties’ proprietary rights.
Even if you are successful in bringing an action, the laws of China may render you unable to enforce a judgment against the assets of HJ Group and its management, all of which are located in China. 20 Risks Related to Doing Business in China Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business that we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition.
Risks Related to Doing Business in China Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business that we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition.
We do not anticipate paying cash dividends on our ordinary shares in the foreseeable future and we may not have sufficient funds legally available to pay dividends. Even if the funds are legally available for distribution, we may nevertheless decide not to pay any dividends. We intend to retain all earnings for our operations.
Even if the funds are legally available for distribution, we may nevertheless decide not to pay any dividends. We intend to retain all earnings for our operations.
Carrying excess inventory could increase our inventory holding costs, and failure to have inventory in stock when a customer orders or purchases it could cause us to lose that order or that customer, either of which could have a material adverse effect on our business, financial condition and results of operations. 31 We may need additional capital, and the sale of equity securities could result in dilution to our shareholders, while debts may require us to make covenants restricting how we operate.
Carrying excess inventory could increase our inventory holding costs, and failure to have inventory in stock when a customer orders or purchases it could cause us to lose that order or that customer, either of which could have a material adverse effect on our business, financial condition and results of operations.
The recent regulatory developments in China, in particular with respect to restrictions on China-based companies raising capital offshore, may lead to additional regulatory review in China over our financing and capital raising activities in the United States.
If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed. 20 The recent regulatory developments in China, in particular with respect to restrictions on China-based companies raising capital offshore, may lead to additional regulatory review in China over our financing and capital raising activities in the United States.
Furthermore, if the interpretation or implementation of existing laws and regulations changes or if new regulations come into effect requiring us to obtain any additional licenses, permits or certifications that were previously not required to operate our existing businesses, we cannot provide assurance that we can successfully obtain such licenses, permits or certifications. 13 Risks Relating to Our Pharmacy Operations Our ability to grow our pharmacy business may be constrained by our inability to find suitable new store locations at acceptable prices or by the expiration of our current leases.
Furthermore, if the interpretation or implementation of existing laws and regulations changes or if new regulations come into effect requiring us to obtain any additional licenses, permits or certifications that were previously not required to operate our existing businesses, we cannot provide assurance that we can successfully obtain such licenses, permits or certifications.
Techniques employed by manipulative short sellers in Chinese small-cap stocks may drive down the market price of our ordinary shares. Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender.
Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later date to return to the lender.
Uncertainties relating to the regulation of drugstores and medical practice in China also extend to evolving licensing practices, which means that permits, licenses or operations at our company may be subject to challenge. This may disrupt our business or subject us to sanctions, requirements to increase capital, or other conditions or enforcement.
Uncertainties relating to the regulation of pharmaceutical wholesale and online sales business in China also extend to evolving licensing practices, which means that permits, licenses or operations at our company may be subject to challenge.
As competition increases in the markets in which we operate, a significant increase in general pricing pressures could occur, which could require us to reevaluate our pricing structures to remain competitive. Our competitors may be able to offer larger discounts on competing products, and we may not be able to profitably match those discounts.
As competition increases in the markets in which we operate, a significant increase in general pricing pressures could occur, which could require us to reevaluate our pricing structures to remain competitive.
We may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency. Furthermore, if these companies incur debt on their own in the future, the instruments governing the debt may restrict their ability to make payments.
Furthermore, if these companies incur debt on their own in the future, the instruments governing the debt may restrict their ability to make payments.
To the extent cash or assets in the business is in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC/Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of such entities, their subsidiaries, or the consolidated VIEs by the PRC government to transfer cash or assets. 4 Supplemental Financial Information Related to the VIEs The following tables present supplemental information provided in the form of condensed consolidated statements of operations, condensed consolidated balance sheets and condensed consolidated cash flows for China Jo-Jo Drugstores, Inc., the primary beneficiaries of the VIEs, the VIEs, and other subsidiaries for the periods as of and for the dates presented.
To the extent cash or assets in the business is in the PRC/Hong Kong or a PRC/Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC/Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of such entities, their subsidiaries, or any consolidated VIEs, by the PRC government to transfer cash or assets.
In 2020 and 2021, the RMB appreciated approximately 8.7% against the U.S. Dollar, but the RMB has sharply depreciated against the U.S.
In 2020 and 2021, the RMB appreciated approximately 8.7% against the U.S. Dollar, but the RMB has sharply depreciated against the U.S. Dollar by 7.8% and 2.9%, respectively, in 2022 and 2023. In 2024 and 2025, the RMB has sharply depreciated against the U.S. Dollar by 5.1% and 0.5%, respectively.
However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China.
Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China.
While the Statement of Protocol may lead to resolution of the previously identified issues, there can be no assurance that this will be the case. 27 On December 15, 2022, the PCAOB issued a new Determination Report which: (1) vacated the December 16, 2021 Determination Report; and (2) concluded that the PCAOB has been able to conduct inspections and investigations completely in the PRC in 2022.
On December 15, 2022, the PCAOB issued a new Determination Report which: (1) vacated the December 16, 2021 Determination Report; and (2) concluded that the PCAOB has been able to conduct inspections and investigations completely in the PRC in 2022.
Moreover, the legal uncertainty created by the Data Security Law and the recent Chinese government actions could materially adversely affect our ability, on favorable terms, to raise capital, including engaging in follow-on offerings of our securities in the U.S. market. 22 Adverse regulatory developments in China may subject us to additional regulatory review, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC in response to risks related to recent regulatory developments in China may impose additional compliance requirements for companies like us with significant China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements.
Adverse regulatory developments in China may subject us to additional regulatory review, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC in response to risks related to recent regulatory developments in China may impose additional compliance requirements for companies like us with significant China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements.
If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations.
If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations. 23 Changes in international trade policies, trade disputes, barriers to trade, the emergence of a trade war and/or other disruptions to international commerce, including between the United States and China, could harm the global economy and may dampen growth in China, our principal place of business.
If we are not able to maintain and increase the awareness of our pharmacy’s brand and the products and services we provide, we may not be able to attract and retain customers and our reputation may also suffer. We expect to incur substantial expenses in our marketing and promotional efforts to both attract and retain customers.
Our pricing strategies and value propositions must be appropriate for our target customers. If we are not able to maintain and increase the awareness of our brand and the products and services we provide, we may not be able to attract and retain customers and our reputation may also suffer.
The VIE structure is used to provide contractual exposure to foreign investment in Chinese-based companies where Chinese law prohibits direct foreign investment in the operating companies, and that investors may never directly hold equity interests in the Chinese operating entities. We are subject to certain legal and operational risks associated with the VIEs’ operations in China.
The VIE structure was used to provide contractual exposure to foreign investment in Chinese-based companies where Chinese law prohibits direct foreign investment in the operating companies, and that investors may never directly hold equity interests in the Chinese operating entities. As disclosed further below under Item 4.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeWholesale Since acquiring Jiuxin Medicine in August 2011, we have been distributing third-party products primarily to drug distributors throughout China, including: ● Approximately 1,542 prescription drugs, the sales of which accounted for approximately 65.5% of our wholesale revenue for the fiscal year ended March 31, 2024 as compared to approximately 1,615 prescription drugs, the sales of which accounted for approximately 65.4% of our wholesale revenue for the fiscal year ended March 31, 2023; ● Approximately 1,793 OTC drugs, the sales of which accounted for approximately 24.1% of our wholesale revenue for the fiscal year ended March 31, 2024 as compared to approximately 1,886 OTC drugs, the sales of which accounted for approximately 31.1% of our wholesale revenue for the fiscal year ended March 31, 2023; ● Approximately 841 nutritional supplements, the sales of which accounted for approximately 1.6% of our wholesale revenue for the fiscal year ended March 31, 2024 as compared to approximately 813 nutritional supplements, the sales of which accounted for approximately 0.9% of our wholesale revenue for the fiscal year ended March 31, 2023; 39 ● TCM products, the sales of which accounted for approximately 0.8% of our wholesale revenue for the fiscal year ended March 31, 2024; ● Sundry products, the sales of which accounted for approximately 1.5% of our wholesale revenue for the fiscal year ended March 31, 2024; and ● Medical devices, the sales of which accounted for approximately 6.5% of our wholesale revenue for the fiscal year ended March 31, 2024.
Biggest changeSince acquiring Jiuxin Medicine in August 2011, we have been distributing third-party products primarily to drug distributors throughout China, including prescription drugs, OTC drugs, nutritional supplements, TCM products, sundry products, and medical devices. During the fiscal year ended March 31, 2025, we expanded our operations in wholesale distribution business by the acquisition of Ridgeline and its subsidiary, Allright.
Our main telephone number is +86-571-88219579. Our website is www.jiuzhou360.com. We routinely post important information on our website. The information contained on our website is not a part of this annual report. Our transfer agent is Equiniti Trust Company, , LLC, whose address is 48 Wall Street, Floor 23 New York, NY 10005, and whose telephone number is (800) 468-9716.
Our main telephone number is +86-571-88219579. Our website is www.ridgetch.com. We routinely post important information on our website. The information contained on our website is not a part of this annual report. Our transfer agent is Equiniti Trust Company, LLC, whose address is 48 Wall Street, Floor 23 New York, NY 10005, and whose telephone number is (800) 468-9716.
ITEM 4. INFORMATION ON THE COMPANY. A . HISTORY AND DEVELOPMENT OF THE COMPANY. Overview We are a retailer and wholesale distributor of pharmaceutical and other healthcare products in the People’s Republic of China (“PRC” or “China”). Prior to acquiring Zhejiang Jiuxin Medicine Co., Ltd.
ITEM 4. INFORMATION ON THE COMPANY. A . HISTORY AND DEVELOPMENT OF THE COMPANY. Overview We are a wholesale distributor of pharmaceutical and other healthcare products in the People’s Republic of China (“PRC” or “China”). As further described below, the wholesale business is primarily conducted through subsidiaries of Renovation, including Zhejiang Jiuxin Medicine Co., Ltd.
PROPERTY, PLANTS AND EQUIPMENT We are headquartered in Hangzhou, China. We own three properties.
PROPERTY, PLANTS AND EQUIPMENT We are headquartered in Hangzhou, China. We own one property and lease our principal office.
In addition, Jiuxin Medicine supplies 96.8% of the inventory of Jiuzhou Pharmacy worth $77,054,670 in the fiscal year March 31, 2024. 36 We also have a herb farming business cultivating and wholesaling herbs used for TCM. This business is conducted through Hangzhou Qianhong Agriculture Development Co., Ltd. (“Qianhong Agriculture”), a wholly-owned subsidiary.
We also had a herb farming business cultivating and wholesaling herbs used for TCM prior to the Restructuring Transactions. This business was conducted through Hangzhou Qianhong Agriculture Development Co., Ltd. (“Qianhong Agriculture”), a wholly-owned subsidiary of Jiuxin Investment.
The number of employees for each area of operations, and such employees as a percentage of our total workforce, are as follows: As of March 31, 2024 Employees Percentage Non-pharmacist store staff 464 46.2 % Pharmacists 327 32.6 % Management - non-pharmacists 30 3.0 % Physicians 77 7.7 % Non-physician clinic staff 38 3.8 % Wholesale - non-warehouse 20 2.0 % Online pharmacy - technicians 2 0.2 % Online pharmacy - non-technicians 45 4.5 % Total 1,003 100.00 % We closely monitor the quality of the service provided by our employees at all levels, including in-store pharmacists and store staff who directly interact with our customers.
The number of employees for each area of operations, and such employees as a percentage of our total workforce, are as follows: As of March 31, 2025 Employees Percentage Management 6 9.8 % Technicians 2 3.3 % Offline wholesale 34 55.7 % Online platform 19 31.2 % Total 61 100.00 % We closely monitor the quality of the service provided by our employees at all levels.
The suppliers are neither related to nor affiliated with us. We believe that competitive sources are readily available for substantially all of the products we require for our retail and wholesale businesses. As such, we believe that we can change suppliers without any material interruption to our business.
For the fiscal year ended March 31, 2024, the Company had one supplier that accounted for more than 10% of the Company’s total purchases, which was 13.5%. This supplier is neither related to nor affiliated with us. We believe that competitive sources are readily available for substantially all of the products we require for our retail and wholesale businesses.
The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. 37 B. BUSINESS OVERVIEW. Pharmacies As of March 31, 2024, we currently have one hundred and twenty-seven (127) pharmacies throughout Hangzhou, the provincial capital of Zhejiang and neighborhood cities.
The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. B. BUSINESS OVERVIEW. We are a holding company incorporated in the Cayman Islands that conducts substantially all of its business operations in China.
We operate our pharmacies (including the medical clinics) through the following companies in China that we manage through contractual arrangements (refer to “ Contractual Arrangements with HJ Group and the Key Personnel” below in this report regarding the details of contractual arrangements : ● Hangzhou Jiuzhou Grand Pharmacy Chain Co., Ltd.
(“Jiuzhou Pharmacy”), Hangzhou Jiuzhou Clinic of Integrated Traditional and Western Medicine (General Partnership) (“Jiuzhou Clinic”), and Hangzhou Jiuzhou Medical & Public Health Service Co., Ltd. (“Jiuzhou Service”), which we controlled contractually through Jiuxin Investment (refer to “ Contractual Arrangements with HJ Group and the Key Personnel ” below in this report regarding the details of contractual arrangements).
Relevant PRC Regulations Information relating to the relevant PRC Regulations is incorporated by reference from our 2023 Annual Report under the caption “Relevant PRC Regulations.” Please also refer to the above Risk Factor sections “Risks Related to Our Corporate Structure” and “Risks Related to Doing Business in China”.
Please also refer to the above Risk Factor sections “Risks Related to Our Corporate Structure” and “Risks Related to Doing Business in China”. Environmental Matters Neither our wholesale operation, nor historically our retain pharmacy business, involve any activities subject to specific PRC environmental regulations.
Dividend Distribution As of March 31, 2024, the accumulated balance of our statutory reserve funds reserves amounted to $1.31 million, and the accumulated losses of our consolidated PRC entities amounted to $40.85 million. Environmental Matters Information relating to the environmental matters is incorporated by reference from our 2023 Annual Report under the caption “Environmental Matters.” 42 C.
As of March 31, 2025, the accumulated balance of our statutory reserve funds reserves amounted to nil, and the accumulated losses of our consolidated PRC entities amounted to $25.94 million.
ORGANIZATIONAL STRUCTURE The following diagram illustrates our current corporate structure as of July 30, 2024: The table below summarizes the status of the registered capital of our PRC subsidiaries and controlled companies as of the date of this report: Entity Name Entity Type Registered Capital Registered Capital Paid Due Date for Unpaid Registered Capital Jiutong Medical Subsidiary USD 2,600,000 USD 2,600,000 N/A Jiuzhou Clinic VIE N/A N/A N/A Jiuzhou Pharmacy VIE USD 733,500 USD 733,500 N/A Jiuzhou Service VIE USD 73,350 USD 73,350 N/A Jiuxin Management Subsidiary USD 30,000,000 USD 27,500,000 N/A Jiuxin Medicine Subsidiary USD 1,564,000 USD 1,564,000 N/A Qianhong Agriculture Subsidiary USD 1,497,000 USD 1,497,000 N/A Shouantang Technology Subsidiary USD 11,000,000 USD 11,000,000 N/A Shouantang Bio Subsidiary USD 162,900 USD 162,900 N/A Jiuyi Technology Subsidiary USD 5,000,000 USD 2,500,000 September 25, 2026 Linjia Medical VIE USD 2,979,460 USD 1,489,730 N/A Hongtong Service VIE USD 14,615 USD 0 N/A Jiuzhen Health VIE USD 14,615 USD 14,615 N/A Shouantang Clinic VIE USD 14,615 USD 14,615 N/A 43 The following is the tabular form condensed consolidating schedule depicting the financial position, cash flows and results of operations for the parent, the consolidated variable interest entity, and any consolidation adjustments separately - as of and for the years ending March 31, 2024, 2023 and 2022.
ORGANIZATIONAL STRUCTURE The following diagrams illustrate our corporate structure before the Restructuring Transactions and after the Restructuring Transactions (which also reflects the structure as of the date of this report), respectively: Before the Restructuring Transactions : 42 After the Restructuring Transactions (also as of the date of this report) : 43 The table below summarizes the status of the registered capital of our PRC subsidiaries as of the date of this report: Entity Name Entity Type Registered Capital Registered Capital Paid Due Date for Unpaid Registered Capital Jiutong Medical Subsidiary USD 2,600,000 USD 2,600,000 N/A Jiuxin Medicine Subsidiary USD 1,564,000 USD 1,564,000 N/A Shouantang Technology Subsidiary USD 11,000,000 USD 11,000,000 N/A Shouantang Bio Subsidiary USD 162,900 USD 162,900 N/A Jiuyi Technology Subsidiary USD 5,000,000 USD 2,500,000 September 25, 2026 Allright Subsidiary USD 1,378,037 USD 110,243 December 31, 2031 D.
Our stores provide customers with a wide variety of pharmaceutical products, including prescription and over-the-counter (“OTC”) drugs, nutritional supplements, TCM, personal and family care products, and medical devices, as well as convenience products, including consumable, seasonal, and promotional items.
Since August 2011, we have operated a wholesale business through Jiuxin Medicine, distributing third-party pharmaceutical products, including prescription and over-the-counter (“OTC”) drugs, nutritional supplements, traditional Chinese medicine (“TCM”), personal and family care products, and medical devices, as well as convenience products, including consumable, seasonal, and promotional items primarily to trading companies throughout China. Jiuxin Medicine is wholly owned by Renovation.
Throughout this report, we will sometimes refer to Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service, as well as the subsidiaries of Jiuzhou Pharmacy, collectively as “HJ Group.” Corporate History Information relating to our corporate history is incorporated by reference from our annual report on Form 20-F for the fiscal year March 31, 2023 filed with the SEC on June 15, 2023 (the “ 2023 Annual Report ”) under the caption “Corporate History.” Contractual Arrangements with HJ Group and the Key Personnel Information relating to the contractual arrangements with HJ Group and the Key Personnel is incorporated by reference from our 2023 Annual Report under the caption “Contractual Arrangements with HJ Group and the Key Personnel.” Corporate Information Our principal executive office is located at 4th Floor, Building 5, Renxin Yaju, Gong Shu District, Hangzhou City, Zhejiang Province, and China.
For more information relating to the historical contractual arrangements with HJ Group and the Key Personnel, please see the Annual Report on Form 10-K for the fiscal year ended March 31, 2020 of our predecessor, China Jo-Jo Drugstores, Inc. a Nevada Corporation, filed with the SEC on July 10, 2020 under Part I, Item 1 “ Business ” - “ Contractual Arrangements with HJ Group and the Key Personnel .” Corporate Information Our principal executive office is located at 5th Floor, Building 6, No. 100, 18th Street, Baiyang Sub-district, Qiantang District, Hangzhou City, Zhejiang Province, and China.
For the fiscal year ended March 31, 2024, one supplier, HuaDong Pharmaceutical Co., Ltd. accounted for thirteen point five percent (13.5%) of our total purchases. The suppliers are neither related to nor affiliated with us. For the fiscal year ended March 31, 2023, one supplier, HuaDong Pharmaceutical Co., Ltd. accounted for fifteen point eight percent (15.8%) of our total purchases.
For the fiscal year ended March 31, 2025, the Company had four suppliers that accounted for more than 10% of the Company’s total purchases, which were 14.9%, 14.3%, 10.8% and 10.1%, respectively. These suppliers are neither related to nor affiliated with us.
We provide extensive training for newly recruited employees in the first three months of their employment. The training is designed to encompass a number of areas, such as knowledge of our products and effective customer service. In addition, we regularly carry out training programs on medicinal information, nutritional information, and selling skills for our store staff and in-store pharmacists.
The training is designed to encompass a number of areas, such as knowledge of our products and effective customer service. We believe these programs have played an important role in strengthening the capabilities of our employees. Relevant PRC Regulations SAFE Registration In October 2005, SAFE issued Circular 75.
Removed
(“Jiuxin Medicine”) in August 2011 (see “ Our Corporate History and Structure - HJ Group ” below), we were primarily a retail pharmacy operator. As of March 31, 2024, we have one hundred and twenty-seven (127) store locations under the store brand “Jiuzhou Grand Pharmacy” in Hangzhou city. We acquired four single drugstores in fiscal 2021.
Added
(“Jiuxin Medicine”) acquired by us in August 2011, and Allright (Hangzhou) Internet Technology Co. Ltd (“Allright”) acquired by us in February 2025 (see “ Corporate History ” below).
Removed
After the acquisition, we liquidated them and then opened four new stores with the four licenses of local government medical insurance reimbursement program. On the other side, we have been concentrating on new stores within Hangzhou metropolitan area and opened fourteen stores in the fiscal year 2024.
Added
Under the name of China Jo-Jo Drugstores, Inc., the Company was originally founded as a retail pharmacy business and subsequently ventured into the wholesale business in 2011 through the acquisition of Jiuxin Medicine. Prior to the Restructuring Transactions, we operated our pharmacies (including the medical clinics) through VIEs including Hangzhou Jiuzhou Grand Pharmacy Chain Co., Ltd.
Removed
As China has been successfully controlling the spread of COVID-19, and the recurrences of the pandemic have not materially affected our business, the negative impacts are limited.
Added
In the first quarter of 2025, the Company completed strategic restructuring of its overall business, aiming to transition from a high-cost retail segment to a wholesale-focused model by expansion of its wholesale business through acquisition of Allright and divestiture of its retail drugstores business. Pursuant to that certain Equity Exchange Agreement with Renovation, Mr. Lei Liu, Ms.
Removed
We currently operate in four business segments in China: (1) retail drugstores, (2) online pharmacy, (3) wholesale business selling products similar to those we carry in our pharmacies, and (4) farming and selling herbs used for traditional Chinese medicine (“TCM”). All of the above business are performed in China with no international sales.
Added
Li Qi, and Oakview International Limited (“Oakview”), dated January 31, 2025, Renovation transferred all equity in Jiuxin Investment to Oakview, in exchange for irrevocable surrender for no consideration by Mr. Liu, Ms. Qi, Oakview and their affiliates in total 2,548,353 ordinary shares back to us. Concurrently on January 31, 2025, we entered into that certain Equity Exchange Agreement with Mr.
Removed
Additionally, we have doctors licensed in both western medicine and TCM on site for consultation, examination and treatment of common ailments at scheduled hours.
Added
Lingtao Kong and Ridgeline, pursuant to which the Company acquired from Mr. Kong all of the issued and outstanding ordinary shares of Ridgeline, the direct parent company of Allright, by issuing 2,225,000 ordinary shares to Mr. Kong.
Removed
Four (4) stores have adjacent medical clinics offering urgent care (to provide treatment for minor ailments such as sprains, minor lacerations, and dizziness that can be treated on an outpatient basis), TCM (including acupuncture, therapeutic massage, and cupping) and minor outpatient surgical treatments (such as suturing).
Added
The Restructuring Transactions were approved by our shareholders at our annual general meeting of shareholders held on February 25, 2025, and were closed on February 28, 2025.
Removed
Our stores vary in size, but presently average close to 200 square meters per store. We attempt to tailor each store’s product offerings, physician access, and operating hours to suit the community where the store is located.
Added
Following the consummation of the Divestiture, Jiuxin Investment and all entities owned or controlled by Jiuxin Investment, including each of Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service, are owned or controlled indirectly by Mr. Liu and Ms. Qi.
Removed
(“Jiuzhou Pharmacy”), which we control contractually, operates our “Jiuzhou Grand Pharmacy” stores; ● Hangzhou Jiuzhou Clinic of Integrated Traditional and Western Medicine (General Partnership) (“Jiuzhou Clinic”), which we control contractually, operates one (1) of our three (3) medical clinics; and ● Hangzhou Jiuzhou Medical & Public Health Service Co., Ltd.
Added
As the result of the Restructuring Transactions, the Company currently operates primarily in the wholesale business selling pharmaceutical products to trading companies and other businesses. We currently operate in the offline wholesale distribution of pharmaceutical products primarily to local buyers, while also engaging in online sales through both our self-operated and third-party platforms to customers nationwide.
Removed
(“Jiuzhou Service”), which we control contractually, operates our other medical clinics. We also offer OTC drugs and nutritional supplements for sale through a website (www.dada360.com) operated by Jiuzhou Pharmacy.
Added
As discussed above, Allright was acquired by us in February 2025. Allright operates in the B2B sector, providing wholesale distribution and online sales through self-operated and third-party platforms, with a focus on pharmaceuticals, medical devices, health foods, cosmetics, and daily necessities.
Removed
For the fiscal year ended March 31, 2024, retail revenue, including pharmacies, medical clinics accounted for approximately 49.0% of our total revenue, while online pharmacy revenue accounted for 20.6% of our total revenue.
Added
As result of the Restructuring Transactions in February 2025, we no longer operate in the retail pharmacy business or the herb farming business. 31 Corporate History We were incorporated in Nevada on December 19, 2006, under the name “Kerrisdale Mining Corporation,” with a principal business objective to acquire and develop mineral properties.
Removed
Since August 2011, we have operated a wholesale business through Jiuxin Medicine, distributing third-party pharmaceutical products (similar to those carried by our pharmacies) primarily to trading companies throughout China. Jiuxin Medicine is wholly owned by Jiuzhou Pharmacy. For the fiscal year March 31, 2024, wholesale revenue accounted for approximately 30.4% of our total revenue.
Added
Although we had acquired certain mining claims, we were not operational. On September 17, 2009, we acquired control of Renovation, pursuant to a share exchange agreement. On September 24, 2009, we amended our Articles of Incorporation to change our name from “Kerrisdale Mining Corporation” to “China Jo-Jo Drugstores, Inc.” (“CJJD Nevada”).
Removed
During the fiscal year ended March 31, 2024, our herb farming business generated approximately 0% of our retail revenue.
Added
On May 14, 2021, CJJD Nevada and China Jo-Jo Drugstores Holdings, Inc., an exempted company incorporated under the laws of the Cayman Islands and a wholly owned subsidiary of CJJD Nevada (“CJJD Cayman”) entered into a definitive agreement and plan of merger (the “Merger Agreement”), pursuant to which, upon the terms and subject to the conditions set forth in the Merger Agreement, CJJD Nevada merged with and into CJJD Cayman (the “Redomicile Merger”), with CJJD Cayman surviving and changing its name to China Jo-Jo Drugstores, Inc.
Removed
Pharmacy sales accounted for approximately 95.4% of our retail revenue, and 46.7% of our total revenue, for the fiscal year ended March 31, 2024.
Added
Following the Redomicile Merger, CJJD Cayman, together with its subsidiaries, owns and continues to conduct CJJD Nevada’s business in substantially the same manner as was conducted by CJJD Nevada and its subsidiaries prior to the Redomicile Merger. The Redomicile Merger was completed on July 30, 2021.
Removed
We offer primarily third-party products at our pharmacies, including: ● Approximately 1,460 prescription drugs (345 of which require a physician’s prescription and the remainder requiring customer personal information registration only), sales of which accounted for approximately 33.4% of our retail revenue for the fiscal year ended March 31, 2024; ● Approximately 1,722 OTC drugs, sales of which accounted for approximately 41.7% of our retail revenue for the fiscal year ended March 31, 2024; ● Approximately 916 nutritional supplements, including a variety of healthcare supplements, vitamin, mineral and dietary products, sales of which accounted for approximately 13.1% of our retail revenue for the fiscal year ended March 31, 2024; ● TCM, including drinkable herbal remedies and pre-packaged herbal mixtures for making soup, sales of which accounted for approximately 4.5% of our retail revenue for the fiscal year ended March 31, 2024; ● Sundry products (i.e., personal care products such as skin care, hair care and beauty products, convenience products such as soft drinks, packaged snacks, and other consumable, cleaning agents, stationeries, and seasonal and promotional items tailored to local consumer demand for convenience and quality), sales of which accounted for approximately 1.5% of our retail revenue for the fiscal year ended March 31, 2024; and ● Medical devices (i.e., family planning and birth control products, early pregnancy test products, portable electronic diagnostic apparatus, rehabilitation equipment, and surgical tools such as hemostats, needle forceps and surgical scissors), sales of which accounted for approximately 5.9% of our retail revenue for the fiscal year ended March 31, 2024.
Added
As a result of the Reorganization, each issued and outstanding share of CJJD Nevada’s common stock was converted into the right to receive one CJJD Cayman ordinary share, which shares were issued by CJJD Cayman as part of the Redomicile Merger. On January 31, 2025, we entered into (i) that certain Equity Exchange Agreement with Mr.
Removed
We favor retail locations in well-established residential communities with relatively concentrated consumer purchasing power or are located in close proximity to local hospitals, and evaluate potential store sites to assess consumer traffic, visibility and convenience. Depending on its size, each drugstore has between two (2) to twenty-five (25) pharmacists on staff, all of whom are properly licensed.
Added
Lingtao Kong and Ridgeline, pursuant to which the Company acquired from Mr. Kong, the sole shareholder of Ridgeline, all of the issued and outstanding ordinary shares of Ridgeline, by issuing 2,225,000 our ordinary shares to Mr. Kong, and (ii) that certain Equity Exchange Agreement with Renovation, Mr. Lei Liu, Ms.
Removed
We only accept prescriptions from licensed health care providers, and verify the validity, accuracy, and completeness of all prescriptions. We also ask all prescription customers to disclose their drug allergies, current medical conditions, and current medications. Most pharmacies also maintain a TCM counter staffed by licensed herbalists.
Added
Li Qi, and Oakview, pursuant to which Renovation transferred all equity in Jiuxin Investment to Oakview, in exchange for irrevocable surrender for no consideration by Mr. Liu, Ms. Qi, Oakview and their affiliates in total 2,548,353 our ordinary shares back to us. The transactions were closed on February 28, 2025.
Removed
After opening, a location without SHI (Social Health Insurance) coverage may take up to one year to achieve our projected revenue goals for that particular location. Various factors influence individual store revenue including, but not limited to: location, nearby competition, local population demographics, square footage, and government insurance coverage.
Added
Following the closing of these transactions, we changed our name from “China Jo-Jo Drugstores, Inc.” to “Ridgetech, Inc.”, effective as of February 28, 2025. We also changed our trading symbol on The Nasdaq Stock Market LLC from “CJJD” to “RDGT”, effective as of March 4, 2025. Effective as of the closing, Mr. Liu and Ms.
Removed
All of our one hundred and twenty-seven (127) of our drugstores are located in Hangzhou city. To enhance our customers’ experience, we have licensed physicians available at several of our “Jiuzhou Grand Pharmacy” locations for consultation, examination and treatment of common ailments at scheduled hours.
Added
Qi resigned from our board of directors and any other officer positions with us (including Mr. Liu’s role as our Chief Executive Officer), and Mr. Ming Zhao, our Chief Financial Officer, was appointed as our interim Chief Executive Officer to hold such office until a permanent Chief Executive Officer is duly appointed.
Removed
In addition, our Daguan, Wenhua, Xiasha and Yueming stores have adjoining medical clinics that provide urgent care (for conditions such as sprains, minor lacerations, and dizziness), TCM treatments (including acupuncture, therapeutic massage, moxibustion, and cupping), and minor outpatient surgical treatments (such as suturing). 38 To ensure quality and personal attention for patients, we employ only licensed doctors and certified nurses and technicians.
Added
On May 28, 2025, following the receipt of an order granted by the Grand Court of the Cayman Islands confirming the capital reduction and the share subdivision, we effected a reduction of the par value of each of our issued, ordinary share from US$0.24 to US$0.001 by cancelling the paid-up capital to the extent of the difference between US$0.24 and such new par value, and immediately following the capital reduction, each of our authorized but unissued ordinary shares of par value of US$0.24 be sub-divided into 240 new ordinary shares of par value of US$0.001 each.
Removed
Patient treatment at our five (5) Jiuzhou Clinics and Jiuzhou Service, follow nationally established clinical practice guidelines from China’s Ministry of Health. We currently have seventy-seven (77) physicians and thirty-eight (38) clinic staff.
Added
On May 29, 2025, we filed a copy of the Fourth Amended and Restated Memorandum and Articles of Association reflecting the capital reduction and the share subdivision with the Cayman Islands General Registry.
Removed
In-store consultations and examinations by our physicians are provided free-of-charge to ensure that customers are being prescribed and taking the appropriate medication for their ailments, and to afford customers convenience.
Added
Pursuant to the Fourth Amended and Restated Memorandum and Articles, our authorized share capital now has become US$36,010,000 divided into (i) 36,000,000,000 ordinary shares of a par value of US$0.001 each and (ii) 10,000,000 preferred shares of a par value of US$0.001 each. 32 Contractual Arrangements with HJ Group and the Key Personnel Our relationships with HJ Group and Mr.
Removed
We view our medical services as more consumer-driven than other health care specialties, because consumers requiring the types of medical services that we provide often seek treatment on their own accord.
Added
Lei Liu and Ms. Li Qi, in their capacity as shareholders of HJ Group were historically governed by a series of contractual arrangements between Jiuxin Investment and HJ Group. As result of the Restructuring Transactions in the first quarter of 2025, we transferred our equity interests in Jiuxin Investment to Mr. Liu and Ms.
Removed
We have developed our medical services to respond to the public need for convenient access to medical consultations and/or care and the significant savings that we can provide as compared to a more traditional medical setting such as a hospital.
Added
Qi and their affiliates and no longer have any VIE within our corporate structure.
Removed
Many of our patients often need immediate access to medical services, do not have a regular physician, or may lack suitable alternatives. Patient flow is derived from the physical presence of our drugstores, not from pre-existing doctor-patient relationships or referrals from other healthcare providers. We generate limited revenue directly from our clinics.
Added
Following the disposition of our wholly-owned subsidiary, Jiuxin Investment and its owned or controlled entities, we have divested our retail pharmacy business, and shifted our focus to the wholesale business of pharmaceutical products in China, both online and offline.
Removed
However, our clinic brings patients into our stores, where they then purchase medical products. Online Sales Since May 2010, we have been retailing OTC drugs and nutritional supplements on the Internet at www.dada360.com.
Added
We currently operate in the offline wholesale distribution of pharmaceutical products primarily to local buyers, while also engaging in online sales through both our self-operated and third-party platforms to customers nationwide.
Removed
Before November 2015, our subsidiary Quannuo Technology operated and maintained the website pursuant to the Internet Pharmaceutical Transaction Service Qualification Certificate issued by the National Medical Products Administration (the “NMPA”) of Zhejiang Province, which allows us to engage in online retail pharmaceutical sales throughout China.
Added
Allright is a rapidly growing online and offline wholesale distributor of pharmaceutical and other healthcare products such as health foods, cosmetics and daily necessities in China. Allright actively sells on popular online distribution platforms nationwide. Through these online platforms, Allright sells various medical products to retail pharmacies, clinics and other vendors across the country.
Removed
As we sold all our equity interests in Quannuo Technology in November 2015, we have transferred our online pharmacy operation function to Jiuzhou Pharmacy. We have established payment methods with banks and online intermediaries such as Alipay or Wechat Pay, and are cooperating with business-to-consumer online vendors such as Taobao, JD.com or Pinduoduo.
Added
Allright also operates its own online distribution platform, which is designed to provide services such as medication guidance, sales management, and customer health solutions while utilizing digital tools to enhance the user experience. Its operations are supported by modern logistics systems, including automated and intelligent warehousing, and a focus on quality management and traceability to maintain product safety and transparency.
Removed
By using Taobao’s platform in addition to our own website as mentioned above, we can be exposed to a wider range of customers. Online sales accounted for approximately 20.6% of our total revenue, for the fiscal year ended March 31, 2024. Online sales accounted for approximately 21.8% of our total revenue, for the fiscal year ended March 31, 2023.
Added
Additionally, Allright has a professional sales team with strong service capabilities, and it has a well-established and high-quality sales network covering Zhejiang Province.
Removed
Online sales accounted for approximately 18.4% of our total revenue, for the fiscal year ended March 31, 2022.
Added
We believe that our presence on multiple platforms offers greater opportunities to distribute pharmaceutical products nationwide, and that following the acquisition of Allright, the Company is better positioned to enhance its financial performance. 33 Our Customers Our wholesale customers includes retail pharmacies, clinics and third-party trading companies that purchase from us to resell to pharmacies throughout China.
Removed
Wholesale revenue increased primarily as a result of our ability to resell certain products, which our retail stores made large orders on, to other vendors. As our retail drugstores achieved large quantity sales of certain brand name merchandise, we were able to negotiate for lower purchase prices than the market level on such merchandise.
Added
As of June 2025, we have more than 5000 varieties of products and serves over 150,000 customers including retail pharmacies, clinics and other vendors across the country. On February 28, 2025, the Divestiture was completed.
Removed
As a result, certain vendors who were unable to obtain better prices than ours, will turn to us for such merchandise, leading the wholesale volume to grow. On the other side, we have been trying to act as a local agent for well-known health products in Zhejiang Province.
Added
In accordance with ASC 205-20 (Discontinued Operations), the Company determined that Jiuxin Investment’s business qualified as a discontinued operation and has presented it as such in the audited consolidated financial statements. Financial results for discontinued operations are reported separately from continuing operations.
Removed
For example, we kept a strategic cooperation agreement with Dong’a Gelatin (DEEJ) and act as its local sale agent in Zhejiang Province.
Added
After divestiture of Jiuxin Investment, the internal sales to Jiuzhou Pharmacy were not eliminated in the audited consolidated financial statements. For the fiscal year ended March 31, 2025, the Company had two customers that accounted for more than 10% of the Company’s total sales from continuing operations, which were 67.1% and 18.7%, respectively.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

37 edited+62 added−73 removed18 unchanged
Biggest changeGross Profit The average gross margins for each of our four business segments for the years ended March 31, 2024, 2023 and 2022 are as follows: Year ended March 31, 2024 2023 2022 Average gross margin for retail drugstores 29.9 % 32.2 % 32.0 % Average gross margin for online sales 11.3 % 12.0 % 11.9 % Average gross margin for wholesale business 10.4 % 10.9 % 12.0 % Average gross margin for farming business N/A N/A N/A Comparison of years ended March 31, 2024 and 2023 Gross profit decreased by $3,171,916 or 9.3% period over period primarily as a result of a decrease in gross profit provided by retail drugstores, which decreased significantly in the year ended March 31, 2024.
Biggest changeGross Profit The average gross margins for each of our two business segments for the years ended March 31, 2025 and 2024 are as follows: Year ended March 31, 2025 2024 Average gross margin for offline wholesale 3.2 % 3.9 % Average gross margin for online platform 7.4 % N/A % Gross profit was $3,838,815 for the year ended March 31, 2025, representing a decrease by $1,039,602, or 21.3%, as compared to that of $4,878,417 for the year ended March 31, 2024.
We undertake no obligation to update publicly any forward-looking statements for any reason even if new information becomes available or other events occur in the future other than in compliance with the SEC rules and regulations. Our financial statements are prepared in U.S. Dollars and in accordance with accounting principles generally accepted in the United States.
We undertake no obligation to update publicly any forward-looking statements for any reason even if new information becomes available or other events occur in the future other than in compliance with the SEC rules and regulations. 44 Our financial statements are prepared in U.S. Dollars and in accordance with accounting principles generally accepted in the United States.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us. Exchange Rates Our subsidiaries, the VIEs and affiliated companies in the PRC maintain their books and records in RMB, the lawful currency of the PRC.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us. Exchange Rates Our subsidiaries and affiliated companies in the PRC maintain their books and records in RMB, the lawful currency of the PRC.
Since the use of estimates is an integral component of the financial reporting process, our actual results could differ materially from those estimates. We believe that any reasonable deviation from those judgments and estimates would not have a material impact on our financial condition or results of operations.
Since the use of estimates is an integral component of the financial reporting process, our actual results could differ materially from those estimates. 45 We believe that any reasonable deviation from those judgments and estimates would not have a material impact on our financial condition or results of operations.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS A . OPERATING RESULTS. The following discussion and analysis of our results of operations and financial condition for the fiscal years ended March 31, 2024, 2023 and 2022 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this report.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS A . OPERATING RESULTS. The following discussion and analysis of our results of operations and financial condition for the fiscal years ended March 31, 2025, 2024 and 2023 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this report.
In the year ended March 31, 2024, Online platforms such as Pharmacist Help, Yiyao Help and Yao Help have become popular ways to transact medical products by bulk. The platforms attract a plenty of buyers and sellers, so both parties have extended opportunities to expose themselves.
In the year ended March 31, 2024, online platforms such as Pharmacist Help, Yiyao Help and Yao Help have become popular ways to transact medical products by bulk. The platforms attracted a plenty of buyers and sellers, so both parties have extended opportunities to expose themselves.
Industry and Market Outlook Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended March 31, 2024 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions. 57 E.
Industry and Market Outlook Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended March 31, 2025 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
The change is primarily attributable to an increase in net income of $16,904,535, an increase in accounts receivable of $727,315, an increase in cash provided by accounts payable of $4,236,698 and an increase in cash provided by other payables and accrued liabilities of $2,210,422, offset by a decrease in bad debt direct write-off and provision of $6,789,437, a decrease in inventories and biological assets of $1,177,071 and a decrease in stock compensation of $10,360,000.
The change is primarily attributable to an increase in net income of $16,904,535, an increase in accounts receivable of $727,315, an increase in cash provided by accounts payable of $4,236,698 and an increase in cash provided by other payables and accrued liabilities of $2,295,804, offset by a decrease in bad debt direct write-off and provision of $6,789,437, a decrease in inventories and biological assets of $1,177,071 and a decrease in stock compensation of $10,360,000.
The exchange rates used to translate amounts in RMB into USD for the purposes of preparing the audited consolidated financial statements or otherwise disclosed in this report were as follows: March 31, 2024 March 31, 2023 March 31, 2022 Balance sheet items, except for the registered and paid-up capital, as of end of period/year USD1: RMB 7.2203 USD1: RMB 6.8676 USD1: RMB 6.3393 Amounts included in the statement of Operations and statement of cash flows for the period/ year ended USD1: RMB 7.1671 USD1: RMB 6.8516 USD1: RMB 6.4180 56 Inflation We believe that inflation has not had a material effect on our operations to date.
The exchange rates used to translate amounts in RMB into USD for the purposes of preparing the audited consolidated financial statements or otherwise disclosed in this report were as follows: March 31, 2025 March 31, 2024 March 31, 2023 Balance sheet items, except for the registered and paid-up capital, as of end of period/year USD1: RMB 7.2567 USD1: RMB 7.2203 USD1: RMB 6.8676 Amounts included in the statement of Operations and statement of cash flows for the period/ year ended USD1: RMB 7.2163 USD1: RMB 7.1671 USD1: RMB 6.8516 Inflation We believe that inflation has not had a material effect on our operations to date.
These estimates can be affected by a number of factors including, but not limited to, general economic and regulatory conditions, efforts of third party organizations to reduce their prescription drug costs and/or increased member co-payments, the continued efforts of competitors to gain market share and consumer spending patterns.
These estimates can be affected by a number of factors including, but not limited to, general economic and regulatory conditions, efforts of third party organizations to reduce their costs , the continued efforts of competitors to gain market share and consumer spending patterns.
Income Taxes Our income tax expense for the year ended March 31, 2024 decreased by $331,679 as compared to the year ended March 31, 2023 due to a decrease in the effective rate resulting from an increase in profits in several business lines.
Income Taxes Our income tax expense for the year ended March 31, 2024 decreased by $435,904 as compared to the year ended March 31, 2023 due to a decrease in the effective rate resulting from a decrease in profits in several business lines.
In April and December 2022, we issued a total of 3,000,000 shares of ordinary shares and recorded stock-based compensation of approximately $10.36 million. Impairment of Long-lived Assets We recorded an impairment of long-lived assets of $0, $0 and $148,795 for the year ended March 31, 2024, 2023 and 2022.
Share-based Compensation We recorded stock-based compensation of $0 and $10,360,000 for the years ended March 31, 2024 and 2023. In April and December 2022, we issued a total of 3,000,000 shares of ordinary shares and recorded stock-based compensation of approximately $10.36 million.
Net cash provided by financing activities For the year ended March 31, 2024, net cash provided by financing activities amounted to $8,004,291, as compared to $2,366,156 a year ago. The change is primarily due to notes payable and proceeds from short-term bank loan.
The change is primarily due to proceeds from equity and debt financing and change in notes payables issued to HUB. For the year ended March 31, 2024, net cash provided by financing activities amounted to $8,004,291, as compared to $2,366,156 for the same period a year ago.
We have spent significant efforts in exploring these buyers with certain products at reasonable prices as a result, we are able to attract more buyers and promote our sales. We believe that selling on the modern wholesale platform may be a new growth point.
We spent significant efforts in exploring these buyers with certain products at reasonable prices; as a result, we were able to attract more buyers and promote our sales. We believed that selling on the modern wholesale platform may be a new growth point. Therefore, we were actively looking for potential acquisition targets with trading platform to strengthen our wholesale business.
For the year ended March 31, 2023 cash used in operating activities amounted to $(3,283,513), as compared to $(5,385,793) a year ago.
For the year ended March 31, 2024 cash used in operating activities amounted to $(3,155,439), as compared to $(3,283,513) for the same period a year ago.
LIQUIDITY AND CAPITAL RESOURCES Our cash flows for the periods indicated are as follows: For the year ended March 31, 2024 2023 2022 Net cash used in operating activities $ (3,155,439 ) $ (3,283,513 ) $ (5,385,973 ) Net cash used in investing activities $ (2,039,850 ) $ (316,097 ) $ (306,138 ) Net cash provided by financing activities $ 8,004,291 $ 2,366,156 $ 4,836,898 Net cash used in operating activities For the year ended March 31, 2024 cash used in operating activities amounted to $(3,155,439), as compared to $(3,283,513) a year ago.
Our cash flows for the periods indicated are as follows: For the year ended March 31, 2025 2024 2023 Net cash provided by (used in) operating activities $ 1,247,770 $ (3,155,439 ) $ (3,283,513 ) Net cash used in investing activities $ (18,135,078 ) $ (2,039,850 ) $ (316,097 ) Net cash provided by financing activities $ 1,505,592 $ 8,004,291 $ 2,366,156 Net cash used in operating activities For the year ended March 31, 2025 cash provided by (used in) operating activities amounted to $1,247,770, as compared to $(3,155,439) a year ago.
The critical accounting policies and related judgments and estimates used to prepare our financial statements are identified in Note 2 to our audited consolidated financial statements accompanying in this report. Revenue recognition In May 2014, the FASB issued ASU No. 2014-09, which creates Topic 606, Revenue from Contracts with Customers.
A summary of the Company’s significant accounting policies is contained in Note 2 to our audited consolidated financial statements accompanying in this report. Revenue recognition In May 2014, the FASB issued ASU No. 2014-09, which creates Topic 606, Revenue from Contracts with Customers.
Our income tax expense for the year ended March 31, 2023 decreased by $705,185 as compared to the year ended March 31, 2022 due to an increase in the effective rate resulting from a decrease in profits in several business lines.
Income Taxes Our income tax expense for the year ended March 31, 2025 increased by $544,887 as compared to the year ended March 31, 2024 due to an increase in the effective rate resulting from an increase in profits in several business lines.
Net cash used in investing activities For the year ended March 31, 2024, net cash used in investing activities amounted to $(2,039,850), as compared to $(316,097) provided by investing activities a year ago. The change is primarily attributable to investment in a joint venture and purchases of long-term assets.
For the year ended March 31, 2024, net cash used in investing activities amounted to $(2,039,850), as compared to $(316,097) provided by investing activities a year ago.
See “Exchange Rates” at the end of this section for information concerning the exchanges rates at which Renminbi (“RMB”) were translated into U.S. Dollars (“USD” or “$”) at various pertinent dates and for pertinent periods.
See “Exchange Rates” at the end of this section for information concerning the exchanges rates at which Renminbi (“RMB”) were translated into U.S. Dollars (“USD” or “$”) at various pertinent dates and for pertinent periods. Overview We are a wholesale distributor of pharmaceutical and other healthcare products in the People’s Republic of China (“PRC” or “China”).
The sales and marketing expenses decreased by approximately $0.87 million, which primarily attributable to the decrease in fee charged by distribution channels resulting from the decrease in retail drugstores and online pharmacy sales. Overall, such expenses as a percentage of our revenue were 17.7% and 19.6% respectively, in the years ended March 31, 2024 and 2023.
The sales and marketing expenses decreased by approximately $0.39 million, which was primarily attributable to the decrease in warehousing and distribution costs. Overall, such expenses as a percentage of our revenue were 0.8% and 1.1% respectively, for the years ended March 31, 2024 and 2023.
Sales and marketing expenses for the year ended March 31, 2023 decreased by $1,699,796 or 5.5% as compared to the year ended March 31, 2022, primarily due to decrease in rent, offset by increase in the sales and marketing expenses.
Selling and Marketing Expenses Sales and marketing expenses for the year ended March 31, 2024 decreased by $331,802 or 26.2% as compared to the year ended March 31, 2023, primarily due to a decrease in the sales and marketing expenses.
Contractual Obligations and Off-Balance Sheet Arrangements Contractual Obligations The following table summarizes our contractual obligations: Payments due by period Contractual obligations Total Less than 1 year 1-3 years 3-5 years More than 5 years Short-term loan payable $ 276,997 276,997 - - - Notes payable 31,676,335 31,676,335 - - - Long-term loan payable - - - - - Total $ 31,953,332 31,953,332 - - - Off-balance Sheet Arrangements We do not have any outstanding financial guarantees or commitments to guarantee the payment obligations of any third parties.
Net Loss from continuing operations As a result of the foregoing, net loss was $785,706 and $15,835,301 in the years ended March 31, 2024 and 2023. 51 Contractual Obligations and Off-Balance Sheet Arrangements Contractual Obligations The following table summarizes our contractual obligations: Payments due by period Contractual obligations Total Less than 1 year 1-3 years 3-5 years More than 5 years Notes payable $ 10,386,612 10,386,612 - - - Total $ 10,386,612 10,386,612 - - - Off-balance Sheet Arrangements We do not have any outstanding financial guarantees or commitments to guarantee the payment obligations of any third parties.
For the year ended March 31, 2023, net cash used in investing activities amounted to $(316,097), as compared to $(306,138) provided by investing activities a year ago. The change is primarily attributable to purchases of long-term assets.
The change is primarily attributable to investment in a joint venture and purchases of long-term assets. 53 Net cash provided by financing activities For the year ended March 31, 2025, net cash provided by financing activities amounted to $1,505,592, as compared to $8,004,291 for the same period a year ago.
Overall, such expenses as a percentage of our revenue were 19.6% and 18.8% respectively, in the years ended March 31, 2023 and 2022. 53 General and Administrative Expenses General and administrative expenses for the year ended March 31, 2024 decreased by $8,411,160 or 53.7% as compared to the year ended March 31, 2023, primarily due to the decrease in bad debt expense.
General and Administrative Expenses General and administrative expenses for the year ended March 31, 2024 decreased by $1,789,629 or 34.8% as compared to the year ended March 31, 2023, primarily due to the decrease in bad debt expense.
Such expenses as a percentage of revenue decreased to 4.7% from 10.5% for the same period a year ago. In the year ended March 31, 2024, we recorded a reduction of $0.22 million in the allowance account for bad debts as compared to the increase of $7.58 million in the allowance account for bad debts in FY2023.
Such expenses as a percentage of revenue decreased for the year ended March 31, 2024 to 2.7% from 4.3% for the same period a year ago.
In the year ended March 31, 2023, we recorded an increase in the allowance for bad debts of $7.58 million as compared to the increase in the allowance for bad debts of $1.32 million in FY2022. Share-based Compensation We recorded stock-based compensation of $0, $10,360,000 and $0 for the years ended March 31, 2024, 2023 and 2022.
In the year ended March 31, 2024, we recorded a reduction of $0.24 million in the allowance account for bad debts as compared to the increase of $2.32 million in the allowance account for bad debts in the year ended March 31, 2023.
However, we incurred labor, logistic and tax cost for our wholesale business. As a result, to keep reasonable profitability, we abandoned certain wholesales at low gross profit margin in the year ended March 31, 2023. As a result, the wholesale revenue declined.
As a local wholesale distributor in pharmaceutical products, our sales are limited to local and neighborhood regions. As the market became competitive, to keep reasonable profitability, we abandoned certain wholesales with low gross profit margin in the year ended March 31, 2025. As a result, the wholesale revenue declined..
Loss from Operations As a result of the above, loss from operations was $3,534,563, $20,925,383 and $2,693,890 for the years ended March 31, 2024, 2023 and 2022, respectively. Our operating margin for the year ended March 31, 2024, 2023 and 2022 was (2.3) %, (14.1) % and (1.6) %, respectively.
Income (loss) from Operations As a result of the above, income (loss) from operations was $(1,035,339) and $596,082 for the years ended March 31, 2025 and 2024, respectively. Our operating margin for the year ended March 31, 2025 and 2024 was (0.9) % and 0.5%, respectively.
Wholesale gross margin slightly decreased primarily due to certain products with low profit margin we carried and sold to certain pharmaceutical vendors. In the year ended March 31, 2024,we have been actively looking for new buyers in certain emerging new platforms such as .
For the year ended March 31, 2025 and 2024, gross margins were approximately 3.2% and 3.9%, respectively. Gross margin of offline wholesale sales slightly decreased for the year ended March 31, 2025, as compared to the year ended March 31, 2024, primarily due to various products with different profit margins we carried and sold to certain pharmaceutical vendors.
The adoption of the new revenue standard was not material and is not expected to be material to our net income on an ongoing basis. 48 Impairment of definite-lived intangible assets The Company evaluates the recoverability of definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.
The adoption of the new revenue standard was not material and is not expected to be material to our net income on an ongoing basis.
As we have price advantages in quite a few products, we have attracted quite a few customers such as other local drugstores and clinics across the country. In order to attract these customers, we offered competitive prices. However, as we accumulate the sale volume by selling to more customers, we may negotiate and obtain lower purchase prices from our vendors.
In the year ended March 31, 2024, we were actively looking for new buyers in certain emerging new platforms. As we had price advantages in quite a few products, we attracted quite a few customers such as other local drugstores and clinics across the country. In order to attract these customers, we offered competitive prices.
Selling and Marketing Expenses Sales and marketing expenses for the year ended March 31, 2024 decreased by $1,791,576 or 6.1% as compared to the year ended March 31, 2023, primarily due to a decrease in expense related to Normal Nucleic Acid Testing (“NNAT”) requested by local government and a decrease in the sales and marketing expenses.
Selling and Marketing Expenses Sales and marketing expenses for the year ended March 31, 2025 increased by $599,977 or 64.2%, as compared to the year ended March 31, 2024, primarily due to an increase in the sales and marketing expenses.
Our sales through our own platform are primarily generated by customers who use their private commercial medical insurances package. We operate a wholesale business through Jiuxin Medicine distributing third-party pharmaceutical products (similar to those carried by our pharmacies) primarily to trading companies and other local drugstores in China.
Prior to the acquisition of Allright in the first quarter of 2025, we operated a wholesale business primarily through Jiuxin Medicine distributing third-party pharmaceutical products (similar to those historically carried by our pharmacies) primarily to trading companies and other local drugstores in China. As discussed above, on February 28, 2025, we acquired Ridgeline and its wholly owned subsidiary Allright.
We do not expect significant increase in gross margin our online sales. Wholesale gross margin decreased primarily due to various products with different profit margin we carried and sold to certain pharmaceutical vendors. Although we have attempted to market our products to major local hospitals and other pharmacies, we have not been able to make significant progress.
Although as a retailer and distributor we have attempted to market the products to major local hospitals and other pharmacies, we have not been able to make significant progress. As a result, we do not have big bargain power on the prices. So our wholesale profit margin varies from time to time.
The sales and marketing expenses increased by approximately $1.91 million, which primarily reflects the increase in fee charged by distribution channels such as Tmall and JD as a percentage of online pharmacy sales.
The sales and marketing expenses increased by approximately $0.69 million, which primarily attributable to the increase in drug distribution service fee.
General and administrative expenses for the year ended March 31, 2023 increased by $7,481,508 or 91.4% as compared to the year ended March 31, 2022, primarily due to the increase in bad debt expense. Such expenses as a percentage of revenue increased to 10.5% from 5.0% for the same period a year ago.
Such expenses as a percentage of revenue increased for the year ended March 31, 2025 to 2.8% from 2.7% for the same period a year ago. In the year ended March 31, 2025, we recorded approximately $0.52 million in warehousing management fee as compared to approximately of $0.99 million in warehousing management fee in the year ended March 31, 2024.
Removed
Overview We currently operate in four business segments in China: (1) retail drugstores, (2) online pharmacy, (3) wholesale of products similar to those that we carry in our pharmacies, and (4) farming and selling herbs used for traditional Chinese medicine (“TCM”). 47 Our drugstores offer customers a wide variety of pharmaceutical products, including prescription and over-the-counter (“OTC”) drugs, nutritional supplements, TCM, personal and family care products, medical devices, and convenience products, including consumable, seasonal, and promotional items.
Added
We currently operate in the offline wholesale distribution of pharmaceutical products primarily to local buyers, while also engaging in online sales through both our self-operated and third-party platforms to customers nationwide. Prior to February 28, 2025, we were primarily a retail pharmacy operator.
Removed
Additionally, we have licensed doctors of both western medicine and TCM on site for consultation, examination and treatment of common ailments at scheduled hours. During the year ended March 31, 2021, the Company sold its Lin’An Jiuzhou Pharmacy Co., Ltd (“Lin’An Jiuzhou”), which runs ten stores in Linan City, to local investors for total proceeds of $125,514.
Added
We operated our pharmacies (including the medical clinics) through Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service, which we controlled contractually through our indirect subsidiary Jiuxin Investment. On January 31, 2025, the Company, Renovation, Mr. Lei Liu, Ms.
Removed
On the other side, we have been concentrating on new stores within Hangzhou metropolitan area. As of March 31, 2024, we had 127 pharmacies in Hangzhou city under the store brand of “Jiuzhou Grand Pharmacy”. Since May 2010, we have also been selling certain OTC drugs, medical devices, nutritional supplements and other sundry products online.
Added
Li Qi, and Oakview entered into that certain Equity Exchange Agreement, pursuant to which Renovation transferred all equity in Jiuxin Investment to Oakview, in exchange for irrevocable surrender by Mr. Liu, Ms. Qi, Oakview and their affiliates in total 2,548,353 our ordinary shares back to us.
Removed
Our online pharmacy sells through several third-party platforms such as Alibaba’s Tmall, JD.com and Amazon.com, and the Company’s own platform all over China. In fiscal year 2020, in order to keep competitive in certain third-party platforms such as Tmall, we have spent reasonable resources on marketing our products through these third-party platforms.
Added
Concurrently on January 31, 2025, we entered into that certain Equity Exchange Agreement, with Mr. Lingtao Kong and Ridgeline, pursuant to which the Company acquired from Mr. Kong all of the issued and outstanding ordinary shares of Ridgeline, the direct parent company of Allright, by issuing 2,225,000 our ordinary shares to Mr. Kong.
Removed
We also farm certain herbs used in TCM but have not made sales in the year ended March 31, 2024. During the COVID-19 outbreak, we experienced a decline in the number of customer visits at our stores. To avoid face-to-face contact, customers tended to shop online.
Added
The Restructuring Transactions were approved by our shareholders at our annual general meeting of shareholders held on February 25, 2025, and were closed on February 28, 2025.
Removed
In order to keep pace with customers’ change in their ways of shopping, we strengthened our O2O service team, which takes orders online, i.e. via mobile phone app, and delivers products to local community from our stores. The spread of the disease has been effectively controlled in China.
Added
Following the consummation of the Divestiture, Jiuxin Investment and all entities owned or controlled by Jiuxin Investment, including each of Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service, are owned or controlled indirectly by Mr. Liu and Ms. Qi.
Removed
In December 2022, the local government has eased its control and the demand on medical products surged therefrom. Currently, COVID-19 has no significant impact on our operation.
Added
As the result of the strategic restructuring, the Company operates primarily in the wholesale business selling pharmaceutical products to trading companies and other businesses.
Removed
On April 1, 2018, we adopted the guidance in ASC 606 and all the related amendments and applied the new revenue standard to all contracts using the modified retrospective method. Based on the new standard our revenue recognition policies related to membership rewards programs has changed.
Added
Allright is a rapidly growing online and offline wholesale distributor of pharmaceutical and other healthcare products such as health foods, cosmetics and daily necessities in China. Allright actively sells on popular online distribution platforms nationwide. Through third-party platforms and Allright’s own platform, we sell various medical products to retail pharmacies, clinics and other vendors across the country.
Removed
Membership rewards, usually membership points, are accumulated by customers based on their historical spending levels. The Company has determined that there is an additional performance obligation to those customers at the time of the initial transaction. The customers can then redeem these points against the prices of merchandises they purchase in the future.
Added
We believe that our presence on multiple platforms offers greater opportunities to distribute pharmaceutical products nationwide. On February 28, 2025, the Divestiture was consummated.
Removed
At the end of each period, unredeemed membership rewards are reflected as a contract liability.
Added
In accordance with ASC Topic 205, Presentation of Financial Statements (“ASC 205”), Subtopic 20 - Discontinued Operations, the Company determined that Jiuxin Investment’s business line met the conditions for a discontinued operation and is recorded as such in the audited consolidated financial statements.
Removed
In the years ended March 31, 2024 and 2023, we evaluated the use rights of the forest land, which is currently used to cultivate Ginkgo trees. The forest rights certificate from the local village extends the life of the lease to January 31, 2060.
Added
The Company reports financial results for discontinued operations separately from continuing operations in order to distinguish the financial impact of the disposal transaction from ongoing operations.
Removed
Based on the evaluation of the forest land use rights, the Company did not record an impairment for the years ended March 31, 2024 and 2023.
Added
Goodwill and Other Intangible Assets The Company tests its goodwill and other indefinite-lived intangible assets for impairment annually in the fiscal fourth quarter unless there are indications during a different interim period that these assets may have become impaired.
Removed
Results of Operations Comparison of years ended March 31, 2024, 2023 and 2022 The following table summarizes our results of operations for the years ended March 31, 2024, 2023 and 2022: Years ended December 31, 2024 2023 2022 Amount Percentage of total revenue Amount Percentage of total revenue Amount Percentage of total revenue Revenue $ 154,541,077 100.0 % $ 148,811,976 100.0 % $ 164,392,555 100.0 % Cost of goods sold $ 123,432,529 79.9 % 114,531,512 77.0 % 127,873,515 77.8 % Gross profit $ 31,108,548 20.1 % $ 34,280,464 23.0 % $ 36,519,040 22.2 % Selling expenses $ 27,385,587 17.7 % $ 29,177,163 19.6 % $ 30,876,959 18.8 % General and administrative expenses $ 7,257,524 4.7 % $ 15,668,684 10.5 % $ 8,187,176 5.0 % Stock based compensation $ - 0 % $ 10,360,000 7.0 % $ - 0 % Impairment of long-lived assets $ - 0 % $ - 0 % $ 148,795 0.1 % Loss from operations $ (3,534,563 ) (2.3 )% $ (20,925,383 ) (14.1 )% $ (2,693,890 ) (1.6 )% Other Expense, net $ (636,817 ) (0.4 )% $ 181,147 0.1 % $ 595,250 0.4 % Change in fair value of derivative liability $ - 0.0 % $ - 0.0 % $ - 0.0 % Income tax expense $ 62,862 0.0 % $ 394,541 0.3 % $ 1,099,726 0.7 % Net loss $ (4,234,242 ) (2.7 )% $ (21,138,777 ) (14.2 )% $ (3,198,366 ) (1.9 )% 49 Revenue by Segment Comparison of years ended March 31, 2024 and 2023 The following table breaks down the revenue for our four business segments for the years ended March 31, 2024 and 2023: For the years ended March 31, 2024 2023 Amount % of total revenue Amount % of total revenue Variance by amount % of change Revenue from retail drugstores $ 75,678,470 49.0 % $ 83,351,768 56.0 % $ (7,673,298 ) (9.2 )% Revenue from online sales 31,857,883 20.6 % 32,385,089 21.8 % (527,206 ) (1.6 )% Revenue from wholesale business 47,004,724 30.4 % 33,075,119 22.2 % 13,929,605 42.1 % Revenue from farming business - - % - - % - - % Total revenue $ 154,541,077 100.0 % $ 148,811,976 100.0 % $ 5,729,101 3.8 % Retail drugstores sales, which accounted for approximately 49.0% of total revenue for the year ended March 31, 2024, decreased by $7,673,298, or 9.2% compared to the year ended March 31, 2023, to $75,678,470.
Added
Goodwill In its evaluation of goodwill impairment, the Company has the option to first assess qualitative factors such as the maturity and stability of the reporting unit, the magnitude of the excess fair value over the carrying value from a prior period’s impairment testing, other reporting unit operating results, microeconomic and macroeconomic factors, as well as new events and circumstances impacting the operations at the reporting unit level.
Removed
Same-store sales decreased by approximately $9,071,271 or 10.9%, while new stores contributed approximately $1,397,972 in revenue in the year ended March 31, 2024. However, after removing the impact of exchange rate fluctuation, the actual retail drugstores sales decreased 5.0%.
Added
If the test indicates a potential for impairment, a quantitative test is performed. In the quantitative test, the Company compares the estimated fair value of each reporting unit to its carrying value.
Removed
The decrease in our retail drugstore sales is primarily due to local consumption cutback, extremely competitive market and the temporary surge of sale in the second half of fiscal 2023, which is nonrecurring and is due to Chinese government’s sanction lift on COVID-19. Because of the economy slowdown, local people tend to be more frugal and spend less.
Added
If the estimated fair value of any reporting unit is less than its carrying value, an impairment charge is recorded for the difference between the carrying value and the fair value of the reporting unit. Determining the fair value of a reporting unit requires significant judgments, assumptions and estimates by management which are subject to uncertainty.
Removed
Except for prescription medicines, the sale of other products such as nutritional supplements and upscale merchandises used as gifts decreased. Unless the economy recovers quickly, the retail sales may continue to slow down. The retail drugstore market has become saturated in China.
Added
The Company uses a discounted cash flow (DCF) method under the income approach for its quantitative test, as it believes that this approach is the most reliable indicator of the fair value of its businesses and the fair value of their future earnings and cash flows.
Removed
In Hangzhou City, over 4,000 drugstores, including chain stores and single stores, make the city one of the most competitive drugstore markets in China. The local population per store becomes as low as 2,000. As such, the sales per store were negatively affected.
Added
Under this approach, the Company estimates the future cash flows of each reporting unit and discounts these cash flows at a rate of return that reflects their relative risk.
Removed
In order to keep competitive, we have to adjust our product category or lower our prices continually, therefore, our store sales decreased. In the second half of 2023, the government lifted the sanction on Covid 19. People were no longer quarantined and were able to travel, so we quickly experienced a Covid 19 outbreak.
Added
The cash flows used in the DCF method are consistent with those the Company uses in its internal planning, which gives consideration to actual business trends experienced and the long-term business strategy.
Removed
Because people had not prepared enough preventive and therapeutic medicines, they flooded into local drugstores for medicines. Our retail sales surged in that time period. However, the increase was temporary and we were able to achieve the same level of sales in fiscal 2024. Our new stores have also contributed additional sales.
Added
The other key estimates and factors used in the DCF method include, but are not limited to, net sales and expense growth rates, commodity prices, foreign exchange rates, inflation and a terminal growth rate.
Removed
Our store count is 114 at March 31, 2023 and 127 at March 31, 2024. Our online pharmacy sales decreased by approximately $527,206 or 1.6% for the year ended March 31, 2024, as compared to the year ended March 31, 2023. The decrease was primarily caused by a decrease in sales via e-commerce platforms such as JD and Pinduoduo.
Added
Future changes in the judgments, assumptions and estimates that are used in the impairment testing for goodwill could result in significantly different estimates of the fair values and future impairment charges. 46 Impairment of definite-lived intangible assets The Company evaluates the recoverability of definite-lived intangible assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.
Removed
Because the online prices are transparent, to be competitive in online sales, we have to keep low prices. More competitors came into the online retail sales market.
Added
Allowance for Expected Credit Losses To estimate expected credit losses, the Company has identified the relevant risk characteristics of its customers and the related receivables. The Company considers the past collection experience, current economic conditions, future economic conditions (external data and macroeconomic factors) and changes in the Company’s customer collection trends.
Removed
As we do not have dominating power such as lowest prices or exclusive products, we may not be able to improve our sales significantly in the near future. 50 Wholesale revenue increased by $13,929,605 or 42.1%.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

34 edited+29 added−30 removed24 unchanged
Biggest changeOutstanding Equity Awards at Fiscal Year Ended March 31, 2024 Option Awards Stock Awards Name Number of securities underlying unexercised options exercisable Equity incentive plan awards: number of securities underlying unexercised options unexercisable Equity incentive plan awards: number of securities underlying unexercised unearned options Option exercise price ($) Option expiration date Number of shares or units of stock that have not vested Market value of shares or units of stock that have not vested ($) Equity incentive plan awards: number of unearned shares, units or other rights that have not vested Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) Lei Liu - - - - - - - - $ - Ming Zhao - - - - - - - - $ - Li Qi - - - - - - - - $ - Equity Compensation Plan Information Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted- average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans Equity compensation plans approved by security holders - - - Equity compensation plans not approved by security holders - - - TOTAL - - - 61 Discussion of Summary Compensation and Grants of Plan-based Awards Tables A summary of certain material terms of our existing compensation plans and arrangements is set forth below.
Biggest changeOutstanding Equity Awards at Fiscal Year Ended March 31, 2025 Option Awards Stock Awards Name Number of securities underlying unexercised options exercisable Equity incentive plan awards: number of securities underlying unexercised options unexercisable Equity incentive plan awards: number of securities underlying unexercised unearned options Option exercise price ($) Option expiration date Number of shares or units of stock that have not vested Market value of shares or units of stock that have not vested ($) Equity incentive plan awards: number of unearned shares, units or other rights that have not vested Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) Liu Lei (1) - - - - - - - - - Ming Zhao - - - - - - - - $ - (1) As disclosed above under Item 4.
Zhao is subject to certain restrictive covenants, including (i) prohibition against engaging in any work that competes with us and our business and soliciting our customers, potential customers and employees, and (ii) requirement to maintain our confidential information. Mr. Zhao’s employment agreement terminates upon his death or disability. If Mr.
Zhao is subject to certain restrictive covenants, including (i) prohibition against engaging in any work that competes with us and our business and soliciting our customers, potential customers and employees, and (ii) requirement to maintain our confidential information. 56 Mr. Zhao’s employment agreement terminates upon his death or disability. If Mr.
Our Board of Directors has determined, based on information furnished by Ms. Caroline Wang and other available information, that she meets the requirements of an “audit committee financial expert” as that term is defined in the rules promulgated under the Securities Act and the Exchange Act, and has accordingly designated her as such.
Our Board of Directors has determined, based on information furnished by Ms. Caroline Wang and other available information, that she meets the requirements of an “audit committee financial expert” as that term is defined in the rules promulgated under the Exchange Act, and has accordingly designated her as such.
The responsibilities of our Audit Committee include: ● meeting with our management periodically to consider the adequacy of our internal control over financial reporting and the objectivity of our financial reporting; ● appointing the independent registered public accounting firm, determining the compensation of the independent registered public accounting firm, and pre-approving the engagement of the independent registered public accounting firm for audit and non-audit services; ● overseeing the independent registered public accounting firm, including reviewing its independence and quality control procedures, as well as the experience and qualifications of the audit personnel that are providing audit services to us; 64 ● meeting with the independent registered public accounting firm and reviewing the scope and significant findings of the audits performed by them, and meeting with management and internal financial personnel regarding these matters; and ● reviewing our financing plans, the adequacy and sufficiency of our financial and accounting controls, practices and procedures, the activities and recommendations of the auditors and our reporting policies and practices, and reporting recommendations to our full Board of Directors for approval.
The responsibilities of our Audit Committee include: ● meeting with our management periodically to consider the adequacy of our internal control over financial reporting and the objectivity of our financial reporting; ● appointing the independent registered public accounting firm, determining the compensation of the independent registered public accounting firm, and pre-approving the engagement of the independent registered public accounting firm for audit and non-audit services; 59 ● overseeing the independent registered public accounting firm, including reviewing its independence and quality control procedures, as well as the experience and qualifications of the audit personnel that are providing audit services to us; ● meeting with the independent registered public accounting firm and reviewing the scope and significant findings of the audits performed by them, and meeting with management and internal financial personnel regarding these matters; and ● reviewing our financing plans, the adequacy and sufficiency of our financial and accounting controls, practices and procedures, the activities and recommendations of the auditors and our reporting policies and practices, and reporting recommendations to our full Board of Directors for approval.
Additionally, she is entitled to be included as an insured under our directors and officers insurance policy. On May 31, 2024, Ms. Pingfan Wu had resigned from her position as a member of the board of directors (the “Board”) due to personal reasons. 63 C. BOARD PRACTICES.
Additionally, she is entitled to be included as an insured under our directors and officers insurance policy. On May 31, 2024, Ms. Pingfan Wu had resigned from her position as a member of the Board due to personal reasons. 58 C. BOARD PRACTICES.
Wang was an audit department assistant manager with KPMG Huazhen LLP Hangzhou Branch, conducting financial report audits and internal control audits for listing companies and also providing audit services to pre-IPO companies. None of these companies are related to or affiliated with the registrant. Ms.
Wang was an audit department assistant manager with KPMG Huazhen LLP Hangzhou Branch, conducting financial report audits and internal control audits for listing companies and also providing audit services to pre-IPO companies. None of these companies are related to or affiliated with us. Ms.
Compensation Committee Our Compensation Committee operates under a written charter, a copy of which is available on our website at http://www.jiuzhou360.com under the tabs “Investor”–“Corporate Governance”–“Documents”, and is made up of our three (3) independent directors. Jiangliang He is chairperson of the committee.
Compensation Committee Our Compensation Committee operates under a written charter, a copy of which is available on our website at www.ridgetch.com under the tabs “Investor”-“Corporate Governance”-“Documents”, and is made up of our three (3) independent directors. Jiangliang He is chairperson of the committee.
Nominating Committee Our Nominating Committee operates under a written charter, a copy of which is available on our website at http://www.jiuzhou360.com under the tabs “Investor”–“Corporate Governance”–“Documents”, and is made up of our four (4) independent directors. Genghua Gu is chairperson of the committee.
Nominating Committee Our Nominating Committee operates under a written charter, a copy of which is available on our website at www.ridgetch.com under the tabs “Investor”-“Corporate Governance”-“Documents”, and is made up of our four (4) independent directors. Genghua Gu is chairperson of the committee.
During the fiscal year ended March 31, 2024, our Board of Directors and its committees held the following number of meetings and took the following number of actions by unanimous written consent: Meetings Unanimous written consents Board of Directors 2 3 Audit Committee 1 1 Compensation Committee 1 0 Nominating Committee 1 0 Audit Committee Our Audit Committee operates under a written charter, a copy of which is available on our website at http://www.jiuzhou360.com under the tabs “Investor”–“Corporate Governance”–“Documents”, and is composed of our three (3) independent directors.
During the fiscal year ended March 31, 2025, our Board of Directors and its committees held the following number of meetings and took the following number of actions by unanimous written consent: Meetings Unanimous written consents Board of Directors 2 3 Audit Committee 1 1 Compensation Committee 1 0 Nominating Committee 1 0 Audit Committee Our Audit Committee operates under a written charter, a copy of which is available on our website at www.ridgetch.com under the tabs “Investor”-“Corporate Governance”-“Documents”, and is composed of our three (3) independent directors.
Zhao dated as of August 1, 2011, under which Mr. Zhao is serving as our Chief Financial Officer for a term of two years commencing August 1, 2011, for annual compensation of $100,000, payable in monthly installments, as well as a one-time grant of 3,333 shares of our ordinary shares (the “Shares”) under our 2010 Equity Incentive Plan.
Zhao is serving as our Chief Financial Officer for a term of two years commencing August 1, 2011, for annual compensation of $100,000, payable in monthly installments, as well as a one-time grant of 3,333 shares of our ordinary shares under our 2010 Equity Incentive Plan.
We intend to develop such a policy in the near future. Agreement with Genghua Gu On December 9, 2013, we entered into an agreement with Dr. Gu in the form of a director offer letter, pursuant to which we have agreed to compensate him $6,000 annually for his services, payable in monthly installments on the last day of each month.
Agreement with Genghua Gu On December 9, 2013, we entered into an agreement with Dr. Gu in the form of a director offer letter, pursuant to which we have agreed to compensate him $6,000 annually for his services, payable in monthly installments on the last day of each month.
Wang has the qualification to serve as a member of the Board given her extensive financial, accounting and auditing experience, as well as her English and Chinese bilingual capabilities to facilitate the Board’s supervision of the management. Jiangliang He , has extensive experience as a professional attorney.
Wang has the qualification to serve as a member of the Board given her extensive financial, accounting and auditing experience, as well as her English and Chinese bilingual capabilities to facilitate the Board’s supervision of the management. Jiangliang He has been a member of our Board since September 4, 2018. He has extensive experience as a professional attorney.
Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information regarding our ordinary shares beneficially owned on July 30, 2024 or the latest applicable date prior to that date, for (i) each stockholder known to be the beneficial owner of five percent (5%) or more of our outstanding ordinary shares, (ii) each executive officer and director, and (iii) all executive officers and directors as a group.
Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information regarding our ordinary shares beneficially owned on July 28, 2025, for (i) each stockholder known to be the beneficial owner of five percent (5%) or more of our outstanding ordinary shares, (ii) each executive officer and director, and (iii) all executive officers and directors as a group.
Employment Agreements, Termination of Employment and Change-in-Control Arrangements Except as described below, we currently have no employment agreements with any of our executive officers, nor any compensatory plans or arrangements resulting from the resignation, retirement or any other termination of any of our executive officers, from a change-in-control, or from a change in any executive officer’s responsibilities following a change-in-control. 60 Agreement with Ming Zhao We entered into an employment agreement with Mr.
Employment Agreements, Termination of Employment and Change-in-Control Arrangements Except as described below, we currently have no employment agreements with any of our executive officers, nor any compensatory plans or arrangements resulting from the resignation, retirement or any other termination of any of our executive officers, from a change-in-control, or from a change in any executive officer’s responsibilities following a change-in-control.
Wang served as a CFO assistant of Kandi Technologies Group, Inc. (Nasdaq: KNDI), a company engaged in the research, development, manufacturing, and sales of vehicle products. She was mainly responsible for consolidation of financial reports and internal control audits. From 2012 to 2015, Ms.
(Nasdaq: KNDI), a company engaged in the research, development, manufacturing, and sales of vehicle products. She was mainly responsible for consolidation of financial reports and internal control audits. From 2012 to 2015, Ms.
The Code of Ethics was filed as Exhibit 14 to the Company’s Current Report on Form 8-K filed with the SEC on March 23, 2010, a copy of which is available on our website at http://www.jiuzhou360.com under the tabs “Investor”–“Corporate Governance”–“Documents”. D. EMPLOYEES.
The Code of Ethics was filed as Exhibit 14.1 to the Current Report on Form 8-K our predecessor, China Jo-Jo Drugstores, Inc. a Nevada Corporation, filed with the SEC on March 16, 2010, a copy of which is available on our website at www.ridgetch.com under the tabs “Investor”-“Corporate Governance”-“Documents”. D. EMPLOYEES.
Caroline Wang has been a member of our Board since March 29, 2017. Ms. Wang has been a project manager with JC Group, a comprehensive industrial financial group which serves the “city management”, performing internal audit and projects management for a variety of financial products since October 2015. Prior to that, Ms.
Wang has been a project manager with JC Group, a comprehensive industrial financial group which serves the “city management”, performing internal audit and projects management for a variety of financial products since October 2015. Prior to that, Ms. Wang served as a CFO assistant of Kandi Technologies Group, Inc.
COMPENSATION. Compensation of Directors and Executive Officers The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to our principal executive officer and principal financial officer during the last two (2) fiscal years.
Compensation of Directors and Executive Officers The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to our principal executive officer and principal financial officer during the last two fiscal years. No other executive officer received compensation in excess of $100,000 during the fiscal year ended March 31, 2025 and 2024.
Ordinary Shares Beneficially Owned Executive officers and directors: (1) Number of Shares beneficially owned (2) Percentage of class beneficially owned (3) Lei Liu, Chief Executive Officer and Chairman of the Board of Directors (4) 511,568 7.7 % Ming Zhao, Chief Financial Officer 3,331 0.1 % Li Qi, Director (4) 25,125 0.4 % Caroline Wang, Director (5) - * % Genghua Gu, Director (6) 42 * % Jiangliang, He, Director - * % All directors and executive officers as a group (6 persons) 7.8 % 5% Shareholders: (1) N/A * Less than 0.1%.
Ordinary Shares Beneficially Owned Executive officers and directors: (1) Number of Shares beneficially owned (2) Percentage of class beneficially owned (3) Lingtao Kong, Chairman of the Board of Directors (4) 2,225,000 38.0 % Lei Liu, former Chief Executive Officer and Chairman of the Board of Directors (5) - - Ming Zhao, Interim Chief Executive Officer and Chief Financial Officer (6) 581 * % Caroline Wang, Director (7) - - Genghua Gu, Director (8) 42 * % Jiangliang, He, Director - - Li Qi, former Director (5) - - Pingfan Wu, former Director (9) - - 5% Shareholders: N/A 61 * Less than 0.1%.
As of March 31, 2024, there were 0 ordinary share available for future issuance under the Plan. 62 Director Compensation The following table provides compensation information for our directors during the fiscal year ended March 31, 2024: Director Compensation Table Name Fiscal Year ended March 31, Fees Earned or Paid in Cash ($) Stock Awards ($)(1) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Lei Liu (2) 2024 90,000 -0- -0- -0- -0- -0- 90,000 Li Qi (2) 2024 68,000 -0- -0- -0- -0- -0- 68,000 Caroline Wang 2024 11,162 -0- -0- -0- -0- -0- 11,162 Genghua Gu 2024 5,000 -0- -0- -0- -0- -0- 5,000 Jiangliang He 2024 5,023 -0- -0- -0- -0- -0- 5,023 Pingfan Wu 2024 8,757 -0- -0- -0- -0- -0- 8,757 (1) Reflects dollar amount expensed by the Company during the applicable fiscal year for financial statement reporting purposes.
Liu’s role as our Chief Executive Officer), effective as of February 28, 2025. 57 Director Compensation The following table provides compensation information for our directors during the fiscal year ended March 31, 2025: Director Compensation Table Name Fiscal Year ended March 31, Fees Earned or Paid in Cash ($) Stock Awards ($)(1) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Lei Liu (2) 2025 82,500 -0- -0- -0- -0- -0- 82,500 Lingtao Kong (3) 2025 -0- -0- -0- -0- -0- -0- -0- Li Qi (2) 2025 62,333 -0- -0- -0- -0- -0- 62,333 Caroline Wang 2025 11,162 -0- -0- -0- -0- -0- 11,162 Genghua Gu 2025 6,000 -0- -0- -0- -0- -0- 6,000 Jiangliang He 2025 5,023 -0- -0- -0- -0- -0- 5,023 Pingfan Wu (4) 2025 1,460 -0- -0- -0- -0- -0- 1,460 (1) Reflects dollar amount expensed by the Company during the applicable fiscal year for financial statement reporting purposes.
The following table identifies our current executive officers and directors as of the date of this report, their respective offices and positions, and their respective dates of election or appointment: Name Age(1) Position Date of Appointment Lei Liu 59 Chief Executive Officer and Chairman of the Board of Directors September 17, 2009 Ming Zhao 48 Chief Financial Officer August 1, 2011 Li Qi 52 Director October 23, 2009 Caroline Wang (2) (3) (4) 37 Director March 29, 2017 Jiangliang He (2) (3) (4) 61 Director September 4, 2018 Genghua Gu (2) (3) (4) 73 Director March 28, 2014 (1) As of the date of this report.
The following table identifies our current executive officers and directors as of the date of this report, their respective offices and positions, and their respective dates of election or appointment: Name Age(1) Position Date of Appointment Lingtao Kong 35 Chairman of the Board of Directors February 28, 2025(6) Ming Zhao 49 Interim Chief Executive Officer and Chief Financial Officer August 1, 2011(2) Caroline Wang (3) (4) (5) 38 Director March 29, 2017 Jiangliang He (3) (4) (5) 62 Director September 4, 2018 Genghua Gu (3) (4) (5) 74 Director March 28, 2014 (1) As of the date of this report.
Gu served as an oral surgeon from 1977 to 1988 at the Affiliate Hospital. Dr. Gu graduated from Shanghai Jiaotong University’s School of Medicine, Department of Stomatology in 1977. The Board has determined that Dr. Gu should serve as a director given his extensive medical and scientific research experience, as well as his government and hospital management and logistics experience.
Gu served as an oral surgeon from 1977 to 1988 at the Affiliate Hospital. Dr. Gu graduated from Shanghai Jiaotong University’s School of Medicine, Department of Stomatology in 1977. The Board has determined that Dr.
He received his bachelor’s degree in law from Beijing University. Genghua Gu is a retired physician, professor and published scientific researcher in the field of stomatology. From 2003 to 2013, Dr. Gu was a member of the Standing Committee of Zhejiang Province Political Consultative Conference. From 2000 to 2009, Dr.
He received his bachelor’s degree in law from Beijing University. The Board believes his knowledge and experiences in law helps the Board have a good corporate governance. Genghua Gu is a retired physician, professor and published scientific researcher in the field of stomatology. From 2003 to 2013, Dr.
Wu did not result from any disagreement with the Company on any matter relating to the Company’s business operations, financial reporting or controls, policies or practices We do not currently have an established policy to provide compensation to members of our Board of Directors for their services in that capacity, although we have entered into certain agreements with some of our directors as described below.
We do not currently have an established policy to provide compensation to members of our Board of Directors for their services in that capacity, although we have entered into certain agreements with some of our directors as described below. We may develop such a policy in the future.
Summary Compensation Table Name and Principal Position Fiscal Year ended March 31, Salary ($) Bonus ($) Stock Awards ($)(1) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Lei Liu, 2024 90,000 -0- - -0- -0- -0- -0- 90,000 CEO (2) 2023 90,000 -0- 1,691,800 -0- -0- -0- -0- 1,781,800 Ming Zhao, 2024 88,000 -0- - -0- -0- -0- -0- 88,000 CFO 2023 88,000 -0- 101,000 -0- -0- -0- -0- 189,000 (1) Reflects the full fair value of stock issued during the applicable fiscal year for financial statement reporting purposes.
Summary Compensation Table Name and Principal Position Fiscal Year ended March 31, Salary ($)(3) Bonus ($) Stock Awards ($)(2) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) Lei Liu, 2025(1) 82,500 -0- - -0- -0- -0- -0- 82,500 Former CEO 2024 90,000 -0- - -0- -0- -0- -0- 90,000 Ming Zhao, 2025(1) 88,000 -0- - -0- -0- -0- -0- 88,000 CFO and Interim CEO 2024 88,000 -0- - -0- -0- -0- -0- 88,000 (1) As disclosed above under Item 4.
Zhao was a senior manager at CFO Oncall, Inc., a financial consulting firm providing CFO services to U.S.-listed, China-based publicly traded companies. From December 2006 through August 2010, Mr. Zhao was a senior auditor at Sherb & Co., LLP. From January through June 2003, Mr. Zhao worked as a financial analyst at Microsoft Corporation. Mr.
Ming Zhao has served as our Chief Financial Officer since August 2011 and as our interim Chief Executive Officer since February 2025. From September 2010 to July 2011, Mr. Zhao was a senior manager at CFO Oncall, Inc., a financial consulting firm providing CFO services to U.S.-listed, China-based publicly traded companies. From December 2006 through August 2010, Mr.
We believe that all of our directors meet the foregoing qualifications. Based on the information submitted by Ms. Caroline Wang, Mr. Jiangliang He, Ms. Pingfan Wu and Dr. Genghua Gu, our Board of Directors has determined that each of them is independent under Rule 5605(a)(2) of The Nasdaq Listing Rules. Our Board of Directors has three (3) committees.
Genghua Gu, our Board of Directors has determined that each of them is independent under Rule 5605(a)(2) of The Nasdaq Listing Rules. Our Board of Directors has three committees.
Zhao is a licensed certified public accountant. He graduated with a bachelor’s degree in accounting from Central University of Finance and Economic in Beijing in July 1999, and obtained a master’s degree in professional accounting from the University of Washington in December 2002. 58 Li Qi is one of the three founders of HJ Group. Ms.
He graduated with a bachelor’s degree in accounting from Central University of Finance and Economic in Beijing in July 1999, and obtained a master’s degree in professional accounting from the University of Washington in December 2002. Caroline Wang has been a member of our Board since March 29, 2017. Ms.
(2) Salary as reported is based on interbank exchange rate of RMB 6.8516 to $1.00 on March 31, 2023 and RMB 7.1671 to $1.00 on March 31, 2024.
(2) Reflects the full fair value of stock issued during the applicable fiscal year for financial statement reporting purposes. (3) Salary as reported is based on interbank exchange rate of RMB 7.1671 to $1.00 on March 31, 2024 and RMB 7. 2567 to $1.00 on March 31, 2025.
The Board of Directors and Committees We seek directors with established strong professional reputations and experience in areas relevant to the strategy and operation of our businesses.
The directors of the Company do not have a definite term of office, and each director will serve until the next annual meeting and until the director’s successor is elected and qualified. We seek directors with established strong professional reputations and experience in areas relevant to the strategy and operation of our businesses.
The number of employees for each area of operations, and such employees as a percentage of our total workforce, are as follows: As of March 31, 2024 Employees Percentage Non-pharmacist store staff 464 46.2 % Pharmacists 327 32.6 % Management - non-pharmacists 30 3.0 % Physicians 77 7.7 % Non-physician clinic staff 38 3.8 % Wholesale - non-warehouse 20 2.0 % Online pharmacy - technicians 2 0.2 % Online pharmacy - non-technicians 45 4.5 % Total 1,003 100.00 % 65 E.
Information on the Company - History and Development of the Company. 60 The number of employees for each area of operations as of March 31, 2025, and such employees as a percentage of our total workforce, are as follows: As of March 31, 2025 Employees Percentage Management 6 9.8 % Technicians 2 3.3 % Offline wholesale 34 55.7 % Online platform 19 31.2 % Total 61 100.00 % E.
(1) Unless otherwise noted, the address for each of the named beneficial owners is: Renxin Yaju Building 5 Floor 4 Gong Shu District, Hangzhou City, Zhejiang Province, China, 310008.
(1) Unless otherwise noted, the address for each of the Company’s current directors and officers is: 5th Floor, Building 6, No. 100, 18th Street, Baiyang Sub-district, Qiantang District, Hangzhou City, Zhejiang Province, People’s Republic of China, 310008.
(2) Member of the Audit Committee. (3) Member of the Compensation Committee. (4) Member of the Nominating Committee. Biographical Information of Our Current Directors and Executive Officers Lei Liu has served as our Chief Executive Officer and Chairman of our Board of Directors since September 17, 2009. Mr.
(2) Mr. Zhao was appointed as our Chief Financial Officer as of August 1, 2011 and as Interim Chief Executive Officer as of February 28, 2025. (3) Member of the Audit Committee. (4) Member of the Compensation Committee. (5) Member of the Nominating Committee.
(2) Compensation is reflected in the Summary Compensation Table on page 60 above. (3) On May 31, 2024, Ms. Pingfan Wu had resigned from her position as a member of the board of directors (the “Board”) due to personal reasons. The resignation of Ms.
Pingfan Wu had resigned from her position as a member of the Board due to personal reasons. The resignation of Ms. Wu did not result from any disagreement with the Company on any matter relating to the Company’s business operations, financial reporting or controls, policies or practices.
Removed
Liu is one of the three founders of Hangzhou Jiuzhou Grand Pharmacy Chain Co., Ltd. (“Jiuzhou Pharmacy”), Hangzhou Jiuzhou Clinic of Integrated Traditional and Western Medicine (General Partnership) (“Jiuzhou Clinic”) and Hangzhou Jiuzhou Service & Public Health Service Co., Ltd.
Added
(6) Pursuant to that certain equity exchange agreement, dated as of January 31, 2025 (the “Acquisition Agreement”), we entered into with Ridgeline and Lingtao Kong, we agreed to take all necessary action to cause Mr. Kong to be nominated and elected as a director on our Board effective as of the closing of the transactions contemplated by the Acquisition Agreement.
Removed
(“Jiuzhou Service”) (Jiuzhou Pharmacy, Jiuzhou Clinic and Jiuzhou Service, as well as the subsidiaries of Jiuzhou Pharmacy, collectively as “HJ Group”), and has been the executive director of Jiuzhou Pharmacy since September 2003 and the supervising director of Jiuzhou Service since November 2005. From December 1997 to August 2003, Mr. Liu worked in Tai He Drugstore as a general manager.
Added
Kong to our Board as Chairman was approved by our shareholders at our annual general meeting of shareholders held on February 25, 2025 and his appointment was effective as of February 28, 2025. 54 Biographical Information of Our Current Directors and Executive Officers Lingtao Kong has served as Chairman of our Board of Directors since February 28, 2025.
Removed
From September 1992 to November 1997, Mr. Liu was an administration official of Hangzhou Medical Junior College, his alma mater, where he was also a researcher and an anatomy instructor from September 1983 to July 1992. Mr. Liu has been a licensed researcher in the PRC since September 1988.
Added
Since September 2014, Mr. Kong has been serving at the Hong Kong subsidiary of a large energy group, where he has successively held the position of Deputy Director in the Finance Department. His primary responsibilities include resource trading, overseas investment, and financing activities. Since the inception of Ridgeline in 2023, Mr. Kong has served as its sole director.
Removed
As the founder and CEO responsible for our strategies and directions, Mr. Liu has been valuable to us and our Board of Directors. Ming Zhao has served as our Chief Financial Officer since August 2011. From September 2010 to July 2011, Mr.
Added
After Ridgeline’s acquisition of Allright, he has been actively involved in Allright’s strategic planning and business development, either directly or through delegating responsibilities to Allright’s general manager. Beyond his experience in the energy industry, Mr. Kong has extensive expertise in wholesaling and e-commerce, particularly in cross-border e-commerce and the logistics industry.
Removed
Qi had served as our secretary since October 23, 2009 to September 4, 2018, and is currently the general manager of both Jiuzhou Pharmacy and Jiuzhou Service. From January 2000 to June 2003, Ms. Qi worked in Zhejiang Yikang Drugstore as a general manager. From October 1991 to January 2000, Ms.
Added
Additionally, since 2008, he has been a successful investor in the pharmaceutical sector and several reputable high-tech companies. Mr. Kong holds a Master of Science in Engineering Enterprise Management from the Hong Kong University of Science and Technology and a Bachelor of Commerce from the University of Alberta. He also holds the professional title of Intermediate Economist.
Removed
Qi worked in the Branch Hospital of Hangzhou No. 1 People’s Hospital as a nurse. Ms. Qi is a licensed TCM pharmacist in the PRC and is a 1991 graduate of Hangzhou Nurse School. As a founder and general manager of our two subsidiaries overseeing our day-to-day corporate operations, Ms. Qi is qualified to serve on our Board of Directors.
Added
Zhao was a senior auditor at Sherb & Co., LLP. From January through June 2003, Mr. Zhao worked as a financial analyst at Microsoft Corporation. Mr. Zhao is a licensed certified public accountant.
Removed
Family Relationships There are no family relationships among our officers and directors and those of our subsidiaries and affiliated companies. 59 Board Diversity The Nominating Committee does not have a formal policy with respect to diversity.
Added
Gu was a member of the Standing Committee of Zhejiang Province Political Consultative Conference. From 2000 to 2009, Dr.
Removed
However, the Board of Directors and the Nominating Committee believe that it is essential that the members of the Board of Directors represent diverse viewpoints. In considering candidates for the Board of Directors, the Board of Directors and the Nominating Committee consider the entirety of each candidate’s credentials in the context of the factors mentioned above.
Added
Gu should serve as a director given his extensive medical and scientific research experience, as well as his government and hospital management and logistics experience. 55 Family Relationships There are no family relationships among our officers and directors and those of our subsidiaries and affiliated companies. B. COMPENSATION.
Removed
The Company is currently in compliance with the diversity requirements of Nasdaq Rule 5605(f) and 5606, with three female Asian directors and three male Asian directors.
Added
We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Removed
Board Diversity Matrix (as of the date of this annual report) Country of Principal Executive Offices China Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 5 Part I: Gender Identity Female Male Non- Binary Did Not Disclose Gender Directors 2 3 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 0 0 0 LGBTQ+ 0 0 0 0 Did Not Disclose Demographic Background 0 0 0 0 B.
Added
Information on the Company - History and Development of the Company, Mr. Liu resigned from our board of directors (the “Board”) and any other officer positions with us (including Mr. Liu’s role as our Chief Executive Officer), effective as of February 28, 2025. Mr. Zhao was appointed as Interim Chief Executive Officer as of February 28, 2025.
Removed
No other executive officer received compensation in excess of $100,000 during the fiscal year ended March 31, 2024 and 2023.
Added
Agreement with Ming Zhao We entered into an employment agreement with Mr. Zhao dated as of August 1, 2011, under which Mr.
Removed
On September 21, 2010, our Board of Directors approved a stock incentive plan for officers, directors, employees, and consultants entitled “China Jo-Jo Drugstores, Inc. 2010 Equity Incentive Plan” (the “Plan”). The maximum number of shares that may be issued under the Plan is 168,750 shares of our ordinary shares.
Added
Information on the Company - History and Development of the Company, Mr. Liu resigned from our Board and any other officer positions with us (including Mr.
Removed
The Plan was approved by our shareholders at our annual meeting held on November 2, 2010. On February 24, 2015, our Board of Directors adopted and approved Amendment No. 1 to the Plan to increase the number of shares of the Company’s ordinary shares available for issuance thereunder from 168,750 share limit to 360,417 shares.
Added
(2) Compensation is reflected in the Summary Compensation Table on page 56 above. As disclosed above under Item 4. Information on the Company - History and Development of the Company, Mr. Liu resigned from our Board and any other officer positions with us (including Mr. Liu’s role as our Chief Executive Officer), effective as of February 28, 2025. Ms.
Removed
Amendment No. 1 was approved by the stockholders at the annual shareholders meeting on March 23, 2015. On January 27, 2016, our Board of Directors adopted and approved Amendment No. 2 to the Plan to increase the number of shares of the Company’s ordinary shares available for issuance thereunder from 360,417 share limit to 597,917 shares.
Added
Qi resigned from our Board effective as of February 28, 2025. (3) For more information, see above under Item 4. Information on the Company - History and Development of the Company, the election of Mr.
Removed
Amendment No. 2 was approved by the stockholders at the annual shareholders meeting on March 23, 2016. Under the Plan, the Company may issue ordinary shares and/or options to purchase ordinary shares to our officers, directors, employees and consultants.
Added
Kong to our Board as Chairman was approved by our shareholders at our annual general meeting of shareholders held on February 25, 2025 and his appointment was effective as of February 28, 2025. Mr. Kong did not receive any compensation during the fiscal year ended March 31, 2025. (4) On May 31, 2024, Ms.
Removed
The Plan is administered either by our Board of Directors or a committee that it designates comprising of at least two (2) “non-employee” directors.
Added
The Board of Directors and Committees Under the Company’s Fourth Amended and Restated Memorandum of Association and Articles of Association, the number of directors of the Company shall not be less than two. There shall be no maximum number of directors unless otherwise determined from time to time by the shareholders in general meeting.
Removed
The board (or the committee, if one is designated) has full and complete authority, in its discretion, but subject to the express provisions of the Plan, to grant awards, to determine the number of awards to be granted and the time or times at which awards shall be granted; to establish the terms and conditions upon which awards may be exercised; to remove or adjust any restrictions and conditions upon awards; to specify, at the time of grant, provisions relating to exercisability of awards and to accelerate or otherwise modify the exercisability of any awards; and to adopt such rules and regulations and to make all other determinations deemed necessary or desirable for the administration of the Plan.
Added
The Company may from time to time in general meeting by ordinary resolution increase or reduce the number of directors but the number of directors shall never be less than two. Currently, the Board consists of four directors.
Removed
On February 14, 2017, our Board of Directors adopted and approved Amendment No. 3 to the Plan to increase the number of shares of the Company’s ordinary shares available for issuance thereunder from 597,917 share limit to 808,039 shares. Amendment No. 3 was approved by the stockholders at the annual shareholders meeting on March 29, 2017.
Added
We believe that all of our directors meet the foregoing qualifications. None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. Based on the information submitted by Ms. Caroline Wang, Mr. Jiangliang He and Dr.
Removed
On March 26, 2018, the shareholders of the Company approved the Amendment No. 4 to the Plan which increased the total shares of ordinary shares available for issuance thereunder to 1,016,372.
Added
As of March 31, 2025, we had 61 employees combined in our wholesale operations. The change in our number of employees from March 31, 2024 to March 31, 2025 is primary due to the divestiture of Jiuxin Investment and its owned and controlled entities and the acquisition of Ridgeline and Allright on February 28, 2028.
Removed
On June 30, 2018, the Compensation Committee of the Board approved the Amendment No. 5 to the Plan as The Tax Cuts and Jobs Act of 2017 removed the 162(m) qualified performance based compensation exemption to the $1 million cap on deductions for compensation to covered executives.
Added
For more information about these transactions, see above under Item 4.
Removed
Section 1.3.2 was in the Plan to permit grants under the Plan to fit within that exemption. As that exemption no longer applies for grants made in 2018 or thereafter, the Plan had been amended to remove the provisions intended to comply with that exemption, including the one in Section 1.3.2. of the Plan.
Added
(3) Unless otherwise noted, the number and percentage of outstanding shares of ordinary shares is based upon 5,855,009 shares outstanding as of July 28, 2025. (4) Representing 2,225,000 ordinary shares issued to Mr. Kong pursuant to that certain equity exchange agreement , dated January 31, 2025, by and among the Company, Ridgeline International Limited, and Lingtao Kong.
Removed
On March 5, 2020, the shareholders of the Company approved the Amended and Restated 2010 Equity Incentive Plan, which in addition to the incorporation of the Amendment No. 4 and Amendment No. 5 to the Plan, clarified the term of the Plan in order to render the Plan being available for incentive stock options grants in the future and approved the proposal of adding a ten-year term to the Plan.
Added
(5) As previously disclosed on the Report of Foreign Private Issuer on Form 6-K furnished by the Company to the SEC on October 21, 2024, in October 2024, Mr. Liu agreed to surrender for no consideration in total 52,500 fully-paid ordinary shares, par value $0.24 per share, of the Company.
Removed
The Plan, effective since November 2, 2010, shall terminate automatically on January 14, 2030 (the tenth anniversary of the Board’s approval of this Plan), unless terminated earlier by the Board, except with respect to Awards then outstanding.
Added
As previously disclosed on the Report of Foreign Private Issuer on Form 6-K furnished by the Company to the SEC on November 11, 2024, in November 2024, Mr. Liu agreed to surrender for no consideration in total 420,715 fully-paid ordinary shares, par value $0.24 per share, of the Company.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

1 edited+12 added−5 removed2 unchanged
Biggest changeThe voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares. B. RELATED PARTY TRANSACTIONS. BUSINESS RELATIONSHIPS.
Biggest changeThe voting rights of our major shareholders do not differ from the voting rights of other holders of the same class of shares. B. RELATED PARTY TRANSACTIONS. Equity Exchange Agreements On January 31, 2025, we entered into (i) that certain Equity Exchange Agreement with Mr. Lingtao Kong and Ridgeline, pursuant to which the Company acquired from Mr.
Removed
Our Officers and Directors’ Relationship with Us, Our Subsidiaries and VIE As described in “ Business - Our Corporate History and Structure ” above, we control HJ Group through contractual arrangements between Jiuxin Management, our wholly-owned subsidiary, and each of Jiuzhou Pharmacy, Jiuzhou Service and Jiuzhou Clinic. HJ Group is owned by Mr. Lei Liu and Mr.
Added
Kong all of the issued and outstanding ordinary shares of Ridgeline, by issuing 2,225,000 our ordinary shares to Mr. Kong, and (ii) that certain Equity Exchange Agreement with Renovation, Mr. Lei Liu, Ms. Li Qi, and Oakview, pursuant to which Renovation transferred all equity in Jiuxin Investment to Oakview, in exchange for irrevocable surrender for no consideration by Mr.
Removed
Li Qi (the “Key Personnel”), whom also hold positions as our executive officers and/or directors. Because the Key Personnel also collectively own a substantial amount of our issued and outstanding ordinary shares, we believe that our interests are aligned with those of HJ Group and the Key Personnel.
Added
Liu, Ms. Qi, Oakview and their affiliates in total 2,548,353 our ordinary shares back to us. The transactions were closed on February 28, 2025. Following the closing of these transactions, we changed our name from “China Jo-Jo Drugstores, Inc.” to “Ridgetech, Inc.”, effective as of February 28, 2025.
Removed
However, see ” Risk Factors - Risks Related to Our Corporate Structure - Our contractual arrangements with HJ Group and the Key Personnel may not be as effective in providing control over these entities as direct ownership,” and “Management members of HJ Group have potential conflicts of interest with us, which may adversely affect our business and your ability for recourse.” Other Related Party Transactions Due from related parties: March 31, 2024 March 31, 2023 Hangzhou Kahamadi Biotechnology Co., Ltd 32,825 - Others (the directors of subsidiaries) (1) 280,521 - Total $ 313,346 $ - Due to related parties: March 31, 2024 March 31, 2023 Due to a director and CEO (2) : 1,580,057 683,560 Other (3) : 253,452 - Total $ 1,833,509 $ 683,560 (1) Advances to directors of our subsidiaries.
Added
We also changed our trading symbol on The Nasdaq Stock Market LLC from “CJJD” to “RDGT”, effective as of March 4, 2025. Effective as of the closing, Mr. Liu and Ms. Qi resigned from our board of directors and any other officer positions with us (including Mr. Liu’s role as our Chief Executive Officer), and Mr.
Removed
(2) Due to foreign exchange restrictions, the Company’s director and CEO, Mr. Lei Liu personally lent U.S. dollars to the Company to facilitate its payments of expenses in the United States. The Company leases a retail space from Mr. Lei Liu. The lease will expire in September 2025.
Added
Ming Zhao, our Chief Financial Officer, was appointed as our interim Chief Executive Officer to hold such office until a permanent Chief Executive Officer is duly appointed. Share Surrender In October 2024, Mr.
Removed
The amounts owed under the lease for the twelve months ended March 31, 2024 were paid to Mr. Liu as of March 31, 2024. (3) Linjia Medical borrowed from its non-controlling shareholder. C. INTERESTS OF EXPERTS AND COUNSEL. Not applicable. 67
Added
Lei Liu, our former Chairman of the Board and Chief Executive Officer, agreed to surrender for no consideration in total 52,500 fully-paid ordinary shares, par value $0.24 per share, of the Company, and Mr.
Added
Ming Zhao, our Chief Financial Officer, agreed to surrender for no consideration in total 2,500 ordinary shares, par value $0.24 per share, of the Company, such ordinary shares in each case to be immediately cancelled by the Company. In November 2024, Mr.
Added
Liu agreed to surrender for no consideration in total additional 420,715 fully-paid ordinary shares, par value $0.24 per share, of the Company, to be immediately cancelled by the Company.
Added
The Company shall make available for reissuance to participants under the Company’s 2010 Equity Incentive Plan an equivalent number of ordinary shares as surrendered and cancelled in connection with the share surrender. No grants, cash payments or other consideration has been or will be made to replace such ordinary shares or otherwise in connection with the share surrender.
Added
Other Related Party Transactions In connection with the divestiture of Jiuxin Investment and its owned and controlled entities during the fiscal year ended March 31, 2025, we have revised the presentation of our historical consolidated financial statements to exclude the operations of the divested entities for all periods presented.
Added
This re-presentation is intended to provide a consistent basis of comparison that reflects our continuing operations.
Added
As a result, certain financial information for prior periods included in this annual report including the amounts disclosed for the fiscal year ended March 31, 2024, differs from the corresponding financial information presented in our annual report on Form 20-F for the fiscal year ended March 31, 2024. 63 Due from related parties: March 31, 2025 March 31, 2024 Hangzhou Kahamadi Biotechnology Co., Ltd - 12,535 Others (the directors of subsidiaries) (1) - 7,202 Total - $ 19,737 Due to related parties: March 31, 2025 March 31, 2024 Due to a director of subsidiaries (2) : 2,130 2,140 Total $ 2,130 $ 2,140 (1) Advances to directors of our subsidiaries.
Added
(2) Borrowed from a director of subsidiaries. C. INTERESTS OF EXPERTS AND COUNSEL. Not applicable.