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What changed in Akso Health Group's 20-F — 2022 vs 2023

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Paragraph-level year-over-year comparison of Akso Health Group's 2022 and 2023 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 2023 report.

+395 added−827 removedSource: 20-F (2023-07-14) vs 20-F (2022-12-29)

Top changes in Akso Health Group's 2023 20-F

395 paragraphs added · 827 removed · 259 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

107 edited+49 added−339 removed366 unchanged
Biggest changeBecause we control the VIEs through contractual arrangements, neither us nor our subsidiaries are able to make direct capital contribution to the VIEs or their respective subsidiaries. 8 Table of Contents The following table describes transfers among us, our subsidiaries and the VIEs made during the periods presented: ​ ​ ​ ​ Year Ended March 31, 2022 ​ ​ (US$in millions) Capital contributions from us to our offshore subsidiaries (1) — Loans from us to our offshore subsidiaries 12,017,200 Capital contributions from us or our offshore subsidiaries to PRC subsidiaries — Loans from us or our offshore subsidiaries to PRC subsidiaries — Loans from our subsidiaries to the VIEs, net (9,549,548) Other amounts paid by our subsidiaries to the VIEs (2) — Other amounts paid by VIEs and their subsidiaries to our subsidiaries — Notes: (1) “Offshore subsidiaries” refer to all of our subsidiaries except our PRC subsidiaries.
Biggest changeCash may be transferred within our organization in the following manner: (i) we may transfer funds to our subsidiaries, including our PRC subsidiaries, by way of capital contributions or loans, through intermediate holding companies or otherwise; and (ii) our subsidiaries, including our PRC subsidiaries, may make dividends or other distributions to us through intermediate holding companies or otherwise. 3 The following table describes transfers among us, our subsidiaries and the former VIEs made during the periods presented: Year Ended March 31, 2023 (US$ in millions) Capital contributions from us to our offshore subsidiaries (1) — Loans from us to our offshore subsidiaries — Capital contributions from us or our offshore subsidiaries to PRC subsidiaries — Loans from us or our offshore subsidiaries to PRC subsidiaries — Loans from our subsidiaries to the former VIEs, net — Other amounts paid by our subsidiaries to the formerVIEs (2) — Other amounts paid by former VIEs and their subsidiaries to our subsidiaries — Notes: (1) “Offshore subsidiaries” refer to all of our subsidiaries except our PRC subsidiaries.
The proposed Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges (“EQUITABLE”) Act prescribes increased disclosure requirements for these issuers and, beginning in 2025, the delisting from U.S. national securities exchanges such as the Nasdaq of issuers included on the SEC’s list for three consecutive years. It is unclear if this proposed legislation will be enacted.
The proposed Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges (“EQUITABLE”) Act prescribes increased disclosure requirements for these issuers and, beginning in 2025, the delisting from U.S. national securities exchanges such as Nasdaq of issuers included on the SEC’s list for three consecutive years. It is unclear if this proposed legislation will be enacted.
On July 19, 2018, our board of directors also approved a special cash dividend of US$0.13 per ordinary share of our company (or US$0.13 per ADS), in addition to an annual dividend pursuant to the newly adopted annual dividend policy of US$0.27 per ordinary share (or US$0.27 per ADS), for a total dividend of US$0.40 per ordinary share (or US$0.40 per ADS).
On July 19, 2018, our board of directors also approved a special cash dividend of US$0.13 per ordinary share of our company (or US$0.13 per ADS), in addition to an annual dividend pursuant to the newly adopted annual dividend policy of US$0.27 per ordinary share (or US$0.27 per ADS), for a total dividend of US$0.40 per ordinary share (or US$0.40 per ADS).
Failure to take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely affect our current corporate structure, corporate governance and business operations We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of Internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.
Failure to take timely and appropriate measures to cope with any of these or similar regulatory compliance challenges could materially and adversely affect our current corporate structure, corporate governance and business operations. 21 We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of Internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations.
Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCA Act and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, which would reduce the time before our securities may be prohibited from trading or be delisted.
Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”), which, if enacted, would amend the HFCA Act and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three and would reduce the time before our securities may be prohibited from trading or delisted.
Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations. ​
Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations. 33
Under the HFCA Act, our securities may be prohibited from trading on the Nasdaq or other U.S. stock exchanges if our auditor is not inspected by the PCAOB for three consecutive years, and this ultimately could result in our Ordinary Shares being delisted. Furthermore, on June 22, 2021, the U.S.
Under the HFCA Act, our securities may be prohibited from trading on Nasdaq or other U.S. stock exchanges if our auditor is not inspected by the PCAOB for three consecutive years, and this ultimately could result in our Ordinary Shares being delisted. 13 Furthermore, on June 22, 2021, the U.S.
Any uninsured business disruptions may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect on our results of operations and financial condition. If we do not find available sources of liquidity for capital and financing needs, our business and operations may be materially and adversely affected.
Any uninsured business disruptions may result in our incurring substantial costs and the diversion of resources, which could have an adverse effect on our results of operations and financial condition. 9 If we do not find available sources of liquidity for capital and financing needs, our business and operations may be materially and adversely affected.
Business Overview-Regulation-Regulations Relating to Foreign Exchange - Regulations on Stock Incentive Plans.” If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.
Business Overview-Regulation-Regulations Relating to Foreign Exchange - Regulations on Stock Incentive Plans.” 24 If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.
As part of a continued regulatory focus in the United States on access to audit and other information currently protected by national law, in particular China’s, in June 2019, a bipartisan group of lawmakers introduced bills in both houses of the U.S.
As part of a continued regulatory focus in the United States on access to audit and other information currently protected by national law, in particular mainland China’s, in June 2019, a bipartisan group of lawmakers introduced bills in both houses of the U.S.
These restrictions may cause a material decline in the value of our ADSs. You may experience dilution of your holdings due to inability to participate in rights offerings. We may, from time to time, distribute rights to our shareholders, including rights to acquire securities.
These restrictions may cause a material decline in the value of our ADSs. 32 You may experience dilution of your holdings due to inability to participate in rights offerings. We may, from time to time, distribute rights to our shareholders, including rights to acquire securities.
In addition, the above amendments and any additional actions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information could create some uncertainty for investors, the market price of our ADSs or ordinary shares could be adversely affected, and we could be delisted if we and our auditor are unable to meet the PCAOB inspection requirement or being required to engage a new audit firm, which would require significant expense and management time.
In addition, the above amendments and any additional actions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information could create some uncertainty for investors, the market price of our ADSs could be adversely affected, and we could be delisted if we and our auditor are unable to meet the PCAOB inspection requirement or being required to engage a new audit firm, which would require significant expense and management time.
In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights.
In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. 20 From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights.
Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: ● the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; 55 Table of Contents ● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; ● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and ● the selective disclosure rules by issuers of material non-public information under Regulation FD.
Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: ● the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; ● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; ● the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and ● the selective disclosure rules by issuers of material non-public information under Regulation FD.
Moreover, we are exposed to the risk of misconduct, errors and failure to functions by our management, employees and parties that we collaborate with, who may from time to time be subject to litigation and regulatory investigations and proceedings or otherwise face potential liability and penalties in relation to noncompliance with applicable laws and regulations, which could harm our reputation and business. 38 Table of Contents In light of recent events indicating greater oversight by the Cyberspace Administration of China, or CAC, over data security, particularly for companies seeking to list on a foreign exchange, we are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, our listing on NASDAQ, financial condition, and results of operations.
Moreover, we are exposed to the risk of misconduct, errors and failure to functions by our management, employees and parties that we collaborate with, who may from time to time be subject to litigation and regulatory investigations and proceedings or otherwise face potential liability and penalties in relation to noncompliance with applicable laws and regulations, which could harm our reputation and business. 16 In light of recent events indicating greater oversight by the Cyberspace Administration of China, or CAC, over data security, particularly for companies seeking to list on a foreign exchange, we are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, our listing on NASDAQ, financial condition, and results of operations.
Section 404 of the Sarbanes-Oxley Act of 2002 requires that we include a management report on such company’s internal control over financial reporting in our annual report on Form 20-F beginning with our annual report for the fiscal year ended March 31, 2022.
Section 404 of the Sarbanes-Oxley Act of 2002 requires that we include a management report on such company’s internal control over financial reporting in our annual report on Form 20-F beginning with our annual report for the fiscal year ended March 31, 2023.
Whether we are a PFIC is a factual determination and we must make a separate determination each taxable year as to whether we are a PFIC (after the close of each taxable year). Accordingly, we cannot assure you that we will not be a PFIC for our taxable year ending March 31, 2022 or any future taxable year.
Whether we are a PFIC is a factual determination and we must make a separate determination each taxable year as to whether we are a PFIC (after the close of each taxable year). Accordingly, we cannot assure you that we will not be a PFIC for our taxable year ending March 31, 2023 or any future taxable year.
Given the nature of our business in China and the fact that we do not have personal information of more than one million users, we do not believe we are an “internet platform operator” that is required to file for a cybersecurity review pursuant to the Measures for Cybersecurity Review. 6 Table of Contents On August 20, 2021, the Standing Committee of the National People’s Congress adopted the Personal Information Security Law, which took effect on November 1, 2021.
Given the nature of our business in China and the fact that we do not have personal information of more than one million users, we do not believe we are an “internet platform operator” that is required to file for a cybersecurity review pursuant to the Measures for Cybersecurity Review. 1 On August 20, 2021, the Standing Committee of the National People’s Congress adopted the Personal Information Security Law, which took effect on November 1, 2021.
Sales of our ADSs in the public market, or the perception that these sales could occur, could cause the market price of our ADSs to decline. As of March 31, 2022, we had 68,598,050 ordinary shares outstanding. Among these shares, 38,675,000 ordinary shares are in the form of ADSs.
Sales of our ADSs in the public market, or the perception that these sales could occur, could cause the market price of our ADSs to decline. As of March 31, 2023, we had 68,598,050 ordinary shares outstanding. Among these shares, 38,675,000 ordinary shares are in the form of ADSs.
Moreover, according to Notice of the National Development and Reform Commission on Promoting the Administrative Reform of the Recordation and Registration System for Enterprises’ Issuance of Foreign Debts issued by the NDRC in September 2015, any loans we extend to our consolidated variable interest entities or other PRC operating companies that are domestic PRC entities for more than one year must be filed with the NDRC or its local counterpart and must also be registered with SAFE or its local branches. 30 Table of Contents We may also decide to finance our PRC subsidiary by means of capital contributions.
Moreover, according to Notice of the National Development and Reform Commission on Promoting the Administrative Reform of the Recordation and Registration System for Enterprises’ Issuance of Foreign Debts issued by the NDRC in September 2015, any loans we extend to our consolidated variable interest entities or other PRC operating companies that are domestic PRC entities for more than one year must be filed with the NDRC or its local counterpart and must also be registered with SAFE or its local branches. 11 We may also decide to finance our PRC subsidiary by means of capital contributions.
If we are considered a non-resident enterprise under the EIT Law and if the PRC tax authorities make adjustments to the taxable income of the transactions under SAT Circular 59, Circular 698, the SAT Announcement 7 and Bulletin 37, our income tax costs associated with such potential acquisitions will be increased, which may have an adverse effect on our financial condition and results of operations. 50 Table of Contents RISKS RELATED TO OUR ADSs The trading price of our ADSs may be volatile, which could result in substantial losses to investors.
If we are considered a non-resident enterprise under the EIT Law and if the PRC tax authorities make adjustments to the taxable income of the transactions under SAT Circular 59, Circular 698, the SAT Announcement 7 and Bulletin 37, our income tax costs associated with such potential acquisitions will be increased, which may have an adverse effect on our financial condition and results of operations. 26 RISKS RELATED TO OUR ADSs The trading price of our ADSs may be volatile, which could result in substantial losses to investors.
Therefore, cybersecurity review could materially and adversely affect our business, financial condition, and results of operations. 39 Table of Contents In addition, the PRC Data Security Law, which was promulgated by the Standing Committee of the National People’s Congress on June 10, 2021 and took effect on September 1, 2021, requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.
Therefore, cybersecurity review could materially and adversely affect our business, financial condition, and results of operations. 17 In addition, the PRC Data Security Law, which was promulgated by the Standing Committee of the National People’s Congress on June 10, 2021 and took effect on September 1, 2021, requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.
If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our ADSs. 46 Table of Contents Failure to make adequate contributions to various employee benefit plans as required by PRC regulations may subject us to penalties.
If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our ADSs. Failure to make adequate contributions to various employee benefit plans as required by PRC regulations may subject us to penalties.
Under current PRC laws, regulations and regulatory rules, we, our PRC subsidiaries and our consolidated affiliated entities may be required to obtain permissions from the China Securities Regulatory Commission, or the CSRC, and may be required to go through cybersecurity review by the Cyberspace Administration of China, or the CAC, in connection with any future offering and listing on overseas capital markets.
Under current PRC laws, regulations and regulatory rules, we and our PRC subsidiaries may be required to obtain permissions from the China Securities Regulatory Commission, or the CSRC, and may be required to go through cybersecurity review by the Cyberspace Administration of China, or the CAC, in connection with any future offering and listing on overseas capital markets.
Based on the projected composition of our assets and income, we do not believe that we were a PFIC for our taxable year ended March 31, 2022 and we do not anticipate becoming a PFIC in the foreseeable future.
Based on the projected composition of our assets and income, we do not believe that we were a PFIC for our taxable year ended March 31, 2023 and we do not anticipate becoming a PFIC in the foreseeable future.
We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business. 43 Table of Contents The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value.
We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our business. The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value.
We are reliant on our core senior management team. If one or more key executives were unable or unwilling to continue in their present positions, our business and results of operations may be adversely affected. Our business, corporate strategies and future performance depends on our core senior management team comprising our directors, executive officers and other key personnel.
If one or more key executives were unable or unwilling to continue in their present positions, our business and results of operations may be adversely affected. Our business, corporate strategies and future performance depends on our core senior management team comprising our directors, executive officers and other key personnel.
Any failure to properly upgrade our technology infrastructure to serve the growing number of customers, maintain the satisfactory performance, security and integrity of our social e-commerce platform and systems, may materially and adversely affect our business and reputation. 16 Table of Contents We may incur liability or become subject to administrative penalties for counterfeit or unauthorized merchandise displayed on our platform, or for merchandise displayed on our platform that infringe on third-party intellectual property rights, or for other misconduct.
Any failure to properly upgrade our technology infrastructure to serve the growing number of customers, maintain the satisfactory performance, security and integrity of our social e-commerce platform and systems, may materially and adversely affect our business and reputation. 6 We may incur liability or become subject to administrative penalties for counterfeit or unauthorized merchandise displayed on our platform, or for merchandise displayed on our platform that infringe on third-party intellectual property rights, or for other misconduct.
If we fail to improve our existing services or introduce new ones in a timely or cost-effective manner, our ability to attract and retain clients may be impaired, and our results of operations and prospects may be adversely affected. 22 Table of Contents Our development of new cancer therapy and radiation oncology centers could result in fluctuations in our short-term financial performance, and newly opened cancer therapy and radiation oncology centers and clinics may not achieve timely profitability, or at all.
If we fail to improve our existing services or introduce new ones in a timely or cost-effective manner, our ability to attract and retain clients may be impaired, and our results of operations and prospects may be adversely affected. 7 Our development of new cancer therapy and radiation oncology centers could result in fluctuations in our short-term financial performance, and newly opened cancer therapy and radiation oncology centers and clinics may not achieve timely profitability, or at all.
The issuance and sale of additional equity would result in dilution to our shareholders. We cannot guarantee that financing will be available to us under terms acceptable to us, or at all. 26 Table of Contents ● The incurrence of indebtedness would result in increased fixed obligations and could result in covenants restricting our operations.
The issuance and sale of additional equity would result in dilution to our shareholders. We cannot guarantee that financing will be available to us under terms acceptable to us, or at all. ● The incurrence of indebtedness would result in increased fixed obligations and could result in covenants restricting our operations.
Any declaration and payment, as well as the amount, of dividends will be subject to our constitutional documents and applicable Chinese and U.S. state and federal laws and regulations, including the approval from the shareholders of each subsidiary which intends to declare such dividends, if applicable. 52 Table of Contents Substantial future sales or perceived potential sales of our ADSs in the public market could cause the price of our ADSs to decline.
Any declaration and payment, as well as the amount, of dividends will be subject to our constitutional documents and applicable Chinese and U.S. state and federal laws and regulations, including the approval from the shareholders of each subsidiary which intends to declare such dividends, if applicable. 28 Substantial future sales or perceived potential sales of our ADSs in the public market could cause the price of our ADSs to decline.
For more information, see “Item 10. Additional Information—E. Taxation—U.S. Federal Income Tax Considerations—PFIC Rules.” 53 Table of Contents The amended and restated memorandum and articles of association that we expect to adopt contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares and ADSs.
For more information, see “Item 10. Additional Information—E. Taxation—U.S. Federal Income Tax Considerations—PFIC Rules.” 29 The amended and restated memorandum and articles of association that we expect to adopt contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares and ADSs.
Risk Factors—Risks Relating to Doing Business in the People’s Republic of China— Although the audit report included in this annual report is prepared by U.S. auditors who are currently inspected by the PCAOB, there is no guarantee that future audit reports will be prepared by auditors inspected by the PCAOB and, as such, in the future investors may be deprived of the benefits of such inspection.
Risk Factors—Risks Relating to Doing Business in the People’s Republic of China— Although the audit report included in this annual report is prepared by an auditor who are currently inspected by the PCAOB, there is no guarantee that future audit reports will be prepared by auditors inspected by the PCAOB and, as such, in the future investors may be deprived of the benefits of such inspection.
We cannot assure you that our practices would not be deemed to violate any PRC laws, regulations or policies either now or in the future. 37 Table of Contents Moreover, developments in the ACTCS service industry may lead to changes in PRC laws, regulations and policies or in the interpretation and application of existing laws, regulations and policies, which may limit or restrict the ACTCS hardware and services we offer.
We cannot assure you that our practices would not be deemed to violate any PRC laws, regulations or policies either now or in the future. 15 Moreover, developments in the ACTCS service industry may lead to changes in PRC laws, regulations and policies or in the interpretation and application of existing laws, regulations and policies, which may limit or restrict the ACTCS hardware and services we offer.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States. 54 Table of Contents Certain judgments obtained against us by our shareholders may not be enforceable.
As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States. 30 Certain judgments obtained against us by our shareholders may not be enforceable.
Furthermore, trading in our securities may be prohibited under the HFCA Act if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, and as a result, U.S. national securities exchanges, such as the Nasdaq, may determine to delist our securities. Furthermore, on June 22, 2021, the U.S.
Furthermore, trading in our securities may be prohibited under the HFCA Act if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, and as a result, U.S. national securities exchanges, such as Nasdaq, may determine to delist our securities.
If we are unable to maintain our reputation, enhance our brand recognition or increase positive awareness of our platform, products and services, it may be difficult to maintain and grow our member and user base, and our business and growth prospects may be materially and adversely affected. 15 Table of Contents If our social e-commerce platform is unable to provide good customer experience, our business and reputation may be materially and adversely affected.
If we are unable to maintain our reputation, enhance our brand recognition or increase positive awareness of our platform, products and services, it may be difficult to maintain and grow our member and user base, and our business and growth prospects may be materially and adversely affected. 5 If our social e-commerce platform is unable to provide good customer experience, our business and reputation may be materially and adversely affected.
Pursuant to the HFCAA, the PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China and (2) Hong Kong. In addition, the PCAOB’s report identified the specific registered public accounting firms which are subject to these determinations.
On December 16, 2021, the PCAOB issued a Determination Report which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the PRC, and (2) Hong Kong. In addition, the PCAOB’s report identified the specific registered public accounting firms which are subject to these determinations.
According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC. 48 Table of Contents We believe none of our entities outside of China is a PRC resident enterprise for PRC tax purposes.
According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in the PRC; and (iv) at least 50% of voting board members or senior executives habitually reside in the PRC.
House of Representatives, all call for additional and more stringent criteria to be applied to emerging market companies. These developments could add uncertainties to our business operations, share price and reputation.
Senate and the U.S. House of Representatives, all call for additional and more stringent criteria to be applied to emerging market companies. These developments could add uncertainties to our business operations, share price and reputation.
Any of these factors may result in large and sudden changes in the volume and price at which our ADSs will trade. 51 Table of Contents Techniques employed by short sellers may drive down the market price of our ADSs.
Any of these factors may result in large and sudden changes in the volume and price at which our ADSs will trade. 27 Techniques employed by short sellers may drive down the market price of our ADSs.
In addition, the recent developments would add uncertainties to our offering and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements.
In addition, the recent developments would add uncertainties to the listing and trading of our Class A ordinary shares and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements.
Reasons for the Offer and Use of Proceeds Not applicable. 10 Table of Contents D. Risk Factors RISKS RELATED TO OUR BUSINESS AND INDUSTRY We are no longer engaged in the online microlending business, but we cannot assure you that we would not be penalized under relevant regulations for the previous microlending business.
Capitalization and Indebtedness Not applicable. C. Reasons for the Offer and Use of Proceeds Not applicable. D. Risk Factors RISKS RELATED TO OUR BUSINESS AND INDUSTRY We are no longer engaged in the online microlending business, but we cannot assure you that we would not be penalized under relevant regulations for the previous microlending business.
GAAP. 29 Table of Contents PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our initial public offering and the concurrent private placement to make loans to or make additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
RISKS RELATED TO OUR CORPORATE STRUCTURE PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds of our initial public offering and the concurrent private placement to make loans to or make additional capital contributions to our PRC subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business.
As of the date of this report, we and our PRC subsidiaries have not received any inquiry, notice, warning or objection in relation to this offering or Nasdaq listing from the CSRC, the CAC or any other PRC authorities.
As of the date of this annual report, we and our PRC subsidiaries have not received any inquiry, notice, warning or objection in relation to the listing or trading of our securities on Nasdaq from the CSRC, the CAC or any other PRC authorities.
Senate passed the HFCA Act, which includes requirements for the SEC to identify issuers whose audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely because of a restriction imposed by a non-U.S. authority in the auditor’s local jurisdiction. The U.S.
Senate passed the Holding Foreign Companies Accountable Act (the “HFCA Act”), which includes requirements for the SEC to identify issuers whose audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely because of a restriction imposed by a non-U.S. authority in the auditor’s local jurisdiction. The U.S.
Under the deposit agreement for the ADSs, if you do not give proper or timely voting instructions to the depositary, the depositary will give us a discretionary proxy to vote the ordinary shares represented by your ADSs at shareholders’ meetings unless: ● we have failed to timely provide the depositary with notice of meeting and related voting materials; ● we have instructed the depositary that we do not wish a discretionary proxy to be given; ● we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting; ● a matter to be voted on at the meeting would have a material adverse impact on shareholders; or ● the voting at the meeting is to be made on a show of hands. 56 Table of Contents The effect of the foregoing is that if you do not give proper or timely voting instructions to the depositary as to how to vote at shareholders’ meetings, a discretionary proxy to vote the ordinary shares represented by your ADSs will be given to a person designated by us, except under the circumstances described above.
Under the deposit agreement for the ADSs, if you do not give proper or timely voting instructions to the depositary, the depositary will give us a discretionary proxy to vote the ordinary shares represented by your ADSs at shareholders’ meetings unless: ● we have failed to timely provide the depositary with notice of meeting and related voting materials; ● we have instructed the depositary that we do not wish a discretionary proxy to be given; ● we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting; ● a matter to be voted on at the meeting would have a material adverse impact on shareholders; or ● the voting at the meeting is to be made on a show of hands.
While the Company’s auditor is headquartered in Singapore and is registered with PCAOB and subject to PCAOB inspection, in the event it is later determined that the PCAOB is unable to inspect or investigate completely the Company’s auditor because of a position taken by an authority in a foreign jurisdiction, then such lack of inspection could cause trading in the Company’s securities to be prohibited under the Holding Foreign Companies Accountable Act, and ultimately result in a determination by a securities exchange to delist the Company’s securities.
While our auditor is based in the Singapore and is registered with the PCAOB and subject to PCAOB inspection, in the event it is later determined that the PCAOB is unable to inspect or investigate completely our auditor because of a position taken by an authority in a foreign jurisdiction, then such lack of inspection could cause trading in our ADSs to be prohibited under the HFCA Act, and ultimately result in a determination by a securities exchange to delist our Ordinary Shares.
Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” We have registered certain ordinary shares that we may issue under our share incentive plans and intend to register all ordinary shares that we may issue under our share incentive plans.
Compensation—Share Incentive Plan.” We have registered certain ordinary shares that we may issue under our share incentive plans and intend to register all ordinary shares that we may issue under our share incentive plans.
We may be required to obtain additional licenses, permits, filings or approvals for the functions and services of our platform in the future. For more detailed information, see “Item 3. Key Information—D.
We may be required to obtain additional licenses, permits, filings or approvals for the functions to operate our business in the future. For more detailed information, see “Item 3. Key Information—D.
On July 19, 2018, our board of directors approved an annual dividend policy. Under this policy, annual dividends will be set at an amount equivalent to approximately 15-25% of our anticipated net income after tax in each year commencing from the fiscal year ended March 31, 2019.
Under this policy, annual dividends will be set at an amount equivalent to approximately 15-25% of our anticipated net income after tax in each year commencing from the fiscal year ended March 31, 2019.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.
Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions.
Based on PRC laws and regulations effective as of the date of this report and subject to different interpretations of these laws and regulations that may be adopted by PRC authorities, we believe that, as of the date of this report, we, our PRC subsidiaries and consolidated affiliated entities are not required to obtain any permission from the CSRC, the CAC, or any other PRC authority in connection with this offering.
Based on PRC laws and regulations effective as of the date of this report and subject to different interpretations of these laws and regulations that may be adopted by PRC authorities, we believe that, as of the date of this report, we, our PRC subsidiaries are not required to obtain any permission from the CSRC, the CAC, or any other PRC authority in connection with the listing or trading of our Ordinary Shares in foreign stock exchanges.
The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations.
Some of these measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations.
Furthermore, trading in our securities may be prohibited under the HFCA Act if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, and as a result, U.S. national securities exchanges, such as the Nasdaq, may determine to delist our securities. Furthermore, on June 22, 2021, the U.S.
Furthermore, trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act (the “HFCA Act”) if the SEC subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, and as a result, U.S. national securities exchanges, such as Nasdaq, may determine to delist our securities.
Although we operate through our subsidiaries substantially in mainland China, a jurisdiction where the PCAOB is currently unable to conduct inspections without the approval of the Chinese government authorities, our auditor, the independent registered public accounting firm that issues the audit report 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 our auditor’s compliance with the applicable professional standards.
Although we operate part of of our business in mainland China, a jurisdiction where the PCAOB is currently unable to conduct inspections without the approval of the Chinese government authorities, our auditor, OneStop Assurance PAC, the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess our auditor’s compliance with the applicable professional standards.
With the development of the foreign exchange market and progress towards interest rate liberalization and RMB internationalization, the PRC government may in the future announce further changes to the exchange rate system and there is no guarantee that the RMB 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 RMB internationalization, the PRC government may in the future announce further changes to the exchange rate system and there is no guarantee that the RMB will not appreciate or depreciate significantly in value against the U.S. dollar in the future. 22 Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations.
Changes in the policies of the PRC government could have a significant impact upon our ability to operate profitably in the PRC. We conduct all of our operations and all of our revenue is generated in the PRC. Accordingly, economic, political and legal developments in the PRC will significantly affect our business, financial condition, results of operations and prospects.
We conduct all of our operations and all of our revenue is generated in the PRC. Accordingly, economic, political and legal developments in the PRC will significantly affect our business, financial condition, results of operations and prospects. Policies of the PRC government can have significant effects on economic conditions in the PRC and the ability of businesses to operate profitably.
Furthermore, we are subject to PRC rules and regulations relating to overseas listing and securities offering, and a substantial extension of the PRC government’s oversight over our business operations or overseas listings may hinder our ability to offer or continue to offer our securities.
Risk Factors—Risks Related to Doing Business in the People’s Republic of China.” Furthermore, we are subject to PRC rules and regulations relating to overseas listing and securities offering, and a substantial extension of the PRC government’s oversight over our business operations or overseas listings may hinder our ability to offer or continue to offer our securities.
In such event, these regulatory agencies may impose fines or other penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from overseas financings into the PRC, restrict or prohibit payment or remittance of dividends to us or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our ADSs or ordinary shares.
In any such event, these regulatory agencies may impose fines and penalties on our operations in China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offerings into the PRC, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in China, or other actions that could have a material and adverse effect on our business, reputation, financial condition, results of operations, prospects, as well as the trading price of the ADSs.
On September 22, 2021, the PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether the Board is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. 35 Table of Contents On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act.
On September 22, 2021, the PCAOB adopted a final rule implementing the AHFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the AHFCAA, whether the Board is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
(2) Cash paid by one of our Hong Kong subsidiaries to one of our VIEs for services rendered. Our board of directors has discretion regarding whether to declare or pay dividends. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors.
Our board of directors has discretion regarding whether to declare or pay dividends. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors.
The trading price of our ADSs has ranged from US$1.23 to US$22.39per ADS in 2021. The trading prices of our ADSs are likely to be volatile and could fluctuate widely due to factors beyond our control.
The trading price of our ADSs has ranged from US$0.2 to US$1.85 per ADS in fiacal year 2023. The trading prices of our ADSs are likely to be volatile and could fluctuate widely due to factors beyond our control.
The Chinese government also exercises significant control over China’s economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting the monetary policy, and determining the different levels of treatment accorded to different industries and companies in accordance with its national development policy. 44 Table of Contents While the Chinese economy has experienced significant growth over the past decades, the growth rate has had sporadic bursts, across geographically and among various sectors and industries.
The Chinese government also exercises significant control over China’s economic growth through allocating resources, controlling payment of foreign currency-denominated obligations, setting the monetary policy, and determining the different levels of treatment accorded to different industries and companies in accordance with its national development policy.
However, according to Circular 81 and Circular 60, if the relevant tax authorities consider the transactions or arrangements we have are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future. 49 Table of Contents Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.
However, according to Circular 81 and Circular 60, if the relevant tax authorities consider the transactions or arrangements we have are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future.
Our business, financial performance and results of operations could be adversely affected by deterioration of the relation between China and the United States. The relation between China and the United States is constantly changing.
We may also be required to restate our financial statements from prior periods. 10 Our business, financial performance and results of operations could be adversely affected by deterioration of the relation between China and the United States. The relation between China and the United States is constantly changing.
The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our net revenues in RMB.
Governmental control of currency conversion may limit our ability to utilize our net revenues effectively and affect the value of your investment. The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our net revenues in RMB.
In addition, we expect that our management and other personnel will need to divert attention from operational and other business matters to devote substantial time to these public company requirements.
In addition, we expect that our management and other personnel will need to divert attention from operational and other business matters to devote substantial time to these public company requirements. We cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.
Risk Factors—Risks Relating to Doing Business in the People’s Republic of China— In light of recent events indicating greater oversight by the Cyberspace Administration of China, or CAC, over data security, particularly for companies seeking to list on a foreign exchange, we are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, our listing on NASDAQ, financial condition, and results of operations,” and “Risk Factors—Risks Relating to Doing Business in the People’s Republic of China—The approval of the CSRC and other compliance procedures may be required, and, if required, we cannot predict whether we will be able to obtain such approval.” 7 Table of Contents Holding Foreign Companies Accountable Act (HFCAA) Our ADSs may be prohibited from trading on a national exchange or “over-the-counter” markets under the HFCAA if the PCAOB determines it is unable to inspect or investigate completely our auditors for three consecutive years beginning in 2021.
Risk Factors—Risks Relating to Doing Business in the People’s Republic of China— In light of recent events indicating greater oversight by the Cyberspace Administration of China, or CAC, over data security, particularly for companies seeking to list on a foreign exchange, we are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, our listing on Nasdaq, financial condition, and results of operations,” and “Risk Factors—Risks Relating to Doing Business in the People’s Republic of China—The Opinions, the Trial Measures, and the revised Provisions recently issued by the PRC authorities may subject us to additional compliance requirements in the future.” 2 Holding Foreign Companies Accountable Act (HFCAA) Our ADSs may be prohibited from trading on a national exchange or over-the-counter under the Holding Foreign Companies Accountable Act (the “HFCA Act”) if the Public Company Accounting Oversight Board (United States) (the “PCAOB”) is unable to inspect our auditors for three consecutive years beginning in 2021.
A portion of our revenues and expenditures are denominated in RMB, and the functional currency for our PRC subsidiary and consolidated variable interest entities is RMB, whereas our reporting currency is the U.S. dollar.
Fluctuations in exchange rates could have a material adverse effect on our results of operations and the value of your investment. A portion of our revenues and expenditures are denominated in RMB, and the functional currency for our PRC subsidiary and consolidated variable interest entities is RMB, whereas our reporting currency is the U.S. dollar.
We will incur significantly increased costs and devote substantial management time as a result of being a public company. As a public company, we incur additional legal, accounting and other expenses as a public reporting company, particularly after we cease to qualify as an “emerging growth company” pursuant to the JOBS Act.
We will incur significantly increased costs and devote substantial management time as a result of being a public company. As a public company, we incur additional legal, accounting and other expenses as a public reporting company.
We cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. 57 Table of Contents In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming.
In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming.
The primary role of this new agency is to facilitate the policy-making and legislative development in this field, to direct and coordinate with the relevant departments in connection with online content administration and to deal with cross-ministry regulatory matters in relation to the Internet industry. 45 Table of Contents Fluctuations in exchange rates could have a material adverse effect on our results of operations and the value of your investment.
The primary role of this new agency is to facilitate the policy-making and legislative development in this field, to direct and coordinate with the relevant departments in connection with online content administration and to deal with cross-ministry regulatory matters in relation to the Internet industry.
We believe that our current cash and cash equivalents, anticipated cash flows from operating activities, and the proceeds from our initial public offering and the proceeds from the three-year senior unsecured note we issued to Majik Fund SPC will be sufficient to meet our anticipated working capital requirements and capital expenditures in the ordinary course of business for the next 12 months.
We believe that our current cash and cash equivalents, anticipated cash flows from operating activities, and the loans from third parties or our related parties will be sufficient to meet our anticipated working capital requirements and capital expenditures in the ordinary course of business for the next 12 months.
Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from the MOC or its local counterparts may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.
Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from the MOC or its local counterparts may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share. 23 PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiary’s ability to increase its registered capital or distribute profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law.
We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.
As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States. We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.
However, a transaction or arrangement entered into for the primary purpose of enjoying a favorable tax treatment should not be a reason for the application of the favorable tax treatment under the Double Tax Avoidance Arrangement. If a taxpayer inappropriately is entitled to such favorable tax treatment, the competent tax authority has the power to make appropriate adjustments.
However, a transaction or arrangement entered into for the primary purpose of enjoying a favorable tax treatment should not be a reason for the application of the favorable tax treatment under the Double Tax Avoidance Arrangement.
On August 26, 2022, the China Securities Regulatory Commission, the MOF, and the PCAOB signed the Protocol governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong.
The SOP Agreement, together with two protocol agreements (collectively, “SOP Agreements”), governing inspections and investigations of audit firms based in mainland China and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong.
While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currency.
To date, we have not entered into any hedging transactions in an effort to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all.
All of our shareholders who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being PRC residents have completed the foreign exchange registrations required in connection with our recent corporate restructuring. 47 Table of Contents However, we may not be informed of the identities of all the PRC residents or entities holding direct or indirect interest in our company, nor can we compel our beneficial owners to comply with SAFE registration requirements.
All of our shareholders who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us as being PRC residents have completed the foreign exchange registrations required in connection with our recent corporate restructuring.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeOn October 10, 2018, the PBOC, the CBIRC and CSRC together promulgated the Measures for the Anti-money Laundering and Anti-terrorist Finance of Internet Finance, which further specified that, any Internet finance institutions incorporated upon approval or upon record-filing by applicable regulatory authority, shall report any forms of cash receipts and payments whose transaction value reaches or exceeds RMB 50,000 or foreign currency equivalent of US$10,000 on a per-transaction or cumulative basis on a given day, within five working days from the date when such transaction takes place.
Biggest changeOn October 10, 2018, the PBOC, the CBIRC and CSRC together promulgated the Measures for the Anti-money Laundering and Anti-terrorist Finance of Internet Finance, which further specified that, any Internet finance institutions incorporated upon approval or upon record-filing by applicable regulatory authority, shall report any forms of cash receipts and payments whose transaction value reaches or exceeds RMB 50,000 or foreign currency equivalent of US$10,000 on a per-transaction or cumulative basis on a given day, within five working days from the date when such transaction takes place. 44 Regulations on Value-Added Telecommunication Services The Telecommunications Regulations promulgated by the State Council and its related implementation rules, including the Catalog of Classification of Telecommunications Business issued by the MIIT, amended in 2019 categorize various types of telecommunications and telecommunications-related activities into basic or value-added telecommunications services, and Internet information services, or ICP services, and on-line data processing and transaction processing services, are classified as value-added telecommunications businesses.
Akso First Health Treatment Center Inc., Akso Remote Medical Consultation Center Inc. and Akso Online MediTech Co., Ltd. are 100% owned by We Health Limited. Business Restructuring and Disposition of Hexin E-Commerce Prior to our disposition of Hexin E-Commerce, on November 20, 2020, Mr. Ming Jia and Mr.
Akso First Health Treatment Center Inc., Akso Remote Medical Consultation Center Inc. and Akso Online MediTech Co., Ltd. are 100% owned by We Health Limited. Business Restructuring and Disposition Prior to our disposition of Hexin E-Commerce, on November 20, 2020, Mr. Ming Jia and Mr.
Medicare has authorized reimbursement for certain forms of cancer treatment. Over the last several years, such third-party payors are increasingly challenging the cost effectiveness of medical products and services and taking other cost containment measures. In the future, the Company may establish additional radiation oncology and cancer therapy services.
Medicare has authorized reimbursement for certain forms of cancer treatment. Over the last several years, such third-party payors are increasingly challenging the cost effectiveness of medical products and services and taking other cost containment measures. 53 In the future, the Company may establish additional radiation oncology and cancer therapy services.
Foreign-invested enterprises established before the implementation of this Law may retain the original business organization and so on within five years after the implementation of this Law. The Foreign Investment Law is formulated to further expand opening-up, vigorously promote foreign investment and protect the legitimate rights and interests of foreign investors.
Foreign-invested enterprises established before the implementation of this Law may retain the original business organization and so on within five years after the implementation of this Law. 42 The Foreign Investment Law is formulated to further expand opening-up, vigorously promote foreign investment and protect the legitimate rights and interests of foreign investors.
These include: ● establishment registration and device listing with the FDA; ● QSR requirements, which require manufacturers and contract manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process; ● labeling regulations and FDA prohibitions against the promotion of investigational products, or “off-label” uses of cleared or approved products; ● requirements related to promotional activities; ● clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices; ● medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or 88 Table of Contents ● a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur; ● correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections, product removals or recalls if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; ● the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and ● post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.
These include: ● establishment registration and device listing with the FDA; ● QSR requirements, which require manufacturers and contract manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process; ● labeling regulations and FDA prohibitions against the promotion of investigational products, or “off-label” uses of cleared or approved products; ● requirements related to promotional activities; ● clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices; 57 ● medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or ● a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur; ● correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections, product removals or recalls if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; ● the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and ● post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.
These treatments may be more effective or less costly, or both, compared to the treatment methods that our cancer therapy and radiation oncology centers will provide. iHealth COVID-19 Test Kit Business The diagnostic testing industry, especially for COVID-19, is highly competitive, and given the significant interest and growth in COVID-19 related diagnostic tests, we expect ongoing intense competition from different sources, including from manufacturers and producers of diagnostic tests, vaccines and therapeutic treatments.
These treatments may be more effective or less costly, or both, compared to the treatment methods that our cancer therapy and radiation oncology centers will provide. iHealth COVID-19 Test Kit Business in the United States The diagnostic testing industry, especially for COVID-19, is highly competitive, and given the significant interest and growth in COVID-19 related diagnostic tests, we expect ongoing intense competition from different sources, including from manufacturers and producers of diagnostic tests, vaccines and therapeutic treatments.
If the FDA determines that we failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● unanticipated expenditures to address or defend such actions; ● customer notifications for repair, replacement, refunds; ● recall, withdrawal, administrative detention or seizure of our test kits; ● operating restrictions or partial suspension or total shutdown of production; ● refusal of or delay in granting our requests for 510(k) clearance or PMA approval of new test kits or modified test kits; ● operating restrictions, partial suspension or total shutdown of production; ● withdrawing 510(k) clearance or PMA approvals that are already granted; ● refusal to grant export approval for our test kits; or ● criminal prosecution. 89 Table of Contents Health Insurance Portability and Accountability Act and Other Privacy Laws The federal Health Insurance Portability and Accountability Act of 1996, as amended by the Healthcare Information Technology for Economic and Clinical Health Act of 2009, or collectively HIPAA, among other things, established federal protection for the privacy and security of protected health information, or PHI.
If the FDA determines that we failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions: ● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties; ● unanticipated expenditures to address or defend such actions; ● customer notifications for repair, replacement, refunds; ● recall, withdrawal, administrative detention or seizure of our test kits; ● operating restrictions or partial suspension or total shutdown of production; ● refusal of or delay in granting our requests for 510(k) clearance or PMA approval of new test kits or modified test kits; ● operating restrictions, partial suspension or total shutdown of production; ● withdrawing 510(k) clearance or PMA approvals that are already granted; ● refusal to grant export approval for our test kits; or ● criminal prosecution. 58 Health Insurance Portability and Accountability Act and Other Privacy Laws The federal Health Insurance Portability and Accountability Act of 1996, as amended by the Healthcare Information Technology for Economic and Clinical Health Act of 2009, or collectively HIPAA, among other things, established federal protection for the privacy and security of protected health information, or PHI.
As part of our business restructuring in December 2020 and our disposal of Hexin E-commerce, we are no longer a beneficiary to Trust 1. In January 2019, we incorporated HX China Investment Limited, also our wholly-owned subsidiary in the British Virgin Islands, for the purpose of acquiring a 5.88% equity stake in Phoenix Intelligent Credit Group Ltd.
As part of our business restructuring in December 2020 and our disposal of Hexin E-commerce, we are no longer a beneficiary to Trust 1. In January 2019, we incorporated HX China Investment Limited (“HX China”), also our wholly-owned subsidiary in the British Virgin Islands, for the purpose of acquiring a 5.88% equity stake in Phoenix Intelligent Credit Group Ltd.
A PMA application, which is intended to demonstrate that the device is reasonably safe and effective for its intended use and must be supported by extensive data, typically including data from pre-clinical studies and clinical trials. 85 Table of Contents Emergency Use Authorization In emergency situations, such as a pandemic, the FDA has the authority to allow unapproved medical products or unapproved uses of cleared or approved medical products to be used in an emergency to diagnose, treat or prevent serious or life-threatening diseases or conditions caused by chemical, biological, radiological or nuclear warfare threat agents when there are no adequate, approved, and available alternatives.
A PMA application, which is intended to demonstrate that the device is reasonably safe and effective for its intended use and must be supported by extensive data, typically including data from pre-clinical studies and clinical trials. 54 Emergency Use Authorization In emergency situations, such as a pandemic, the FDA has the authority to allow unapproved medical products or unapproved uses of cleared or approved medical products to be used in an emergency to diagnose, treat or prevent serious or life-threatening diseases or conditions caused by chemical, biological, radiological or nuclear warfare threat agents when there are no adequate, approved, and available alternatives.
By contrast, approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital account items, such as direct investments, repayment of foreign currency-denominated loans, repatriation of investments and investments in securities outside of China. 80 Table of Contents In November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, mostly recently amended in December 2019, which substantially amends and simplifies the current foreign exchange procedure.
By contrast, approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital account items, such as direct investments, repayment of foreign currency-denominated loans, repatriation of investments and investments in securities outside of China. 48 In November 2012, SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, mostly recently amended in December 2019, which substantially amends and simplifies the current foreign exchange procedure.
Akso Online Meditech has entered into a supply agreement to purchase “iHealth” brastnded COVID-19 Rapid Antigen test kits from its supplier in Hong Kong and sells these test kits to distributors in the United States.
Akso Online Meditech has entered into a supply agreement to purchase “iHealth” branded COVID-19 Rapid Antigen test kits from its supplier in Hong Kong and sells these test kits to distributors in the United States.
Business Overview Business transition into the social e-commerce industry We were formally known as Hexindai Inc., and used to be engaged in the business of providing online facilitation related services via our consumer lending marketplace in China, facilitating loans to meet the increasing consumption demand of the emerging middle class in China from 2017 to 2019.
The social e-commerce industry We were formally known as Hexindai Inc., and used to be engaged in the business of providing online facilitation related services via our consumer lending marketplace in China, facilitating loans to meet the increasing consumption demand of the emerging middle class in China from 2017 to 2019.
On November 3, 2017, our ADSs commenced trading on the NASDAQ Global Market under the symbol “HX.” 58 Table of Contents As part of our strategy to expand our investment, in June 2018, we incorporated HX Asia Investment Limited, a wholly-owned subsidiary in the British Virgin Islands, to acquire a 19.99% equity stake in Musketeer Group Inc, an Indonesian online lending platform that offers consumption instalment loans.
On November 3, 2017, our ADSs commenced trading on the NASDAQ Global Market under the symbol “HX.” As part of our strategy to expand our investment, in June 2018, we incorporated HX Asia Investment Limited (“HX Asia”), a wholly-owned subsidiary in the British Virgin Islands, to acquire a 19.99% equity stake in Musketeer Group Inc, an Indonesian online lending platform that offers consumption instalment loans.
Local authorities shall enhance supervision and administration of the establishment of the microlending companies and suspend newly-incorporated microlending companies from engaging in the Internet microlending business and other inter-provincial business. 70 Table of Contents On November 2, 2020, CBIRC and PBOC published the Interim Administrative Measures for Online Microlending Business (Draft for Comment) (“Draft Interim Administrative Measures”), for public review and comments.
Local authorities shall enhance supervision and administration of the establishment of the microlending companies and suspend newly-incorporated microlending companies from engaging in the Internet microlending business and other inter-provincial business. On November 2, 2020, CBIRC and PBOC published the Interim Administrative Measures for Online Microlending Business (Draft for Comment) (“Draft Interim Administrative Measures”), for public review and comments.
This notice has amended SAFE Circular 37 requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. 81 Table of Contents PRC residents or entities who had contributed legitimate onshore or offshore interests or assets to SPVs but had not obtained registration as required before the implementation of the SAFE Circular 37 must register their ownership interests or control in the SPVs with qualified banks.
This notice has amended SAFE Circular 37 requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. 49 PRC residents or entities who had contributed legitimate onshore or offshore interests or assets to SPVs but had not obtained registration as required before the implementation of the SAFE Circular 37 must register their ownership interests or control in the SPVs with qualified banks.
Bulletin 37 further details and clarifies the tax withholding methods in respect of income of non-resident enterprises. 79 Table of Contents Pursuant to the Double Taxation Avoidance Arrangement, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise is reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the PRC enterprise.
Bulletin 37 further details and clarifies the tax withholding methods in respect of income of non-resident enterprises. 47 Pursuant to the Double Taxation Avoidance Arrangement, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise is reduced to 5% from a standard rate of 10% if the Hong Kong enterprise directly holds at least 25% of the PRC enterprise.
In addition, the FDA collects user fees for certain medical device submissions and annual fees and for medical device establishments. 86 Table of Contents Before the FDA will accept a 510(k) submission for substantive review, the FDA will first assess whether the submission satisfies a minimum threshold of acceptability.
In addition, the FDA collects user fees for certain medical device submissions and annual fees and for medical device establishments. 55 Before the FDA will accept a 510(k) submission for substantive review, the FDA will first assess whether the submission satisfies a minimum threshold of acceptability.
The features of online microlending loans include online borrower acquisition, credit assessment based on the online information collected from the Internet enterprise’s business operations and the borrower’s Internet usage, as well as online loan application, approval and funding. 69 Table of Contents Consistent with the Guidance on the Pilot Establishment of Microlending Companies and Circular 141, the Rectification Implementation Plans of Online Microlending Companies emphasize several aspects where inspection and rectification measures must be carried out for the online microlending loans industry, which include, among others, (i) the online microlending companies shall be approved by the competent authorities in accordance with the applicable regulations promulgated by the State Council, and the approved online microlending companies subsequently in violation of any regulatory requirements shall be re-examined; (ii) qualification requirements to conduct online micro-loan business (including the qualification of sponsor shareholders, the sources of borrowers, the Internet scenario and the digital risk-management technology); (iii) whether the qualification and funding source of the shareholders of online microlending companies are in compliance with the applicable laws and regulations; (iv) whether the “integrated actual interest” (namely the aggregated borrowing costs charged to borrowers in the form of interest and various fees) are annualized and subject to the limit on the interest rate of private lending set forth in the Private Lending Judicial Interpretations issued by the Supreme People’s Court and, whether any interest, handling fee, management fee or deposit are deducted from the principal of loans provided to the borrowers in advance, prior to the repayment of the loan; (v) whether campus loans or online microlending loans with no specific scenario or designated use of loan proceeds are granted; (vi) with respect to the loan business conducted in cooperation with third-party institutions, whether the online microlending companies outsource the core business (including the credit assessment and risk control), or accept any credit enhancement service (whether or not in a disguised form) provided by any third-party institutions with no approval to provide financing guarantee and whether any applicable third-party institution collects any interest or fees from the borrowers; and (vii) entities that conduct online microlending loans business without relevant approval or license for lending business shall be shut down and banned.
Consistent with the Guidance on the Pilot Establishment of Microlending Companies and Circular 141, the Rectification Implementation Plans of Online Microlending Companies emphasize several aspects where inspection and rectification measures must be carried out for the online microlending loans industry, which include, among others, (i) the online microlending companies shall be approved by the competent authorities in accordance with the applicable regulations promulgated by the State Council, and the approved online microlending companies subsequently in violation of any regulatory requirements shall be re-examined; (ii) qualification requirements to conduct online micro-loan business (including the qualification of sponsor shareholders, the sources of borrowers, the Internet scenario and the digital risk-management technology); (iii) whether the qualification and funding source of the shareholders of online microlending companies are in compliance with the applicable laws and regulations; (iv) whether the “integrated actual interest” (namely the aggregated borrowing costs charged to borrowers in the form of interest and various fees) are annualized and subject to the limit on the interest rate of private lending set forth in the Private Lending Judicial Interpretations issued by the Supreme People’s Court and, whether any interest, handling fee, management fee or deposit are deducted from the principal of loans provided to the borrowers in advance, prior to the repayment of the loan; (v) whether campus loans or online microlending loans with no specific scenario or designated use of loan proceeds are granted; (vi) with respect to the loan business conducted in cooperation with third-party institutions, whether the online microlending companies outsource the core business (including the credit assessment and risk control), or accept any credit enhancement service (whether or not in a disguised form) provided by any third-party institutions with no approval to provide financing guarantee and whether any applicable third-party institution collects any interest or fees from the borrowers; and (vii) entities that conduct online microlending loans business without relevant approval or license for lending business shall be shut down and banned. 41 The Rectification Implementation Plans of Online Microlending Companies also sets forth that all related institutions shall be subject to inspection and investigation.
On January 3, 2022, we incorporated Akso Remote Medical Consultation Center Inc. in Wyoming. 59 Table of Contents On January 26, 2022, we established Qingdao Akso Health Management Co., Ltd, which is a wholly-owned subsidiary of We Healthy Limited. On January 4, 2022, we incorporated Akso Online MediTech Co., Ltd. (“Akso Online MediTech”) in Wyoming.
On January 3, 2022, we incorporated Akso Remote Medical Consultation Center Inc. in Wyoming. On January 26, 2022, we established Qingdao Akso Health Management Co., Ltd, which is a wholly-owned subsidiary of We Healthy Limited (“Qingdao Akso”). On January 4, 2022, we incorporated Akso Online MediTech Co., Ltd. (“Akso Online MediTech”) in Wyoming.
The PBOC and other governmental authorities issued a series of administrative rules and regulations to specify the anti-money laundering obligations of financial institutions and certain non-financial institutions, such as payment institutions. 73 Table of Contents In July 2018, the PBOC issued the Notice on Strengthening Supervision on Anti-money Laundering by Certain Non-financial Institutions, stipulating that the following non-financial institutions shall undertake the responsibilities of anti-money laundering and anti-terrorist financing during certain of their respective business operations: (i) real estate development enterprises and real estate agencies while selling real estates and providing service for real estate transactions; (ii) precious metal traders and precious metals trading platforms while conducting or providing service for precious metal spot trading; (iii) accounting firms, law firms and notary offices while conducting real estate transactions, asset management, bank account and securities account management, fund-raising for establishment or operation of enterprises and business entities transactions on behalf of their clients; and (iv) company service providers providing service for establishment, operation and management of companies.
In July 2018, the PBOC issued the Notice on Strengthening Supervision on Anti-money Laundering by Certain Non-financial Institutions, stipulating that the following non-financial institutions shall undertake the responsibilities of anti-money laundering and anti-terrorist financing during certain of their respective business operations: (i) real estate development enterprises and real estate agencies while selling real estates and providing service for real estate transactions; (ii) precious metal traders and precious metals trading platforms while conducting or providing service for precious metal spot trading; (iii) accounting firms, law firms and notary offices while conducting real estate transactions, asset management, bank account and securities account management, fund-raising for establishment or operation of enterprises and business entities transactions on behalf of their clients; and (iv) company service providers providing service for establishment, operation and management of companies.
To date, we have not experienced a material misappropriation of our intellectual property. Despite our efforts to protect our proprietary rights, third parties may attempt to use, copy or otherwise obtain and market or distribute our proprietary technology or develop a platform that is similar to our marketplace.
Intellectual Property We have registered a website at http://www.ahgtop.com/en/index.html. To date, we have not experienced a material misappropriation of our intellectual property. Despite our efforts to protect our proprietary rights, third parties may attempt to use, copy or otherwise obtain and market or distribute our proprietary technology or develop a platform that is similar to our marketplace.
In diagnostic testing, we anticipate facing competition from companies that have or are developing molecular tests (including centralized laboratory and POC tests) as well as antigen and antibody tests to detect SARS-CoV-2. In addition, we face competition from companies developing COVID-19, tests.
In diagnostic testing, we anticipate facing competition from companies that have or are developing molecular tests (including centralized laboratory and POC tests) as well as antigen and antibody tests to detect SARS-CoV-2. In addition, we face competition from companies developing COVID-19, tests. We face potential competition from many sources, including academic institutions, public and private research institutions and governmental agencies.
Regulation PRC Regulations This section sets forth a summary of the most significant rules and regulations that affect our business activities in China.
U.S. Regulations This section sets forth a summary of the most significant rules and regulations that affect our business activities in the United States.
If the online service provider receives any notice from the infringed party on any infringing activities, the online service provider shall take necessary measures, including deleting, blocking, and unlinking the infringing content, in a timely manner.
If the online service provider receives any notice from the infringed party on any infringing activities, the online service provider shall take necessary measures, including deleting, blocking, and unlinking the infringing content, in a timely manner. Otherwise, it will be jointly liable with the relevant online user for extended damages.
In such cases, the manufacturer might be required to follow certain patient groups for a number of years and to make periodic reports to the FDA on the clinical status of those patients. Failure to comply with the conditions of approval can result in material adverse enforcement action, including withdrawal of the approval.
In such cases, the manufacturer might be required to follow certain patient groups for a number of years and to make periodic reports to the FDA on the clinical status of those patients.
Pursuant to this agreement, Hexin Yongheng has agreed to assign and transfer to Kuaishangche the control over Hexin E-Commerce, in exchange for cash consideration of RMB 5 million.
On December 16, 2020, Hexin Yongheng, Kuaishangche, Hexin E-Commerce, Xiaobo An, Xiaoning An, and Xiaobin Zhai entered into an assignment and assumption agreement. Pursuant to this agreement, Hexin Yongheng has agreed to assign and transfer to Kuaishangche the control over Hexin E-Commerce, in exchange for cash consideration of RMB 5 million.
Foreign Investment in Value-Added Telecommunication Services The Provisions on Administration of Foreign Invested Telecommunications Enterprises promulgated by the State Council in December 2001 and subsequently amended in September 2008 and 2016 prohibit a foreign investor from owning more than 50% of the total equity interest in any value-added telecommunications service business in China and require the major foreign investor in any value-added telecommunications service business in China to have a good and profitable record and operating experience in this industry.
The staff of the NDRC addressed in an interview on 27 December 2021 that certain existing overseas listed enterprises whose foreign investors’ shareholding percentage exceed the aforementioned threshold are not required to make adjustment or deduction. 43 Foreign Investment in Value-Added Telecommunication Services The Provisions on Administration of Foreign Invested Telecommunications Enterprises promulgated by the State Council in December 2001 and subsequently amended in September 2008 and 2016 prohibit a foreign investor from owning more than 50% of the total equity interest in any value-added telecommunications service business in China and require the major foreign investor in any value-added telecommunications service business in China to have a good and profitable record and operating experience in this industry.
Should the Company enter into future ventures such “need” will be demonstrable, but it can have no assurance that CONs will be granted. 84 Table of Contents Regulation of Medical Devices in the United States Our COVID-19 self-test kits and operations are subject to extensive and ongoing regulation by the FDA under the Federal Food, Drug, and Cosmetic Act and its implementing regulations, collectively referred to as the FDCA, as well as other federal and state regulatory bodies in the United States.
Regulation of Medical Devices in the United States Our COVID-19 self-test kits and operations are subject to extensive and ongoing regulation by the FDA under the Federal Food, Drug, and Cosmetic Act and its implementing regulations, collectively referred to as the FDCA, as well as other federal and state regulatory bodies in the United States.
We face potential competition from many sources, including academic institutions, public and private research institutions and governmental agencies. 67 Table of Contents In addition to competition from diagnostic testing companies, there are companies developing vaccines and therapeutic treatments for COVID-19. In December 2020 and February 2021, for example, the FDA issued Emergency Use Authorizations for three COVID-19 vaccines.
In addition to competition from diagnostic testing companies, there are companies developing vaccines and therapeutic treatments for COVID-19. In December 2020 and February 2021, for example, the FDA issued Emergency Use Authorizations for three COVID-19 vaccines.
Certain changes to an approved device, such as changes in manufacturing facilities, methods, or quality control procedures, or changes in the design performance specifications, that affect the safety or effectiveness of the device, require submission of a PMA 87 Table of Contents supplement.
Failure to comply with the conditions of approval can result in material adverse enforcement action, including withdrawal of the approval. 56 Certain changes to an approved device, such as changes in manufacturing facilities, methods, or quality control procedures, or changes in the design performance specifications, that affect the safety or effectiveness of the device, require submission of a PMA supplement.
The Civil Code of the PRC, effective on January 1, 2021, also provides that if an online service provider is aware that an online user is committing infringing activities, such as selling counterfeit products, through its Internet services and fails to take necessary measures, it shall be jointly liable with the said online user for such infringement.
In addition, online marketplace platform providers may be jointly and severally liable with sellers and manufacturers if they are aware or should be aware that any seller or manufacturer is using the online platform to infringe upon the lawful rights and interests of consumers and fail to take measures necessary to prevent or stop such activity. 45 The Civil Code of the PRC, effective on January 1, 2021, also provides that if an online service provider is aware that an online user is committing infringing activities, such as selling counterfeit products, through its Internet services and fails to take necessary measures, it shall be jointly liable with the said online user for such infringement.
If such investor fails to or refuses to undertake such rectification, it would be ordered to dispose of the equity or asset and to take any other necessary measures so as to return to the status quo and to erase the impact to national security. 72 Table of Contents Industry Catalog Relating to Foreign Investment Investment activities in the PRC by foreign investors are principally governed by the Catalog of Industries for Encouraging Foreign Investment, or the Catalog, which became effective on January 27, 2021, and the Special Administrative Measures (Negative List) for Foreign Investment Access, or the Negative List promulgated by the MOC, which became effective on July 23, 2020 and has been amended from time to time by the MOC and the National Development and Reform Commission.
Industry Catalog Relating to Foreign Investment Investment activities in the PRC by foreign investors are principally governed by the Catalog of Industries for Encouraging Foreign Investment, or the Catalog, which became effective on January 27, 2021, and the Special Administrative Measures (Negative List) for Foreign Investment Access, or the Negative List promulgated by the MOC, which became effective on July 23, 2020 and has been amended from time to time by the MOC and the National Development and Reform Commission.
On August 1, 2019, Hexin Digital, which was established on September 9, 2017 with the provision of technology consultancy and technological services as its principal business, was acquired by Hexin Jinke from an independent third party, and Hexin Digital had minimal activities before being acquired by us.
At the time of our acquisition, Phoenix Intelligent Credit Group Ltd was an operator of one of China’s leading P2P lending platforms and a wholly-owned subsidiary of Phoenix Financial Group Ltd., which was unrelated to us. 34 On August 1, 2019, Hexin Digital, which was established on September 9, 2017 with the provision of technology consultancy and technological services as its principal business, was acquired by Hexin Jinke from an independent third party, and Hexin Digital had minimal activities before being acquired by us.
On September 26, 2021, we signed a product purchase agreement with a third-party supplier to purchase equipment for the new cancer therapy and radiation oncology business. The total price of the equipment was approximately US$12.7 million. Considering the effect of COVID-19 and global chip shortage, we expected to receive all the equipment by March 31, 2022.
On September 26, 2021, we signed a product purchase agreement with a third-party supplier to purchase equipment for the new cancer therapy and radiation oncology business. The total price of the equipment was approximately US$12.7 million. We prepaid 80% of the purchase price and planned to pay the balance after the equipment was received and installed.
Our agent for service of process in the United States is Law Debenture Corporate Services Inc., located at 801, 2nd Avenue, Suite 403, New York, NY 10017. 60 Table of Contents B.
Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104. Our agent for service of process in the United States is Law Debenture Corporate Services Inc., located at 801, 2nd Avenue, Suite 403, New York, NY 10017. 36 B.
In the future, the Company will develop its the cancer therapy and radiation oncology market in the U.S. We plan to open 2 vaccine research centers for AIDS and Covid-19 and 100 radiation oncology centers on the east coast of the U.S. catering to cancer patients at varying stages of treatment.
We plan to open 2 vaccine research centers for AIDS and Covid-19 and 100 radiation oncology centers on the east coast of the U.S. catering to cancer patients at varying stages of treatment. This will include specialized radiation therapy centers for radiotherapy (RT), personalized consultation, conventional treatment planning, and other related services for a wide variety of cancer therapy treatments.
On December 1, 2020, Hexin Yongheng, our wholly-owned subsidiary, entered into a new series of contractual arrangements with Wusu Company and Hexin E-Commerce whereby Hexin Yongcheng retained its interests as the primary beneficiary to Wusu Company. On December 16, 2020, Hexin Yongheng, Kuaishangche, Hexin E-Commerce, Xiaobo An, Xiaoning An, and Xiaobin Zhai entered into an assignment and assumption agreement.
Shiwei Wu entered into a VIE termination agreement, which terminated all rights and obligations with respect to each party thereto under the 2018 Wusu VIE Agreements. 35 On December 1, 2020, Hexin Yongheng, our wholly-owned subsidiary, entered into a new series of contractual arrangements with Wusu Company and Hexin E-Commerce whereby Hexin Yongcheng retained its interests as the primary beneficiary to Wusu Company.
Xiaobai Maimai leverages our integrated buyer resources to select and source goods globally, and rewards users with a small commission for every purchase, share or recommendation of a product made to friends.
Xiaobai Maimai leverages our integrated buyer resources to select and source goods globally, and rewards users with a small commission for every purchase, share or recommendation of a product made to friends. Hexin Digital has obtained its EDI License and ICP License for e-commerce business, which is qualified for providing online transactions between consumers and third-party merchants .
As of June 30, 2022, Xiaobai Maimai had approximately 288,858 active customer accounts (an active customer account refers to a customer account that has made at least one purchase) since its launch. Xiaobai Maimai will continue to grow through its cooperation with mainstream online platforms in China.
As of June 30, 2022, Xiaobai Maimai had approximately 288,858 active customer accounts (an active customer account refers to a customer account that has made at least one purchase) since its launch. In May 2023, the Company entered into a Disposition SPA to dispose the social e-commerce business.
Liu is board certified in anatomical pathology and serves on the executive board of the Association of Chinese American Physicians. 61 Table of Contents On January 4, 2022, we incorporated Akso Online Meditech in the State of Wyoming and have begun the sale of COVID-19 Rapid Antigen test kits through Akso Online Meditech as of the date of this report.
On January 4, 2022, we incorporated Akso Online MediTech in the State of Wyoming and have begun the sale of COVID-19 Rapid Antigen test kits through Akso Online Meditech since March, 2022.
If existing or future vaccines are widely distributed and compliantly administered or if therapeutic treatments are identified and become widely used, our COVID-19 testing opportunities and the market as a whole may shrink or disappear.
If existing or future vaccines are widely distributed and compliantly administered or if therapeutic treatments are identified and become widely used, our COVID-19 testing opportunities and the market as a whole may shrink or disappear. 39 We believe the following factors affect our ability to compete successfully: ● test accuracy; ● timeliness in delivery of test results; ● user experience; ● cost control; ● pricing; ● manufacturing capability; and ● access to market.
These reserves are not distributable as cash dividends. 82 Table of Contents Regulations Relating to Employment The PRC Labor Law and the Labor Contract Law require that employers must execute written employment contracts with full-time employees.
Wholly foreign-owned companies may, at their discretion, allocate a portion of their after-tax profits based on PRC accounting standards to staff welfare and bonus funds. These reserves are not distributable as cash dividends. 50 Regulations Relating to Employment The PRC Labor Law and the Labor Contract Law require that employers must execute written employment contracts with full-time employees.
On March 23, 2016, the former State of Administration of Industry and Commerce (which has been merged into SAMR) promulgated the Risk Warning for New Types of Pyramid Selling, which provides that if an activity satisfies the three features stated above at the same time, it will be identified as pyramid selling, regardless of whether any illegal benefit is obtained. 71 Table of Contents Regulations Relating to Foreign Investment PRC Foreign Investment Law The Foreign Investment Law was formally adopted by the second session of the 13th National People’s Congress on March 15, 2019, which has become effective on January 1, 2020 and, together with their implementation rules and ancillary regulations, has replaced the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law.
Regulations Relating to Foreign Investment PRC Foreign Investment Law The Foreign Investment Law was formally adopted by the second session of the 13th National People’s Congress on March 15, 2019, which has become effective on January 1, 2020 and, together with their implementation rules and ancillary regulations, has replaced the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law.
This will include specialized radiation therapy centers for radiotherapy (RT), personalized consultation, conventional treatment planning, and other related services for a wide variety of cancer therapy treatments. On October 22, 2021, we announced the appointment of Dr. Yingxian Liu as the medical consultant to the Company. Dr. Liu has extensive experience, and is highly respected in the pathology field.
On October 22, 2021, we announced the appointment of Dr. Yingxian Liu as the medical consultant to the Company. Dr. Liu has extensive experience, and is highly respected in the pathology field. We believe Dr.
Otherwise, it will be jointly liable with the relevant online user for extended damages. 76 Table of Contents We are subject to these laws and regulations as an online supplier of commodities and a provider of an online marketplace platform.
We are subject to these laws and regulations as an online supplier of commodities and a provider of an online marketplace platform.
We prepaid 80% of the purchase price and planned to pay the balance after the equipment was received and installed. In February 2022, affected by the continuous influence of Covid-19 and the global chip shortage, we have terminated the purchase agreement and the prepayment for equipment purchase has been refunded. On October 22, 2021, we announced the appointment of Dr.
In February 2022, affected by the continuous influence of COVID-19 and the global chip shortage, we terminated the purchase agreement and the prepayment for equipment purchase has been refunded. We intend to keep pursuing business opportunities in this sector under the guidance of Dr. Yingxian Liu.
Federal, state, local, and foreign data privacy and security obligations also may include penalties for noncompliance, as well as a private right of action. ​ 90 Table of Contents C.
Federal, state, local, and foreign data privacy and security obligations also may include penalties for noncompliance, as well as a private right of action. 59 C. Organizational Structure The following diagram illustrates our corporate structure, including our subsidiaries and consolidated affiliated entities as of the date of this annual report on Form 20-F: D.
Regulation on Intellectual Property Rights The PRC has adopted comprehensive legislation governing intellectual property rights, including trademarks. The PRC Trademark Law and its implementation rules protect registered trademarks. The PRC Trademark Law has adopted a “first-to-file” principle with respect to trademark registration.
The PRC Trademark Law has adopted a “first-to-file” principle with respect to trademark registration.
We believe Dr. Liu’s insights and guidance will support our mission in assembling the necessary team and infrastructure to build a best-in-class practice that’s scalable and delivers safe and high-quality cancer treatments for our patients.” 66 Table of Contents Competition Social E-commerce Business The e-commerce industry in China is intensely competitive.
Liu’s insights and guidance will support our mission in assembling the necessary team and infrastructure to build a best-in-class practice that’s scalable and delivers safe and high-quality cancer treatments for our patients.” 38 Our Suppliers Our subsidiaries source the medical devices, such as COVID-19 Rapid Antigen test kits, defibrillators and anesthesia laryngoscope, from its supplier in mainland China and Hong Kong.
Prior to and during these periods of strong customer demand, Xiaobai Maimai increases its marketing efforts by channeling value through the company websites and members’ social network outlets. Akso Health’s radiation oncology services and Covid-19 research business model Currently, the Company is engaged in the sale of COVID-19 Rapid Antigen test kits.
Akso Health’s radiation oncology services and Covid-19 research business model Currently, the Company is engaged in the sale of COVID-19 Rapid Antigen test kits. In the future, the Company will develop its the cancer therapy and radiation oncology market in the U.S.
On December 3, 2021, our shareholders approved our name change from “Xiaobai Maimai Inc.” to “Akso Health Group” to reflect our business transition. Corporate Information Our principal executive offices are located at Room 515, Floor 5, Jia No. 92-4 to 24 Jianguo Road, Chaoyang District, Beijing 100020, the People’s Republic of China.
On December 3, 2021, our shareholders approved our name change from “Xiaobai Maimai Inc.” to “Akso Health Group” to reflect our business transition.
These draft regulations stipulate that PRC domestic companies that seek to offer and list securities in overseas markets directly or indirectly shall complete the filing procedures with and report relevant information to the CSRC.
Pursuant to the Trial Measures, domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following its submission of initial public offerings or listing application.
On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.
On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions. The Opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies.
Akso Health’s radiation oncology services business On September 24, 2021, the Board of Directors approved our new business plan to enter the radiation oncology services market in the U.S. In addition, we have established We Health Limited, a wholly-owned subsidiary of the Company based in New York, to tap into the cancer therapy and radiation oncology business in the U.S.
Revenue attributable to the sales of medical equipment for the fiscal year ended March 31, 2023 was $13.2 million, representing 100% of the Company’s total revenue. Akso Health’s radiation oncology services busines s On September 24, 2021, the Board of Directors approved our new business plan to enter the radiation oncology services market in the U.S.
As of the date of this annual report on Form 20-F, we have 88 registered trademarks under our variable interest entity, Hexin Jiuding, five registered trademarks under our variable interest entity, Hexin Digital, and one trademark applications pending registration of transfer with the Trademark Office under the State Administration for Industry and Commerce.
As of the date of this annual report on Form 20-F, we have no registered trademarks.
Such negative list does not further elaborate whether existing overseas listed enterprise will be subject to such requirements. The staff of the NDRC addressed in an interview on 27 December 2021 that certain existing overseas listed enterprises whose foreign investors’ shareholding percentage exceed the aforementioned threshold are not required to make adjustment or deduction.
Such negative list does not further elaborate whether existing overseas listed enterprise will be subject to such requirements.
Radiation Oncology and Cancer Therapy Center Business The oncology healthcare service market in the United States is fragmented and competition is intense.
Our three main customers are Syndicate One Group, Xuzhou Bowei Medical Equipment Co., Ltd. and Faith Group, which represented approximately 59.5%, 11.1% and 10.1% of our total revenues for the fiscal year ended March 31, 2023. Competition Radiation Oncology and Cancer Therapy Center Business The oncology healthcare service market in the United States is fragmented and competition is intense.
Removed
At the time of our acquisition, Phoenix Intelligent Credit Group Ltd was an operator of one of China’s leading P2P lending platforms and a wholly-owned subsidiary of Phoenix Financial Group Ltd., which was unrelated to us.
Added
On May 10, 2023, the Company, HX Asia, HX China, and Hexindai HK (together with HX Asia and HX China, the “Targets”), and Umbrella Capital Investment Co., Ltd, a British Virgin Islands company which is not affiliate of the Company of any of its directors or officers (the “Purchaser”) entered into certain share purchase agreement (the “Disposition SPA”).
Removed
Shiwei Wu entered into a VIE termination agreement, which terminated all rights and obligations with respect to each party thereto under the 2018 Wusu VIE Agreements.
Added
Pursuant to the Disposition SPA, the Purchaser agreed to purchase the Targets in exchange for cash consideration of US$215,000 (the “Purchase Price”). The Disposition closed on May 19, 2023.
Removed
Our telephone number at this address is +86 10 5370 9902. Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104.
Added
Upon the closing of the Disposition, the Buyer became the sole shareholder of the Targets and as a result, assume all assets and liabilities of the Targets and subsidiaries owned or controlled by the Target.
Removed
Under such cooperation schemes, Xiaobai Maimai provides hyperlinks to these mainstream platforms, and sales promotions, such as coupons, discounts or rebates, are available to purchasers if these mainstream platforms are accessed through hyperlinks from Xiaobai Maimai.
Added
Corporate Information Our principal executive offices are located at Room 8201-4-4(A), 2nd Floor, Qiantongyuan Building, No. 44, Moscow Road, QianwanBonded Port Area, Qingdao Pilot Free Trade Zone, China (Shandong). Our telephone number at this address is +86 152 1005 4919.
Removed
Since 2020, Akso Health’s Hexin Digital has been a standing committee member of the Social E-commerce Branch of the China Association of Trade in Services (CATIS), the sole national non-profit organization for trade in services in China. According to reports issued by research institutions, China’s social e-commerce market continues to grow at an unprecedented rate.
Added
Business Overview The Company currently operates in healthcare equipment and products trading. Since 2020, we started transitioning from an online loan facilitator into a social e-commerce platform operator in China, offering high-quality and affordable branded products. Since the fourth quarter of 2021, the Company started exploring healthcare equipment and product trading and related healthcare services business.
Removed
In 2021, the market scale of social E-commerce in China has reached RMB2.5 trillion, which represents a year-on-year increase of 10.9%. Research data also shows that in 2021, the number of social e-commerce users in China reached about 795 million, and will reach about 878 million in 2026, and the scale of social e-commerce will exceed RMB10 trillion.
Added
Management expects steady growth of the healthcare segment given management’s intentional allocation of more resources to this segment. In May 2023, the Company entered into a Disposition SPA to dispose the social e-commerce business.
Removed
Yingxian Liu as the medical consultant for the Company. Dr. Liu will work closely with management to develop the Company's cancer therapy and radiation oncology business that We Health Limited will operate. Dr. Liu received his medical degree from Sun Yat-sen University of Medical Sciences in Guangzhou, China.
Added
Healthcare equipment and products trading and radiation oncology service business Sales of medical devices Through our operating subsidiaries, Akso Online Meditech and Qingdao Akso, we are mainly specialized in the sales of medical devices both in China and in the United States.
Removed
He completed his pathology residency at North Shore University Hospital in Manhasset, New York. Dr. Liu completed his hematopathology fellowship at Albert Einstein College of Medicine at Montefiore Medical Center in the Bronx, New York, and his surgical pathology residency at Mount Sinai Hospital in Manhattan, New York. Dr.
Added
Since April 2022, the Company has engaged in the sale of medical devices such as defibrillators and anesthesia laryngoscope through its subsidiary, Qingdao Akso, in China. Qingdao Akso purchases these medical devices in bulk from its suppliers and distributes the products to downstream distributors and end-users.
Removed
Xiaobai Maimai’s Business Model Xiaobai Maimai has been conducting a supplier to business to customer business model since May 2020 and launched its Xiaobai Maimai App in May 2020. Xiaobai Maimai connects suppliers and customers. Leveraging the cooperation with major e-commerce platforms (“Platforms”), and influential brands.
Added
Pursuant to the Regulation on the Supervision and Administration of Medical Devices (2021 Revision) promulgated on January 4, 2000 and came into effect on June 1, 2014 (the “Supervision and Administration of Medical Devices”), which was latest amended on February 9, 2021 and came into effect on June 1, 2021, medical devices are classified into the following three categories based on the degree of risk. 37 ● “Class I medical devices” means the medical devices with low risks, whose safety and effectiveness can be ensured through routine administration.
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Xiaobai Maimai offers a variety of value-for-money products covering food and beverage, wine, cosmetic products, fashion and apparel, entertainment, housewares and home appliances.
Added
As of September 30, 2022, we and our subsidiaries do not sell Class I medical devices. ● “Class II medical devices” means the medical devices with moderate risks, which shall be strictly controlled and administered to ensure their safety and effectiveness.
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This convenient, one-stop App for Xiaobai Maimai’s customers not only helps them save big on daily necessities when they shop online, but also helps them stay informed of the latest promotions with attractive discounts, coupons and rebates on the App.
Added
For example, the anesthesia laryngoscope that Qingdao Akso currently may sell are Class II medical devices. ● “Class III medical devices” means the medical devices with relatively high risks, which shall be strictly controlled and administered through special measures to ensure their safety and effectiveness. For example, the defibrillators Qingdao Akso currently may sell are Class III medical devices.
Removed
Customers can easily compare these superior products at competitive prices without having to change their shopping preferences or switch between different online merchants.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

49 edited+10 added−21 removed27 unchanged
Biggest changeSince the Company was incorporated on February 2, 2021, the evaluation was performed for the upcoming 2021 tax year which will be the only period subject to examination. ​ ​ ​ ​ ​ ​ ​ ​ For the Fiscal Years Ended March 31, ​ 2020 2021 2022 ​ US$ US$ US$ NET REVENUES 6,914,474 1,754,935 6,311,092 Cost of goods sold — — 5,394,866 Gross Profit ​ 6,914,474 ​ 1,754,935 ​ 916,226 OPERATING EXPENSES ​ ​ ​ ​ ​ ​ Service and development 1,032,562 544,572 421,186 Sales and marketing 1,462,798 1,087,009 240,927 General and administrative 20,488,796 27,217,613 14,996,104 Finance cost 2,498,706 2,154,621 804,138 Impairment charge on long-term investments 29,189,836 1,600,000 — Share-based compensation 347,466 55,468 391,625 Total operating costs and expenses 55,020,164 32,659,283 16,853,980 LOSS FROM CONTINUING OPERATIONS (48,105,690) (30,904,348) (15,937,754) Total other income (loss), net 1,232,160 (164,919) (780,546) LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (46,873,530) (31,069,267) (16,718,300) Provision for income tax 489,955 482,976 131,433 NET LOSS FROM CONTINUING OPERATIONS (47,363,485) (31,552,243) (16,849,733) Net loss from discontinued operations, net of income taxes (23,834,894) (6,439,549) — Gain from disposal of discontinued operations, net of income taxes — 3,164,802 — NET LOSS ​ (71,198,379) ​ (34,826,990) ​ (16,849,733) ​ The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.
Biggest changeFor the Fiscal Years Ended March 31, 2021 2022 2023 US$ US$ US$ NET REVENUES — 6,000,000 13,181,561 Cost of goods sold — 5,394,866 11,912,571 Gross Profit — 605,134 1,268,990 OPERATING EXPENSES Sales and marketing — — 6,661 General and administrative 2,031,160 2,669,834 15,529,182 Finance cost 2,154,621 804,138 — Share-based compensation 55,468 391,625 — Total operating costs and expenses 4,241,249 3,865,597 15,535,843 LOSS FROM CONTINUING OPERATIONS (4,241,249 ) (3,260,463 ) (14,266,853 ) Total other income (loss), net (52,078 ) (747,818 ) 1,200,364 LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (4,293,327 ) (4,008,281 ) (13,066,489 ) Provision for income tax — 92,816 17,549 NET LOSS FROM CONTINUING OPERATIONS (4,293,327 ) (4,101,097 ) (13,084,038 ) Net (loss) income from discontinued operations, net of income taxes (33,698,464 ) (12,748,636 ) 11,836,612 Gain from disposal of discontinued operations, net of income taxes 3,164,802 — — Total (loss) income from discontinued operations (30,533,662 ) (12,748,636 ) 11,836,612 NET LOSS (34,826,989 ) (16,849,733 ) (1,247,426 ) The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.
Trend Information Other than as disclosed elsewhere in this annual report on Form 20-F, we are not aware of any trends, uncertainties, demands, commitments or events for the fiscal year ended March 31, 2022 that are reasonably likely to have a material 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 operating results or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report on Form 20-F, we are not aware of any trends, uncertainties, demands, commitments or events for the fiscal year ended March 31, 2023 that are reasonably likely to have a material 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 operating results or financial conditions.
The increase was attributable to increase in the recognition of the share-based compensation in connection with the options and restricted share units granted under the Amended and Restated 2016 Equity Incentive Plan.
The decrease was attributable to increase in the recognition of the share-based compensation in connection with the options and restricted share units granted under the Amended and Restated 2016 Equity Incentive Plan.
There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
Consequently, income taxes are not reflected in the Company’s financial statements. ​ 100 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated, both in absolute amount and as a percentage of our net revenue This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report on Form 20-F.
Consequently, income taxes are not reflected in the Company’s financial statements. 63 Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated, both in absolute amount and as a percentage of our net revenue This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report on Form 20-F.
E. Critical Accounting Estimates. Our discussion and analysis of our financial condition and results of operations relates to our consolidated financial statements, which have been prepared in accordance with United States of America generally accepted accounting principles (“U.S. GAAP”).
D. Critical Accounting Estimates. Our discussion and analysis of our financial condition and results of operations relates to our consolidated financial statements, which have been prepared in accordance with United States of America generally accepted accounting principles (“U.S. GAAP”).
Share-based compensation Share-based compensation are expenses related to awards granted under the Amended and Restated 2016 Equity Incentive Plan which began vesting on November 3, 2017. 99 Table of Contents Income Taxes The Company accounts for income taxes under ASC Topic 740, Income Taxes (“ASC 740”).
Share-based compensation Share-based compensation are expenses related to awards granted under the Amended and Restated 2016 Equity Incentive Plan which began vesting on November 3, 2017. Income Taxes The Company accounts for income taxes under ASC Topic 740, Income Taxes (“ASC 740”).
We conduct our operations primarily through our PRC subsidiaries, including our joint venture and our consolidated affiliated entities in China. As a result, our ability to pay dividends and to finance any debt we may incur depends upon direct and indirect dividends paid by our subsidiaries and consolidated affiliated entities.
We conduct our operations primarily through our PRC subsidiaries. As a result, our ability to pay dividends and to finance any debt we may incur depends upon direct and indirect dividends paid by our subsidiaries and consolidated affiliated entities.
Net loss As a result of the above factors, we had net loss of US$16.8 million for the fiscal year ended March 31, 2022, compared to net loss of US$34.8 million for the fiscal year ended March 31, 2021.
Net loss As a result of the above factors, we had net loss of US$1.2 million for the fiscal year ended March 31, 2023, compared to net loss of US$16.8 million for the fiscal year ended March 31, 2022.
Net loss from discontinued operations, net of income taxes Net loss from discontinued operations, net of income taxes, for fiscal year ended March 31, 2022, was nil, compared to a loss of US$6.4 million in the prior period.
Net loss from discontinued operations, net of income taxes Net loss from discontinued operations, net of income taxes, for fiscal year ended March 31, 2022, was US$12.7 million, compared to a loss of US$33.7 million in the prior period.
This discussion and analysis may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D.
This discussion and analysis may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” or in other parts of this annual report on Form 20-F. 60 A.
We believe that our current cash, cash flows provided by operating activities and net proceeds from our initial public offering will be sufficient to meet our working capital needs in the next 12 months from the date of this annual report on Form 20-F. 104 Table of Contents Substantially all of our operations are conducted in China, and all of our revenue, expenses, cash and cash equivalents are denominated in RMB.
We believe that our current cash, cash flows provided by operating activities and net proceeds from our initial public offering will be sufficient to meet our working capital needs in the next 12 months from the date of this annual report on Form 20-F.
As of March 31, 2021, our cash and cash equivalents were US$15.1 million, representing an increase of US$4.2 million from US$10.9 million as of March 31, 2020, mainly due to an increase in cash generated from operating activities.
As of March 31, 2022, our cash and cash equivalents were US$18.4 million, representing an increase of US$16.9 million from US$1.5 million as of March 31, 2021, mainly due to an increase in cash generated from financing activities.
Gain from disposal of discontinued operations, net of income taxes We recognized a gain from the disposal of discontinued operations, net of income taxes, of US$3.2 million in connection with the sale of P2P Business for the fiscal year ended March 31, 2021.
Gain from disposal of discontinued operations, net of income taxes We recognized a gain from the disposal of discontinued operations, net of income taxes, of US$3.2 million in connection with the sale of P2P Business for the fiscal year ended March 31, 2021. 65 Net loss As a result of the above factors, we had net loss of US$16.8 million for the fiscal year ended March 31, 2022, compared to net loss of US$34.8 million for the fiscal year ended March 31, 2021.
The decrease was primarily due to a decrease in employee expenses and advertising expenses. ● General and administrative expenses General and administrative expenses for the fiscal year ended March 31, 2021 were US$ 27.2 million, an in crease of 32.8 % from US$ 20.5 million for the fiscal year ended March 31, 2020.
The decrease was primarily due to a decrease in finance costs. ● General and administrative expenses General and administrative expenses for the fiscal year ended March 31, 2022 were US$2.7 million, an increase of 32.8% from US$2.0 million for the fiscal year ended March 31, 2021.
Net loss from continuing operations Loss from continuing operations, net of income taxes, for fiscal year ended March 31, 2022, was US$16.8 million, compared to US$31.6 million in the same prior period of fiscal year 2021. Net loss from continuing operations was mainly resulted from provision for loan receivables and other receivable.
Net loss from continuing operations Loss from continuing operations, net of income taxes, for fiscal year ended March 31, 2022, was US$4.1 million, compared to US$4.3 million in the same prior period of fiscal year 2021. Net loss from continuing operations was mainly resulted from general and administrative expenses.
Provision for income tax Our income tax expense was US$0.5 million for the fiscal year ended March 31, 2021, as compared to US$0.5 million for the fiscal year ended March 31, 2020. The income tax was primarily resulted from microlending business.
Provision for income tax Our income tax expense was US$92,816 for the fiscal year ended March 31, 2022, as compared to nil for the fiscal year ended March 31, 2021. The income tax was primarily resulted from medical devices business.
We have limited financial obligations dominated in U.S. dollars, thus the foreign currency restrictions and regulations in the PRC on dividend distribution will not have a material impact on our liquidity, financial condition and results of operations. Our capital expenditures consist primarily of expenditures for the purchase of property, equipment and software.
We have limited financial obligations dominated in U.S. dollars, thus the foreign currency restrictions and regulations in the PRC on dividend distribution will not have a material impact on our liquidity, financial condition and results of operations. 66 Holding Company Structure We are a holding company with no material operations of our own.
Changes in Financial Position As of March 31, 2022, our cash and cash equivalents were US$21.9million, representing an increase of US$6.8 million from US$15.1 million as of March 31, 2021, mainly due to an increase in cash used in operating activities.
Changes in Financial Position As of March 31, 2023, our cash and cash equivalents were US$7.9million, representing an decrease of US$10.5 million from US$18.4 million as of March 31, 2022, mainly due to an increase in cash used in financing activities.
Discontinued Operations According to ASC 205, the effect of discontinued operations of loan facilitation services, post-origination services, recommendation services and other related services for the fiscal years ended March 31, 2020 and 2021 has been accounted for retroactively in the consolidated statement of operations for all the periods presented.
Discontinued Operations According to ASC 205, the effect of discontinued operations of commission service from social from social E-commerce business and interest income from mecrolending business and other related services for the fiscal years ended March 31, 2021 and 2022 and 2023 has been accounted for retroactively in the consolidated statement of operations for all the periods presented.
On December 30, 2020, we completed the disposal of P2P Business, which historically operated our loan facilitation services, post-origination services, and other related services. As a result, the operating results of our P2P Business have been retrospectively reclassified under discontinued operations for the fiscal years ended March 31, 2020 and 2021.
As a result, the operating results of our P2P Business have been retrospectively reclassified under discontinued operations for the fiscal years ended March 31, 2020 and 2021.
You should read the following description of critical accounting estimates in conjunction with our consolidated financial statements and other disclosures included in this annual report.
For a detailed discussion of our significant accounting policies and related judgments, please see “Note 2—Summary of Significant Accounting Policies” of our consolidated financial statements included elsewhere in this annual report. You should read the following description of critical accounting estimates in conjunction with our consolidated financial statements and other disclosures included in this annual report.
There are other items within our financial statements that require estimation but are not deemed critical, as defined above.
There are other items within our financial statements that require estimation but are not deemed critical, as defined above. Changes in estimates used in these and other items could have a material impact on our financial statements.
Total other expense Our other expense was US$0.8 million for the fiscal year ended March 31, 2022, an increase of 373.3% from US$0.2 million in the fiscal year ended March31, 2021, the increase was primarily attributable to exchange loss.
Total other expenses Our other expense was US$0.7 million for the fiscal year ended March 31, 2022, as compared to other loss of US$52,078 for the fiscal year ended March 31, 2021, the increase was primarily due to exchange loss.
Net loss from continuing operations Loss from continuing operations, net of income taxes, for fiscal year ended March 31, 2021, was US$31.6 million, compared to US$47.4 million in the same prior period of fiscal year 2020. Net loss from continuing operations was mainly resulted from provision for loan receivables and impairment charged on long-term investment.
Net (loss) from continuing operations Loss from continuing operations, net of income taxes, for fiscal year ended March 31, 2023, was US$13.1 million, compared to US$4.1 million in the same prior period of fiscal year 2022. Net loss from continuing operations was mainly resulted from general and administrative expenses.
Liquidity and Capital Resources We have financed our operations primarily through cash provided by operating activities, capital raised from our initial public offering, the proceeds from the three-year senior unsecured note we issued to Majik Fund SPC, borrowings from our shareholder, and proceeds from private placement and short term loan from SOS Information Technology New York, Inc.
Liquidity and Capital Resources We have financed our operations primarily through cash provided by operating activities, the loans from third parties and shareholder, and proceeds from private placement and short term loan from SOS Information Technology New York, Inc. We plan to finance our future operations primarily from cash generated from our operations and cash on hand.
For the fiscal year ended March 31, 2022, our net cash generated from investing activities was US$36,140, compared to net cash used in investing activities of US$0.1 million for the fiscal year ended March 31, 2021, primarily attributable to the collection of principal from microlending business.
For the fiscal year ended March 31, 2022, our net cash generated from financing activities was US$34.8 million, compared to that of US$9.0 million for the fiscal year ended March 31, 2021, primarily attributable to the proceeds from the private placement.
Operating expenses Total operating costs and expenses for the fiscal year ended March 31, 2022 were US$16.9 million, a decrease of 48.4% from US$32.7 million for the fiscal year ended March 31, 2021.
Operating expenses Total operating costs and expenses for the fiscal year ended March 31, 2023 were US$15.5 million, an increase of 301.9% from US$3.9 million for the fiscal year ended March 31, 2022.
We had net losses of USD 71.2 million, USD 34.8 million and USD 16.8 million for the fiscal years ended March 31, 2020, 2021 and 2022, respectively.
We had net losses of US$34.8 million, net losses of US$16.8 million and net loss of US$1.2 million for the years ended March 31, 2021, 2022, and 2023, respectively, respectively. The Company currently operates in healthcare equipment and products trading segment.
Results from these discontinued operations, net of income tax, were losses of USD 23.8 million and USD 6.4 million for the fiscal years ended March 31, 2020 and 2021, respectively. 97 Table of Contents Key Components of Results of Operations Revenues Revenues are comprised of commission from online marketplace, interest income and other revenues.
Results from these discontinued operations, net of income tax, were losses of USD33.7 million, losses of USD12.7 million and income of USD 11.8 million for the fiscal years ended March 31, 2021, 2022 and 2023, respectively. 61 Key Components of Results of Operations Revenues Revenues are from the sale of medical devices business.
Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements.
Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. Since the Company was incorporated on February 2, 2021, the evaluation was performed for the upcoming 2021 tax year which will be the only period subject to examination.
Net loss from discontinued operations, net of income taxes Net loss from discontinued operations, net of income taxes, for fiscal year ended March 31, 2021, was US$6.4 million, compared to a loss of US$23.8 million in the prior period. 103 Table of Contents Gain from disposal of discontinued operations, net of income taxes We recognized a gain from the disposal of discontinued operations, net of income taxes, of US$3.2 million in connection with the sale of P2P Business for the fiscal year ended March 31, 2021.
Net income (loss) from discontinued operations, net of income taxes Net income from discontinued operations, net of income taxes, for fiscal year ended March 31, 2023, was US$11.8 million , compared to a loss of US$12.7 million in the prior period.
As of March 31, 2020, 2021 and 2022, our working capital (excluding the amount due from related parties) amounted to US$36.7 million US$15.7 million and US$12.3 million, respectively.
As of March 31, 2021, 2022 and 2023, we had US$1.5 million, US$18.4 million and US$7.9 million, respectively, in cash on hand and cash deposited with banks. As of March 31, 2021, 2022 and 2023, our working capital (excluding the amount due from related parties) amounted to US$20.2 million US$12.2 million and US$8.8 million, respectively.
The decrease was attributable to decrease in the recognition of the share-based compensation in connection with the options and restricted share units granted under the Amended and Restated 2016 Equity Incentive Plan.
The increase was primarily attributable to the increase of provisions made for the uncollected receivables. ● Finance cost Finance cost for the fiscal year ended March 31, 2023 was nil compared with US$0.8 million for the fiscal year ended March 31, 2022. ● Share-based compensation Share-based compensation for the fiscal year ended March 31, 2023 was nil, compared with US$0.4 million in the fiscal year ended March 31, 2022 The decrease was attributable to increase in the recognition of the share-based compensation in connection with the options and restricted share units granted under the Amended and Restated 2016 Equity Incentive Plan.
The decrease was primarily due to a decrease in employee expenses and advertising expenses. ● General and administrative expenses General and administrative expenses for the fiscal year ended March 31, 2022 were US$15.0 million, a decrease of 44.9% from US$27.2 million for the fiscal year ended March 31, 2021.
The inccrease was primarily due to expenses related to the Company’s brand building and market development for its new business. ● General and administrative expenses General and administrative expenses for the fiscal year ended March 31, 2023 were US$15.5 million, a increase of 481.7% from US$2.7 million for the fiscal year ended March 31, 2022.
For the fiscal year ended March 31, 2021, our net cash used in investing activities was US$0.1 million, compared to that of US$12.8 million for the fiscal year ended March 31, 2020, primarily attributable to the payment of consideration for long-term investment.
For the fiscal year ended March 31, 2022, our net cash used in financing activities was US$27.5 million, compared to net cash genereated from financing activities of US$34.8 million for the fiscal year ended March 31, 2022, primarily attributable to the repayment of loan from related party .
Provision for income tax Our income tax expense was US$0.1 million for the fiscal year ended March 31, 2022, as compared to US$0.5 million for the fiscal year ended March 31, 2021.
Total other income (expense) Our other income was US$1.2 million for the fiscal year ended March 31, 2023, compared with other loss of US$0.7 million in the fiscal year ended March31, 2022, the increase was primarily attributable to exchange gain. 64 Provision for income tax Our income tax expense was US$17,549 for the fiscal year ended March 31, 2023, as compared to US$92,816 for the fiscal year ended March 31, 2022.
Risk Factors” or in other parts of this annual report on Form 20-F. 96 Table of Contents A. Operating Results Overview Our Business Historically, we generated revenues primarily from our loan facilitation services, post-origination services, and other related services.
Operating Results Overview Our Business Historically, we generated revenues primarily from our loan facilitation services, post-origination services, and other related services. On December 30, 2020, we completed the disposal of P2P Business, which historically operated our loan facilitation services, post-origination services, and other related services.
The decrease was primarily due to a decrease in general and administrative expenses, impairment charge on long term investments and finance costs. ● Service and development expenses Service and development expenses for the fiscal year ended March 31, 2022 were US$0.4 million, a decrease of 22.7% from US$0.5 million for the fiscal year ended March 31, 2021.
The increase was primarily attributable to the increase of staff costs and professional service fee. ● Finance cost Finance cost for the fiscal year ended March 31, 2022 was US$0.8 million, a decrease of 62.7% from US$2.2 million for the fiscal year ended March 31, 2021 due to the repayment of US$10.0 million principal in December 2020. ● Share-based compensation Share-based compensation for the fiscal year ended March 31, 2022 was US$0.4 million, a decrease of 606.0% from US$55,468 for the fiscal year ended March 31, 2021.
The decrease was primarily attributable to the decrease in employee expenses. ● Sales and marketing expenses Sales and marketing expenses for the fiscal year ended March 31, 2021 were US$1.1 million, a decrease of 2 5.7 % from US$1.5 million for the fiscal year ended March 31, 2020.
The increase was primarily due to a increase in general and administrative expenses. ● Sales and marketing expenses Sales and marketing expenses for the fiscal year ended March 31, 2023 were US$ 6,661, compared to nil for the fiscal year ended March 31, 2022.
Akso Online Meditech has entered into a supply agreement to purchase “iHealth” branded COVID-19 Rapid Antigen test kits from its supplier and sells these test kits to distributers in the United States. Our net revenues were USD 6.9 million, USD 1.8 million and USD 6.3 million for the fiscal years ended March 31, 2020, 2021 and 2022, respectively.
Akso Online Meditech has entered into a supply agreement to purchase “iHealth” branded COVID-19 Rapid Antigen test kits from its supplier and sells these test kits to distributers in the United States. On January 26, 2022, we incorporated Qingdao Akso in Shandong Province, China and have begun the sales of medical devices through Qingdao Akso since April 2022.
Fiscal Year Ended March 31, 2021 Compared to Fiscal Year Ended March 31, 2020 Net revenues Net revenues generated for the fiscal year ended March 31, 2021 was US$1.8 million, representing a decrease of 74.6% from US$6.9 million for the fiscal year ended March 31, 2020. ● Commissions from online marketplace, net Commissions from online marketplace was US$0.1 million, The Company launched its social e-commerce platform in May 2020. ● Recommendation and other service, net Recommendation and other service revenue was nil for the fiscal year ended on March 31, 2021, compared to US$3.9 million for the fiscal year ended March 31,2020.
Fiscal Year Ended March 31, 2022 Compared to Fiscal Year Ended March 31, 2021 Net revenues Net revenues generated for the fiscal year ended March 31, 2022 was US$6.0 million, increased from nil in the fiscal year ended March 31, 2021.
Fiscal Year Ended March 31, 2022 Compared to Fiscal Year Ended March 31, 2021 Net revenues Net revenues generated for the fiscal year ended March 31, 2022 was US$6.3 million, representing an increase of 259.6% from US$1.8 million for the fiscal year ended March 31, 2021. ● Commission from online marketplace Commissions from online marketplace was US$0.1 million, compared to US$ 0.1 million in fiscal year 2021. ● Sale of medical devices Revenue from medical devices was US$6.0 million, which was generated from our new business started since January 2022. ● Interest income Interest income was US$0.2 million in the fiscal year ended March 31, 2022, compared to US$1.7 million for the fiscal year ended March 31, 2021, the decrease of interest income was mainly due to the decrease of outstanding balance of loans issued by microlending business.
Fiscal Year Ended March 31, 2023 Compared to Fiscal Year Ended March 31, 2022 Net revenues Net revenues generated for the fiscal year ended March 31, 2023 was US$13.2 million, representing an increase of 119.7% from US$6.0 million for the fiscal year ended March 31, 2022.
General and administrative expenses General and administrative expenses consist primarily of salaries and benefits related to our management, accounting and finance, legal and human resources teams, loan provisions made for our microlending business and other operating expenses.
General and administrative expenses General and administrative expenses consist primarily of salaries and benefits related to our management, professional service fees and provisions made for uncollected receivables. 62 Finance cost Finance cost consists primarily of interest expenses for loans from related parties and senior notes.
Revenue from sales of merchandise to non-retail customers is recognized when the merchandise is transferred to customers. There was no sales return since the start the business.
Qingdao Akso purchases mecical devices in quantity and distribute producet parimrily to meical products dealers or end-users such as hospitals. The deliveries may take one day or longer depending on the customers’ location. Revenue from sales of merchandise to non-retail customers is recognized when the merchandise is transferred to customers. There was no sales return since the start the business.
Interest income The Company started to lend funds to microlending borrowers up to their approved credit amount in August 2017 and recognized interest income. since May 2019, the Company has ceased to issue new loans through its microlending business Cost of goods sold Cost of goods sold consist primarily of purchase price of COVID-19 Antigen Test kit related to the sale of medical devices.. 98 Table of Contents Operating expenses Our operating expenses primarily consist of service and development expenses, sales and marketing expenses, general and administrative expenses, provision for loans receivable, impairment charge on long term investments, finance cost and share-based compensation.
Cost of goods sold Cost of goods sold consist primarily of purchase price of COVID-19 Antigen Test kit,defibrillators and anesthesia laryngoscope related to the sale of medical devices.. Operating expenses Our operating expenses primarily consist of sales and marketing expenses, general and administrative expenses,finance cost and share-based compensation.
Sale of medical devices ​ Started in February 2022, throught its subsidiary Akso Online MediTech, the Company engaged in the sale of Covid-19 Antigen Rapid Tests in US market. Akso Online MediTech purchases medical devices in quantity and distributes products primarily to medical products dealers. The deliveries may take one day or longer depending on the customers’ location.
Akso Online MediTech purchases medical devices in quantity and distributes products primarily to medical products dealers. Since April 2022, through its subsidiary Qingdao Akso Health Management Co., Ltd, the Company started its sales of medical devices business in China domestic market.
The decrease was primarily attributable to the decrease in employee expenses. 101 Table of Contents ● Sales and marketing expenses Sales and marketing expenses for the fiscal year ended March 31, 2021 were US$0.2 million, a decrease of 77.8% from US$1.1 million for the fiscal year ended March 31, 2021.
Cost of goods sold Cost of goods sold consist primarily of purchase price of COVID-19 Antigen Test kit related to the sale of medical devices. Operating costs and expenses Total operating expenses for the fiscal year ended March 31, 2022 were US$3.9 million, a decrease of 8.9% from US$4.2 million for the fiscal year ended March 31, 2021.
Our historical results presented below are not necessarily indicative of the results that may be expected for any future period. ​ The following table sets forth our revenues breakdown for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Fiscal Years Ended March 31, ​ 2020 2021 2022 ​ (US$) (US$) (US$) Revenues(1) Commission from online marketplace — 82,054 96,332 Recommendation services and other 3,916,276 — — Sale of medical devices — — 6,000,000 Interest income 3,043,096 1,690,448 215,393 Total revenues 6,959,372 1,772,502 311,725 Business and sales related taxes 44,898 17,567 633 Net Revenues ​ 6,914,474 ​ 1,754,935 ​ 6,311,092 (1) Represents amounts net of VAT.
The following table sets forth our revenues breakdown for the periods indicated: For the Fiscal Years Ended March 31, 2021 2022 2023 (US$) (US$) (US$) Revenues(1) Sale of medical devices — 6,000,000 13,186,525 Total revenues — 6,000,000 13,186,525 Business and sales related taxes — — 4,964 Net Revenues — 6,000,000 13,181,561 (1) Represents amounts net of VAT.
Removed
The following table sets forth the components of our revenues by amounts and percentages of our total revenues for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 2021 2022 ​ ​ %of ​ ​ %of ​ ​ ​ %of ​ ​ (US$) revenues (US$) revenues (US$) revenues ​ Revenues ​ Commission from online marketplace — — 82,054 4.6 % 96,332 1.5 % Recommendation services and other 3,754,738 54.0 % — — ​ — — ​ Sale of medical devices ​ — ​ — ​ — ​ — ​ 6,000,000 ​ 95.1 % Interest income 3,043,096 43.7 % 1,690,448 95.4 % 215,393 3.4 % Others 161,538 2.3 % — — ​ — — ​ Total revenues 6,959,372 100.0 % 1,772,502 100.0 % 6,311,725 100 % Business and sales related taxes 44,898 0.6 % 17,567 1.0 % 633 0.1 % Net Revenues 6,914,474 — 1,754,935 — 6,311,092 — ​ ​ Commissions from online marketplace, net Since May 2020 , we launched our marketplace business, allowing third-party merchants to sell their products on the platform or cooperating with other mainstream e-commerce platform, and charge commissions from them.
Added
Qingdao Akso has entered into supply agreements to purchase medical devices such as defibrillators, anesthesia laryngoscope from its supplier and sells these devices to distributers or end-users in China. Our net revenues were US$ nil, US$6.0 million and US$13.2 million for the fiscal years ended March 31, 2021, 2022, and 2023, respectively.
Removed
The revenues from the marketplace business are recognized on a net basis at the point of receipt of products, net of return allowance and incentives to consumers or channels. Recommendation services and other We started to provide recommendation services by referring certain borrowers to financial partners since July 2019.
Added
Since 2020, we started transitioning from an online loan facilitator into a social e-commerce platform operator in China, offering high-quality and affordable branded products. Since the fourth quarter of 2021, the Company started exploring healthcare equipment and product trading and related healthcare services business.
Removed
Such services primarily include referral through our marketplace that directs users to financial partners. We receive referral fees from the financial partners and such revenue is recognized at the point that the recommendation services are performed and the related funds are drawdown by borrowers. The Company has ceased to provide such recommendation services since November 2019.
Added
Management expects steady growth of the healthcare segment given management’s intentional allocation of more resources to this segment. In May 2023, the Company disposed its social e-commerce business.
Removed
The following table sets forth a breakdown of our operating costs and expenses for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Fiscal Years Ended March 31, ​ 2020 2021 2022 ​ US$ US$ US$ Operating expenses Service and development expenses 1,032,562 544,572 421,186 Sales and marketing expenses 1,462,798 1,087,009 240,927 General and administrative expenses 20,488,796 27,217,613 14,996,104 Impairment charge on long term investments 29,189,836 1,600,000 — Finance cost 2,498,706 2,154,621 804,138 Share-based compensation ​ 347,466 ​ 55,468 ​ 391,625 Total operating expenses 16,853,980 32,659,283 22,248,846 ​ Service and development expenses Service and development expenses consist primarily of salaries, benefits and service costs directly relating to developing our social e-commerce platform and servicing users.
Added
The following table sets forth the components of our revenues by amounts and percentages of our total revenues for the periods presented: 2021 2022 2023 % of % of % of (US$) revenues (US$) revenues (US$) revenues Revenues Sale of medical devices — — 6,000,000 100.0 13,186,525 100.0 % Total revenues — — % 6,000,000 100.0 % 13,186,525 100.0 % Business and sales related taxes — — % — — % 4,964 0.1 % Net Revenues — — 6,000,000 — 13,181,561 — Sale of medical devices Started in February 2022, throught its subsidiary Akso Online MediTech, the Company engaged in the sale of Covid-19 Antigen Rapid Tests in US market.
Removed
These expenses relate to maintenance and upgrading of our proprietary technology, live customer support, and service fees paid to third-parties. Sales and marketing expenses Sales and marketing expenses consist primarily of channel fee, expenses for building our brand recognition and salaries and benefits related to our sales and marketing team.
Added
The following table sets forth a breakdown of our operating costs and expenses for the periods indicated: For the Fiscal Years Ended March 31, 2021 2022 2023 US$ US$ US$ Operating expenses Sales and marketing expenses — — 6,661 General and administrative expenses 2,031,160 2,669,834 15,529,182 Finance cost 2,154,621 804,138 — Share-based compensation 55,468 391,625 — Total operating expenses 4,241,249 3,865,597 15,535,843 Sales and marketing expenses Sales and marketing expenses consist primarily of expenses for building our brand recognition and opening up new market related to our sales of medical devices business.
Removed
Impairment charge on long term investments Impairment charge on long term investments consists of the recognition of the full impairment of our investment in Musketeer Group Inc. as of March 31, 2021 and full impairment of our investment in Phoenix Intelligent Credit Group Ltd as of March 31, 2020.
Added
Our historical results presented below are not necessarily indicative of the results that may be expected for any future period.
Removed
Finance cost Finance cost consists primarily of interest expenses for senior notes and short-term debt.
Added
The Compmay’s revenue generated from its new business for the sales of medical devices, which was initially started in US market in January 2022, and since April 2022, the Company started its business in PRC domestic market.
Removed
The Company has ceased to issued new loans since May 2019 and has exiting the microlending business since October 2019.
Added
Cost of goods sold Cost of goods sold consist primarily of purchase price of COVID-19 Antigen Test kit, defibrillators and anesthesia laryngoscope related to the sale of medical devices..
Removed
Interest income and recommendation service revenue was presented as revenue from continuing operation as the Company currently had no intention to sell or plan to find a buyer for the disposal of such business and might continue to carry out them in the foreseeable future when the economic condition improved and the pandemic controlled Cost of goods sold Cost of goods sold for the fiscal year ended March 31, 2022 were US$5.4 million, which was generated from our new business since January 2022.
Added
The Compmay’s revenue generated from its new business for the sales of medical devices, which was initially started in US market in January 2022, and since April 2022, the Company started its business in PRC domestic market.
Removed
The decrease was primarily attributable to the decrease of allowance for uncollectable loans and other receivable from US$22.2 million in fiscal year 2021 to US$10.1 million in fiscal year 2022 based on recent collection history and in light of the continuing impact from COVID-19. ● Finance cost Finance cost for the fiscal year ended March 31, 2022 was US$0.8 million, a decrease of 62.7% from US$2.2 million for the fiscal year ended March 31, 2021 due to the repayment of remaining US$10.0 million principal of the note payable in October 2021. ● Impairment charge on long-term investments Impairment on for the fiscal year ended March 31, 2022 was nil, compared to US$1.6 million in the fiscal year ended March 31, 2021, as the Company has recognized fully impairment of its equity investment in Musketeer Group Inc.in last fiscal year. ● Share-based compensation Share-based compensation for the fiscal year ended March 31, 2022 was US$0.4 million, increase from US$0.1 million for the fiscal year ended March 31, 2021.
Added
Substantially all of our operations are conducted in China, and all of our revenue, expenses, cash and cash equivalents are denominated in RMB.
Removed
The recommendation revenue was generated by referring certain borrowers to Funding Partners in from July to September 2019. 102 Table of Contents ● Interest income Interest income was US$1.7 million in the fiscal year ended March 31, 2021, compared to US$3.0 million for the fiscal year ended March 31, 2020, the decrease of interest income was mainly due to the decrease of outstanding balance of loans issued by microlending business.
Removed
The Company has ceased to issued new loans since May 2019 and has exiting the microlending business since October 2019.
Removed
Interest income and recommendation service revenue was presented as revenue from continuing operation as the Company currently had no intention to sell or plan to find a buyer for the disposal of such business and might continue to carry out them in the foreseeable future when the economic condition improved and the pandemic controlled Operating costs and expenses Total operating expenses for the fiscal year ended March 31, 2021 were US$32.7 million, a decrease of 40.6% from US$55.0 million for the fiscal year ended March 31, 2020.
Removed
The decrease was primarily due to a decrease in impairment charge on long term investments. ● Service and development expenses Service and development expenses for the fiscal year ended March 31, 2021 were US$0.5 million, a decrease of 47.3% from US$1.0 million for the fiscal year ended March 31, 2020.
Removed
The in crease was primarily attributable to t he Company has increased its allowance for uncollectable loans for its micro-lending business from US$13.2 million in fiscal year 2020 to US$22.2 million in fiscal year 2021 based on recent collection history and in light of the continuing impact from COVID-19 . ● Finance cost Finance cost for the fiscal year ended March 31, 2021 was US$2.2 million, a decrease of 11.4% from US$2.5 million for the fiscal year ended March 31, 2020 due to the repayment of US$10.0 million principal in December 2020. ● Impairment charge on long-term investments The Company recognized fully impairment of its equity investment in Musketeer Group Inc. as of March 31, 2021. ● Share-based compensation Share-based compensation for the fiscal year ended March 31, 2021 was US$0.1 million, a decrease of 84.0% from US$0.3 million for the fiscal year ended March 31, 2020.
Removed
Total other (expense)income Our other expense was US$0.2 million for the fiscal year ended March 31, 2021, as compared to other income of US$1.2 million for the fiscal year ended March 31, 2020, due to the effect of changes in exchange rate, which resulted in exchange gains in fiscal year 2020 while exchange losses in fiscal year 2021.
Removed
Net loss As a result of the above factors, we had net loss of US$34.8 million for the fiscal year ended March 31, 2021, compared to net loss of US$71.2 million for the fiscal year ended March 31, 2020.
Removed
We plan to finance our future operations primarily from cash generated from our operations and cash on hand. As of March 31, 2020, 2021 and 2022, we had US$6.7 million, US$15.1 million and US$21.9, respectively, in cash on hand and cash deposited with banks.
Removed
We made capital expenditures of US$0.3 million, US$0.02million and 0.01 million for the fiscal years ended March 31, 2020, 2021 and 2022, respectively, primarily due to purchases of office equipment as a result of our business growth. Holding Company Structure We are a holding company with no material operations of our own.
Removed
Research and Development As of March 31, 2022, we have a dedicated product development team consisting of 4 full-time employees. This team is responsible for developing and implementing new products to introduce to our marketplace. D.
Removed
Changes in estimates used in these and other items could have a material impact on our financial statements. 105 Table of Contents For a detailed discussion of our significant accounting policies and related judgments, please see “Note 2—Summary of Significant Accounting Policies” of our consolidated financial statements included elsewhere in this annual report.

Item 6. [Reserved]

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

39 edited+6 added−8 removed43 unchanged
Biggest changeThe following table summarizes, as of March 31, 2022, the outstanding options granted to the individual executive officers and directors named below and to other individuals as a group. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ ​ ​ ​ ​ Underlying ​ Exercise Price ​ Date of ​ Date of Name Options (US$/Share) Grant Expiration Yilin (Linda) Wang ​ — ​ — ​ — ​ — Wenjuan (Vivian) Liu — — ​ — — Rui (Kerrie) Zhang ​ ​ ​ ​ ​ ​ ​ Xiaobo An (Vice President, former CEO and Chairman) ​ ​ ​ ​ ​ ​ ​ Stephen Markscheid (former independent director) ​ ​ ​ ​ ​ ​ ​ ​ Dagang Guo (former independent director) ​ — — ​ — — David Wei Tang (former independent director) — — ​ — ​ — Other Individuals as a Group 591,398 0.88 (1) April 1, 2016 ​ March 31, 2026 ​ * 8.60 (1) July 31, 2018 ​ July 30, 2028 * Upon exercise of all options granted, would beneficially own less than 1% of our total outstanding ordinary shares. 109 Table of Contents (1) Pursuant to the declaration of a special cash dividend of US$0.40 per ordinary share / ADS by our board of director in July 2018, our board entered into a written resolution adjusting the exercise price of the outstanding options granted on April 1, 2016 from US$1.28 to US$0.88, and the exercise price of the outstanding options granted on July 31, 2018 from US$9.0 to US$8.60.
Biggest change(1) Pursuant to the declaration of a special cash dividend of US$0.40 per ordinary share / ADS by our board of director in July 2018, our board entered into a written resolution adjusting the exercise price of the outstanding options granted on April 1, 2016 from US$1.28 to US$0.88, and the exercise price of the outstanding options granted on July 31, 2018 from US$9.0 to US$8.60.
Wang has served as the Director and CEO of SOS Information Technology Co., Ltd., a wholly-owned subsidiary of SOS Limited (NYSE: SOS) since March 2016, and has been the founder and CEO of Shijiazhuang Weigou Information Technology Co., Ltd., since November 2010. Ms.
Ms. Wang has served as the Director and CEO of SOS Information Technology Co., Ltd., a wholly-owned subsidiary of SOS Limited (NYSE: SOS) since March 2016, and has been the founder and CEO of Shijiazhuang Weigou Information Technology Co., Ltd., since November 2010. Ms.
Mr. Brown, has served as the chief financial officer of SolarMax Technology, Inc. since May 2017. From 2013 until April 2017, he was chief financial officer of STAAR Surgical Company. Mr. Brown was vice president, global finance of Bausch & Lomb from 2008 until 2013 and chief financial officer of Hoya Surgical Optics from 2007 to 2008.
Brown, has served as the chief financial officer of SolarMax Technology, Inc. since May 2017. From 2013 until April 2017, he was chief financial officer of STAAR Surgical Company. Mr. Brown was vice president, global finance of Bausch & Lomb from 2008 until 2013 and chief financial officer of Hoya Surgical Optics from 2007 to 2008.
The audit committee is responsible for, among other things: ● selecting the independent registered public accounting firm and pre-screening all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; 110 Table of Contents ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; and ● reporting regularly to the board of directors.
The audit committee is responsible for, among other things: ● selecting the independent registered public accounting firm and pre-screening all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; and ● reporting regularly to the board of directors.
From August 2009 to June 2011, he served as sales director at Henan Region of Shijiazhuang Shengdian Pharmaceutical Co., Ltd. Mr. Liu earned his bachelor’s degree in marking and business English from University of Portsmouth in 2007. Mr. Gerald (Jerry) T. Neal, aged 71, Mr. Gerald (Jerry) T. Neal has served as our independent director since June 7, 2022. Mr.
From August 2009 to June 2011, he served as sales director at Henan Region of Shijiazhuang Shengdian Pharmaceutical Co., Ltd. Mr. Liu earned his bachelor’s degree in marking and business English from University of Portsmouth in 2007. Mr. Gerald (Jerry) T. Neal, aged 72, Mr. Gerald (Jerry) T. Neal has served as our independent director since June 7, 2022. Mr.
Zhe Liu , aged 38, has served as our independent director since October 12, 2022. In 2012, Mr. Liu founded Shijiazhuang Zizhe Import and Export Trading Co., Ltd and served as CEO since January 2012. From June 2011 to January 2012, he served as deputy manager at Shijiazhuang Branch of Beijing Aohongxuan Wine Co., Ltd.
Zhe Liu , aged 39, has served as our independent director since October 12, 2022. In 2012, Mr. Liu founded Shijiazhuang Zizhe Import and Export Trading Co., Ltd and served as CEO since January 2012. From June 2011 to January 2012, he served as deputy manager at Shijiazhuang Branch of Beijing Aohongxuan Wine Co., Ltd.
Ms. Wenjuan (Vivian) Liu, aged 36, was appointed as our director on July 14, 2021. Ms. Liu has served as the Chief Executive Officer of Hebei Chuangjie Technology Co., Ltd. since August 2018. From May 2015 to July 2018, Ms. Liu served as the Key Client Manager of Hebei Branch of Guosen Co., Ltd. Ms.
Ms. Wenjuan (Vivian) Liu, aged 37, was appointed as our director on July 14, 2021. Ms. Liu has served as the Chief Executive Officer of Hebei Chuangjie Technology Co., Ltd. since August 2018. From May 2015 to July 2018, Ms. Liu served as the Key Client Manager of Hebei Branch of Guosen Co., Ltd. Ms.
Wang obtained her bachelor’s degree in management from the Hebei University of Science & Technology, China, and a master’s degree in science and engineering management from the Hebei Dizhi University, China. Ms. Rui (Kerrie) Zhang , aged 39, has served as our chief financial officer since August 2019. Ms.
Wang obtained her bachelor’s degree in management from the Hebei University of Science & Technology, China, and a master’s degree in science and engineering management from the Hebei Dizhi University, China. Ms. Rui (Kerrie) Zhang , aged 40, has served as our chief financial officer since August 2019. Ms.
Board Diversity Matrix Country of Principal Executive Offices: ​ China ​ Foreign Private Issuer ​ Yes ​ Disclosure Prohibited under Home Country Law ​ No ​ Total Number of Directors ​ 5 ​ ​ ​ Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity ​ ​ ​ ​ ​ ​ ​ ​ ​ Directors ​ 2 ​ 3 ​ — ​ — ​ Part II: Demographic Background ​ ​ ​ ​ ​ Underrepresented Individual in Home Country Jurisdiction ​ — ​ ​ ​ ​ LGBTQ+ ​ — ​ ​ ​ ​ Did Not Disclose Demographic Background ​ — ​ ​ ​ ​ ​ 107 Table of Contents B.
Board Diversity Matrix Country of Principal Executive Offices: China Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 5 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 2 3 — — Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction — LGBTQ+ — Did Not Disclose Demographic Background — B.
Subject to the provisions of the Amended and Restated 2016 Equity Incentive Plan, the administrator has the power to determine the terms of awards, including the eligible participants, the exercise price, if any, the number of shares subject to each award, the fair market value of a share of our ordinary shares, the vesting schedule applicable to the awards, together with any vesting acceleration, and the form of settlement of awards in shares or cash or a combination thereof and the terms of the award agreement for use under the Amended and Restated 2016 Equity Incentive Plan.
Subject to the provisions of the 2023 Equity Incentive Plan, the administrator has the power to determine the terms of awards, including the eligible participants, the exercise price, if any, the number of shares subject to each award, the fair market value of a share of our ordinary shares, the vesting schedule applicable to the awards, together with any vesting acceleration, and the form of settlement of awards in shares or cash or a combination thereof and the terms of the award agreement for use under the 2023 Equity Incentive Plan.
Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company. D. Employees We had 182, 113 and 42 full-time employees as of March 31, 2020, 2021 and 2022, respectively.
Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company. D. Employees We had 113, 42 and 12 full-time employees as of March 31, 2021, 2022 and 2023, respectively.
Each executive officer has agreed to indemnify us against any actual loss incurred by us as a result of his or her breach of the confidentiality and non-competition obligations. 112 Table of Contents We have entered into indemnification agreements with each of our directors and executive officers.
Each executive officer has agreed to indemnify us against any actual loss incurred by us as a result of his or her breach of the confidentiality and non-competition obligations. 73 We have entered into indemnification agreements with each of our directors and executive officers.
Liu has extensive experience in financial investments, capital market operations and enterprise management. Ms. Liu obtained her bachelor’s degree in marketing from the Department of Economics and Management at Nankai University of China. 106 Table of Contents Non-executive Directors Mr. Stephen P. Brown , aged 63 Mr. Stephen P. Brown has served as our independent director since April 11, 2022.
Liu has extensive experience in financial investments, capital market operations and enterprise management. Ms. Liu obtained her bachelor’s degree in marketing from the Department of Economics and Management at Nankai University of China. Non-executive Directors Mr. Stephen P. Brown , aged 64 Mr. Stephen P. Brown has served as our independent director since April 11, 2022. Mr.
Administrator may cause a local PRC subsidiary of our Company to grant local cash-settled awards in lieu of any other award under the Amended and Restated 2016 Equity Incentive Plan, which such local awards shall be paid wholly by such PRC subsidiary. Each local award shall be linked to the fair market value of a share.
Administrator may cause a local PRC subsidiary of our Company to grant local cash-settled awards in lieu of any other award under the 2023 Equity Incentive Plan, which such local awards shall be paid wholly by such PRC subsidiary. Each local award shall be linked to the fair market value of a share.
Compensation—Share Incentive Plan.” Share Incentive Plan Amended and Restated 2016 Equity Incentive Plan Our Amended and Restated 2016 Equity Incentive Plan was adopted to attract and retain the best available personnel for positions of substantial responsibility, provide additional incentive to employees, directors and consultants and promote the success of our business.
Compensation—Share Incentive Plan.” Share Incentive Plan 2023 Equity Incentive Plan Our 2023 Equity Incentive Plan was adopted to attract and retain the best available personnel for positions of substantial responsibility, provide additional incentive to employees, directors and consultants and promote the success of our business.
In the event that any dividend or other distribution, recapitalization, share division, share consolidation, reorganization or any change in the corporate structure of the Company affecting the shares occurs, the administrators will make an adjustment with respect to the number and class of shares that may be delivered under the Amended and Restated 2016 Equity Incentive Plan and/or the number, class and price of shares covered by outstanding awards, in order to prevent diminution of the benefits intended to be made available under the Amended and Restated 2016 Equity Incentive Plan.
In the event that any dividend or other distribution, recapitalization, share division, share consolidation, reorganization or any change in the corporate structure of the Company affecting the shares occurs, the administrators will make an adjustment with respect to the number and class of shares that may be delivered under the 2023 Equity Incentive Plan and/or the number, class and price of shares covered by outstanding awards, in order to prevent diminution of the benefits intended to be made available under the 2023 Equity Incentive Plan. 69 Awards under the Equity Incentive Plan Share Options Share options may be granted under the 2023 Equity Incentive Plan.
The shares that are tendered by a participant of the Amended and Restated 2016 Equity Incentive Plan or withheld by us to pay the exercise price of an option or to satisfy the participant’s tax withholding obligations in connection with an award shall not be added back to the limit of the Amended and Restated 2016 Equity Incentive Plan.
The shares that are tendered by a participant of the 2023 Equity Incentive Plan or withheld by us to pay the exercise price of an option or to satisfy the participant’s tax withholding obligations in connection with an award shall not be added back to the limit of the 2023 Equity Incentive Plan.
Compensation For the fiscal year ended March 31, 2022, we paid an aggregate of approximately US$ 643,655 in cash to our executive officers and directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Compensation For the fiscal year ended March 31, 2023, we paid an aggregate of approximately US$ 582,375 in cash to our executive officers and directors. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.
Change in Control The Amended and Restated 2016 Equity Incentive Plan provides that in the event of a change in control of our Company, each outstanding award will be assumed or substituted by the successor corporation.
Change in Control The 2023 Equity Incentive Plan provides that in the event of a change in control of our Company, each outstanding award will be assumed or substituted by the successor corporation.
Ordinary shares issued pursuant to awards under the Amended and Restated 2016 Equity Incentive Plan that are forfeited or cancelled or otherwise expired, will become available for future grant under the Amended and Restated 2016 Equity Incentive Plan.
Ordinary shares issued pursuant to awards under the 2023 Equity Incentive Plan that are forfeited or cancelled or otherwise expired, will become available for future grant under the 2023 Equity Incentive Plan.
Granted Options and Restricted Share Units As of March 31, 2022, the aggregate numbers of our ordinary shares underlying our outstanding options and restricted share units were 591,398 and nil, respectively. For the fiscal year ended March 31, 2022, nil of the options granted had been vested, and 727,476 of the restricted share units granted had been vested.
Granted Options and Restricted Share Units As of March 31, 2023, the aggregate numbers of our ordinary shares underlying our outstanding options and restricted share units were nil and nil, respectively. For the fiscal year ended March 31, 2023, nil of the options granted had been vested, and nil of the restricted share units granted had been vested.
Our insider trading policy allows directors, officers and other employees covered under the policy to establish, under limited circumstances contemplated by Rule 10b5-1 under the Securities Exchange Act of 1934, written programs that permit automatic trading of our stock or trading of our shares or ADSs by an independent person who is not aware of material non-public information at the time of the trade.
Neal earned a Bachelor’s degree from University of Georgia in 1973. 68 Our insider trading policy allows directors, officers and other employees covered under the policy to establish, under limited circumstances contemplated by Rule 10b5-1 under the Securities Exchange Act of 1934, written programs that permit automatic trading of our stock or trading of our shares or ADSs by an independent person who is not aware of material non-public information at the time of the trade.
We also enter into standard confidentiality and non-compete agreements with our executive officers. See “Item 7. Major Shareholders and Related Party Transactions—B. Compensation—Employment Agreements and Confidentiality Agreements.” E. Share Ownership Please refer to “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholder” and “—B. Compensation—Share Incentive Plan.” ​
We also enter into standard confidentiality and non-compete agreements with our executive officers. See “Item 7. Major Shareholders and Related Party Transactions—B. Compensation—Employment Agreements and Confidentiality Agreements.” E. Share Ownership Please refer to “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholder” and “—B. Compensation—Share Incentive Plan.” F . Disclosure of a registrant’s action to recover erroneously awarded compensation.
Committees of the Board of Directors We have established an audit committee, a compensation committee and a nominating and corporate governance committee under the board of directors. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. Audit Committee. Our audit committee consists of three members and is chaired by Mr.
Committees of the Board of Directors We have established an audit committee, a compensation committee and a nominating and corporate governance committee under the board of directors. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. 71 Audit Committee.
Our directors must also exercise their powers only for a proper purpose. Our directors also owe to our company a duty to act with skills they actually possess and exercise such care and diligence that a reasonably prudent person would exercise in comparable circumstances.
Our directors also owe to our company a duty to act with skills they actually possess and exercise such care and diligence that a reasonably prudent person would exercise in comparable circumstances.
Stephen P. Brown. Each of Mr. Stephen P. Brown, Mr. Zhe Liu and Mr. Gerald (Jerry) T. Neal satisfies the “independence” requirements of the listing rules of NASDAQ and meets the independence standards under Rule 10A-3 under the Exchange Act. We have determined that Mr. Stephen P.
Our audit committee consists of three members and is chaired by Mr. Stephen P. Brown. Each of Mr. Stephen P. Brown, Mr. Zhe Liu and Mr. Gerald (Jerry) T. Neal satisfies the “independence” requirements of the listing rules of NASDAQ and meets the independence standards under Rule 10A-3 under the Exchange Act. We have determined that Mr. Stephen P.
The nominating and corporate governance committee is responsible for, among other things: ● recommending nominees to the board of directors for election or re-election to the board of directors, or for appointment to fill any vacancy on the board of directors; ● reviewing annually with the board of directors the current composition of the board of directors with regards to characteristics such as independence, age, skills, experience and availability of service to us; ● selecting and recommending to the board of directors the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. 111 Table of Contents Duties of Directors Under Cayman Islands law, our directors owe fiduciary duties to our company, including a duty to act honestly, and a duty to act in what they consider in good faith to be in our best interests.
The nominating and corporate governance committee is responsible for, among other things: ● recommending nominees to the board of directors for election or re-election to the board of directors, or for appointment to fill any vacancy on the board of directors; ● reviewing annually with the board of directors the current composition of the board of directors with regards to characteristics such as independence, age, skills, experience and availability of service to us; 72 ● selecting and recommending to the board of directors the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
Awards under the Equity Incentive Plan Share Options Share options may be granted under the Amended and Restated 2016 Equity Incentive Plan. The exercise price of each option shall be determined by the administrator; provided, however, that the per share exercise price may be no less than 100% of the fair market value per share on the date of grant.
The exercise price of each option shall be determined by the administrator; provided, however, that the per share exercise price may be no less than 100% of the fair market value per share on the date of grant.
During the term of the Amended and Restated 2016 Equity Incentive Plan, we will at all times reserve and keep available a sufficient number of ordinary shares available for issue to satisfy the requirements of the Amended and Restated 2016 Equity Incentive Plan.
During the term of the 2023 Equity Incentive Plan, we will at all times reserve and keep available a sufficient number of ordinary shares available for issue to satisfy the requirements of the 2023 Equity Incentive Plan. Plan Administration The 2023 Equity Incentive Plan is administered by our compensation committee.
We have established comprehensive training programs, including orientation programs and on-the-job-training, to enhance performance and service quality. As required by PRC Laws and regulations, we participate in various government statutory employee benefit plans, including a pension contribution plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan, a maternity insurance plan and a housing provident fund.
As required by PRC Laws and regulations, we participate in various government statutory employee benefit plans, including a pension contribution plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan, a maternity insurance plan and a housing provident fund.
The termination of the Amended and Restated 2016 Equity Incentive Plan will not limit the administrator’s ability to exercise the powers granted to it with respect to awards granted under the plan prior to the date of termination.
Plan Amendment Our board of directors may amend, alter, suspend or terminate the 2023 Equity Incentive Plan, subject to certain exceptions. The termination of the 2023 Equity Incentive Plan will not limit the administrator’s ability to exercise the powers granted to it with respect to awards granted under the plan prior to the date of termination.
One-third of the shares subject to an award will vest on each of the first, second and third annual anniversaries of the vesting commencement date, unless otherwise provided in the award agreement. 108 Table of Contents Restricted Shares A restricted share award agreement will specify restrictions on the duration of the restricted period, the number of shares granted, and any other terms and conditions specified by the administrator.
Restricted Shares A restricted share award agreement will specify restrictions on the duration of the restricted period, the number of shares granted, and any other terms and conditions specified by the administrator.
The equity incentive plan provides for the grant of an option, restricted shares, restricted share units and local awards.
The equity incentive plan provides for the grant of an option, restricted shares, restricted share units and local awards. Authorized Shares The maximum aggregate number of shares that may be issued under the 2023 Equity Incentive Plan is 10,280,000 of our ordinary shares.
Our administrator shall also determine the time or times at which the options shall vest and may be exercised and will determine any conditions that must be satisfied.
Our administrator shall also determine the time or times at which the options shall vest and may be exercised and will determine any conditions that must be satisfied. One-third of the shares subject to an award will vest on each of the first, second and third annual anniversaries of the vesting commencement date, unless otherwise provided in the award agreement.
The decrease in the number of employees was primarily due to the winding down of our P2P business. None of our employees are represented by a labor union. We have not experienced any work stoppages, and we consider our relations with our employees to be good.
None of our employees are represented by a labor union. We have not experienced any work stoppages, and we consider our relations with our employees to be good. We invest significant resources in the recruitment of employees in support of our business operations. We have established comprehensive training programs, including orientation programs and on-the-job-training, to enhance performance and service quality.
Brown 63 Independent director Zhe Liu 38 Independent director Gerald (Jerry) T. Neal 71 Independent director ​ Executive Officers Ms. Yilin (Linda) Wang, aged 36, has served as our chief executive officer since October 2021. From September 2021 to October 2021, Ms Wang served as the Co-CEO of the Company. Ms Wang has extensive years of experience in corporate management.
Yilin (Linda) Wang, aged 37, has served as our chief executive officer since October 2021. From September 2021 to October 2021, Ms Wang served as the Co-CEO of the Company. Ms Wang has extensive years of experience in corporate management. She is an information technology expert and has rich professional experience in medical health, health management and medical technology-related businesses.
Directors and Senior Management The following table sets forth information regarding our directors and executive officers as of the date of this annual report on Form 20-F. ​ ​ ​ ​ ​ ​ Name Age Position with the Company Executive Directors and Officers: ​ ​ Yilin (Linda) Wang 36 Director, Chairwoman and Chief Executive Officer Rui (Kerrie) Zhang 39 Chief Financial Officer Wenjuan (Vivian) Liu 36 Director Non-Executive Directors: ​ ​ Stephen P.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A. Directors and Senior Management The following table sets forth information regarding our directors and executive officers as of the date of this annual report on Form 20-F.
C. Board Practices Our board of directors consists of five directors, including two executive directors and three non-executive directors.
Neal — * Upon vesting of all restricted share units, would beneficially own less than 1% of our total outstanding ordinary shares. C. Board Practices Our board of directors consists of five directors, including two executive directors and three non-executive directors.
As of March 31, 2021, none of the options granted had been exercised, and 727,476 of the restricted share units granted had vested.
As of March 31, 2023, none of the options granted had been exercised, and none of the restricted share units granted had vested. 70 The following table summarizes, as of March 31, 2023, the outstanding options granted to the individual executive officers and directors named below and to other individuals as a group.
Removed
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES A.
Added
Name Age Position with the Company Executive Directors and Officers: Yilin (Linda) Wang 37 Chairwoman and Chief Executive Officer Rui (Kerrie) Zhang 40 Chief Financial Officer Wenjuan (Vivian) Liu 37 Director Non-Executive Directors: Stephen P. Brown 64 Independent director Zhe Liu 39 Independent director Gerald (Jerry) T. Neal 72 Independent director 67 Executive Officers Ms.
Removed
She is an information technology expert and has rich professional experience in medical health, health management and medical technology-related businesses. Ms.
Added
Number of Ordinary Shares Exercise Underlying Price Date of Date of Name Options (US$/Share) Grant Expiration Yilin (Linda) Wang — — — — Wenjuan (Vivian) Liu — — — — Rui (Kerrie) Zhang — — — — Stephen P. Brown — — — — Zhe Liu — — — — Gerald (Jerry) T.
Removed
Neal earned a Bachelor’s degree from University of Georgia in 1973.
Added
Neal — — — — * Upon exercise of all options granted, would beneficially own less than 1% of our total outstanding ordinary shares.
Removed
Authorized Shares The maximum aggregate number of shares that may be issued under the Amended and Restated 2016 Equity Incentive Plan is 6,312,000 of our ordinary shares, adjusted for the nominal share issuance (please see Note 18 to the consolidated financial statements for additional information related to the nominal share issuance), plus an annual increase on the last day of the last fiscal year, starting in the fiscal year ended March 31, 2017, by an amount equal to (i) 15% of the total number of outstanding shares of our common shares less (ii) the total number of unissued shares under the Amended and Restated 2016 Equity Incentive Plan less (iii) the total number of shares subject to then-outstanding awards under the Amended and Restated 2016 Equity Incentive Plan, in each case of (i), (ii) and (iii) as of the last calendar day of the last immediately preceding fiscal year.
Added
The following table summarizes, as of March 31, 2023 the outstanding restricted share units granted to the individual executive officers and directors named below and to other individuals as a group.
Removed
Plan Administration The Amended and Restated 2016 Equity Incentive Plan is administered by the board or our compensation committee. The administrators may delegate limited authority over the day-to-day administration of the Amended and Restated 2016 Equity Incentive Plan to such other subcommittees or specified officers.
Added
Number of Ordinary Shares Underlying Restricted Share Date of Date of Name Units Grant Expiration Yilin (Linda) Wang — — — Wenjuan (Vivian) Liu — — — Rui (Kerrie) Zhang * June 30, 2021 June 30, 2031 Stephen P. Brown — Zhe Liu — Gerald (Jerry) T.
Removed
Plan Amendment and Termination Our board of directors may amend, alter, suspend or terminate the Amended and Restated 2016 Equity Incentive Plan, subject to certain exceptions. The Amended and Restated 2016 Equity Incentive Plan will automatically terminate in 2026, unless we terminate it sooner.
Added
Duties of Directors Under Cayman Islands law, our directors owe fiduciary duties to our company, including a duty to act honestly, and a duty to act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose.
Removed
The following table summarizes, as of March 31, 2022 the outstanding restricted share units granted to the individual executive officers and directors named below and to other individuals as a group. ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ Ordinary Shares ​ ​ ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ Restricted Share ​ Date of ​ Date of Name Units Grant Expiration Yilin (Linda) Wang ​ — ​ — ​ — Wenjuan (Vivian) Liu — ​ — ​ — Rui (Kerrie) Zhang ​ * ​ June 30, 2021 ​ June 30, 2031 Stephen Markscheid (former independent director) * ​ July 31, 2018 ​ July 30, 2028 Dagang Guo (former independent director) * ​ July 31, 2018 ​ July 30, 2028 David Wei Tang (former independent director) * ​ July 31, 2018 ​ July 30, 2028 Other Individuals as a Group ​ * ​ July 31, 2018 ​ July 30, 2028 * Upon vesting of all restricted share units, would beneficially own less than 1% of our total outstanding ordinary shares.
Removed
The following table sets forth the number of our full-time employees categorized by function as of March 31, 2022: ​ ​ ​ ​ ​ Number of Function Employees Technology ​ 6 Risk Management 2 Operations 6 Product Development 6 Sales and Marketing 1 General and Administrative 21 Total 42 ​ We invest significant resources in the recruitment of employees in support of our business operations.

Item 7. Management's Discussion & Analysis

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

7 edited+3 added−5 removed15 unchanged
Biggest changeThe percentage of beneficial ownership of our ordinary shares is based on 71,478,550 ordinary shares outstanding immediately as of the date of this annual report, including 1,714,617 ordinary shares issued to our depositary and reserved for the future exercise of awards granted under our Amended and Restated 2016 Equity Incentive Plan. ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ Beneficially Owned ​ Number % (2) Directors and Executive Officers (1) : ​ Yilin (Linda) Wang (3) — — ​ Stephen P.
Biggest changeThese ordinary shares, however, are not included in the computation of the percentage ownership of any other person. 74 The percentage of beneficial ownership of our ordinary shares is based on 71,478,550 ordinary shares outstanding immediately as of the date of this annual report, including 1,714,617 ordinary shares issued to our depositary and reserved for the future exercise of awards granted under our Amended and Restated 2016 Equity Incentive Plan.
The registered office address of Webao Limited is 12 / F, Santai building, 137-139 Connaught Road Central, Hong Kong. 114 Table of Contents To our knowledge, as of the date of this annual report, a total of 44,477,649 ordinary shares were held by three record holders in the United States, including 44,056,049 ordinary shares (of which1,714,617 ordinary shares were reserved for the future exercise of awards granted under our Amended and Restated 2016 Equity Incentive Plan) held by Citibank N.A., our depositary, but excluding 1,165,883 ordinary shares represented by the ADSs repurchased by the Company.
The registered office address of Webao Limited is 12 / F, Santai building, 137-139 Connaught Road Central, Hong Kong. 75 To our knowledge, as of the date of this annual report, a total of 44,477,649 ordinary shares were held by three record holders in the United States, including 44,056,049 ordinary shares (of which1,714,617 ordinary shares were reserved for the future exercise of awards granted under our Amended and Restated 2016 Equity Incentive Plan) held by Citibank N.A., our depositary, but excluding 1,165,883 ordinary shares represented by the ADSs repurchased by the Company.
Neal (6) — — ​ Rui (Kerrie) Zhang * * ​ Wenjuan (Vivian) Liu — — ​ All directors and executive officers as a group * * ​ Principal Shareholders: ​ ​ ​ Webao Limited (7) 7,980,800 11.2 % Notes: * Less than 5% of our total outstanding ordinary shares. (1) Except for Mr. Stephen P. Brown and Mr.
Neal (6) — — Rui (Kerrie) Zhang * * Wenjuan (Vivian) Liu — — All directors and executive officers as a group * * Principal Shareholders: Webao Limited (7) 7,980,800 11.2 % Notes: * Less than 5% of our total outstanding ordinary shares. (1) Except for Mr. Stephen P. Brown and Mr. Gerald (Jerry) T.
Gerald (Jerry) T. Neal, the business address of our directors and executive officers is Room 515, Floor 5, Jia No. 92-4 to 24 Jianguo Road Chaoyang District, Beijing 100020, People’s Republic of China.
Neal, the business address of our directors and executive officers is Room 515, Floor 5, Jia No. 92-4 to 24 Jianguo Road Chaoyang District, Beijing 100020, People’s Republic of China.
As of March 31, 2022, the balance of amount due to related parties was US$2.0 million. On January 24, 2022, the Company entered into a loan agreement with SOS Information Technology New York, Inc.
In August 2022, the loan was entended one year to August 27, 2023. As of March 31, 2022, the balance of amount due to related parties was US$2.0 million. On January 24, 2022, the Company entered into a loan agreement with SOS Information Technology New York, Inc.
Major Shareholders The following table presents information regarding the beneficial ownership of our ordinary shares as of the date of this annual report by: ● each person or entity that we know beneficially owns or will beneficially own more than 5% of our outstanding ordinary shares; ● each director or executive officer who beneficially owns or will beneficially own more than 1% of our outstanding ordinary shares; and ● all of our directors and executive officers as a group. 113 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Major Shareholders The following table presents information regarding the beneficial ownership of our ordinary shares as of the date of this annual report by: ● each person or entity that we know beneficially owns or will beneficially own more than 5% of our outstanding ordinary shares; ● each director or executive officer who beneficially owns or will beneficially own more than 1% of our outstanding ordinary shares; and ● all of our directors and executive officers as a group.
Organizational Structure—Contractual Arrangements with Hexin Jiuding, Wusu Company and Hexin Digital.” 115 Table of Contents Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—C. Board Practices—Employment Agreements and Confidentiality Agreements.” Share Incentive Plans See “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” C. Interests of Experts and Counsel Not applicable. ​
Directors, Senior Management and Employees—B. Compensation—Share Incentive Plan.” C. Interests of Experts and Counsel Not applicable. 76
Removed
These ordinary shares, however, are not included in the computation of the percentage ownership of any other person.
Added
Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Removed
Brown (4) — — ​ Zhe Liu (5) * * ​ Gerald (Jerry) T.
Added
Ordinary Shares Beneficially Owned Number % (2) Directors and Executive Officers (1) : Yilin (Linda) Wang (3) — — Stephen P. Brown (4) — — Zhe Liu (5) * * Gerald (Jerry) T.
Removed
The Company made a payment of US$27,872,600 for the above principal and interest on July 28, 2022. Contractual Arrangements with Our Variable Interest Entities and Their Shareholders PRC laws and regulations currently restrict foreign ownership and investment in value-added telecommunications services in China.
Added
The Company made a payment of US$27,872,600 for the above principal and interest on July 28, 2022.As of March 31, 2023, the remaining unpaid balance of principal and interest was US$ 7,686,152 and US$105,085, respectively. Employment Agreements and Indemnification Agreements See “Item 6. Directors, Senior Management and Employees—C. Board Practices—Employment Agreements and Confidentiality Agreements.” Share Incentive Plans See “Item 6.
Removed
As a result, we operate our relevant business through contractual arrangements among Hexin Yongheng, our wholly-owned PRC subsidiary, Hexin Jiuding, Wusu Company and Hexin Digital, our variable interest entities, and the shareholders of Hexin Jiuding, Wusu Company and Hexin Digital. For a description of these contractual arrangements, see “Item 4. Information on the Company—C.
Removed
Organizational Structure—Contractual Arrangements with Hexin Jiuding, Wusu Company and Hexin Digital.” We operate our social e-commerce business through contractual arrangements among Hexin Yongheng, our PRC subsidiary, Hexin Digital, our variable interest entity, and Hexin Jinke, the shareholders of Hexin Digital. For a description of these contractual arrangements, see “Item 4. Information on the Company—C.

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