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What changed in UTime Ltd's 20-F — 2024 vs 2025

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

+329 added−310 removedSource: 20-F (2025-08-11) vs 20-F (2024-07-30)

Top changes in UTime Ltd's 2025 20-F

329 paragraphs added · 310 removed · 230 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

91 edited+25 added−49 removed782 unchanged
Biggest changeSelected Condensed Consolidated Statements of Comprehensive Loss Data Year Ended March 31, 2022 Year Ended March 31, 2023 Year ended March 31, 2024 RMB RMB RMB US$ Parent VIE WFOE Other entities Elimination Consolidated Parent VIE WFOE Other entities Elimination Consolidated Parent VIE WFOE Other entities Elimination Consolidated Consolidated Net sales (1) - 273,922 - - - 273,922 - 197,564 - - - 197,564 - 172,156 - - - 172,156 24,264 Cost of sales (1) - 259,904 - - - 259,904 - 167,143 - - - 167,143 - 163,286 - - - 163,286 23,014 Gross profit (loss) - 14,018 - - - 14,018 - 30,421 - - - 30,421 - 8,870 - - - 8,870 1,250 Operating expenses 6,483 38,002 3 20 111 44,619 69,220 39,013 1 101 (309 ) 108,026 10,802 28,400 2 2 (196 ) 39,010 5,498 Loss from operations (6,483 ) (23,984 ) (3 ) (20 ) (111 ) (30,601 ) (69,220 ) (8,592 ) (1 ) (101 ) 309 (77,605 ) (10,802 ) (19,530 ) (2 ) (2 ) 196 (30,140 ) (4,248 ) Investment loss from VIE/subsidiaries 32,350 - - - -32,350 - 18,396 - - - (18,396 ) - 50,082 - - - (50,082 ) - - Interest expenses - 4,875 - - - 4,875 - 6,149 - - - 6,149 - 3,617 - - - 3,617 510 Loss before income taxes (38,833 ) (28,859 ) (3 ) (20 ) 32,239 (35,476 ) (87,616 ) (14,741 ) (1 ) (101 ) 18,705 (83,754 ) (60,884 ) (23,147 ) (2 ) (2 ) 50,278 (33,757 ) (4,758 ) Income tax benefit - (46 ) - - - (46 ) - (171 ) - - - (171 ) - (171 ) - - - (171 ) (24 ) Net loss from continuing operations (38,833 ) (28,813 ) (3 ) (20 ) 32,239 (35,430 ) (87,616 ) (14,570 ) (1 ) (101 ) 18,705 (83,583 ) (60,884 ) (22,976 ) (2 ) (2 ) 50,278 (33,586 ) (4,734 ) Discontinued operations Loss on disposal of discontinued operation - - - - - - - - - - - - - (19,199 ) - (7,520 ) - (26,719 ) (3,766 ) Loss from discontinued operations - (830 ) - (3,070 ) - (3,900 ) - (4,652 ) - (1,787 ) (6,439 ) - (1,903 ) - - - (1,903 ) (268 ) Net loss from discontinued operations - (830 ) - (3,070 ) - (3,900 ) - (4,652 ) - (1,787 ) - (6,439 ) - (21,102 ) - (7,520 ) - (28,622 ) (4,034 ) Net loss (38,833 ) (29,643 ) (3 ) (3,090 ) 32,239 (39,330 ) (87,616 ) (19,222 ) (1 ) (1,888 ) 18,705 (90,022 ) (60,884 ) (44,078 ) (2 ) (7,522 ) 50,278 (62,208 ) (8,768 ) 11 Selected Condensed Consolidated Balance Sheets Data 31-Mar-23 31-Mar-24 RMB RMB US$ Parent VIE WFOE Other entities Elimination Consolidated Parent VIE WFOE Other entities Elimination Consolidated Consolidated Assets Current Assets Cash and cash equivalents 2 272 5 71,641 - 71,920 1 2,704 3 73,967 - 76,675 10,807 Restricted cash - 500 - - - 500 - 500 - - - 500 70 Accounts receivable, net - 52,172 - - - 52,172 - 30,240 - - - 30,240 4,262 Prepaid expenses and other current assets, net 25,109 66,331 - - - 91,440 25,924 81,576 350,001 - - 457,501 64,482 Intercompmany receivables (1) 79,393 54,036 - 988 (134,417 ) - 444,934 2,710 - 995 (448,639 ) - - Due from related parties - 584 - - - 584 - 553 - - - 553 78 Inventories - 16,169 - - - 16,169 - 11,026 - - - 11,026 1,554 Assets related to discontinued operations - 3,948 - 292 - 4,240 - 1,441 - - - 1,441 203 Total current assets 104,504 194,012 5 72,921 (134,417 ) 237,025 470,859 130,750 350,004 74,962 (448,639 ) 577,936 81,456 Non-Current assets Property and equipment, net - 61,407 - - - 61,407 - 54,188 - - - 54,188 7,637 Operating lease right-of-use assets, net - 13,030 - - - 13,030 - 9,781 - - - 9,781 1,379 Finance lease right-of-use assets, net - 6,460 - - - 6,460 911 Intangible assets, net - 1,677 - - - 1,677 - 662 - - - 662 93 Long-term investments (18,929 ) - - - 18,929 - (43,653 ) 43,653 - - Equity method investment - - - - - - - - - - - - - Deferred loss on sale-leaseback - 767 - - - 767 108 Other non-current assets - - - - - - - 153 - - - 153 22 Total non-current assets (18,929 ) 76,118 - 18 18,929 76,114 (43,653 ) 72,011 - - 43,653 72,011 10,150 Total Assets 85,575 270,128 5 72,919 (115,488 ) 313,139 427,206 202,761 350,004 74,962 (404,986 ) 649,947 91,606 Liabilities and Stockholder’s equity Current liabilities Accounts payable - 125,374 - 0 - 125,374 - 106,092 - - - 106,092 14,953 Short-term borrowings - 53,935 - - - 53,935 - 56,949 - - - 56,949 8,027 Current portion of long-term borrowings - 1080 - - - 1,080 - - - - - - - Due to related parties 313 4466 - - - 4,779 23,728 11,516 - - - 35,244 4,967 Lease liability - 3,673 - - - 3,673 - 6,824 - - - 6,824 962 Other payables and accrued liabilities 5,539 48,100 - - - 53,639 32,794 31,157 - - - 63,951 9,014 Intercompmany payables (1) 35,634 1000 16 97,826 (134,476 ) - 2,886 14,071 350,017 81,995 (448,969 ) - - Income tax payables - 18 - - - 18 - 18 - - - 18 3 Current liabilities related to discontinued operations 2,390 781 3,171 - 1,929 1,929 272 Total current liabilities 41,486 240,036 16 98,607 (134,476 ) 245,669 59,408 228,556 350,017 81,995 (448,969 ) 271,007 38,198 Non-current liabilities Long-term borrowings - 6,870 - - - 6,870 - - - - - - - Government grants - 8,697 - - - 8,697 - 6,154 - - - 6,154 867 Deferred tax liability - 295 - - - 295 - 125 - - - 125 18 Lease liability - non-current - 10,876 - - - 10,876 - 10,054 - - - 10,054 1,417 Total non-current liabilities - 26,738 - - - 26,738 - 16,333 - - - 16,333 2,302 Total liabilities 41,486 266,773 16 98,608 (134,476 ) 272,407 59,408 244,889 350,017 81,995 (448,969 ) 287,340 40,500 Ordinary shares 9 - - - - 9 278 - - - - 278 39 Additional paid-in capital 216,504 72,413 - 807 (73,220 ) 216,504 573,615 72,413 - 807 (73,220 ) 573,615 80,848 Accumulated deficit (175,893 ) (66,738 ) (11 ) (27,813 ) 94,562 (175,893 ) (208,828 ) (111,899 ) (13 ) (5,072 ) 116,984 (208,828 ) (29,433 ) Accumulated other comprehensive income 3,469 507 - 1,847 (2,354 ) 3,469 2,733 (818 ) - 599 219 2,733 384 Total UTime Limited shareholder’s equity 44,089 6,182 (11 ) (25,159 ) 18,988 44,089 367,798 (40,304 ) (13 ) (3,666 ) 43,983 367,798 51,838 Non-controlling interests - (2,827 ) - (530 ) - (3,357 ) - (1,824 ) - (3,367 ) - (5,191 ) (732 ) Total shareholders’ equity 44,089 3,355 (11 ) (25,689 ) 18,988 40,732 367,798 (42,128 ) (13 ) (7,033 ) 43,983 362,607 51,106 Total liabilities and shareholders’ equity 85,575 270,128 5 72,919 (115,488 ) 313,139 427,206 202,761 350,004 74,962 (404,986 ) 649,947 91,606 12 Selected Condensed Consolidated Cash Flows Data Year Ended March 31, 2022 Year Ended March 31, 2023 Year Ended March 31, 2024 RMB RMB RMB US$ Parent VIE WFOE Other entities Elimination Consolidated Parent VIE WFOE Other entities Elimination Consolidated Parent VIE WFOE Other entities Elimination Consolidated Cash flows from operating activities: Net loss (38,833 ) (29,643 ) (3 ) (3,090 ) 32,239 (39,330 ) (87,616 ) (19,222 ) (1 ) (1,888 ) 18,705 (90,022 ) (60,884 ) (44,078 ) (2 ) (7,522 ) 50,278 (62,208 ) (8,768 ) Net loss from discontinued operations - (830 ) - (3,070 ) - (3,900 ) - (4,651 ) - (1,788 ) - (6,439 ) - (21,102 ) - (7,520 ) - (28,622 ) (4,034 ) Net loss from continuing operations (38,833 ) (28,813 ) (3 ) (20 ) 32,239 (35,430 ) (87,616 ) (14,571 ) (1 ) (100 ) 18,705 (83,583 ) (60,884 ) (22,976 ) (2 ) (2 ) 50,278 (33,586 ) (4,734 ) Adjustments to reconcile net loss from operations to net cash provided by (used in) operating activities - Depreciation and amortization - 4,277 - - - 4,277 - 5,769 - - - 5,769 - 6,736 - - - 6,736 949 Allowances for obsolete inventories, net - 1,664 - - - 1,664 - (356 ) - - - (356 ) - 688 - - - 688 97 Provision for doubtful account, net - 1,379 - - - 1,379 - - - - - - - 152 - - - 152 21 Share-based compensation and expenses - 63,656 63,656 8,892 - - - - 8,892 1,253 Loss on disposal of property and equipment - 10 - - - 10 - 184 - - - 184 - - - - - - - Loss on disposal of discontinued operation - - - - - - - - - - - - - - - - - - - Deferred tax - 348 - - - 348 - (171 ) - - - (171 ) - (171 ) - - - (171 ) (24 ) Equity loss of subsidiaries 32,350 - - - (32,350 ) - 18,396 (18,396 ) - 50,082 - - (50,082 ) - - Net changes in operating assets and liabilities: - - Accounts receivable - (5,720 ) - (1 ) - (5,721 ) - (27,463 ) - - - (27,463 ) - 22,429 - - (18,311 ) 4,118 580 Prepaid expenses and other current assets (1,173 ) 8,342 - (11 ) - 7,158 - (22,908 ) - - - (22,908 ) (500 ) (27,456 ) (350,001 ) - 16,386 (361,571 ) (50,961 ) Intercompany receivables (1) 2,381 (2,634 ) - (529 ) 782 - - (1,623 ) - 7 1,616 - (13,078 ) 33,901 - - (20,823 ) - - Inventories - (5,249 ) - - - (5,249 ) - 17,265 - - - 17,265 - 4,459 - - - 4,459 628 Accounts payable - 21,577 - 1,923 - 23,500 - 18,161 - 56 - 18,217 - (29,017 ) - - 18,411 (10,606 ) (1,495 ) Other payables and accrued liabilities, and lease liabilities 1,269 (14,676 ) - 1,907 - (11,500 ) 4,026 4,226 - - - 8,252 25,531 (4,448 ) - - (16,870 ) 4,213 594 Intercompany payables (1) 5,619 498 3 (5,629 ) (682 ) (191 ) 1,539 - 5 (54 ) (1,490 ) - (33,989 ) 13,078 - 3 20,909 - - Related parties - (699 ) - - - (699 ) - 877 - - - 877 2,901 48 - - - 2,949 416 Government grants - - - - - - - 8,697 - - - 8,697 - (2,542 ) - - - (2,542 ) (358 ) Other non-current assets - (208 ) - - - (208 ) - 541 - - - 541 - (153 ) - - - (153 ) (22 ) Net cash provided by (used in) operating activities 1,613 (19,904 ) - (2,360 ) (11 ) (20,662 ) 1 (11,372 ) 4 (91 ) 435 (11,023 ) (21,045 ) (5,272 ) (350,003 ) 1 (103 ) (376,422 ) (53,056 ) Net cash (used in) provided by operating activities - Discontinued operations 98 (301 ) (203 ) - (3,898 ) - (217 ) - (4,115 ) - 246 - - - 246 35 Net cash provided by(used in) provided by operating activities 1,613 (19,806 ) - (2,661 ) (11 ) (20,865 ) 1 (15,270 ) 4 (308 ) 435 (15,138 ) (21,045 ) (5,026 ) (350,003 ) 1 (103 ) (376,176 ) (53,021 ) Investing activities: Payment for property and equipment - (5,860 ) - - - (5,860 ) - (2,593 ) - - - (2,593 ) (971 ) (971 ) (137 ) Payment for intangible assets - - - - - - - (307 ) - - - (307 ) - - - Cash received from consolidation, net of cash acquired - - - - - - - - - - - - - - - Proceeds from sale of property, plant and equipment - - 6,500 6,500 916 Disposal of discontinued operation - - - - - Net cash (used in) provided by investing activities - Continuing operations - (5,860 ) - - - (5,860 ) - (2,900 ) - - - (2,900 ) - 5,529 - - - 5,529 779 Net cash used in provided by investing activities - Discontinued operations 28 28 - - - - - - - - - (9 ) - (9 ) (1 ) Net cash (used in) provided by investing activities - (5,832 ) - - - (5,832 ) - (2,900 ) - - - (2,900 ) - 5,529 - (9 ) - 5,520 778 Financing activities: Proceeds from short-term borrowings - 46,500 - - - 46,500 - 66,300 - - - 66,300 - 60,571 - - - 60,571 8,537 Loan received from a shareholder - 5,980 - - - 5,980 - 4,010 - - - 4,010 20,546 21,250 - - - 41,796 5,891 Proceeds from long-term borrowings - 9,000 - - - 9,000 - - - - - - - - - - - - Repayment of loan from a shareholder - (3,000 ) - - - (3,000 ) - (3,000 ) - - - (3,000 ) - (14,200 ) - - - (14,200 ) (2,001 ) Repayment of short-term borrowings - (41,520 ) - - - (41,520 ) - (48,145 ) - - - (48,145 ) - (57,557 ) - - - (57,557 ) (8,112 ) Repayments of long-term borrowings - (5,760 ) - - - (5,760 ) - (870 ) - - - (870 ) - (7,950 ) - - - (7,950 ) (1,121 ) Down payment for financing services - - - (19,003 ) - (19,003 ) - - - - - - - - - - - - - Contribution in a subsidiary by a shareholder - 6,429 - - - 6,429 - - - - - - - - - - - - Payment of capital lease obligation - - - (498 ) - - - (498 ) (70 ) Proceeds from issuance of ordinary shares - - - 88,262 - 88,262 - - - - - - - - 350,001 - - 350,001 49,331 Net cash provided by financing activities - 17,629 - 69,259 - 86,888 - 18,295 - - - 18,295 20,546 1,616 350,001 - - 372,163 52,455 Effect of exchange rate changes on cash and cash equivalent and restricted cash (1,618 ) (104 ) - (765 ) 11 (2,476 ) - (42 ) - 5,464 (437 ) 4,985 498 330 - 2,329 77 3,234 456 Net increase (decrease) in cash and cash equivalent and restricted cash (5 ) (8,113 ) - 65,833 - 57,715 1 83 4 5,156 (2 ) 5,242 (1 ) 2,449 (2 ) 2,321 (26 ) 4,741 668 Cash and cash equivalents and restricted cash at beginning of year 6 8,805 3 663 - 9,477 1 692 3 66,496 - 67,192 2 777 5 71,650 - 72,434 10,209 Cash and cash equivalents and restricted cash at end of year 1 692 3 66,496 - 67,192 2 776 6 71,652 (2 ) 72,434 1 3,226 3 73,971 (26 ) 77,175 10,877 Less: Cash and cash equivalent and restricted cash - Discontinued operations - (25 ) - (316 ) - (341 ) - (6 ) - (8 ) - (14 ) - - - - - - - Cash and cash equivalents and restricted cash at end of year - Continuing operations 1 667 3 66,180 - 66,851 2 770 6 71,644 (2 ) 72,420 1 3,226 3 73,971 (26 ) 77,175 10,877 13 3.A. [Reserved] 3.B.
Biggest changeSelected Condensed Consolidated Statements of Comprehensive Loss Data Year Ended March 31, 2023 Year Ended March 31, 2024 Year ended March 31, 2025 RMB RMB RMB US$ Parent VIE WFOE Other entities Elimination Consolidated Parent VIE WFOE Other entities Elimination Consolidated Parent Ref VIE WFOE Other entities Elimination Consolidated Consolidated Net sales (1) - 197,564 - - - 197,564 - 172,156 - - - 172,156 - - 250,997 - - - 250,997 34,588 Cost of sales (1) - 167,143 - - - 167,143 - 163,286 - - - 163,286 - - 243,913 - - - 243,913 33,612 Gross profit (loss) - 30,421 - - - 30,421 - 8,870 - - - 8,870 - 7,084 - - 7,084 976 Operating expenses 69,220 39,013 1 101 (309 ) 108,026 10,802 28,400 2 2 (196 ) 39,010 111,688 111,688 193,782 351,338 6,993 7,906 671,707 92,564 Loss from operations (69,220 ) (8,592 ) (1 ) (101 ) 309 (77,605 ) (10,802 ) (19,530 ) (2 ) (2 ) 196 (30,140 ) -111,688 (186,698 ) (351,338 ) (6,993 ) (7,906 ) (664,623 ) (91,588 ) Investment loss from VIE/subsidiaries 18,396 - - - (18,396 ) - 50,082 - - - (50,082 ) - 558,399 (558,399 ) - - Interest expenses - 6,149 - - - 6,149 - 3,617 - - - 3,617 - 3,927 - - - 3,927 541 Loss before income taxes (87,616 ) (14,741 ) (1 ) (101 ) 18,705 (83,754 ) (60,884 ) (23,147 ) (2 ) (2 ) 50,278 (33,757 ) -670,087 (190,625 ) (351,338 ) (6,993 ) 550,493 (668,550 ) (92,129 ) Income tax benefit - (171 ) - - - (171 ) - (171 ) - - - (171 ) - (59 ) - - - (59 ) (8 ) Net loss from continuing operations (87,616 ) (14,570 ) (1 ) (101 ) 18,705 (83,583 ) (60,884 ) (22,976 ) (2 ) (2 ) 50,278 (33,586 ) -670,087 (190,566 ) (351,338 ) (6,993 ) 550,493 (668,491 ) (92,121 ) Discontinued operations Loss on disposal of discontinued operation - - - - - - - (19,199 ) - (7,520 ) - (26,719 ) - - - - - - - Loss from discontinued operations - (4,652 ) - (1,787 ) (6,439 ) - (1,903 ) - - (1,903 ) - (1,596 ) - - - (1,596 ) (220 ) Net loss from discontinued operations - (4,652 ) - (1,787 ) - (6,439 ) - (21,102 ) - (7,520 ) - (28,622 ) - (1,596 ) - - - (1,596 ) (220 ) Net loss (87,616 ) (19,222 ) (1 ) (1,888 ) 18,705 (90,222 ) (60,884 ) (44,078 ) (2 ) (7,522 ) 18,705 (62,208 ) 670,087 (192,162 ) (351,338 ) (6,993 ) 550,493 (670,087 ) (92,341 ) 11 Selected Condensed Consolidated Balance Sheets Data 31-Mar-24 31-Mar-25 RMB RMB US$ Parent VIE WFOE Other entities Elimination Consolidated Parent VIE WFOE Other entities Elimination Consolidated Consolidated Assets Current Assets Cash and cash equivalents 1 2,704 3 73,967 - 76,675 2 517 8 108,686 - 109,213 15,050 Restricted cash - 500 - - - 500 - - - - - - - Accounts receivable, net - 30,240 - - - 30,240 - - - - - - - Prepaid expenses and other current assets, net 25,924 81,729 350,001 - - 457,654 26,516 8,930 10,089 - - 45,535 6,275 Intercompmany receivables (1) 444,934 2,710 - 995 (448,639 ) - 466,289 2,710 1,014 (470,013 ) - - Due from related parties - 553 - - - 553 - 566 - - 566 78 Inventories - 11,026 - - - 11,026 - 6,351 - - - 6,351 875 Assets related to discontinued operations - 1,438 - - - 1,438 - - - - - - - Total current assets 470,859 130,900 350,004 74,962 (448,639 ) 578,086 492,807 19,074 10,097 109,700 (470,013 ) 161,665 22,278 Non-Current assets Property and equipment, net - 54,188 - - - 54,188 - 39,599 - - - 39,599 5,457 Operating lease right-of-use assets, net - 9,781 - - - 9,781 - 1,714 - - - 1,714 236 Finance lease right-of-use assets, net 6,460 - - - 6,460 2,246 - - - 2,246 310 Intangible assets, net - 662 - - - 662 - 205 - - - 205 28 Long-term investments (43,653 ) 43,653 - (563,937 ) - - - 563,937 - - Equity method investment - - - - - - - - - - - - - Deferred loss on sale-leaseback 767 - - - 767 - 605 - - - 605 83 Other non-current assets - 3 - - - 3 - - - - - - - Total non-current assets (43,653 ) 71,861 - - 43,653 71,861 (563,937 ) 44,369 - - 563,937 44,369 6,114 Total Assets 427,206 202,761 350,004 74,962 (404,986 ) 649,947 (71,130 ) 63,443 10,097 109,700 93,924 206,034 28,392 Liabilities and Stockholder’s equity Current liabilities Accounts payable - 106,092 - - - 106,092 - 138,504 - - - 138,504 19,086 Short-term borrowings - 56,949 - - - 56,949 - 57,600 - - - 57,600 7,937 Current portion of government grants - 1,812 - - - 1,812 - 1,812 - - - 1,812 250 Due to related parties 23,728 11,516 - - - 35,244 22,906 16,949 65 867 - 40,787 5,621 Lease liability - 6,824 - - - 6,824 - 4,085 - - - 4,085 563 Other payables and accrued liabilities 32,794 31,157 - - - 63,951 38,951 47,338 150 2,911 - 89,350 12,313 Intercompmany payables (1) 2,886 14,071 350,017 81,995 (448,969 ) - (324 ) 17,266 361,234 83,864 (462,040 ) - - Income tax payables - 18 - - - 18 - - - - - - - Current liabilities related to discontinued operations - 1,929 1,929 - 1,601 - - - 1,601 221 Total current liabilities 59,408 230,368 350,017 81,995 (448,969 ) 272,819 61,533 285,155 361,449 87,642 (462,040 ) 333,739 45,991 Non-current liabilities Long-term borrowings - - - - - - - 6,000 - - - 6,000 827 Government grants - 4,342 - - - 4,342 - 2,530 - - - 2,530 349 Deferred tax liability - 125 - - - 125 - - - - - - - Lease liability - non-current - 10,054 - - - 10,054 - 1,619 - - - 1,619 223 Total non-current liabilities - 14,521 - - - 14,521 - 10,149 - - - 10,149 1,399 Total liabilities 59,408 244,889 350,017 81,995 (448,969 ) 287,340 61,533 295,304 361,449 87,642 (462,040 ) 343,888 47,390 Ordinary shares 12 - - - - 2 26 - - - - 26 4 Additional paid-in capital 573,881 72,413 - 807 (73,220 ) 573,881 732,909 72,413 - 37,091 (109,504 ) 732,909 100,998 Accumulated deficit (208,828 ) (111,899 ) (13 ) (5,072 ) 116,984 (208,828 ) (878,915 ) (304,061 ) (351,352 ) (12,063 ) 667,476 (878,915 ) (121,118 ) Accumulated other comprehensive income 2,733 (818 ) - 599 219 2,733 13,317 341 - 1,667 (2,008 ) 13,317 1,833 Total UTime Limited shareholder’s equity 367,798 (40,304 ) (13 ) (3,666 ) 43,983 367,798 (132,663 ) (231,307 ) (351,352 ) 26,695 555,964 (132,663 ) (18,283 ) Non-controlling interests - (1,824 ) - (3,367 ) - (5,191 ) - (554 ) - (4,637 ) - (5,191 ) (715 ) Total shareholders’ equity 367,798 (42,128 ) (13 ) (7,033 ) 43,983 362,607 (132,663 ) (231,861 ) (351,352 ) 22,058 555,964 (137,854 ) (18,998 ) Total liabilities and shareholders’ equity 427,206 202,761 350,004 74,962 (404,986 ) 649,947 (71,130 ) 63,443 10,097 109,700 93,924 206,034 28,392 12 Selected Condensed Consolidated Cash Flows Data Year Ended March 31, 2023 Year Ended March 31, 2024 Year Ended March 31, 2025 RMB RMB RMB US$ Parent VIE WFOE Other entities Elimination Consolidated Parent VIE WFOE Other entities Elimination Consolidated Parent VIE WFOE Other entities Elimination Consolidated Consolidated Cash flows from operating activities: Net loss (87,616 ) (19,222 ) (1 ) (1,888 ) 18,705 (90,022 ) (60,884 ) (44,078 ) (2 ) (7,522 ) 50,278 (62,208 ) (670,087 ) (192,162 ) (351,338 ) (6,993 ) 550,493 (670,087 ) (92,341 ) Net loss from discontinued operations - (4,651 ) - (1,788 ) - (6,439 ) - (21,102 ) - (7,520 ) - (28,622) - (1,596 ) - - - (1,596 ) (220 ) Net loss from continuing operations (87,616 ) (14,571 ) (1 ) (100 ) 18,705 (83,583 ) (60,884 ) (22,976 ) (2 ) (2 ) 50,278 (33,586) (670,087 ) (190,566 ) (351,338 ) (6,993 ) 550,493 (668,491 ) (92,121 ) Adjustments to reconcile net loss from operations to net cash provided by (used in) operating activities Depreciation and amortization - 5,769 - - - 5,769 - 6,736 - - - 6,736 5,669 5,669 781 Allowances for obsolete inventories, net - (356 ) - - - (356 ) - 688 - - - 688 9,841 9,841 1,356 Impairment of long-live assets 10,496 10,496 1,446 Provision for doubtful account, net - - - - - - - 152 - - - 152 154,632 351,122 - 505,754 69,695 Share-based compensation and expenses 63,656 63,656 8,892 - - - - 8,892 111,034 111,034 15,301 Loss on disposal of property and equipment - 184 - - - 184 - - - - - - - Loss on disposal of discontinued operation - - - - - - - - - - - - - Deferred tax - (171 ) - - - (171 ) - (171 ) - - - (171) - Equity loss of subsidiaries 18,396 (18,396 ) - 50,082 - - - (50,082 ) - 558,399 (558,399 ) - Net changes in operating assets and liabilities: - Accounts receivable - (27,463 ) - - - (27,463 ) - 22,429 - - (18,311 ) 4,118 (22,312 ) (22,312 ) (3,075 ) Prepaid expenses and other current assets - (22,908 ) - - - (22,908 ) (500 ) (27,609 ) (350,001 ) - 16,386 (361,724 ) 10,624 (31,391 ) (11,210 ) (1 ) (9,899 ) (41,877 ) (5,771 ) Intercompany receivables (1) - (1,623 ) - 7 1,616 - (13,078 ) 33,901 - 3 (20,826 ) - (21,355 ) - - - (19 ) 21,374 - Inventories - 17,265 - - - 17,265 - 4,459 - - - 4,459 (5,166 ) (5,166 ) (712 ) Accounts payable - 18,161 - 56 - 18,217 - (29,017 ) - - 18,411 (10,606 ) 32,412 32,412 4,466 Other payables and accrued liabilities, and lease liabilities 4,026 4,226 - - - 8,252 25,531 (4,448 ) - - (16,870 ) 4,213 (5,058 ) 27,378 150 2,911 25,381 3,498 Intercompany payables (1) 1,539 - 5 (54 ) (1,490 ) - (33,989 ) 13,078 - - 20,911 - (3,210 ) 3,195 11,217 1,869 (13,071 ) - - Related parties - 877 - - - 877 2,901 48 - - - 2,949 (822 ) 5,420 65 867 5,530 762 Other non-current assets - - - - - - - - - - - - - Net cash provided by (used in) operating activities 1 (20,610 ) 4 (91 ) 435 (20,261 ) (21,045 ) (2,730 ) (350,003 ) 1 (103 ) (373,880 ) (20,475 ) ( 392 ) 6 (1,366 ) ( 9,502 ) (31,729 ) (4,374) Net cash (used in) provided by operating activities - Discontinued operations - (3,898 ) - (217 ) - (4,115 ) - 246 - - - 246 - - - - - - - Net cash provided by(used in) provided by operating activities 1 (24,508 ) 4 (308 ) 435 (24,376 ) (21,045 ) (2,484 ) (350,003 ) 1 (103 ) (373,634 ) (20,475 ) ( 392 ) 6 (1,366 ) (9,502 ) (31,729 ) (4,374 ) Investing activities: Payment for property and equipment - (2,593 ) - - - (2,593 ) (971 ) - (971 ) - - - Payment for intangible assets - (307 ) - - - (307 ) - - - - - - Cash received from consolidation, net of cash acquired - - - - - - - - - - - - Proceeds from sale of property, plant and equipment - 6,500 - 6,500 - - - Disposal of discontinued operation - - - - - - Net cash (used in) provided by investing activities - Continuing operations - (2,900 ) - - - (2,900 ) - 5,529 - - - 5,529 - - - Net cash used in provided by investing activities - Discontinued operations - - - - - - - - - (9 ) - (9 ) - - Net cash (used in) provided by investing activities - (2,900 ) - - - (2,900 ) - 5,529 - (9 ) - 5,520 - - - - Financing activities: Proceeds from short-term borrowings - 66,300 - - - 66,300 - 60,571 - - - 60,571 - 36,000 36,000 4,961 Loan received from a shareholder - 4,010 - - - 4,010 20,546 21,250 - - - 41,796 - - Proceeds from long-term borrowings - - - - - - - - - - - - - Repayment of loan from a shareholder - (3,000 ) - - - (3,000 ) - (14,200 ) - - - (14,200 ) - - Repayment of short-term borrowings - (48,145 ) - - - (48,145 ) - (57,557 ) - - - (57,557 ) - (29,349 ) (29,349 ) (4,044 ) Repayments of long-term borrowings - (870 ) - - - (870 ) - (7,950 ) - - - (7,950 ) - - Down payment for financing services - - - - - - - - - - - - - - Contribution in a subsidiary by a shareholder - - - - - - - - - - - - - Government grants - 3,233 - 5,464 - 8,697 - (2,542 ) - - - (2,542 ) (1,812 ) (1,812 ) (250 ) Payment of capital lease obligation - - (498 ) - - - (498 ) - (264 ) (264 ) (36 ) Proceeds from issuance of ordinary shares - - - - - - - - 350,001 - - 350,001 11,724 1,449 36,284 (2,083 ) 47,374 6,528 Net cash provided by financing activities - 21,528 - 5,464 - 26,992 20,546 (926 ) 350,001 - - 369,621 11,724 6,024 - 36,284 (2,083 ) 51,949 7,159 Effect of exchange rate changes on cash and cash equivalent and restricted cash - 5,963 - - (437 ) 5,526 498 330 - 2,329 77 3,234 8,752 (8,317 ) (2 ) (200 ) 11,585 11,818 1,388 Net increase (decrease) in cash and cash equivalent and restricted cash 1 83 4 5,156 (2 ) 5,242 (1 ) 2,449 (2 ) 2,321 (26) 4,741 1 (2,685 ) 4 34,718 - 32,038 4,173 Cash and cash equivalents and restricted cash at beginning of year 1 692 3 66,496 - 67,192 2 777 5 71,650 - 72,434 1 3,204 3 73,967 77,175 10,877 Cash and cash equivalents and restricted cash at end of year 2 775 7 71,652 (2 ) 72,434 1 3,226 3 73,971 (26) 77,175 2 519 7 108,685 - 109,213 15,050 Less: Cash and cash equivalent and restricted cash - Discontinued operations - (6 ) - (8 ) - (14 ) - - - - - - - - - - - Cash and cash equivalents and restricted cash at end of year - Continuing operations 2 769 7 71,644 (2 ) 72,420 1 3,226 3 73,971 (26) 77,175 2 519 7 108,685 109,213 15,050 13 3.A. [Reserved] 3.B.
Risks Related to Our Corporate Structure We are a holding company, and will rely on dividends paid by our subsidiaries for our cash needs.
Risks Related to Our Corporate Structure We are a holding company, and will rely on dividends paid by our subsidiaries for our cash needs.
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 on Severe and Lawful Crackdown on Illegal Securities Activities, which was available to the public 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 on Severe and Lawful Crackdown on Illegal Securities Activities, which was available to the public on July 6, 2021.
These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies. These opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection.
These opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies. These opinions proposed to take effective measures, such as promoting the construction of relevant regulatory systems, to deal with the risks and incidents facing China-based overseas-listed companies and the demand for cybersecurity and data privacy protection.
The aforementioned policies and any related implementation rules to be enacted may subject us to additional compliance requirement in the future. As of the date of this annual report, we have not received or denied any permission from the PRC authorities regarding our listing on the Nasdaq Capital Market.
The aforementioned policies and any related implementation rules to be enacted may subject us to additional compliance requirement in the future. As of the date of this annual report, we have not received or denied any permission from the PRC authorities regarding our listing on the Nasdaq Capital Market.
As these opinions were recently issued, official guidance and interpretation of the opinions remain unclear in several respects at this time. Therefore, we cannot assure you that we will remain fully compliant with all new regulatory requirements of these opinions or any future implementation rules on a timely basis, or at all.
As these opinions were recently issued, official guidance and interpretation of the opinions remain unclear in several respects at this time. Therefore, we cannot assure you that we will remain fully compliant with all new regulatory requirements of these opinions or any future implementation rules on a timely basis, or at all.
We face uncertainty about future actions by the PRC government that could significantly affect the operating company’s financial performance and the enforceability of the VIE Agreements.
We face uncertainty about future actions by the PRC government that could significantly affect the operating company’s financial performance and the enforceability of the VIE Agreements.
In addition, on February 24, 2023, the CSRC, together with Ministry of Finance of the PRC, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing which was issued by the CSRC, National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the Provisions.
In addition, on February 24, 2023, the CSRC, together with Ministry of Finance of the PRC, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing which was issued by the CSRC, National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the Provisions.
The revised Provisions is issued under the title the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, and came into effect on March 31, 2023 together with the Trial Measures.
The revised Provisions is issued under the title the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, and came into effect on March 31, 2023 together with the Trial Measures.
One of the major revisions to the revised Provisions is expanding its application to cover indirect overseas offering and listing, as is consistent with the Trial Measures.
One of the major revisions to the revised Provisions is expanding its application to cover indirect overseas offering and listing, as is consistent with the Trial Measures.
The revised Provisions require that, including but not limited to (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.
The revised Provisions require that, including but not limited to (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.
Where a PRC domestic company, after completing the relevant procedures, provides to securities companies, securities service providers or other entities with any documents and materials that contain state secrets or working secrets of government agencies, or any other documents and materials that would be detrimental to national security or public interest if leaked, a non-disclosure agreement must be signed between the provider and receiver of such information according to the relevant PRC laws and regulations, which must specify, among others, the obligations and liabilities on confidentiality held by such securities companies and securities service providers.
Where a PRC domestic company, after completing the relevant procedures, provides to securities companies, securities service providers or other entities with any documents and materials that contain state secrets or working secrets of government agencies, or any other documents and materials that would be detrimental to national security or public interest if leaked, a non-disclosure agreement must be signed between the provider and receiver of such information according to the relevant PRC laws and regulations, which must specify, among others, the obligations and liabilities on confidentiality held by such securities companies and securities service providers.
The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies.
The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies.
On November 14, 2021, the CAC released the Regulations on Network Data Security (draft for public comments), or the draft Regulations on Network Data Security, which reiterates that data processors that process the personal information of more than one million users listing in a foreign country should apply for a cybersecurity review.
On November 14, 2021, the CAC released the Regulations on Network Data Security (draft for public comments), or the draft Regulations on Network Data Security, which reiterates that data processors that process the personal information of more than one million users listing in a foreign country should apply for a cybersecurity review.
According to the Trial Measures, among other requirements, any domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfil the filing procedures with the CSRC within three business days after the submission of the overseas offering and listing application.
According to the Trial Measures, among other requirements, any domestic companies that seek to offer or list securities overseas, both directly and indirectly, should fulfil the filing procedures with the CSRC within three business days after the submission of the overseas offering and listing application.
The Trial Measures provide that if an issuer meets both of the following criteria, the overseas offering and listing of securities conducted by such issuer shall be determined as an indirect overseas offering and listing by a PRC domestic enterprise and is therefore subject to the filing and reporting requirements as required thereunder: (i) any of the operating revenue, total profits, total assets or net assets of the PRC domestic enterprise(s) of the issuer in the most recent fiscal year accounts for more than 50% of the corresponding item in the issuer’s audited consolidated financial statements for the same period; and (ii) the main parts of the issuer’s operation activities are conducted in mainland China, or the principal operation premises are located in mainland China, or the majority of senior management personnel in charge of its business operations and management are PRC citizens or have habitual residences located in mainland China.
The Trial Measures provide that if an issuer meets both of the following criteria, the overseas offering and listing of securities conducted by such issuer shall be determined as an indirect overseas offering and listing by a PRC domestic enterprise and is therefore subject to the filing and reporting requirements as required thereunder: (i) any of the operating revenue, total profits, total assets or net assets of the PRC domestic enterprise(s) of the issuer in the most recent fiscal year accounts for more than 50% of the corresponding item in the issuer’s audited consolidated financial statements for the same period; and (ii) the main parts of the issuer’s operation activities are conducted in mainland China, or the principal operation premises are located in mainland China, or the majority of senior management personnel in charge of its business operations and management are PRC citizens or have habitual residences located in mainland China.
The Trial Measures further stipulate that the determination as to whether a PRC domestic company is indirectly offering and listing securities in an overseas market shall be made on a substance-over-form basis.
The Trial Measures further stipulate that the determination as to whether a PRC domestic company is indirectly offering and listing securities in an overseas market shall be made on a substance-over-form basis.
According to one of the Guidelines for Overseas Listing, where an issuer does not fall within the circumstances as stipulated aforementioned, but the risk factors disclosed in the submitted listing application documents pursuant to the relevant overseas market regulations are mainly related to mainland China, the securities companies and the PRC counsels of the issuer shall, act in accordance with the Trial Measures for Overseas Listing and follow the principle of substance-over-form, conduct comprehensive demonstration and identification with regard to whether the issuer falls within the scope which is subject to the filing requirements under the Trial Measures for Overseas Listing.
According to one of the Guidelines for Overseas Listing, where an issuer does not fall within the circumstances as stipulated aforementioned, but the risk factors disclosed in the submitted listing application documents pursuant to the relevant overseas market regulations are mainly related to mainland China, the securities companies and the PRC counsels of the issuer shall, act in accordance with the Trial Measures for Overseas Listing and follow the principle of substance-over-form, conduct comprehensive demonstration and identification with regard to whether the issuer falls within the scope which is subject to the filing requirements under the Trial Measures for Overseas Listing.
If a PRC company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such PRC company may be subject to administrative penalties, such as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.
If a PRC company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such PRC company may be subject to administrative penalties, such as order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines.
On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that PRC domestic companies that have already been listed overseas on or before the effective date of the Trial Measures for Overseas Listing (i.e., March 31, 2023) can be deemed as existing issuers, or the Existing Issuers.
On the same day, the CSRC also held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that PRC domestic companies that have already been listed overseas on or before the effective date of the Trial Measures for Overseas Listing (i.e., March 31, 2023) can be deemed as existing issuers, or the Existing Issuers.
The revised Provisions is issued under the title the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, and came into effect on March 31, 2023 together with the Trial Measures.
The revised Provisions is issued under the title the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies, and came into effect on March 31, 2023 together with the Trial Measures.
One of the major revisions to the revised Provisions is expanding its application to cover indirect overseas offering and listing, as is consistent with the Trial Measures.
One of the major revisions to the revised Provisions is expanding its application to cover indirect overseas offering and listing, as is consistent with the Trial Measures.
The revised Provisions require that, including but not limited to (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.
The revised Provisions require that, including but not limited to (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level; and (b) domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.
Where a PRC domestic company, after completing the relevant procedures, provides to securities companies, securities service providers or other entities with any documents and materials that contain state secrets or working secrets of government agencies, or any other documents and materials that would be detrimental to national security or public interest if leaked, a non-disclosure agreement must be signed between the provider and receiver of such information according to the relevant PRC laws and regulations, which must specify, among others, the obligations and liabilities on confidentiality held by such securities companies and securities service providers.
Where a PRC domestic company, after completing the relevant procedures, provides to securities companies, securities service providers or other entities with any documents and materials that contain state secrets or working secrets of government agencies, or any other documents and materials that would be detrimental to national security or public interest if leaked, a non-disclosure agreement must be signed between the provider and receiver of such information according to the relevant PRC laws and regulations, which must specify, among others, the obligations and liabilities on confidentiality held by such securities companies and securities service providers.
If we or our VIE is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including: ● revoking the business license and/or operating licenses of our WFOE or our VIE; ● discontinuing or placing restrictions or onerous conditions on our operations through any transactions between our WFOE and our VIE; ● imposing fines, confiscating the income from our WFOE or our VIE, or imposing other requirements with which we or our VIE may not be able to comply; ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with our VIE and deregistering the equity pledges of our VIE, which in turn would affect our ability to consolidate, derive economic interests from, or determine the most significant economic activities of the VIE; or ● restricting or prohibiting our use of the proceeds of our initial public offering to finance our business and operations in China. 36 Furthermore, new PRC laws, rules and regulations may be introduced to impose additional requirements that may be applicable to our corporate structure and contractual arrangements.
If we or our VIE is found to be in violation of any existing or future PRC laws or regulations, or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities would have broad discretion to take action in dealing with such violations or failures, including: ● revoking the business license and/or operating licenses of our WFOE or our VIE; ● discontinuing or placing restrictions or onerous conditions on our operations through any transactions between our WFOE and our VIE; ● imposing fines, confiscating the income from our WFOE or our VIE, or imposing other requirements with which we or our VIE may not be able to comply; ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with our VIE and deregistering the equity pledges of our VIE, which in turn would affect our ability to consolidate, derive economic interests from, or determine the most significant economic activities of the VIE; or ● restricting or prohibiting our use of the proceeds of our initial public offering to finance our business and operations in China. 34 Furthermore, new PRC laws, rules and regulations may be introduced to impose additional requirements that may be applicable to our corporate structure and contractual arrangements.
These risks include, among others: ● significant currency fluctuations between the U.S. dollar and other currencies in which we transact business; ● difficulty in identifying appropriate mobile chipset manufacturers, mobile device OEMs, mobile operators and/or joint venture partners, and establishing and maintaining good relationships with them; ● legal uncertainty owing to the overlap and inconsistencies of different legal regimes, problems in asserting contractual or other rights across international borders and the burden and expense of complying with the laws and regulations of various jurisdictions; ● potentially adverse tax consequences, such as scrutiny of transfer pricing arrangements by authorities in the countries in which we operate; ● adverse effect of inflation and increase in labor costs; ● current and future tariffs and other trade barriers, including restrictions on technology and data transfers; ● general global economic downturn; 25 ● unexpected changes in political environment and regulatory requirements; and ● terrorist attacks and other acts of violence or war.
These risks include, among others: ● significant currency fluctuations between the U.S. dollar and other currencies in which we transact business; ● difficulty in identifying appropriate mobile chipset manufacturers, mobile device OEMs, mobile operators and/or joint venture partners, and establishing and maintaining good relationships with them; ● legal uncertainty owing to the overlap and inconsistencies of different legal regimes, problems in asserting contractual or other rights across international borders and the burden and expense of complying with the laws and regulations of various jurisdictions; ● potentially adverse tax consequences, such as scrutiny of transfer pricing arrangements by authorities in the countries in which we operate; ● adverse effect of inflation and increase in labor costs; ● current and future tariffs and other trade barriers, including restrictions on technology and data transfers; ● general global economic downturn; 23 ● unexpected changes in political environment and regulatory requirements; and ● terrorist attacks and other acts of violence or war.
These provisions include: ● a prohibition on shareholder action through written consent; ● a requirement that extraordinary general meetings of shareholders be called only by a majority of the board of directors or, in limited circumstances, by the board upon shareholder requisition; ● an advance notice requirement for shareholder proposals and nominations to be brought before an annual general meeting; ● the authority of our board of directors to issue preference shares with such terms as our board of directors may determine; and ● a requirement of approval of not less than two-thirds of the votes cast by shareholders entitled to vote thereon in order to amend any provisions of our amended and restated memorandum and articles of association. 35 UTime Limited is a holding company with no material operation.
These provisions include: ● a prohibition on shareholder action through written consent; ● a requirement that extraordinary general meetings of shareholders be called only by a majority of the board of directors or, in limited circumstances, by the board upon shareholder requisition; ● an advance notice requirement for shareholder proposals and nominations to be brought before an annual general meeting; ● the authority of our board of directors to issue preference shares with such terms as our board of directors may determine; and ● a requirement of approval of not less than two-thirds of the votes cast by shareholders entitled to vote thereon in order to amend any provisions of our amended and restated memorandum and articles of association. 33 UTime Limited is a holding company with no material operation.
If we do not remediate the material weaknesses described above, or if other material weaknesses are identified or we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, our reported financial results could be materially misstated or could subsequently require restatement, we could receive an adverse opinion regarding our internal controls over financial reporting from our independent registered public accounting firm and we could be subject to investigations or sanctions by regulatory authorities, which would require additional financial and management resources, and the market price of our ordinary shares could decline. 29 We are subject to various anti-corruption and anti-bribery laws, including the U.S.
If we do not remediate the material weaknesses described above, or if other material weaknesses are identified or we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, our reported financial results could be materially misstated or could subsequently require restatement, we could receive an adverse opinion regarding our internal controls over financial reporting from our independent registered public accounting firm and we could be subject to investigations or sanctions by regulatory authorities, which would require additional financial and management resources, and the market price of our ordinary shares could decline. 27 We are subject to various anti-corruption and anti-bribery laws, including the U.S.
Specifically, when a PRC domestic company provides accounting archives or copies of accounting archives to any entities including securities companies, securities service providers or overseas regulators and individuals, it must complete the due procedures in compliance with applicable national regulations. 43 As of the date of this annual report, no currently effective laws or regulations in the PRC explicitly require us to seek approval from the CSRC or any other PRC governmental authorities for our offering and/or list on the NASDAQ Capital Market, nor has we, any of our subsidiaries or the VIE or the VIE’s subsidiaries received any inquiry, notice, warning or sanctions regarding our planned offering from the CSRC or any other PRC governmental authorities.
Specifically, when a PRC domestic company provides accounting archives or copies of accounting archives to any entities including securities companies, securities service providers or overseas regulators and individuals, it must complete the due procedures in compliance with applicable national regulations. 41 As of the date of this annual report, no currently effective laws or regulations in the PRC explicitly require us to seek approval from the CSRC or any other PRC governmental authorities for our offering and/or list on the NASDAQ Capital Market, nor has we, any of our subsidiaries or the VIE or the VIE’s subsidiaries received any inquiry, notice, warning or sanctions regarding our planned offering from the CSRC or any other PRC governmental authorities.
Operating And Financial Review And Prospects” disclosure; ● not being required to comply with the auditor attestation requirements for the assessment of our internal control over financial reporting provided by Section 404 of the Sarbanes-Oxley Act of 2002; 62 ● not being required to comply with any requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and our financial statements; ● reduced disclosure obligations regarding executive compensation; and ● not being required to hold a nonbinding advisory vote on executive compensation or seek shareholder approval of any golden parachute payments not previously approved.
Operating And Financial Review And Prospects” disclosure; ● not being required to comply with the auditor attestation requirements for the assessment of our internal control over financial reporting provided by Section 404 of the Sarbanes-Oxley Act of 2002; 60 ● not being required to comply with any requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and our financial statements; ● reduced disclosure obligations regarding executive compensation; and ● not being required to hold a nonbinding advisory vote on executive compensation or seek shareholder approval of any golden parachute payments not previously approved.
Although SAT Circular 82 and SAT Bulletin 45 only apply to offshore incorporated enterprises controlled by PRC enterprises or PRC enterprise groups and not those controlled by PRC individuals or foreigners, the determination criteria set forth therein may reflect the SAT’s general position on how the term “de facto management body” could be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, individuals or foreigners. 53 In addition, the SAT issued the Announcement of the State Administration of Taxation on Issues concerning the Determination of Resident Enterprises Based on the Standards of Actual Management Institutions in January 2014 to provide more guidance on the implementation of SAT Circular 82.
Although SAT Circular 82 and SAT Bulletin 45 only apply to offshore incorporated enterprises controlled by PRC enterprises or PRC enterprise groups and not those controlled by PRC individuals or foreigners, the determination criteria set forth therein may reflect the SAT’s general position on how the term “de facto management body” could be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, individuals or foreigners. 51 In addition, the SAT issued the Announcement of the State Administration of Taxation on Issues concerning the Determination of Resident Enterprises Based on the Standards of Actual Management Institutions in January 2014 to provide more guidance on the implementation of SAT Circular 82.
Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures. 34 In addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies in certain circumstances, provided that the arrangement is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent two-thirds in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose.
Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures. 32 In addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies in certain circumstances, provided that the arrangement is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent two-thirds in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose.
Recent statements by the Chinese government indicating an intent, and the PRC government may take actions to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in PRC-based issuers, which could significantly limit or completely hinder our ability to offer or continue to offer ordinary shares to investors and cause the value of our ordinary shares to significantly decline or become worthless. 44 Changes in international trade policies, trade dispute or the emergence of a trade war, may have a material adverse effect on our business.
Recent statements by the Chinese government indicating an intent, and the PRC government may take actions to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in PRC-based issuers, which could significantly limit or completely hinder our ability to offer or continue to offer ordinary shares to investors and cause the value of our ordinary shares to significantly decline or become worthless. 42 Changes in international trade policies, trade dispute or the emergence of a trade war, may have a material adverse effect on our business.
Furthermore, if our VIE or its subsidiaries undergo a voluntary or involuntary liquidation proceeding, its shareholders or unrelated third-party creditors may claim rights to some or all of its assets, hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations. 40 Substantial uncertainties exist with respect to the interpretation and implementation of the newly enacted PRC Foreign Investment Law and its Implementation Regulations and how they may impact the viability of our current corporate structure, corporate governance, business operations and financial results.
Furthermore, if our VIE or its subsidiaries undergo a voluntary or involuntary liquidation proceeding, its shareholders or unrelated third-party creditors may claim rights to some or all of its assets, hindering our ability to operate our business, which could materially and adversely affect our business, financial condition and results of operations. 38 Substantial uncertainties exist with respect to the interpretation and implementation of the newly enacted PRC Foreign Investment Law and its Implementation Regulations and how they may impact the viability of our current corporate structure, corporate governance, business operations and financial results.
President issued a memorandum ordering the President’s working group on financial markets, or the “PWG,” to submit a report to the President within 60 days of the date of the memorandum that should include recommendations for actions that can be taken by the executive branch and by the SEC or PCAOB to enforce U.S. regulatory requirements on Chinese companies listed on U.S. stock exchanges and their audit firms. 46 On August 6, 2020, the PWG released a report recommending that the SEC take steps to implement the five recommendations outlined in the report.
President issued a memorandum ordering the President’s working group on financial markets, or the “PWG,” to submit a report to the President within 60 days of the date of the memorandum that should include recommendations for actions that can be taken by the executive branch and by the SEC or PCAOB to enforce U.S. regulatory requirements on Chinese companies listed on U.S. stock exchanges and their audit firms. 44 On August 6, 2020, the PWG released a report recommending that the SEC take steps to implement the five recommendations outlined in the report.
Failure by such shareholders or beneficial owners to comply with SAFE regulations or failure by us to amend the foreign exchange registrations of our PRC Subsidiary, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiary’s ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects. 52 Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
Failure by such shareholders or beneficial owners to comply with SAFE regulations or failure by us to amend the foreign exchange registrations of our PRC Subsidiary, could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiary’s ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects. 50 Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
We believe that the principal competitive factors in our industry are reliability and efficiency, performance, product features and functionality, development complexity and time-to-market, price, support for multiple architectures and processors, interoperability with other systems, support for emerging industry and customer standards and protocols and levels of training, technical services and customer support. 22 The market in which we operate is highly competitive and is subject to frequent changes due to technological improvements and advancements, availability of new and alternative services and frequently changing client preferences and demands.
We believe that the principal competitive factors in our industry are reliability and efficiency, performance, product features and functionality, development complexity and time-to-market, price, support for multiple architectures and processors, interoperability with other systems, support for emerging industry and customer standards and protocols and levels of training, technical services and customer support. 20 The market in which we operate is highly competitive and is subject to frequent changes due to technological improvements and advancements, availability of new and alternative services and frequently changing client preferences and demands.
However, if any dispute arises between our executive officers or key employees and us, such non-competition, non-solicitation and nondisclosure provisions might not provide effective protection to us, especially in China, where most of these executive officers and key employees reside, in light of the uncertainties with China’s legal system. 26 We could be impacted by unfavorable results of legal proceedings and may, from time to time, be involved in future litigation in which substantial monetary damages are sought.
However, if any dispute arises between our executive officers or key employees and us, such non-competition, non-solicitation and nondisclosure provisions might not provide effective protection to us, especially in China, where most of these executive officers and key employees reside, in light of the uncertainties with China’s legal system. 24 We could be impacted by unfavorable results of legal proceedings and may, from time to time, be involved in future litigation in which substantial monetary damages are sought.
Such unpredictability towards our contractual, property and procedural rights could adversely affect our business and impede our ability to continue our operations. 42 We may be required to obtain permission or approval or other compliance procedures from Chinese authorities to operate and issue ordinary shares to foreign investors in our offering and/or listing on the NASDAQ Capital Market, and if required, if we or the VIE or the VIE’s subsidiaries are not able to obtain such permission or approval in a timely manner, our ordinary shares may substantially decline in value and become worthless.
Such unpredictability towards our contractual, property and procedural rights could adversely affect our business and impede our ability to continue our operations. 40 We may be required to obtain permission or approval or other compliance procedures from Chinese authorities to operate and issue ordinary shares to foreign investors in our offering and/or listing on the NASDAQ Capital Market, and if required, if we or the VIE or the VIE’s subsidiaries are not able to obtain such permission or approval in a timely manner, our ordinary shares may substantially decline in value and become worthless.
In the event we are unable to enforce these contractual arrangements, or if we suffer significant delays or other obstacles in the process of enforcing these contractual arrangements, we may not be able to determine the most significant economic activities of the VIE, and our ability to conduct our business may be negatively affected. 38 PRC regulation of loans to and direct investment in PRC entities by offshore holding companies to PRC entities may delay or prevent us from making loans or additional capital contributions to our PRC operating subsidiaries.
In the event we are unable to enforce these contractual arrangements, or if we suffer significant delays or other obstacles in the process of enforcing these contractual arrangements, we may not be able to determine the most significant economic activities of the VIE, and our ability to conduct our business may be negatively affected. 36 PRC regulation of loans to and direct investment in PRC entities by offshore holding companies to PRC entities may delay or prevent us from making loans or additional capital contributions to our PRC operating subsidiaries.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. 47 On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by mainland China and Hong Kong authorities in those jurisdictions.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. 45 On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by mainland China and Hong Kong authorities in those jurisdictions.
However, according to the aforesaid safe harbor rule, the PRC tax would not be applicable to the transfer by any non-resident enterprise of our ordinary shares acquired and sold on public securities markets. 54 On October 17, 2017, SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or SAT Bulletin 37, which, among others, repealed the Circular 698 on December 1, 2017.
However, according to the aforesaid safe harbor rule, the PRC tax would not be applicable to the transfer by any non-resident enterprise of our ordinary shares acquired and sold on public securities markets. 52 On October 17, 2017, SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at Source, or SAT Bulletin 37, which, among others, repealed the Circular 698 on December 1, 2017.
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. 50 The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of PRC companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.
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. 48 The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of PRC companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.
It is uncertain whether or how these new laws, rules and regulations and the interpretation and implementation thereof may affect us, but among other things, our ability and the ability of our subsidiaries to obtain external financing through the issuance of equity securities overseas could be negatively affected. 55 Numerous regulations, guidelines and other measures are expected to be adopted under the umbrella of or in addition to the Cybersecurity Law and Data Security Law.
It is uncertain whether or how these new laws, rules and regulations and the interpretation and implementation thereof may affect us, but among other things, our ability and the ability of our subsidiaries to obtain external financing through the issuance of equity securities overseas could be negatively affected. 53 Numerous regulations, guidelines and other measures are expected to be adopted under the umbrella of or in addition to the Cybersecurity Law and Data Security Law.
In addition, we have not received any formal inquiry, notice, warning, sanction, or objection from the CSRC with respect our listing on the Nasdaq Capital Market. 56 In addition, on February 24, 2023, the CSRC, together with Ministry of Finance of the PRC, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing which was issued by the CSRC, National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the Provisions.
In addition, we have not received any formal inquiry, notice, warning, sanction, or objection from the CSRC with respect our listing on the Nasdaq Capital Market. 54 In addition, on February 24, 2023, the CSRC, together with Ministry of Finance of the PRC, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing which was issued by the CSRC, National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the Provisions.
Although as of the date of this annual report, we believe we are in compliance with all of our loan covenants, such covenants and obligations are ongoing, and the breach of any such covenants or obligations not otherwise waived or cured could result in a default under the applicable debt obligations and could trigger acceleration of those obligations. 30 Any defaults under our loan arrangements could adversely affect our growth, our financial condition, our results of operations and our ability to make payments on our debt.
Although as of the date of this annual report, we believe we are in compliance with all of our loan covenants, such covenants and obligations are ongoing, and the breach of any such covenants or obligations not otherwise waived or cured could result in a default under the applicable debt obligations and could trigger acceleration of those obligations. 28 Any defaults under our loan arrangements could adversely affect our growth, our financial condition, our results of operations and our ability to make payments on our debt.
Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ordinary shares. 60 There are no assurance that our securities, including our ordinary shares, will continue to be listed or, if listed, that we will be able to comply with the continued listing standards of Nasdaq, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
Sales of ordinary shares by these shareholders could have a material adverse effect on the trading price of our ordinary shares. 58 There are no assurance that our securities, including our ordinary shares, will continue to be listed or, if listed, that we will be able to comply with the continued listing standards of Nasdaq, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
We cannot assure you that suitable alternative locations are readily available on commercially reasonable terms, or at all, and if we are unable to relocate our offices or processing workshops in a timely manner, our operations may be interrupted. 59 Risks Related to Our Ordinary Shares The trading prices of our ordinary shares are likely to be volatile, which could result in substantial losses to investors.
We cannot assure you that suitable alternative locations are readily available on commercially reasonable terms, or at all, and if we are unable to relocate our offices or processing workshops in a timely manner, our operations may be interrupted. 57 Risks Related to Our Ordinary Shares The trading prices of our ordinary shares are likely to be volatile, which could result in substantial losses to investors.
The legal consequences of violation of the Cybersecurity Law include penalties of warning, confiscation of illegal income, suspension of related business, winding up for rectification, shutting down the websites, and revocation of business license or relevant permits. 23 Further, the Standing Committee of the National People’s Congress of the PRC promulgated the PRC Data Security Law on June 10, 2021, which became effective from September 1, 2021.
The legal consequences of violation of the Cybersecurity Law include penalties of warning, confiscation of illegal income, suspension of related business, winding up for rectification, shutting down the websites, and revocation of business license or relevant permits. 21 Further, the Standing Committee of the National People’s Congress of the PRC promulgated the PRC Data Security Law on June 10, 2021, which became effective from September 1, 2021.
While our customer agreements typically contain provisions that seek to limit our liability, there is no assurance these provisions will be enforceable and effective under applicable law. In addition, the cost and operational consequences of implementing further data protection measures could be significant. 24 We are vulnerable to technology infrastructure failures, which could harm our reputation and business.
While our customer agreements typically contain provisions that seek to limit our liability, there is no assurance these provisions will be enforceable and effective under applicable law. In addition, the cost and operational consequences of implementing further data protection measures could be significant. 22 We are vulnerable to technology infrastructure failures, which could harm our reputation and business.
We will rely on dividends paid by our subsidiaries for our cash needs, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. 31 We rely on dividends and other distributions on equity paid by our PRC Subsidiary to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC Subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business.
We will rely on dividends paid by our subsidiaries for our cash needs, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. 30 We rely on dividends and other distributions on equity paid by our PRC Subsidiary to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC Subsidiary to make payments to us could have a material adverse effect on our ability to conduct our business.
If we are unable to assert our contractual control rights over the assets of the VIE that conduct all or substantially all of our operations, our ordinary shares may decline in value or become worthless. 37 We may not be able to consolidate the financial results of some of our affiliated companies or such consolidation could materially adversely affect our operating results and financial condition.
If we are unable to assert our contractual control rights over the assets of the VIE that conduct all or substantially all of our operations, our ordinary shares may decline in value or become worthless. 35 We may not be able to consolidate the financial results of some of our affiliated companies or such consolidation could materially adversely affect our operating results and financial condition.
Any preference shares that are issued may rank ahead of our ordinary shares, in terms of dividends, liquidation rights and voting rights. 61 If securities or industry analysts do not publish or cease publishing research reports about us, if they adversely change their recommendations regarding our ordinary shares or if our operating results do not meet their expectations, the price of our ordinary shares could decline.
Any preference shares that are issued may rank ahead of our ordinary shares, in terms of dividends, liquidation rights and voting rights. 59 If securities or industry analysts do not publish or cease publishing research reports about us, if they adversely change their recommendations regarding our ordinary shares or if our operating results do not meet their expectations, the price of our ordinary shares could decline.
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 and business operations. 41 Risks Related to Doing Business in China Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and 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 and business operations. 39 Risks Related to Doing Business in China Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations.
Whether the PCAOB will be able to conduct inspections of our auditor before the issuance of our financial statements on the annual report on Form 20-F for the year ending March 31, 2024 which is due by July 31, 2024, or at all, is subject to substantial uncertainty and depends on a number of factors out of our and our auditor’s control.
Whether the PCAOB will be able to conduct inspections of our auditor before the issuance of our financial statements on the annual report on Form 20-F for the year ending March 31, 2025 which is due by July 31, 2025, or at all, is subject to substantial uncertainty and depends on a number of factors out of our and our auditor’s control.
SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. 51 Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or SPVs, will be required to register such investments with SAFE or its local branches.
SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future. 49 Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles, or SPVs, will be required to register such investments with SAFE or its local branches.
In addition, we may not be able to grow market share, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements, which could negatively impact our business, operating results and financial condition. Defaults under either of our loan agreements with each of SRCB and CRBZ could result in a substantial loss of our assets.
In addition, we may not be able to grow market share, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements, which could negatively impact our business, operating results and financial condition. Defaults under either of our loan agreements with CRBZ could result in a substantial loss of our assets.
On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. 45 On August 26, 2022, the PCAOB announced that it had signed the Statement of Protocol with the CSRC and the MOFCOM.
On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. 43 On August 26, 2022, the PCAOB announced that it had signed the Statement of Protocol with the CSRC and the MOFCOM.
It may be difficult for us to achieve profitability in the new product categories and our profit margin, if any, may be lower than we anticipate, which would adversely affect our overall profitability and results of operations. 21 Our international expansion is subject to a variety of costs and risks and we may not be successful, which could adversely affect our profitability and operating results.
It may be difficult for us to achieve profitability in the new product categories and our profit margin, if any, may be lower than we anticipate, which would adversely affect our overall profitability and results of operations. 19 Our international expansion is subject to a variety of costs and risks and we may not be successful, which could adversely affect our profitability and operating results.
Although we believe our tax provisions are reasonable, if the PRC tax authorities successfully challenge our position and we are required to pay tax, interest and penalties in excess of our tax provisions, our financial condition and results of operations would be materially and adversely affected. 58 Discontinuation of any of the government subsidies or imposition of any additional taxes and surcharges could adversely affect our financial condition and results of operations.
Although we believe our tax provisions are reasonable, if the PRC tax authorities successfully challenge our position and we are required to pay tax, interest and penalties in excess of our tax provisions, our financial condition and results of operations would be materially and adversely affected. 56 Discontinuation of any of the government subsidies or imposition of any additional taxes and surcharges could adversely affect our financial condition and results of operations.
If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed. 33 Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed. 31 Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
Federal courts may be limited” for risks associated with investing in us as a Cayman Islands company. 48 There are uncertainties under the PRC laws relating to the procedures for U.S. regulators to investigate and collect evidence from companies located in the PRC.
Federal courts may be limited” for risks associated with investing in us as a Cayman Islands company. 46 There are uncertainties under the PRC laws relating to the procedures for U.S. regulators to investigate and collect evidence from companies located in the PRC.
It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and the U.S. dollar in the future. 49 Significant revaluation of the Renminbi may have a material and adverse effect on your investment.
It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between Renminbi and the U.S. dollar in the future. 47 Significant revaluation of the Renminbi may have a material and adverse effect on your investment.
These transactions, individually or in the aggregate, may have an adverse effect on our business and results of operations or may result in government enforcement actions or other litigation. 28 We may be adversely affected by product liability exposure claims.
These transactions, individually or in the aggregate, may have an adverse effect on our business and results of operations or may result in government enforcement actions or other litigation. 26 We may be adversely affected by product liability exposure claims.
For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to be a PFIC, see “Taxation - Material U.S. Federal Income Tax Considerations - Passive Foreign Investment Company”. 63
For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to be a PFIC, see “Taxation - Material U.S. Federal Income Tax Considerations - Passive Foreign Investment Company”. 61
Our inability to maintain the quality of our products, may materially impact our reputation and business. 27 We may not be able to successfully sustain our growth strategy into new geographic markets and innovative consumer electronic products.
Our inability to maintain the quality of our products, may materially impact our reputation and business. 25 We may not be able to successfully sustain our growth strategy into new geographic markets and innovative consumer electronic products.
As a result, our financial condition and results of operations may be materially and adversely affected. 57 Increases in labor costs and enforcement of stricter labor laws and regulations in the PRC may adversely affect our business and our profitability.
As a result, our financial condition and results of operations may be materially and adversely affected. 55 Increases in labor costs and enforcement of stricter labor laws and regulations in the PRC may adversely affect our business and our profitability.
As of March 31, 2023 and 2022, we did not record any withholding tax on the retained earnings of our subsidiaries in the PRC as we intended to re-invest all earnings generated from our PRC Subsidiary for the operation and expansion of our business in China, and we intend to continue this practice in the foreseeable future.
As of March 31, 2025, 2024 and 2023, we did not record any withholding tax on the retained earnings of our subsidiaries in the PRC as we intended to re-invest all earnings generated from our PRC Subsidiary for the operation and expansion of our business in China, and we intend to continue this practice in the foreseeable future.
The Hong Kong government provides deposit protection up to a maximum amount of HK$500,000 (approximately US$ 63,903 based on the midpoint exchange rate for March 31, 2024 reported by “Historical Exchange Rates” at http://www.oanda.com/fx-for-business/historical-rates) for each depositor in any individual bank in Hong Kong.
The Hong Kong government provides deposit protection up to a maximum amount of HK$500,000 (approximately US$ 64,328 based on the midpoint exchange rate for March 31, 2025 reported by “Historical Exchange Rates” at http://www.oanda.com/fx-for-business/historical-rates) for each depositor in any individual bank in Hong Kong.
(“AA”), as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
Our auditor Assentsure PAC (“Assentsure”), as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards.
Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our ordinary shares. ● Minfei Bao, our founder, and director, and Min He, will continue to have significant influence over us after our initial public offering, including control over decisions that require the approval of shareholders, which could limit your ability to influence the outcome of matters submitted to shareholders for a vote. ● We are a “controlled company” within the meaning of Nasdaq’s Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies. ● We may become subject to taxation in the Cayman Islands, which would negatively affect our results. ● We are subject to various changing laws and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance. ● Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our ordinary shares. ● Minfei Bao, our founder, and director, and Min He, will continue to have significant influence over us after our initial public offering, including control over decisions that require the approval of shareholders, which could limit your ability to influence the outcome of matters submitted to shareholders for a vote. ● We may become subject to taxation in the Cayman Islands, which would negatively affect our results. ● We are subject to various changing laws and regulations regarding regulatory matters, corporate governance and public disclosure that have increased both our costs and the risk of non-compliance. ● Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
The PCAOB is required to reassess these determinations by the end of 2022. Under the PCAOB’s rules, a reassessment of a determination under the HFCAA may result in the PCAOB reaffirming, modifying or vacating the determination. Our auditor Audit Alliance LLP.
The PCAOB is required to reassess these determinations by the end of 2022. Under the PCAOB’s rules, a reassessment of a determination under the HFCAA may result in the PCAOB reaffirming, modifying or vacating the determination.
At March 31, 2024, we had cash on hand of $ 10.8 million. Of that amount, approximately $ 10.4 million was held in banks and other financial institutions in Hong Kong, and $ 0.4 million in the PRC.
At March 31, 2025, we had cash on hand of $ 15.1 million. Of that amount, approximately $ 10.4 million was held in banks and other financial institutions in Hong Kong, $ 4.6 million in US and $ 0.1 million in the PRC.
Historically, we have mortgaged our assets to obtain loans with various banking institutions. We have mortgaged our office owned by UTime SZ and pledged accounts receivables equal to RMB22,500,000 (US$3.5 million) owned by UTime SZ under our credit agreement with CCB, which was terminated in November 2020.
Historically, we have mortgaged our assets to obtain loans with various banking institutions. Current year, we have mortgaged our office owned by UTime SZ and pledged accounts receivables equal to RMB22,000,000 (US$3.5 million) owned by UTime SZ under our credit agreement with CRBZ, which will be terminated in November 2025.
We cannot assure you that we will be able to generate profits or positive cash flow from operating activities in the future. Our ability to achieve profitability depends in large part on our ability to manage our costs and expenses.
We may continue to have an adverse effect on our shareholders’ equity and working capital in the future. We cannot assure you that we will be able to generate profits or positive cash flow from operating activities in the future. Our ability to achieve profitability depends in large part on our ability to manage our costs and expenses.
Moreover, beneficial ownership of our ordinary shares by Mr. Bao may also adversely affect the trading price of our ordinary shares on Nasdaq to the extent investors perceive disadvantages in owning shares of a company with a controlling shareholder.
Moreover, beneficial ownership of our ordinary shares by Mr. Bao may also adversely affect the trading price of our ordinary shares on Nasdaq to the extent investors perceive disadvantages in owning shares of a company with a controlling shareholder. As a result, this concentration of ownership may not be in the best interests of our other shareholders.
As of the date of this annual report, we had450,930,953ordinary shares outstanding. All of the ordinary shares of held by affiliates are restricted or control securities under Rule 144 promulgated under the Securities Act.
As of the date of this annual report, we had 20,984,796 Class AOrdinary Shares outstanding. All of the ordinary shares of held by affiliates are restricted or control securities under Rule 144 promulgated under the Securities Act.
We may not be able to do so when necessary, and/or the terms of any financings may not be advantageous to us. As of the fiscal year ended March 31, 2023 and 2024, respectively, we had accumulated deficit of RMB175.9 million and RMB 208.8 (US$29.3 million).
We may not be able to do so when necessary, and/or the terms of any financings may not be advantageous to us. As of the fiscal year ended March 31, 2024 and 2025, respectively, we had accumulated deficit of RMB208.8 million and RMB 879.0 (US$121.1 million).
Operating And Financial Review And Prospects- Liquidity and Capital Resources - Financing Activities.” A failure to repay any of the indebtedness under either of our loan agreements with SRCB or CRBZ as they become due or to otherwise comply with the covenants contained in any of such agreements could result in an event of default thereunder.
A failure to repay any of the indebtedness under either of our loan agreements with CRBZ as they become due or to otherwise comply with the covenants contained in any of such agreements could result in an event of default thereunder.
As of the date of this annual report, Shenzhen Wanhua has not actually performed the judgment, and has not paid any payment and interest to Utime SZ. UTime SZ and Shenzhen Zhonghang Jiayikang Electronics Co., Ltd. (“Jiayikang”) had a sales contract dispute.
As of the date of this annual report, Dongguan Qinling has not actually performed the judgment, and has not paid any payment and interest to Utime SZ. Utime SZ and Shenzhen Wanhua Supply Chain Co., Ltd (“Shenzhen Wanhua”) had a entrustment agreement contract dispute case.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeOn one hand, due to the differences in the level of economic development in various countries, a certain proportion of the population in emerging markets has not obtained got access to mobile phones, and the upgrade of telecommunication infrastructures from Second-Generation (“2G”) to Third-Generation (“3G”) and 4G is constrained due to a shortage of foundational funding in emerging markets.
Biggest changeWhy We are Focusing on Emerging Markets As far as emerging markets are concerned, feature phones still retain a large market and fulfill an important structural demand. On one hand, due to differences in levels of economic development, a certain proportion of the population in many emerging countries has not yet obtained any mobile phone at all.
While the application of the M&A Rules remains unclear, our PRC legal counsel has advised us that based on its understanding of the current PRC laws, rules and regulations and the M&A Rules, prior approval from the CSRC is not required under the M&A Rules for the listing and trading of our ordinary shares on the NASDAQ given that (i) our PRC Subsidiary was directly established by us as a wholly foreign-owned enterprise, and we have not acquired any equity interest or assets of a PRC domestic company owned by PRC companies or individuals as defined under the M&A Rules that are our beneficial owners after the effective date of the M&A Rules, and (ii) no provision in the M&A Rules clearly classifies the contractual arrangements as a type of transaction subject to the M&A Rules. 96 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 on Severely Cracking Down on Illegal Securities Activities According to Law,” or the Opinions.
While the application of the M&A Rules remains unclear, our PRC legal counsel has advised us that based on its understanding of the current PRC laws, rules and regulations and the M&A Rules, prior approval from the CSRC is not required under the M&A Rules for the listing and trading of our ordinary shares on the NASDAQ given that (i) our PRC Subsidiary was directly established by us as a wholly foreign-owned enterprise, and we have not acquired any equity interest or assets of a PRC domestic company owned by PRC companies or individuals as defined under the M&A Rules that are our beneficial owners after the effective date of the M&A Rules, and (ii) no provision in the M&A Rules clearly classifies the contractual arrangements as a type of transaction subject to the M&A Rules. 95 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 on Severely Cracking Down on Illegal Securities Activities According to Law,” or the Opinions.
In addition, data processors that process important data or are listed overseas shall carry out an annual data security assessment on their own or by engaging a data security services institution, and the data security assessment report for the prior year should be submitted to the local cyberspace affairs administration department before January 31 of each year. 86 On December 28, 2021, thirteen PRC regulatory agencies, namely, the CAC, the NDRC, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of State Security, the Ministry of Finance, MOFCOM, SAMR, CSRC, the People’s Bank of China, the National Radio and Television Administration, National Administration of State Secrets Protection and the National Cryptography Administration, jointly adopted and published the Measures for Cybersecurity Review (2021), which became effective on February 15, 2022.
In addition, data processors that process important data or are listed overseas shall carry out an annual data security assessment on their own or by engaging a data security services institution, and the data security assessment report for the prior year should be submitted to the local cyberspace affairs administration department before January 31 of each year. 85 On December 28, 2021, thirteen PRC regulatory agencies, namely, the CAC, the NDRC, the Ministry of Industry and Information Technology, the Ministry of Public Security, the Ministry of State Security, the Ministry of Finance, MOFCOM, SAMR, CSRC, the People’s Bank of China, the National Radio and Television Administration, National Administration of State Secrets Protection and the National Cryptography Administration, jointly adopted and published the Measures for Cybersecurity Review (2021), which became effective on February 15, 2022.
The Foreign Investment Law establishes the basic framework for the access to, and the promotion, protection and administration of foreign investments in view of investment protection and fair competition. 80 According to the Foreign Investment Law, “foreign investment” refers to investment activities directly or indirectly conducted by one or more natural persons, business entities, or otherwise organizations of a foreign country (collectively referred to as “foreign investor”) within China, and the investment activities include the following situations: (i) a foreign investor, individually or collectively with other investors establishes a foreign-invested enterprise within China; (ii) a foreign investor acquires stock shares, equity shares, shares in assets, or other like rights and interests of an enterprise within China; (iii) a foreign investor, individually or collectively with other investors, invests and establishes new projects within China; and (iv) a foreign investor invests through other approaches as stipulated by laws, administrative regulations, or otherwise regulated by the State Council.
The Foreign Investment Law establishes the basic framework for the access to, and the promotion, protection and administration of foreign investments in view of investment protection and fair competition. 79 According to the Foreign Investment Law, “foreign investment” refers to investment activities directly or indirectly conducted by one or more natural persons, business entities, or otherwise organizations of a foreign country (collectively referred to as “foreign investor”) within China, and the investment activities include the following situations: (i) a foreign investor, individually or collectively with other investors establishes a foreign-invested enterprise within China; (ii) a foreign investor acquires stock shares, equity shares, shares in assets, or other like rights and interests of an enterprise within China; (iii) a foreign investor, individually or collectively with other investors, invests and establishes new projects within China; and (iv) a foreign investor invests through other approaches as stipulated by laws, administrative regulations, or otherwise regulated by the State Council.
SAFE Circular 13 delegates the authority to enforce the foreign exchange registration in connection with the inbound and outbound direct investment under relevant SAFE rules to certain banks and therefore further simplifies the foreign exchange registration procedures for inbound and outbound direct investment. 94 Regulations on loans to and direct investment in the PRC entities by offshore holding companies According to the Implementation Rules for the Provisional Regulations on Statistics and Supervision of Foreign Debt promulgated by SAFE on September 24, 1997 and the Interim Provisions on the Management of Foreign Debts promulgated by SAFE, the NDRC and the MOFCOM and effective from March 1, 2003, loans by foreign companies to their subsidiaries in China, which accordingly are FIEs, are considered foreign debt, and such loans must be registered with the local branches of the SAFE.
SAFE Circular 13 delegates the authority to enforce the foreign exchange registration in connection with the inbound and outbound direct investment under relevant SAFE rules to certain banks and therefore further simplifies the foreign exchange registration procedures for inbound and outbound direct investment. 93 Regulations on loans to and direct investment in the PRC entities by offshore holding companies According to the Implementation Rules for the Provisional Regulations on Statistics and Supervision of Foreign Debt promulgated by SAFE on September 24, 1997 and the Interim Provisions on the Management of Foreign Debts promulgated by SAFE, the NDRC and the MOFCOM and effective from March 1, 2003, loans by foreign companies to their subsidiaries in China, which accordingly are FIEs, are considered foreign debt, and such loans must be registered with the local branches of the SAFE.
Pursuant to the Announcement of the State Administration of Taxation on Issuing the Administrative Measures for Special Tax Adjustment and Investigation and Mutual Consultation Procedures, effective on May 1, 2017, an enterprise may adjust and pay taxes at its own discretion when it receives a special tax adjustment risk warning or identifies its own special tax adjustment risks, and the tax authorities may also carry out special tax investigation and adjustment in accordance with the relevant provisions in regard to enterprises that adjust and pay taxes at their own discretion. 91 In January 2009, the SAT promulgated the Provisional Measures for the Administration of Withholding of Enterprise Income Tax for Non-resident Enterprises, or the Non-resident Enterprises Measures, which was repealed by Announcement of the State Administration of Taxation on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises in December 2017.
Pursuant to the Announcement of the State Administration of Taxation on Issuing the Administrative Measures for Special Tax Adjustment and Investigation and Mutual Consultation Procedures, effective on May 1, 2017, an enterprise may adjust and pay taxes at its own discretion when it receives a special tax adjustment risk warning or identifies its own special tax adjustment risks, and the tax authorities may also carry out special tax investigation and adjustment in accordance with the relevant provisions in regard to enterprises that adjust and pay taxes at their own discretion. 90 In January 2009, the SAT promulgated the Provisional Measures for the Administration of Withholding of Enterprise Income Tax for Non-resident Enterprises, or the Non-resident Enterprises Measures, which was repealed by Announcement of the State Administration of Taxation on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises in December 2017.
The consumers whose interests have been damaged due to their purchase of goods or acceptance of services on online marketplace platforms may claim damages from sellers or service providers. 83 Where business operators use internet, television, telephone, mail or other means to provide goods or services, or provide securities, insurance, banking or other financial services, they shall provide consumers with information in regard to themselves and the goods or services provided such as business address, contact information, quantity and quality, price or fees, term and method of performance, safety precautions, risk warnings, after-sale services, and civil liabilities.
The consumers whose interests have been damaged due to their purchase of goods or acceptance of services on online marketplace platforms may claim damages from sellers or service providers. 82 Where business operators use internet, television, telephone, mail or other means to provide goods or services, or provide securities, insurance, banking or other financial services, they shall provide consumers with information in regard to themselves and the goods or services provided such as business address, contact information, quantity and quality, price or fees, term and method of performance, safety precautions, risk warnings, after-sale services, and civil liabilities.
In the event of an application for the network access permit for radio transmission equipment, a Radio Transmission Equipment Type Approval Certificate issued by the MIIT shall also be submitted. 82 Regulations on Production Safety Pursuant to the Production Safety Law of the PRC, or the Production Safety Law, which took effect on November 1, 2002 and was amended on August 31, 2014, the entities that are engaged in production and business operation activities must implement national industrial standards which guarantee the production safety and comply with production safety requirements provided by the laws, administrative regulations and national or industrial standards.
In the event of an application for the network access permit for radio transmission equipment, a Radio Transmission Equipment Type Approval Certificate issued by the MIIT shall also be submitted. 81 Regulations on Production Safety Pursuant to the Production Safety Law of the PRC, or the Production Safety Law, which took effect on November 1, 2002 and was amended on August 31, 2014, the entities that are engaged in production and business operation activities must implement national industrial standards which guarantee the production safety and comply with production safety requirements provided by the laws, administrative regulations and national or industrial standards.
He, our PRC resident shareholders, have completed the required registrations with the local counterpart of SAFE in relation to our financing and restructuring to our shareholding structure. 95 Regulations on Dividend Distributions The principal regulations governing distribution of dividends paid by wholly foreign-owned enterprises include: ● Company Law of the PRC (1993), as amended in 1999, 2004, 2005, 2013 and 2018; ● The Foreign Investment Law, which came into effect on January 1, 2020; ● The Implementation of the Foreign Investment Law of the People’s Republic of China, which came into effect on January 1, 2020.
He, our PRC resident shareholders, have completed the required registrations with the local counterpart of SAFE in relation to our financing and restructuring to our shareholding structure. 94 Regulations on Dividend Distributions The principal regulations governing distribution of dividends paid by wholly foreign-owned enterprises include: ● Company Law of the PRC (1993), as amended in 1999, 2004, 2005, 2013 and 2018; ● The Foreign Investment Law, which came into effect on January 1, 2020; ● The Implementation of the Foreign Investment Law of the People’s Republic of China, which came into effect on January 1, 2020.
Although our WFOE is currently wholly owned by UTime International Limited, we cannot assure you that we will be able to enjoy the preferential withholding tax rate of 5% under the China-HK Taxation Arrangement. 93 Regulations on Foreign Exchange The principal regulations governing foreign currency exchange in China are the PRC Foreign Exchange Administration Regulations, which were promulgated by the State Council on January 29, 1996 and last amended on August 5, 2008.
Although our WFOE is currently wholly owned by UTime International Limited, we cannot assure you that we will be able to enjoy the preferential withholding tax rate of 5% under the China-HK Taxation Arrangement. 92 Regulations on Foreign Exchange The principal regulations governing foreign currency exchange in China are the PRC Foreign Exchange Administration Regulations, which were promulgated by the State Council on January 29, 1996 and last amended on August 5, 2008.
The Bluetooth glasses apply Bluetooth 5.0 profile and True Wireless Stereo, the battery size is 70 mAh. Our Operations Order Placement and Fulfillment Process Procurement We adopt an order-oriented procurement model.
The Bluetooth glasses apply Bluetooth 5.0 profile and True Wireless Stereo, the battery size is 70 mAh. Our Current Operations Order Placement and Fulfillment Process Procurement We adopt an order-oriented procurement model.
Specifically, when a PRC domestic company provides accounting archives or copies of accounting archives to any entities including securities companies, securities service providers or overseas regulators and individuals, it must complete the due procedures in compliance with applicable national regulations. 97 Enforceability of Civil Liabilities We conduct substantially most of our operations in China and substantially most of our assets are located in China.
Specifically, when a PRC domestic company provides accounting archives or copies of accounting archives to any entities including securities companies, securities service providers or overseas regulators and individuals, it must complete the due procedures in compliance with applicable national regulations. 96 Enforceability of Civil Liabilities We conduct substantially most of our operations in China and substantially most of our assets are located in China.
In addition, the PRC Data Security Law also provides that any organization or individual within the territory of the PRC shall not provide any foreign judicial body and law enforcement body with any data without the approval of the competent PRC governmental authorities. 85 On August 17, 2021, the State Council promulgated the Regulations on Security Protection of Critical Information Infrastructure, which became effective on September 1, 2021.
In addition, the PRC Data Security Law also provides that any organization or individual within the territory of the PRC shall not provide any foreign judicial body and law enforcement body with any data without the approval of the competent PRC governmental authorities. 84 On August 17, 2021, the State Council promulgated the Regulations on Security Protection of Critical Information Infrastructure, which became effective on September 1, 2021.
The PRC Patent Law adopts the principle of “first-to-file” system, which provides that where more than one person files a patent application for the same invention, a patent will be granted to the person who files the application first. 87 Existing patents can become narrowed, invalid or unenforceable due to a variety of grounds, including lack of novelty, creativity, and deficiencies in patent application.
The PRC Patent Law adopts the principle of “first-to-file” system, which provides that where more than one person files a patent application for the same invention, a patent will be granted to the person who files the application first. 86 Existing patents can become narrowed, invalid or unenforceable due to a variety of grounds, including lack of novelty, creativity, and deficiencies in patent application.
According to official announcements made by competent authorities in Beijing and Guangdong province, Beijing launched the same Pilot Program on September 1, 2012, and Guangdong province launched it on November 1, 2012. 92 On May 24, 2013, the MOFCOM and the SAT issued the Circular on Tax Policies in the Nationwide Pilot Collection of Value Added Tax in Lieu of Business Tax in the Transportation Industry and Certain Modern Services Industries, or the Pilot Collection Circular.
According to official announcements made by competent authorities in Beijing and Guangdong province, Beijing launched the same Pilot Program on September 1, 2012, and Guangdong province launched it on November 1, 2012. 91 On May 24, 2013, the MOFCOM and the SAT issued the Circular on Tax Policies in the Nationwide Pilot Collection of Value Added Tax in Lieu of Business Tax in the Transportation Industry and Certain Modern Services Industries, or the Pilot Collection Circular.
By logging and breaking down the pass rates along our products in the production process, we are able to identify our quality control weak spots, and improve our operation accordingly. Supply Chain Management Supply Chain Management Process 74 Materials, Products and Other Suppliers We purchase key components from our suppliers, such as chips, batteries, mainboard, screens, battery chargers and controllers.
By logging and breaking down the pass rates along our products in the production process, we are able to identify our quality control weak spots, and improve our operation accordingly. Supply Chain Management Supply Chain Management Process 73 Materials, Products and Other Suppliers We purchase key components from our suppliers, such as chips, batteries, mainboard, screens, battery chargers and controllers.
Vocational training funds shall be set aside and used in accordance with national regulations and vocational training for workers shall be carried out systematically based on the actual conditions of the company. 89 The Labor Contract Law and its implementation rules regulate both parties through a labor contract, namely the employer and the employee, and contain specific provisions involving the terms of the labor contract.
Vocational training funds shall be set aside and used in accordance with national regulations and vocational training for workers shall be carried out systematically based on the actual conditions of the company. 88 The Labor Contract Law and its implementation rules regulate both parties through a labor contract, namely the employer and the employee, and contain specific provisions involving the terms of the labor contract.
The latter two categories are included in a negative list, which was first introduced into the Foreign Investment Catalog in 2017 and specified the restrictive measures for the entry of foreign investment. 79 On June 28, 2018, MOFCOM and NDRC jointly promulgated the Special Administrative Measures for Access of Foreign Investment (Negative List), or the Negative List (Edition 2018), which replaced the negative list attached to the Foreign Investment Catalogue in 2017.
The latter two categories are included in a negative list, which was first introduced into the Foreign Investment Catalog in 2017 and specified the restrictive measures for the entry of foreign investment. 78 On June 28, 2018, MOFCOM and NDRC jointly promulgated the Special Administrative Measures for Access of Foreign Investment (Negative List), or the Negative List (Edition 2018), which replaced the negative list attached to the Foreign Investment Catalogue in 2017.
The MOFCOM Security Review Rule further prohibits foreign investors from bypassing the security review requirement by structuring transactions through proxies, trusts, indirect investments, leases, loans, control through contractual arrangements or offshore transactions. 84 On December 19, 2020, the NDRC and MOFCOM promulgated the Measures for the Security Review of Foreign Investments which became effective on January 18, 2021.
The MOFCOM Security Review Rule further prohibits foreign investors from bypassing the security review requirement by structuring transactions through proxies, trusts, indirect investments, leases, loans, control through contractual arrangements or offshore transactions. 83 On December 19, 2020, the NDRC and MOFCOM promulgated the Measures for the Security Review of Foreign Investments which became effective on January 18, 2021.
Registration by PRC companies at the applicable housing provident fund management center is compulsory and a special housing provident fund account for each of the employees shall be opened at an entrusted bank. 90 The employer shall timely pay up and deposit housing provident fund contributions in full amount and late or insufficient payments shall be prohibited.
Registration by PRC companies at the applicable housing provident fund management center is compulsory and a special housing provident fund account for each of the employees shall be opened at an entrusted bank. 89 The employer shall timely pay up and deposit housing provident fund contributions in full amount and late or insufficient payments shall be prohibited.
If the gains or losses are difficult to determine, the court may render a judgment awarding damages of no more than RMB5 million. 88 Software Copyright Law The newly amended Copyright Law or the Copyright Law, consists of 67 articles in six chapters, and came into force on June 1, 2021.
If the gains or losses are difficult to determine, the court may render a judgment awarding damages of no more than RMB5 million. 87 Software Copyright Law The newly amended Copyright Law or the Copyright Law, consists of 67 articles in six chapters, and came into force on June 1, 2021.
The raw materials from overseas mainly include baseband chips and memory which originally produced outside of China, and we purchase other raw materials primarily in mainland China. 72 Production Our production schedule department is responsible for coordinating all the materials planning, production planning and shipping planning, arranging the production of our own factories, outsourcing factories and other ODMs.
The raw materials from overseas mainly include baseband chips and memory which originally produced outside of China, and we purchase other raw materials primarily in mainland China. 71 Production Our production schedule department is responsible for coordinating all the materials planning, production planning and shipping planning, arranging the production of our own factories, outsourcing factories and other ODMs.
Unless otherwise stipulated in the related laws on foreign investment, foreign invested companies are also required to comply with the provisions of the PRC Company Law. 81 Regulations Relating to Overseas Investment On December 26, 2017, the NDRC issued the Management Rules for Overseas Investment by Enterprises, or the NDRC Order 11.
Unless otherwise stipulated in the related laws on foreign investment, foreign invested companies are also required to comply with the provisions of the PRC Company Law. 80 Regulations Relating to Overseas Investment On December 26, 2017, the NDRC issued the Management Rules for Overseas Investment by Enterprises, or the NDRC Order 11.
(“UTime Guangxi”) November 1, 2021 China UTime Trading’s Subsidiary Manufacturing of mobile devices and components 66 Contractual Arrangements with the VIE and its Respective Shareholders We conduct substantially all of our business in the PRC through a series of contractual arrangements with our VIE and its shareholders.
(“UTime Guangxi”) November 1, 2021 China UTime Trading’s Subsidiary Manufacturing of mobile devices and components 64 Contractual Arrangements with the VIE and its Respective Shareholders We conduct substantially all of our business in the PRC through a series of contractual arrangements with our VIE and its shareholders.
Do Feature Phones also enable end users an expandable memory card slot up to 32 GB. 71 Do Smartphones The Smartphones are Android-based 4G VoLTE smartphone that is certified as Android Enterprise Recommended by Google.
Do Feature Phones also enable end users an expandable memory card slot up to 32 GB. 70 Do Smartphones The Smartphones are Android-based 4G VoLTE smartphone that is certified as Android Enterprise Recommended by Google.
We believe that we compete favorably with respect to the factors described above. 77 Our Competitive Strengths We believe that the following competitive strengths have contributed to, or will contribute to, our recent and ongoing growth: ● Experienced management.
We believe that we compete favorably with respect to the factors described above. 76 Our Competitive Strengths We believe that the following competitive strengths have contributed to, or will contribute to, our recent and ongoing growth: ● Experienced management.
He’s spouse executed an amended and restated spousal consent letter, which contains terms substantially similar to the spousal consent letter described above. 67 Business Operation Agreement.
He’s spouse executed an amended and restated spousal consent letter, which contains terms substantially similar to the spousal consent letter described above. 65 Business Operation Agreement.
As part of our expansion strategy, we are actively evaluating opportunities for strategic cooperation with telecommunication carriers through our existing clients in Southern Asia, Africa, the United States and South America. We intend to expand into more markets including emerging and established markets through business with carriers. 70 Dual-brand pricing strategy.
As part of our expansion strategy, we are actively evaluating opportunities for strategic cooperation with telecommunication carriers through our existing clients in Southern Asia, Africa, the United States and South America. We intend to expand into more markets including emerging and established markets through business with carriers.
In addition to the foregoing protections, we generally control access to and use of our proprietary and other confidential information through the use of internal and external controls, such as use of confidentiality agreement with our employees and outside consultants. 78 Employees As of the date of this annual report, we had 172 full-time employees and nil part-time employees.
In addition to the foregoing protections, we generally control access to and use of our proprietary and other confidential information through the use of internal and external controls, such as use of confidentiality agreement with our employees and outside consultants. 77 Employees As of the date of this annual report, we had 99 full-time employees and nil part-time employees.
The following is a list of our top three customers for the fiscal year 2024: Country/Area Customer Brand Percentage of total revenue Asia Zhuohang electronic technology Limited ODM 22.0 % Asia TCL Communication Limited ODM 14.1 % Asia Shenzhen Shixun Chuangxin Technology Co.,Ltd ODM 11.6 % The following is a list of our top three customers for the fiscal year 2023: Country/Area Customer Brand Percentage of total revenue Asia TCL Communication Limited ODM 22.2 % Africa Vida Resources Pte Ltd.
The following is a list of our top three customers for the fiscal year 2025: Country/Area Customer Brand Percentage of total revenue Asia TCL Communication Limited ODM 14.7 % Asia Dr International(Hong Kong) Co.Limited ODM 12.7 % Asia Shenzhen Shixun Chuangxin Technology Co.,Ltd ODM 12.1 % The following is a list of our top three customers for the fiscal year 2024: Country/Area Customer Brand Percentage of total revenue Asia Zhuohang electronic technology Limited ODM 22.0 % Asia TCL Communication Limited ODM 14.1 % Asia Shenzhen Shixun Chuangxin Technology Co.,Ltd ODM 11.6 % The following is a list of our top three customers for the fiscal year 2023: Country/Area Customer Brand Percentage of total revenue Asia TCL Communication Limited ODM 22.2 % Africa Vida Resources Pte Ltd.
Our core management team members (Chief Executive Officer, Chief Operating Officer and Chief Manufacturing Officer) have at least 10 years of experience in the mobile phone industry, and most of them formerly worked at well-known publicly traded companies. ● Comprehensive global industry ecosystem.
Our core management team members have at least 10 years of experience in the mobile phone industry, and most of them formerly worked at well-known publicly traded companies. ● Comprehensive global industry ecosystem .
Our quality control system covers each stage of our production process. When we establish or adapt an assembly line for a new product or model, we trial-run the assembly line to produce a sample for quality examination. The assembly line can start mass production only if the produced sample is of adequate quality.
When we establish or adapt an assembly line for a new product or model, we trial-run the assembly line to produce a sample for quality examination. The assembly line can start mass production only if the produced sample is of adequate quality.
Bao, through Grandsky Phoenix Limited, and Mr. He, through HMercury Capital Limited, owned 96.95% and 3.05% of the equity interest of the Company, respectively.
He, through HMercury Capital Limited, owned 96.95% and 3.05% of the equity interest of the Company, respectively.
Our second factory was established in May 2022 and started operation since then. We currently lease and occupy approximately 17,478 square meters of office and factory space in Guizhou, China. These leases vary in duration from 1 year to 5 years. We believe that our facilities are adequate to meet our needs for the immediate future.
Our second factory was established in May 2022 and started operation since then. We currently lease and occupy approximately 5,655 square meters of office and factory space in Nanning, China. These leases in duration of 3 years. We believe that our facilities are adequate to meet our needs for the immediate future.
The table below sets forth the breakdown of our employees by function as of the date of this annual report: Function Number of Employees % of Total Administration and Human Resources 13 7.6 % Finance and Accounting 9 5.2 % Production 74 43.0 % Procurement 5 2.9 % Sales and Marketing 16 9.3 % Customer Services 1 0.6 % Research and Development 16 9.3 % Quality Control 25 14.5 % Project and Scheduling 13 7.6 % Total 172 100 % Properties Our headquarters are located in Shenzhen, China, where we own the office building with an aggregate floor area of approximately 640 square meters.
The table below sets forth the breakdown of our employees by function as of the date of this annual report: Function Number of Employees % of Total Administration and Human Resources 6 6.1 % Finance and Accounting 8 8.1 % Production 35 35.4 % Procurement 4 4.0 % Sales and Marketing 7 7.1 % Research and Development 15 15.2 % Quality Control 21 21.2 % Project and Scheduling 3 3.0 % Total 99 100 % Properties Our headquarters are located in Shenzhen, China, where we own the office building with an aggregate floor area of approximately 640 square meters.
We also develop other clients like Swagetk Inc., which has become the largest client in the United States, representing 4.7% and 7.7% of the total revenue in fiscal year 2022 and 2023.
In fiscal year 2023, orders from Quality One Wireless LLC contributed 1.3% of total revenue. We also develop other clients like Swagetk Inc., which has become the largest client in the United States, representing 4.7% and 7.7% of the total revenue in fiscal year 2022 and 2023.
Our sales depend heavily on our major clients, Zhuohang electronic technology Limited, TCL Communication Limited, and Shenzhen Shixun Chuangxin Technology Co.,Ltd, representing 22.0%, 14.1% and 11.6% of the total revenue for fiscal year 2024, respectively. We regularly provide OEM and ODM business for them. In addition, we export our in-house brand products to emerging markets.
Our sales depend heavily on our major clients, Zhuohang electronic technology Limited, TCL Communication Limited, and Shenzhen Shixun Chuangxin Technology Co.,Ltd, representing 14.7%, 12.7% and 12.1%; 22.0%, 14.1% and 11.6%; 22,2%, 12.9% and 12.9% of the total revenue for fiscal year 2025, 2024 and 2023, respectively. We regularly provide OEM and ODM business for them.
Our subsidiary, UTime SZ, is a national certified high technology enterprise that has certain benefits in tax deduction and government grants through 2024 and the certification is renewable every three years.
We continue investing in technology to improve our ability in design, production, testing and software application. Our subsidiary, UTime SZ, is a national certified high technology enterprise that has certain benefits in tax deduction and government grants through 2024 and the certification is renewable every three years.
On December 17, 2021, UTime Trading acquired 51% of the equity interest of Gesoper S De R.L. De C.V. (“Gesoper”). Gesoper is incorporated in Mexico and is a subsidiary of UTime Trading. On January 17, 2022, Gesoper S De R.L. De C.V. (“Gesoper”) acquired 85% of Firts Communications And Technologies De Mexico S.A. De C.V. (“Firts”) equity interest.
On January 17, 2022, Gesoper S De R.L. De C.V. (“Gesoper”) acquired 85% of Firts Communications And Technologies De Mexico S.A. De C.V. (“Firts”) equity interest. Firts was incorporated in Mexico and is a subsidiary of Gesoper. On August 2, 2023, the Company closed its subsidiary in India, UTime India.
He, one of our directors, pursuant to which HMercury Capital Limited purchased an aggregate of 377,514 of the Company’s ordinary shares. On the same day, the Company approved a board resolution for issuance of 377,514 of the Company’s ordinary shares at par value US$0.0001 to HMercury Capital Limited based on the share subscription agreement. As a result, Mr.
On the same day, the Company approved a board resolution for issuance of 377,514 of the Company’s ordinary shares at par value US$0.0001 to HMercury Capital Limited based on the share subscription agreement. As a result, Mr. Bao, through Grandsky Phoenix Limited, and Mr.
Reinforce our Focus in Established Markets We have developed a partnership with Quality One Wireless LLC, our client in the United States, through ODM orders since 2015, and those orders contributed a significant portion, over 10%, of our entire revenue stream from 2017 to 2019. In fiscal year 2023, orders from Quality One Wireless LLC contributed 1.3% of total revenue.
It is another key reason we are prioritizing these regions for expansion. 67 Reinforce our Focus in Established Markets We have developed a partnership with Quality One Wireless LLC, our client in the United States, through ODM orders since 2015, and those orders contributed a significant portion, over 10%, of our entire revenue stream from 2017 to 2019.
On February 27, 2024, the Company established a subsidiary, Changsha UTime Business Management Co., Ltd. (“Changsha UTime”), in China. Changsha UTime is a wholly owned subsidiary of Shenzhen UTime Technology Consulting Co., Ltd. 65 The following diagram illustrates our corporate structure as of the date of this annual report.
On February 27, 2024, the Company established a subsidiary, Changsha UTime Business Management Co., Ltd. (“Changsha UTime”), in China. Changsha UTime is a wholly owned subsidiary of Shenzhen UTime Technology Consulting Co., Ltd.
The following charts display our product contribution for the years ended March 31, 2022, 2023 and 2024: Year ended March 31, 2022 2023 2024 Category Amount % Amount % Amount % RMB RMB RMB US$ (in thousands, except for percentages) Feature phone 111,066 40.3 106,279 53 105,277 14,838 61.2 Smart phone 154,143 56 73,819 36.8 41,348 5,828 24 Others 10,299 3.7 20,449 10.2 25,531 3,598 14.8 Total 275,508 100 200,547 100 172,156 24,264 100 Do Feature Phones Do Feature Phones are a feature phones with dual-SIM function that offer our customers a cost-effective product by implementing call features like Speed Dial, Auto-Call Recording with folder and Blacklist.
The following charts display our product contribution for the years ended March 31, 2023, 2024 and 2025: Year ended March 31, 2023 2024 2025 Category Amount % Amount % Amount % RMB RMB RMB US$ (in thousands, except for percentages) Feature phone 106,279 53 105,277 61.2 47,012 6,478 18.7 Smart phone 73,819 36.8 41,348 24 18,577 2,560 7.4 Pad/Laptop - - - - 124,575 17,167 49.6 Others 20,449 10.2 25,531 14.8 60,833 8,383 24.3 Total 200,547 100 172,156 100 250,997 34,588 100 Do Feature Phones Do Feature Phones are a feature phones with dual-SIM function that offer our customers a cost-effective product by implementing call features like Speed Dial, Auto-Call Recording with folder and Blacklist.
Intellectual Property Protection of our intellectual property is a strategic priority for our business. We rely on a combination of patent, copyright, trademark and trade secret laws, as well as confidentiality agreements, to establish and protect our proprietary rights.
We plan to use advanced AI integration, powered by biosensors and edge-cloud computing, to ensure unparalleled accuracy and user experience. Intellectual Property Protection of our intellectual property is a strategic priority for our business. We rely on a combination of patent, copyright, trademark and trade secret laws, as well as confidentiality agreements, to establish and protect our proprietary rights.
We primarily cover two product categories: 13 types of smartphones and 8 types of feature phones. We believe our products are comparable in quality to the large brands and are price competitive. We believe we fit the needs of low-to-mid income groups of many developing countries and we believe we avoid the vicious competition from large international brands.
We primarily cover two product categories: 13 types of smartphones and 8 types of feature phones. We believe our products are comparable in quality to the large brands and are price competitive.
Firts was incorporated in Mexico and is a subsidiary of Gesoper. On August 2, 2023, the Company closed its subsidiary in India, UTime India. On August 28, 2023, the Company announced a change of trading symbol for its ordinary shares from “UTME” to “WTO”, which became effective on September 5, 2023.
On August 28, 2023, the Company announced a change of trading symbol for its ordinary shares from “UTME” to “WTO”, which became effective on September 5, 2023.
Since inception, Bridgetime has only made nominal investments in Do Mobile and no substantial business operations have occurred. 64 On May 20, 2019, the Company approved a board resolution that agreed to transfer 12,000,000 of its ordinary shares then owned by Mr.
On May 23, 2019, Bridgetime approved a board resolution that transferred the 135,000 ordinary shares owned by Mr. Wukai Song to UTime Limited. As a result, Bridgetime is currently a WOS of the Company. Since inception, Bridgetime has only made nominal investments in Do Mobile and no substantial business operations have occurred.
For descriptions of our leased properties, please see “Item 4B. Business Overview - Facilities.”
For descriptions of our leased properties, please see “Item 4B. Business Overview - Facilities.” ITEM 4A. UNRESOLVED STAFF COMMENTS Not Applicable 97
We are seeking to leverage our first mover advantage in changing markets to become an international enterprise through continuous innovation. In addition, we will seek to optimize current customer and order structure by deprioritizing small and unstable customers and eliminating low margin orders to increase our gross profit margin.
In addition, we will seek to optimize current customer and order structure by deprioritizing small and unstable customers and eliminating low margin orders to increase our gross profit margin.
Except for certain licenses for the off-the-shelf software used in connection with our day-to-day operations, we generally do not rely on third-party licenses of intellectual property for use in our business.
Except for certain licenses for the off-the-shelf software used in connection with our day-to-day operations, we generally do not rely on third-party licenses of intellectual property for use in our business. As of the date of this annual report, we had obtained 50 patents and 43 registered software copyrights, registered 39 trademarks inside and outside of China. Patents.
Bao to Grandsky Phoenix Limited, a company that was established under the laws of the BVI and 100% owned by Mr. Bao. On June 3, 2019, the Company entered into a share subscription agreement with HMercury Capital Limited, a company that was incorporated under the laws of the BVI and controlled by Mr.
On June 3, 2019, the Company entered into a share subscription agreement with HMercury Capital Limited, a company that was incorporated under the laws of the BVI and controlled by Mr. He, one of our directors, pursuant to which HMercury Capital Limited purchased an aggregate of 377,514 of the Company’s ordinary shares.
We continuously endeavor to improve our overall manufacturing service level, to strengthen our cost control processes, and to enhance our ability to respond rapidly to market dynamics in order to ensure a sustainable development in our EMS segment, especially in Printed Circuit Board and Assembly (“PCBA”) for consumer electronic products. 68 Market Opportunities Global Mobile Phone Market Overview We believe that the global mobile phone market has huge potential and broad development prospects Benefiting from the continuous upgrading of communication technologies and mobile phone parts, we believe that the global mobile phone market is currently maintaining a steady growth trend.
We continuously endeavor to improve our overall manufacturing service level, to strengthen our cost control processes, and to enhance our ability to respond rapidly to market dynamics in order to ensure a sustainable development in our EMS segment, especially in Printed Circuit Board and Assembly (“PCBA”) for consumer electronic products.
The populations in those areas are large and the increasing household income makes consumer electronics, like mobile phones, more affordable.
The populations in these regions are very large, and increasing household incomes are making consumer electronics like mobile phones more affordable to more people.
As a result, Mr. Bao, through Grandsky Phoenix Limited, and Mr. He, through HMercury Capital Limited, own 4,380,000 ordinary shares, representing 1.12% of equity interest and 137,793 ordinary shares, representing 0.04% of equity interest of the Company, respectively, as of the date of this annual report.
He, through HMercury Capital Limited, own 4,380,000 ordinary shares, representing 1.12% of equity interest and 137,793 ordinary shares, representing 0.04% of equity interest of the Company, respectively, as of the date of this annual report. 62 On February 7, 2019, UTime India Private Limited (“UTime India”) is incorporated in India and became a wholly owned subsidiary of UTime Trading.
The Indian government imposes a higher import tax on finished goods than the partially assembled one, such as a Semi-Knocked Down (“SKD”) for consumer electronics. Therefore, we ship SKD to Do Mobile from our factory operated by UTime GZ and finish final assembling process in our outsourced factory in India.
For our “Do” brand, we cooperate with an outsourced factory in India due to cost consideration. The Indian government imposes a higher import tax on finished goods than the partially assembled one, such as a Semi-Knocked Down (“SKD”) for consumer electronics.
At the same time, through the “UTime” brand, we target the newly emerging quasi-middle-class customer base in both established and emerging market countries. Expand and diversify our product portfolio. We plan to expand and diversify our product portfolio to meet the fast-changing market. More types of consumer electronics will be added and offered to our customers.
We plan to expand and diversify our product portfolio to meet the fast-changing market. More types of consumer electronics will be added and offered to our customers.
We plan to develop a range of distinctive electronic products, including triple-proof mobile phones that are water-proof, dust-proof and puncture-, shock-, pressure- and impact-proof, portable Bluetooth speakers, sunglasses with built-in speakers, tablets, and wearable devices, among others. Our Products and Services We design, manufacture, and distribute mobile phones and other consumer electronics through our operation plants in and outside China.
We plan to develop a range of distinctive electronic products, including triple-proof mobile phones that are water-proof, dust-proof and puncture-, shock-, pressure- and impact-proof, portable Bluetooth speakers, sunglasses with built-in speakers, tablets, and wearable devices, among others. We will expand our product line to include pediatric and geriatric wearables, featuring non-invasive glucose monitoring, with a planned launch in 2026.
We provide design and production plans to the outsourcing manufacturers and guide them to finish qualified products. 73 For the feature phones offering to our American clients, we cooperate with other ODMs. We provide bill of materials (“BOM”) requirements to other ODMs, and they participate in design, raw materials procurement, manufacturing and sell finished products to us.
The outsourcing manufacturer is responsible for processing and assembling products according to our requirements. We provide design and production plans to the outsourcing manufacturers and guide them to finish qualified products. 72 For the feature phones offering to our American clients, we cooperate with other ODMs.
We signed an entrusted production agreement with the outsourcing manufacturers. We are responsible for the product design and development as well as the raw materials procurement. The outsourcing manufacturer is responsible for processing and assembling products according to our requirements.
We manage the outsourced manufacturers by imposing certain requirements such as processing requirements, limiting labor costs, and imposing quality control and other special requirements. We signed an entrusted production agreement with the outsourcing manufacturers. We are responsible for the product design and development as well as the raw materials procurement.
Our second factory in Nanning went into service in May, 2022. Outsourcing Factories Our production management department is responsible for the resource development and management of factories on which we rely to outsource our manufacturing needs. We manage the outsourced manufacturers by imposing certain requirements such as processing requirements, limiting labor costs, and imposing quality control and other special requirements.
Our second factory in Nanning went into service in May, 2022. Our wearable devices manufacturing facility will be in the same locations as our current business Guizhou, China. Outsourcing Factories Our production management department is responsible for the resource development and management of factories on which we rely to outsource our manufacturing needs.
We believe that predicted rapid economic development, the release of demographic dividends (in the form of an accelerated economic growth and improved productivity from youth) and the construction of communication technology facilities will drive rapid growth in sales in emerging markets. The proportion of smartphones has increased with a stronger demand.
We believe that rapid economic development, the release of demographic dividends (in the form of accelerated economic growth and productivity gains from a young workforce), and the ongoing construction of modern communication infrastructure will drive rapid growth in mobile phone sales across emerging markets.
We plan to restructure our existing product pipeline by developing the “Do” and “UTime” brands at the same time, but targeted to different segments. Through the “Do” brand, we target customers who are price-sensitive and cost-effective, and let them enjoy the latest communication technology products with an affordable price.
Through the “Do” brand, we target customers who are price-sensitive and cost-effective, and let them enjoy the latest communication technology products with an affordable price. At the same time, through the “UTime” brand, we target the newly emerging quasi-middle-class customer base in both established and emerging market countries. Expand and diversify our product portfolio.
We often assist other ODMs in managing the production process and offer critical structural components referring to PCBA, mobile screen and batteries, to ensure production yield and product quality, as well as “Just-in-time” delivery rates. For our “Do” brand, we cooperate with an outsourced factory in India due to cost consideration.
We provide bill of materials (“BOM”) requirements to other ODMs, and they participate in design, raw materials procurement, manufacturing and sell finished products to us. We often assist other ODMs in managing the production process and offer critical structural components referring to PCBA, mobile screen and batteries, to ensure production yield and product quality, as well as “Just-in-time” delivery rates.
We assist our customers in research and development while launching new mobile products based on our industry experience. To date, we have maintained long-term cooperation with our main customers listed above. We have also built nearly 800 service centers for our in-house brand customer in India.
To date, we have maintained long-term cooperation with our main customers listed above. We have also built nearly 800 service centers for our in-house brand customer in India. During the one-year warranty period that we provide on our phone products, customers can phone returned or repaired according to the actual situation.
On February 7, 2019, UTime India Private Limited (“UTime India”) is incorporated in India and became a wholly owned subsidiary of UTime Trading. On November 1, 2021, Guangxi Utime Technology Co., Ltd. (“UTime Guangxi”) is incorporated in Guangxi, China and became a wholly owned subsidiary of UTime Trading.
On November 1, 2021, Guangxi Utime Technology Co., Ltd. (“UTime Guangxi”) is incorporated in Guangxi, China and became a wholly owned subsidiary of UTime Trading. On December 17, 2021, UTime Trading acquired 51% of the equity interest of Gesoper S De R.L. De C.V. (“Gesoper”). Gesoper is incorporated in Mexico and is a subsidiary of UTime Trading.
Once defined, our design and manufacturing team develops and tests the products against these requirements to be delivered to our clients and to be sold to the end users. 75 Customers The majority of our selling items are the feature phones and the smartphones as mentioned above.
Once defined, our design and manufacturing team develops and tests the products against these requirements to be delivered to our clients and to be sold to the end users. Our R&D efforts for the wearable devices are central to maintaining our competitive edge.
All registered patents in China are currently registered under the name of UTime SZ owning 38 UTime NN owning 4 and UTime GZ owning 8. Among them, 28 registered patents were granted as utility model patents, 18 registered patents were granted as design patents and 4 registered patents were granted as invention patents.
We had 50 registered patents in China, which cover technologies for PCAB processing, Industrial Design and testing process. All registered patents in China are currently registered under the name of UTime SZ owning 38 UTime NN owning 4 and UTime GZ owning 8.
Quality Control Management We believe that the quality of our products is crucial to our continued growth. We place great emphasis on quality control and have implemented Total Quality Management (“TQM”) to manage our operations. Before entering our production flow, the raw materials must be certified for quality. We also perform inspections on raw materials in the mass production flow.
Before entering our production flow, the raw materials must be certified for quality. We also perform inspections on raw materials in the mass production flow. Our quality control system covers each stage of our production process.
Tablets and wearable devices, especially smart watch, are the next driven markets that we believe have great opportunities. 5G implementation will bring more orders of tablets and smart accessories in both developed and emerging markets. We believe that the industry is in a transitional period and product performance continues to evolve.
We believe further 5G implementation will boost demand for tablets and smart accessories even more, by enabling better connectivity and new use cases in both developed and emerging markets. In short, the industry is in a transitional period and product performance continues to evolve rapidly, creating new orders for tablets and smart wearables across global markets.
We strategically select our suppliers to minimize over-concentration, control our cost and maintain a good relationship with our suppliers. To reduce over-concentration of supply, to manage costs and to control product quality, we generally engage at least two (2) suppliers for each of our key components.
On the software side, we intend to rely on Amazon Web Services for cloud infrastructure and TensorFlow for AI frameworks, enabling us to deliver robust and scalable solutions. To reduce over-concentration of supply, to manage costs and to control product quality, we generally engage at least two (2) suppliers for each of our key components.
We also have nil pending trademark applications outside of China in the Philippines, Kenya and other jurisdictions. Domain names. We had 7 registered domain names in China and 8 global domain names.
We had 7 registered domain names in China and 8 global domain names.
The strong demand for new products triggered by technology upgrades and functional innovations has driven the mobile phone industry to achieve rapid penetration rate. However, as the industry matures and enters the transition period from 4G to 5G, we believe that the industry growth rate will slow down along with product homogenization.
We believe that the industry is in a transitional period and product performance continues to evolve. The strong consumer demand for new devices – triggered by continuous technology upgrades and feature innovations – has driven the mobile phone industry to achieve a high penetration rate worldwide.
Our Strategies We intend to achieve our mission through successful execution of the key elements of our growth strategy, which include: Optimize the structure of OEM/ODM customers and orders. We have accumulated business resources and experience in both domestic and overseas OEM/ODM markets for the last decade.
However, our focus on AI integration and niche applications, including medical-grade wearables, positions us to carve out a distinct market presence. Our Strategies We intend to achieve our mission through successful execution of the key elements of our growth strategy, which include: Optimize the structure of OEM/ODM customers and orders.
However, we estimate that the mobile phone manufacturing industry, especially in China, will continue to grow and we expect the mobile phone shipments value will increase mainly driven by the growing demand for 5G mobile phones.
We expect the smartphone manufacturing industry – especially in China – to continue growing in value, fueled by the expanding adoption of 5G devices and related upgrades.
On May 23, 2019, Bridgetime approved a board resolution that transferred the 135,000 ordinary shares owned by Mr. Wukai Song to UTime Limited. As a result, Bridgetime is currently a WOS of the Company.
On May 20, 2019, the Company approved a board resolution that agreed to transfer 12,000,000 of its ordinary shares then owned by Mr. Bao to Grandsky Phoenix Limited, a company that was established under the laws of the BVI and 100% owned by Mr. Bao.
We also plan to establish a representative office in the United States to further strengthen our business network in established markets. 76 Sales and Marketing China and other markets We directly provide OEM and ODM business for our customers in China and overseas.
For business-to-business (B2B) sales, we focus on hospitals and corporate wellness programs, utilizing a dedicated direct sales team to build long-term partnerships. 75 Sales and Marketing China and other markets We directly provide OEM and ODM business for our customers in China and overseas.
Emerging Markets Mobile Phone Markets Overview The market starts late and has great potential to grow. Consumer electronics, for instance, mobile phones, focus more on emerging markets, where disposable income is growing fast and the market is far less penetrated. Emerging markets are typically referred to as areas in Asia, South America, Eastern Europe and Africa.
Consumer electronics – especially mobile phones – are increasingly focused on emerging markets, where disposable incomes are rising fast and current penetration levels are far lower than in developed regions. “Emerging markets” typically refers to areas in Asia, South America, Eastern Europe, and Africa.
In summary, feature phones still have a large market and structural demand in major emerging markets around the world. 69 On the other hand, emerging markets generally have a relatively younger population structure in terms of age. Millions of young people rush into labor market every year, forming a rigid demand for mobile phone consumption.
In summary, feature phones continue to have a sizable presence in emerging markets around the world, although their share is expected to gradually decline as the transition to smartphones gains momentum. On the other hand, emerging markets generally have a relatively younger population structure in terms of age.
Currently, we believe the proportion of feature phones is still higher than that of smartphones. However, with the gradual maturity of emerging markets, the smartphones market continues to expand. The market share of smartphones in this market has increased, and we anticipate there will be a large structural improvement.
This underscores the vast growth potential still untapped in emerging economies. The proportion of smartphones has increased with a stronger demand. Currently, we observe that in many emerging markets the proportion of feature phones remains relatively high compared to smartphones – but this is changing quickly.
We also have 0 pending patent in China. Software copyrights. We maintain a portfolio of copyright-protected software. We had 43 registered software copyrights in China. Trademarks. We had 18 registered trademarks in China and 21 registered trademarks outside of China in Africa, Asia, America and Europe.
Among them, 28 registered patents were granted as utility model patents, 18 registered patents were granted as design patents and 4 registered patents were granted as invention patents. Software copyrights. We maintain a portfolio of copyright-protected software. We had 43 registered software copyrights in China. Trademarks. We hold the trademark UTime® registered in 12 countries. Domain names.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

38 edited+23 added−13 removed43 unchanged
Biggest changeThe following table sets forth our revenues by type of contract and as a percentage of revenue for the fiscal years indicated (excluding revenue from discontinued operations): Year ended March 31, 2022 2023 2024 Category Amount % Amount % Amount % RMB RMB RMB US$ (in thousands, except for percentages) OEM/ODM 273,922 100 197,564 100 172,156 24,264 100 In-house brand - - - - - - - Total 273,922 100 197,564 100 172,156 24,264 100 The following table sets forth our revenues by product lines and as a percentage of revenue for the fiscal years indicated: Year ended March 31, 2022 2023 2024 Category Amount % Amount % Amount % RMB RMB RMB US$ (in thousands, except for percentages) Feature phone 110,025 40.2 106,150 53.7 105,277 14,838 61.2 Smart phone 153,754 56.1 70,965 35.9 41,348 5,828 24.0 Others 10,143 3.7 20,449 10.4 25,531 3,598 14.8 Total 273,922 100 197,564 100 172,156 24,264 100 99 The following table sets forth our revenues by geographic region and as a percentage of revenue for the fiscal years indicated: Year ended March 31, 2022 2023 2024 Category Amount % Amount % Amount % RMB RMB RMB US$ (in thousands, except for percentages) PRC 70,314 25.7 82,481 41.7 106,216 14,971 61.7 Hong Kong 18,949 6.90 14,228 7.20 - - - Africa 25,905 9.5 39,515 20 21,478 3,027 12.5 The United States 28,154 10.3 18,158 9.2 15,415 2,173 9.0 Mexico 12,315 4.5 26,199 13.3 8,465 1,193 4.9 South America 118,285 43.2 951 0.5 14,431 2,033 8.4 Japan - - 16,032 8.1 6,151 867 3.6 Total 273,922 100 197,564 100 172,156 24,264 100 Overview The table below sets forth certain line items from our consolidated statement of comprehensive loss (income) for the fiscal years ended March 31, 2022 and 2023: Year ended March 31, 2022 2023 2024 RMB RMB RMB US$ (in thousands) Revenues 273,922 197,564 172,156 24,264 Costs of sales 259,904 167,143 163,286 23,014 Gross profit 14,018 30,421 8,870 1,250 Operating expenses 44,619 108,026 39,010 5,498 Interest expenses 4,875 6,149 3,617 510 Income (loss) before income taxes (35,476 ) (83,754 ) (33,757 ) (4,758 ) Income tax benefit (46 ) (171 ) (171 ) (24 ) Net loss from continuing operations (35,430 ) (83,583 ) (33,586 ) (4,734 ) ● We incurred net loss of RMB35.4 million and net loss of RMB83.6 million for the fiscal years ended March 31, 2022 and 2023, respectively.
Biggest changeThe following table sets forth our revenues by type of contract and as a percentage of revenue for the fiscal years indicated (excluding revenue from discontinued operations): Year ended March 31, 2023 2024 2025 Category Amount % Amount % Amount % RMB RMB RMB US$ (in thousands, except for percentages) OEM/ODM 197,564 100 172,156 100 250,997 34,588 100 In-house brand - - - - - - - Total 197,564 100 172,156 100 250,997 34,588 100 The following table sets forth our revenues by product lines and as a percentage of revenue for the fiscal years indicated: Year ended March 31, 2023 2024 2025 Category Amount % Amount % Amount % RMB RMB RMB US$ (in thousands, except for percentages) Feature phone 106,150 53.7 105,277 61.2 47,012 6,478 18.7 Smart phone 70,965 35.9 41,348 24.0 18,577 2,560 7.4 Pad/Laptop - - - - 124,575 17,167 49.6 Others 20,449 10.4 25,531 14.8 60,833 8,383 24.3 Total 197,564 100 172,156 100 250,997 34,588 100 98 The following table sets forth our revenues by geographic region and as a percentage of revenue for the fiscal years indicated: Year ended March 31, 2023 2024 2025 Category Amount % Amount % Amount % RMB RMB RMB US$ (in thousands, except for percentages) PRC 82,481 41.7 106,216 61.7 187,842 25,879 74.8 Hong Kong 14,228 7.20 - - 36,482 5,027 14.6 Africa 39,515 20 21,478 12.5 11,278 1,554 4.5 The United States 18,158 9.2 15,415 9.0 3,772 520 1.5 Mexico 26,199 13.3 8,465 4.9 - - - South America 951 0.5 14,431 8.4 - - - Japan 16,032 8.1 6,151 3.5 11,623 1,608 4.6 Total 197,564 100 172,156 100 250,997 34,588 100 Overview The table below sets forth certain line items from our consolidated statement of comprehensive loss (income) for the fiscal years ended March 31, 2023, 2024 and 2025: Year ended March 31, 2023 2024 2025 RMB RMB RMB US$ (in thousands) Revenues 197,564 172,156 250,997 34,588 Costs of sales 167,143 163,286 243,913 33,612 Gross profit 30,421 8,870 7,084 976 Operating expenses 108,026 39,010 671,707 92,564 Interest expenses 6,149 3,617 3,927 541 Income (loss) before income taxes (83,754 ) (33,757 ) (668,550 ) (92,129 ) Income tax benefit (171 ) (171 ) (59 ) (8 ) Net loss from continuing operations (83,583 ) (33,586 ) (668,491 ) (92,121 ) ● For the fiscal years ended March 31, 2024 and 2025, we incurred net loss of RMB33.6 million and RMB668.5 million (US$92.1 million).
Investing activities Net cash provided by investing activities for fiscal year ended March 31, 2024 was RMB5.5 million (US$0.8 million) as compared to net cash used in investing activities of RMB2.9 million for the fiscal year ended March 31, 2023. Cash proceed of RMB6.5 million (US$0.9 million) was received for sale-leaseback of equipment.
Net cash provided by investing activities for fiscal year ended March 31, 2024 was RMB5.5 million (US$0.8 million) as compared to net cash used in investing activities of RMB2.9 million for the fiscal year ended March 31, 2023. Cash proceed of RMB6.5 million (US$0.9 million) was received for sale-leaseback of equipment.
Overall, demand of feature phones is decreasing and being replaced by smartphones while smartphones are upgraded faster and demand of them becomes more unstable. OEM/ODM orders were our principal source of revenue for the fiscal years ended March 31, 2023 and 2024, respectively. Sustaining the customer source may help us secure our OEM/ODM orders.
Overall, demand of feature phones is decreasing and being replaced by smartphones while smartphones are upgraded faster and demand of them becomes more unstable. OEM/ODM orders were our principal source of revenue for the fiscal years ended March 31, 2023, 2024 and 2025, respectively. Sustaining the customer source may help us secure our OEM/ODM orders.
An increase in OEM/ODM orders or sale of in-house brand cell phone products will enable us to expand our operations with the increasing internally-generated funds and may allow us to obtain equity and debt financing more easily or on better terms, lessening the difficulty of obtaining financing. 106 A decline in sales (i) will reduce our internally-generated cash flow, which in turn will reduce the available funds for securing clients and developing existing markets, (ii) will increase the difficulty of obtaining equity and debt financing and worsen the terms on which such financing may be obtained, and (iii) will affect the activities of R&D which considerably determines our development in new products and new markets.
An increase in OEM/ODM orders or sale of in-house brand cell phone products will enable us to expand our operations with the increasing internally-generated funds and may allow us to obtain equity and debt financing more easily or on better terms, lessening the difficulty of obtaining financing. 105 A decline in sales (i) will reduce our internally-generated cash flow, which in turn will reduce the available funds for securing clients and developing existing markets, (ii) will increase the difficulty of obtaining equity and debt financing and worsen the terms on which such financing may be obtained, and (iii) will affect the activities of R&D which considerably determines our development in new products and new markets.
In March 2022, UTime Guangxi entered into a Lease Agreement to lease dormitory for staff from Nanning Industrial Investment Group Cp., Ltd, for a term from March 25, 2022 to March 31, 2027, with a monthly rental payment of RMB 30,706.06.
In March 2022, UTime Guangxi entered into a Lease Agreement to lease dormitory for staff from Nanning Industrial Investment Group Cp., Ltd, for a term from March 25, 2022 to March 31, 2027, with a monthly rental 1 payment of RMB 30,706.06.
Selling expenses consist of salary and benefits, business travel, shipping expenses, entertainment, market promotion and other expenses relating to our sales and marketing activities. The increase in selling expense was mainly due to increase expenses on moulds and consumables.
Selling expenses consist of salary and benefits, business travel, shipping expenses, entertainment, market promotion and other expenses relating to our sales and marketing activities. The increase in selling expense was mainly due to increase in expenses on consumables.
Our cost of sales mainly consists of cost of raw materials, third party processing fees and rental of building and machinery. We import screens and mother boards from overseas and purchase camera, battery and electronic components from domestic markets for mobile phone processing and assembling.
Our cost of sales mainly consists of cost of raw materials, third party processing fees and rental of building and machinery. We import screens and mother boards from overseas and purchase cameras, batteries and electronic components from domestic markets for mobile phone processing and assembling.
Overall gross profit margin for the fiscal year ended March 31, 2024 was 5.2%, or 10.2% lower, as compared to gross profit margin of 15.4% for the fiscal year ended March 31, 2023. The decrease was mainly due to decrease of average selling price of feature phones and the increasing unit cost of materials.
Overall gross profit margin for the fiscal year ended March 31, 2025 was 2.8%, or 2.4% lower, as compared to gross profit margin of 5.2% for the fiscal year ended March 31, 2024. The decrease was mainly due to decrease of average selling price of feature phones and the increasing unit cost of materials.
We developed a few new customers in mainland China and South America. We also developed business in Mexico and Africa. During the fiscal year ended March 31, 2023 and 2024, aggregate sales in mainland China, South America, Mexico, and Africa contributed 75.5% and 87.5% of total revenue, respectively.
We developed a few new customers in mainland China and South America. We also developed business in Mexico and Africa. During the fiscal year ended March 31, 2023, 2024 and 2025, aggregate sales in mainland China, Hong Kong, South America, Mexico, and Africa contributed 75,5%, 87.5% and 93.9% of total revenue, respectively.
Operating expenses Year ended March 31, 2023 2024 RMB US$ RMB US$ (in thousands) Selling expenses 7,373 1,073 6,356 896 General and administrative expenses (1) 89,206 12,982 24,065 3,392 R&D related expenses (1) 15,980 2,325 16,646 2,346 Other (income) expenses, net (4,533 ) (660 ) (8,057 ) (1,136 ) Total 108,026 15,720 39,010 5,498 (1) These expenses are combined as general and administrative expenses in consolidated statements of comprehensive income (loss). 101 Our operating expenses consist of selling expenses, general and administrative expenses, R&D expenses and other expenses, net.
The decrease was mainly due to decrease in average selling price of feature phones and the increasing unit cost of materials. 101 Operating expenses Year ended March 31, 2023 2024 RMB US$ RMB US$ (in thousands) Selling expenses 7,373 1,073 6,356 896 General and administrative expenses (1) 89,206 12,982 24,065 3,392 R&D related expenses (1) 15,980 2,325 16,646 2,346 Other (income) expenses, net (4,533 ) (660 ) (8,057 ) (1,136 ) Total 108,026 15,720 39,010 5,498 (1) These expenses are combined as general and administrative expenses in consolidated statements of comprehensive income (loss).
We also provided allowance of RMB1.4 million and RMB nil and RMB 0.2 million on doubtful receivables for the fiscal years ended March 31, 2022, 2023 and 2024, respectively.
We also provided allowance of RMB nil and RMB 0.2 million and RMB 505.8 million on doubtful receivables for the fiscal years ended March 31, 2023, 2024 and 2025, respectively.
On September 1, 2017, UTime GZ entered a lease agreement with Guizhou Jietongda Technology Co., Ltd. (“Jietongda”). Jietongda agreed to lease the factory building located in Xinpu District of Guizhou, China to UTime GZ, for a term of up to 4.5 years, with an annual rental payment of approximately RMB 4.2 million (US$0.6 million).
Jietongda agreed to lease the factory building located in Xinpu District of Guizhou, China to UTime GZ, for a term of up to 4.5 years, with an annual rental payment of approximately RMB 4.2 million (US$0.6 million).
The cash inflow was mainly attributable to proceeds from issuance of common stock to non-U.S. Persons in March 2024 . Net cash provided by financing activities for year ended March 31, 2023 was RMB18.3 million (US$2.7 million) as compared to RMB86.9 million for the year ended March 31, 2022.
The cash inflow was mainly attributable to proceeds from issuance of common stock to non-U.S. Persons in March 2024 . Net cash provided by financing activities for year ended March 31, 2023 was RMB27.0 million (US$5.1 million) as compared to RMB86.9 million for the year ended March 31, 2022. The cash inflow was mainly attributable to proceeds from short-term borrowings.
OEM/ODM revenue decreased from RMB197.6 million for the year ended March 31, 2023 to RMB172.2 million (US$24.3 million) for the year ended March 31, 2024, representing a 13% decrease, which was mainly due to the decrease in smart phone and feature phone sales to customers in Mexico, Japan, Africa and the United states, partially offset by the increase in OEM/ODM sales in South America and China. 100 ● We established sales channels in Mexico, Japan and Africa in 2022.
OEM/ODM revenue decreased from RMB197.6 million for the year ended March 31, 2023 to RMB172.2 million (US$24.3 million) for the year ended March 31, 2024, representing a 13% decrease, which was mainly due to the decrease in smart phone and feature phone sales to customers in Mexico, Japan, Africa and the United states, partially offset by the increase in OEM/ODM sales in South America and China. 99 ● Operating expenses consist of selling expenses, general and administrative expenses, research and development (“R&D”) expenses and other (income) expense.
Cash used in the year ended March 31, 2022 were for payments of property and equipment of RMB2.6 million (US$0.4 million). 104 Financing activities Net cash provided by financing activities for year ended March 31, 2024 was RMB372.1 million (US$52.5 million) as compared to RMB18.3 million for the year ended March 31, 2022.
Cash used in the year ended March 31, 2022 were for payments of property and equipment of RMB2.6 million (US$0.4 million). 103 Financing activities Net cash provided by financing activities for year ended March 31, 2025 was RMB51.9 million (US$7.2 million) as compared to RMB369.6 million for the year ended March 31, 2024.
Net cash used in operating activities was RMB15.1 million (US$2.2 million) for the year ended March 31, 2023. The balance represented an increase of cash flow of RMB5.8 million (US$1.1 million), or 27.5%, from RMB20.9 million used in the year ended March 31, 2022.
Net cash used in operating activities was RMB24.4 million (US$4.6 million) for the year ended March 31, 2023. The balance represented an increase of cash flow of RMB3.5 million (US$0.7 million), or 16.7%, from RMB20.9 million used in the year ended March 31, 2022.
Operating expenses decreased by RMB69 million, or 63.9%, from RMB108 million for the year ended March 31, 2023 to RMB39 million (US$5.5 million) for year ended March 31, 2022.
Our operating expenses consist of selling expenses, general and administrative expenses, R&D expenses and other expenses, net. Operating expenses decreased by RMB69 million, or 63.9%, from RMB108 million for the year ended March 31, 2023 to RMB39 million (US$5.5 million) for year ended March 31, 2022.
The cash inflow was mainly attributable to proceeds from short-term borrowings . Contractual Obligations In September 2019, UTime SZ signed a lease agreement with Fumeibang for a term of one year, with an annual rental payment of approximately RMB1.0 million (US$0.15 million) and was most recently renewed on April 1, 2022.
Contractual Obligations In September 2019, UTime SZ signed a lease agreement with Fumeibang for a term of one year, with an annual rental payment of approximately RMB1.0 million (US$0.15 million) and was most recently renewed on April 1, 2022. On September 1, 2017, UTime GZ entered a lease agreement with Guizhou Jietongda Technology Co., Ltd. (“Jietongda”).
Operating activities Net cash used in operating activities was RMB376.2 million (US$53 million) for the year ended March 31, 2024. The balance represented a decrease of cash flow of RMB361.1 million from RMB15.1 million used in the year ended March 31, 2023.
Net cash used in operating activities was RMB373.6 million (US$53 million) for the year ended March 31, 2024. The balance represented an increase of cash flow of RMB349.2 million from RMB24.4 million used in the year ended March 31, 2023.
R&D related expenses mainly consist of salary and benefits, material and consumables and other expenses to carry out R&D activities. The increase in R&D expenses was mainly due to increase in R&D expenses incurred in the new subsidiary in Guangxi, China. R&D related expenses are included in general and administrative expenses in the income statement.
The increase in R&D expenses was mainly due to increase in R&D expenses incurred in the UTime Guangxi. R&D related expenses are included in general and administrative expenses in the income statement.
Net loss As a result of the above, net loss was RMB83.6 million (US$12.1 million) for the year ended March 31, 2023 compared to net loss of RMB35.4 million for the year ended March 31, 2022. 103 Cash, Cash Equivalents and restricted cash The following table sets forth certain historical information with respect to our statements of cash flows: Year ended March 31, 2022 2023 2024 RMB RMB RMB US$ (in thousands) Net cash provided by (used) in operating activities (20,865 ) (15,138 ) (376,176 ) (53,021 ) Net cash used in investing activity (5,832 ) (2,900 ) 5,520 778 Net cash provided by financing activities 86,888 18,295 372,163 52,455 Effect of exchange rate changes on cash and cash equivalents (2,476 ) 4,985 3,234 456 Net increase (decrease) in cash and cash equivalents and restricted cash 57,715 5,242 4,741 668 We had cash, cash equivalent and restricted cash of approximate RMB67.2 million, RMB72.4 million and RMB77.2 million (US$10.9 million) as of March 31, 2022 and 2023 and March 31, 2024, respectively.
Net loss As a result of the above, net loss was RMB33.6 million (US$4.7 million) for the year ended March 31, 2024 compared to net loss of RMB83.6 million for the year ended March 31, 2023. 102 Cash, Cash Equivalents and restricted cash The following table sets forth certain historical information with respect to our statements of cash flows: Year ended March 31, 2023 2024 2025 RMB RMB RMB US$ (in thousands) Net cash provided by (used) in operating activities (24,376 ) (373,634 ) (31,729 ) (4,374 ) Net cash used in investing activity (2,900 ) 5,520 - - Net cash provided by financing activities 26,992 369,621 51,949 7,159 Effect of exchange rate changes on cash and cash equivalents 5,526 3,234 11,818 1,388 Net increase (decrease) in cash and cash equivalents and restricted cash 5,242 4,741 32,038 4,173 We had cash, cash equivalent and restricted cash of approximate RMB72.4 million, RMB77.2 million and RMB109.2 million (US$15.1 million) as of March 31, 2023 and 2024 and March 31, 2025, respectively.
Therefore, we consider an understanding of the variability and judgment required in making these estimates and assumptions to be critical in fully understanding and evaluating our reported financial results. Allowances of Doubtful Accounts Description: Accounts receivable and other receivables are reflected in our consolidated balance sheets at their estimated collectible amounts.
Therefore, we consider an understanding of the variability and judgment required in making these estimates and assumptions to be critical in fully understanding and evaluating our reported financial results. Allowances of Credit Losses The Company maintains an allowance for credit losses for estimated losses on uncollected accounts receivable.
The following table sets forth our contractual obligations as of March 31, 2024, which included the lease and loan arrangement described above: Payments due by period (in thousands) Contractual obligations Total Less than 1 year 1-2 years 2-3 years More than 3 years Short term borrowings 56,949 56,949 - - - Current portion of long-term borrowings - - - - - Long term borrowings - - - - - Operating lease payments 11,931 4,575 4,575 2,781 - Finance lease payments 6,715 3,390 3,104 78 143 Total 75,595 64,914 7,679 2,859 143 105 5C.
The following table sets forth our contractual obligations as of March 31, 2025, which included the lease and loan arrangement described above: Payments due by period (in thousands) Contractual obligations Total Less than 1 year 1-2 years 2-3 years More than 3 years Short term borrowings 63,600 63,600 - - - Current portion of long-term borrowings - - - - - Long term borrowings - - - - - Operating lease payments 2,691 1,230 1,173 288 - Finance lease payments 3,325 3,104 78 78 65 Total 69,616 67,934 1,251 366 65 1 104 5C.
Income tax benefits Income tax deferred benefit is RMB0.1 million for the years ended March 31, 2023 and 2024. Net loss As a result of the above, net loss was RMB33.6 million (US$4.7 million) for the year ended March 31, 2024 compared to net loss of RMB83.6 million for the year ended March 31, 2023.
Net loss As a result of the above, net loss was RMB668.5 million (US$92.1 million) for the year ended March 31, 2025 compared to net loss of RMB33.6 million for the year ended March 31, 2024.
General and administrative expenses primarily include salary and benefits to our accounting, human resources, design and executive office staff, rental expenses, property management and utilities, office supplies. The decrease was mainly due to (i) issuance of 5,300,000 shares of common stock valued at $9,301,500 to participants in September 2022, and (ii) decrease in manpower costs due to optimization of resources.
The decrease was mainly due to (i) issuance of 5,300,000 shares of common stock valued at $9,301,500 to participants in September 2022, and (ii) decrease in manpower costs due to optimization of resources. R&D related expenses mainly consist of salary and benefits, material and consumables and other expenses to carry out R&D activities.
Comparison of the fiscal years ended March 31, 2023 and 2022 Revenue Revenue for the year ended March 31, 2023 was RMB197.6 million (US$28.8 million), a decrease of RMB76.3 million, or 27.9%, from RMB273.9 million for the year ended March 31, 2022. The decrease was attributable to the decrease in OEM/ODM sales.
Comparison of the fiscal years ended March 31, 2025 and 2024 Revenue Revenue for the year ended March 31, 2025 was RMB251.0 million (US$34.6 million), an increase of RMB78.8 million, or 45.8%, from RMB172.2 million for the year ended March 31, 2024. The increase was attributable to the increase in OEM/ODM sales.
The 136% increase in loss was mainly due to the decrease of gross profit, increase of operating expenses and increase of interest expenses. For the fiscal years ended March 31, 2023 and 2024, we incurred net loss of RMB83.6 million and RMB33.6 million (US$4.7 million).
We incurred net loss of RMB83.6 million and net loss of RMB33.6 million for the fiscal years ended March 31, 2023 and 2024, respectively.
We incurred RMB2.2 million exchange loss, and RMB4 million and RMB4.9 million of exchange gain for fiscal years ended March 31, 2022, 2023 and 2024, respectively, mainly due to fluctuations of exchange rates of RMB against US Dollar. ● We provided RMB1.7 million, wrote off RMB0.4 million and provided RMB 0.7 million of impairment reserve on obsolete inventory for the fiscal years ended March 31, 2022, 2023 and 2024.
The year-on-year decrease in operating expense for fiscal 2024 was mainly due to the decrease in general and administrative expenses and decrease in selling expenses. ● We wrote off RMB0.4 million, provided RMB0.7 million and provided RMB 9.8 million of impairment reserve on obsolete inventory for the fiscal years ended March 31, 2023, 2024 and 2025, respectively.
We provided impairment reserve on obsolete inventory of RMB0.3 million and wrote off RMB0.4 million (US$0.06 million), which are recorded in cost of sales for the year ended March 31, 2022 and 2023.
We provided impairment reserve of RMB 0.7 million and RMB 9.8 million on obsolete inventories, which are recorded in cost of sales for the years ended March 31, 2024 and 2025.
The 59.8% decrease in loss was mainly due to the decrease of operating expenses and decrease of interest expenses, partially offset by the decrease of gross profit. ● OEM/ODM revenue decreased from RMB274.0 million for the year ended March 31, 2022 to RMB197.6 million for the year ended March 31, 2023, representing a 28% decrease, which was mainly due to the decrease in smart phone and feature phone sales to customers in South America and the United states, partially offset by the increase in OEM/ODM sales in Mexico, Japan, Africa and China.
The 59.8% decrease in loss was mainly attributable to the decrease of operating expenses and interest expenses, partially offset by the decrease of gross profit. ● Our revenue increased from RMB172.2 million for the year ended March 31, 2024 to RMB251.0 million (US$34.6 million) for the year ended March 31, 2025, representing a 46% increase, which was mainly attributable to the increase in OEM/ODM sales in China as of the result of the Sino-US trade war.
Cost of sales Cost of sales for the fiscal year ended March 31, 2023 was RMB167.1 million (US$24.3 million), a decrease of RMB92.8 million, or 35.7%, from RMB259.9 million for the year ended March 31, 2022. The decrease was mainly due to the decrease of sales volume and change of product mix.
Cost of sales Cost of sales for the fiscal year ended March 31, 2025 was RMB243.9 million (US$33.6 million), an increase of RMB80.6 million, or 49.4%, from RMB163.3 million for the year ended March 31, 2024. The increase was mainly due to the increase of sales volume and change of product mix.
General and administrative expenses primarily include salary and benefits to our accounting, human resources, design and executive office staff, rental expenses, property management and utilities, office supplies. The increase was mainly due to (i) issuance of 5,300,000 shares of common stock valued at $9,301,500 to participants and (ii) increase in manpower costs in new subsidiaries in Guangxi, China.
General and administrative expenses primarily include salary and benefits to our accounting, human resources, design and executive office staff, rental expenses, property management and utilities, office supplies. The increase was mainly due to the share-based compensation of RMB 111.0 million in Fiscal year 2025.
Gross profit Gross profit for the year ended March 31, 2023 was RMB30.4 million (US$4.4 million), representing an increase of RMB16.4 million, or 117.1%, from the gross profit of RMB14.0 million for the year ended March 31, 2022 as a result of factors mentioned above. 102 Overall gross profit margin for the fiscal year ended March 31, 2023 was 15.4%, or 10.3% higher, as compared to gross profit margin of 5.1% for the fiscal year ended March 31, 2022.
Gross profit Gross profit for the year ended March 31, 2025 was RMB7.1 million (US$1.0 million), representing a decrease of RMB1.8 million, or 20.1%, from the gross profit of RMB8.9 million for the year ended March 31, 2024 as a result of factors mentioned above.
Other expenses, net for the year ended March 31, 2023 was net income of RMB4.5 million (US$0.7 million), as compared to net expense of RMB1.5 million for the year ended March 31, 2022. The increase of income was mainly attributed to the exchange gain due to appreciation of U.S.
Other expenses, net for the year ended March 31, 2025 was net expense of RMB527.1 million (US$72.6 million), as compared to net income of RMB8.1 million for the year ended March 31, 2024.
Dollar against RMB and changes in doubtful account provision, partially offset by decrease in government subsidy. Income tax expenses (benefits) Income tax deferred benefit is RMB0.05 million and RMB0.1 million for the year ended March 31, 2022 and 2023, respectively.
Income tax benefits Income tax deferred benefit is RMB0.1 million for the years ended March 31, 2023 and 2024.
Operating Results We design, manufacture, and distribute mobile phones and other consumer electronics through our operation plants in China. Our products are categorized into the following major categories: feature phone, smartphone and mobile phone accessories.
Operating Results We are mainly engaged in the design, development, production, sales and brand operation of mobile phones, accessories and related consumer electronics.
Most of our products are produced to fulfill OEM/ODM orders received from our long-term clients and sold globally, including Mexico, Brazil, the United States, and other emerging markets in South Asia and Africa as well as Europe. The following charts display our products contribution for the fiscal years ended March 31, 2022, 2023 and 2024.
Our operations are based in China but most of our products are sold overseas, including India, Brazil, the United States, and other emerging markets countries in South Asia, Africa and Europe.
Our operating expenses consist of selling expenses, general and administrative expenses, R&D expenses and other expenses, net. Operating expenses increased by RMB63.4 million, or 142.1%, from RMB44.6 million for the year ended March 31, 2022 to RMB108 million (US$15.7 million) for year ended March 31, 2023.
Operating expenses increased by RMB632.7 million, or 1622%, from RMB39 million for the year ended March 31, 2024 to RMB672 million (US$93 million) for year ended March 31, 2025.
Removed
We had a rapid growth in OEM/ODM revenue, especially in sales of feature phone and tablets, in these areas, such that aggregate sales in Mexico, Japan, and Africa contributed 14% and 41.4% of total revenue for the fiscal year ended March 31, 2022 and 2023, respectively.
Added
We also provide Electronics Manufacturing Services (“EMS”), including Original Equipment Manufacturer (“OEM”), which we manufacture products solely pursuant to customers’ orders, and Original Design Manufacturer (“ODM”) services, which we not only manufacture but also design products based on clients’ demand, for well-known brands, such as TCL Communication Technology Holdings, Ltd., a subsidiary of TCL Corporation, Swagtek Inc., Shanghai Sunvov Communications Technology Co., Ltd. and T2Mobile International Limited.
Removed
We switched our focus to Mainland China and South America markets, which showed great market potentials in the years ended March 31, 2023 and 2024.
Added
We have two in-house brands, “UTime,” which is our middle-to-high end label and targets middle class consumers from emerging markets; and “Do”, our low- to mid-end brand, which is positioned to target grassroots consumers and price-sensitive consumers in emerging markets. Our prime end user groups are segmented into regions like South America, South Asia, Southeast Asia and Africa.
Removed
Aggregate sales in Mainland China and South America contributed 42.2% and 70.1% of total revenue for the fiscal year ended March 31, 2023 and 2024, respectively. ● Operating expenses consist of selling expenses, general and administrative expenses, research and development (“R&D”) expenses and other (income) expense.
Added
We value systematic management and organize production with strictly high-quality standards and production technology.
Removed
The increase in operating expense for the fiscal year ended March 31, 2023 (compared to year ended March 31, 2022) was mainly due to the increase in general and administrative expenses, increase in R&D expenses and increase in selling expenses.
Added
We continuously endeavor to improve our overall manufacturing service level, to strengthen our cost control processes, and to enhance our ability to respond rapidly to market dynamics in order to ensure a sustainable development in our EMS segment, especially in Printed Circuit Board and Assembly (“PCBA”) for consumer electronic products.
Removed
The decrease in operating expense for the fiscal year ended March 31, 2024 (compared to year ended March 31, 2023) was mainly due to the decrease in general and administrative expenses and decrease in selling expenses. ● Exchange rate between RMB and US Dollar considerably affected our financial results as approximately 40%-60% of our products were sold to customers outside of mainland China, and the exchange rate between the US Dollar and RMB considerably affected our financial results.
Added
The following charts display our products contribution for the fiscal years ended March 31, 2023, 2024 and 2025.
Removed
The increase was mainly due to increase of sales of higher-end feature phones, tablets and technical services provided to customers, which had contributed to higher margin in the year ended March 31, 2023.
Added
The 1890.4% increase in loss was mainly attributable to the recording of allowance for doubtful account of RMB505.8 million in accounts receivable, provision for obsolete inventories of RMB9.8 million, impairment of long-lived assets of RMB10.5 million and the share-based compensation expenses of RMB 111.0 million under our share incentive plans in fiscal year.
Removed
Operating expenses Year ended March 31, 2022 2023 RMB US$ RMB US$ (in thousands) Selling expenses 5,282 832 7,373 1,073 General and administrative expenses (1) 23,762 3,743 89,206 12,982 R&D related expenses (1) 14,070 2,216 15,980 2,325 Other (income) expenses, net 1,505 237 (4,533 ) (660 ) Total 44,619 7,029 108,026 15,720 (1) These expenses are combined as general and administrative expenses in consolidated statements of comprehensive income (loss).
Added
The year-on-year increase in operating expense for fiscal 2025 consisted of a RMB505.8 million increase in bad debt expenses, a RMB9.8 million increase in provision for obsolete inventories, a RMB10.5 million increase in impairment of long-lived assets, and a RMB111.0 million increase in share-based compensation expenses.
Removed
The net increase in our operating expenses was attributed to (i) increase in general and administrative expenses by RMB65.4 million (ii) increase in R&D expenses by RMB1.9 million (iii) increase in selling expenses by RMB2.1 million and (iv) net increase of other income by RMB6.0 million for the year ended March 31, 2023.
Added
Operating expenses Year ended March 31, 2024 2025 RMB US$ RMB US$ (in thousands) Selling expenses 6,356 896 7,028 968 General and administrative expenses (1) 24,065 3,392 128,134 17,657 R&D related expenses (1) 16,646 2,346 9,457 1,304 Other (income) expenses, net (8,057 ) (1,136 ) 527,088 72,635 Total 39,010 5,498 671,707 92,564 (1) These expenses are combined as general and administrative expenses in consolidated statements of comprehensive income (loss). 100 Our operating expenses consist of selling expenses, general and administrative expenses, R&D expenses and other expenses, net.
Removed
A substantial majority of our accounts receivable are derived from sales to well-known technological clients. We follow the allowance method of recognizing uncollectible accounts receivable and other receivables, pursuant to which we regularly assess our ability to collect outstanding customer invoices and make estimates of the collectability of accounts receivable and other receivables.
Added
The net increase in our operating expenses was attributed to the provision for doubtful account of RMB505.8 million, allowances for obsolete inventories of RMB9.8 million, impairment of long-lived assets of RMB10.5 million, and the share-based compensation of RMB 111.0 million in Fiscal year 2025.
Removed
We provide an allowance for doubtful accounts when we determine that the collection of an outstanding customer receivable is not probable. Judgments and Uncertainties: The allowance for doubtful accounts is reviewed on a timely basis to assess the adequacy of the allowance.
Added
The decrease of income was mainly attributed to the provision for doubtful account of RMB505.8 million, allowances for obsolete inventories of RMB9.8 million, impairment of long-lived assets of RMB10.5 million. Income tax benefits Income tax deferred benefit is RMB0.2 million and RMB0.1 million for the years ended March 31, 2024 and 2025.
Removed
We take into consideration (a) historical bad debts experience, (b) any circumstances of which we are aware of a customer’s or debtor’s inability to meet its financial obligations, (c) changes in our customer or debtor payment history, and (d) our judgments as to prevailing economic conditions in the industry and the impact of those conditions on our customers and debtors.
Added
Overall gross profit margin for the fiscal year ended March 31, 2024 was 5.2%, which was 10.2% lower than the gross profit margin of 15.4% for the fiscal year ended March 31, 2023.
Removed
Sensitivity of Estimate to Change: The uncollectible amounts estimated are based on review on regular basis.
Added
General and administrative expenses primarily include salary and benefits to our accounting, human resources, design and executive office staff, rental expenses, property management and utilities, and office supplies.
Removed
If circumstances change, such that the financial conditions of our customers or debtors are adversely affected and they are unable to meet their financial obligations to us, we may need to record additional allowances, which would result in a reduction of our net income 107 Impairment of Inventories Description: Inventories of the Company consist of raw materials, finished goods and work in process.
Added
Operating activities Net cash used in operating activities was RMB31.7 million (US$4.4 million) for the year ended March 31, 2025. The balance represented a decrease of cash flow of RMB341.9 million from RMB373.6 million used in the year ended March 31, 2024.
Added
Total net loss for the year ended March 31, 2025 was RMB670.1 million (US$92.3 million), including a loss of RMB1.6 million from discontinued operations. The difference between total net loss and the net cash used in operating activities are attributed to the changes in various asset and liability account balances throughout the year ended March 31, 2025.
Added
Major changes are i) increase of accounts receivable in the amount of RMB22.3 million (US$3.1 million, a decrease to cash) resulted from an increase in sales, ii) increase of accounts payable in the amount of RMB32.4 million (US$4.5 million, an increase to cash), iii) increase of RMB5.2 million (US$0.7 million, a decrease to cash) in the ending inventory balance as of March 31, 2025, iv) increase of RMB41.9 million (US$5.8 million) in prepayment and other current assets (a decrease to net cash) which was mainly due to the advance paid to suppliers, v) increase of RMB25.4 million (US$3.5 million) in other payables and accrued liabilities (an increase to net cash), vi) increase of RMB5.5 million (US$0.8 million) in net amount of related parties (an increase to net cash) during the year ended March 31, 2025.
Added
In addition, the Company had non-cash expenses relating to depreciation and amortization of RMB5.7 million (US$0.8 million), provision of impairment reserve of RMB 9.8 million (US$1.4 million) on obsolete inventory, provision for doubtful account of RMB505.8 million (US$69.7 million) and issuance of common stock as incentive of RMB111.0 million (US$15.3 million).
Added
Investing activities Net cash provided by investing activities for fiscal year ended March 31, 2025 was RMB nil as compared to net cash provided by investing activities of RMB5.5 million for the fiscal year ended March 31, 2024.
Added
The cash inflow was mainly attributable to proceeds from issuance of common stock to non-U.S. investors in Feb 2025 . Net cash provided by financing activities for year ended March 31, 2024 was RMB369.6 million (US$52.1 million) as compared to RMB27.0 million for the year ended March 31, 2023.
Added
In July 2024, UTime Guangxi entered into a Lease Agreement to lease Factory for production from Nanning Industrial Investment Group Cp., Ltd, for a term of 3 years, with a monthly rental payment of RMB 101,796.84 for the first two years, and RMB 104,850.75 for the last year (including 3 months rent-free period).
Added
In June 2024, UTime Guangxi entered into a Lease Agreement to lease dormitory for staff from Nanning Industrial Investment Group Cp., Ltd, for a term from June 25, 2024 to June 24, 2026, with a monthly rental payment of RMB 9,900.00.
Added
Management considers the following factors when determining the collectability of specific accounts: creditworthiness of customers, aging of the receivables, past transaction history with customers and their current condition, changes in customer payment terms, specific facts and circumstances, and the overall economic climate in the industries the Company serves.
Added
The Company evaluates its accounts receivable for expected credit losses on a regular basis. The Company maintains an estimated allowance for credit loss to reduce its accounts receivable to the amount that it believes will be collected.
Added
The Company uses the creditworthiness of customers, aging of the receivables, past transaction history with customers and their current condition, changes in customer payment terms, specific facts and circumstances, and the overall economic climate in the industries the Company serves to monitor the Company’s receivables within the scope of expected credit losses model and use these as a basis to develop the Company’s expected loss estimates. 106 Impairment of Inventories Description: Inventories of the Company consist of raw materials, finished goods and work in process.

Item 6. [Reserved]

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

14 edited+2 added−3 removed58 unchanged
Biggest changeThe maximum number of Ordinary Shares that may be issued pursuant to awards granted to each Eligible Person under this Plan is equal to 58,817,092 Ordinary Shares; the maximum number of Ordinary Shares that may be issued under this Plan is 58,817,092 Ordinary Shares. ● Awards The types of awards that may be granted under this Plan are (i) Share Options, the grant of a right to purchase a specified number of Ordinary Shares during a specified period as determined by the Administrator; (ii) Share Appreciation Rights (“SAR”), a right to receive a payment, in cash and/or Ordinary Shares, equal to the excess of the fair market value of a specified number of Ordinary Shares on the date the SAR is exercised over the “base price” of the award, which base price shall be determined by the Administrator and set forth in the applicable award agreement; (iii) other awards, including restricted shares, restricted share units, and dividend equivalent rights. ● Effective Date, Termination and Suspension, Amendments Unless earlier terminated by the Board, this Plan shall terminate at the close of business on the day before the tenth anniversary of the Effective Date.
Biggest changeClass A ordinary shares that are used to pay the exercise price of an option or that are withheld to satisfy the Participant’s tax withholding obligation will not be available for re-grant under the Plan. ● Awards The types of awards that may be granted under this Plan are (i) Share Options, the grant of a right to purchase a specified number of Ordinary Shares during a specified period as determined by the Administrator; (ii) Share Appreciation Rights (“SAR”), a right to receive a payment, in cash and/or Ordinary Shares, equal to the excess of the fair market value of a specified number of Ordinary Shares on the date the SAR is exercised over the “base price” of the award, which base price shall be determined by the Administrator and set forth in the applicable award agreement; (iii) other awards, including restricted shares, restricted share units, and dividend equivalent rights. ● Effective Date, Termination and Suspension, Amendments Unless earlier terminated by the Board, this Plan shall terminate at the close of business on the day before the tenth anniversary of the Effective Date.
Our Audit Committee performs several functions, including: ● selecting the independent registered public accounting firm and pre-approving 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 the adequacy and effectiveness of our accounting and internal control policies and procedures and any special steps taken to monitor and control major financial risk exposures; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; ● monitoring compliance with our code of ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and ● reporting regularly to the board. 112 Compensation Committee Na Cai, Xiaoqian Jia and Hailin Xie serve as members of our Compensation Committee.
Our Audit Committee performs several functions, including: ● selecting the independent registered public accounting firm and pre-approving 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 the adequacy and effectiveness of our accounting and internal control policies and procedures and any special steps taken to monitor and control major financial risk exposures; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; ● monitoring compliance with our code of ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and ● reporting regularly to the board. 111 Compensation Committee Na Cai, Xiaoqian Jia and Hailin Xie serve as members of our Compensation Committee.
The address of each of our directors and executive officers is c/o UTime Limited, 7th Floor, Building 5A, Shenzhen Software Industry Base, Nanshan District, Shenzhen, People’s Republic of China, 518061. 108 Executive Officers and Directors Hengcong Qiu has been served as our Chief Executive Officer and Chairman of the Board of Directors since May 2023. Before joining our company, Mr.
The address of each of our directors and executive officers is c/o UTime Limited, 7th Floor, Building 5A, Shenzhen Software Industry Base, Nanshan District, Shenzhen, People’s Republic of China, 518061. 107 Executive Officers and Directors Hengcong Qiu has been served as our Chief Executive Officer and Chairman of the Board of Directors since May 2023. Before joining our company, Mr.
The Board may, at any time, terminate or, from time to time, amend, modify or suspend this Plan, in whole or in part. No awards may be granted during any period that the Board suspends this Plan. F. Disclosure of a registrant’s action to recover erroneously awarded compensation. Not applicable. 114
The Board may, at any time, terminate or, from time to time, amend, modify or suspend this Plan, in whole or in part. No awards may be granted during any period that the Board suspends this Plan. F. Disclosure of a registrant’s action to recover erroneously awarded compensation. Not applicable. 113
All fees are subject to approval and/or change as deemed appropriate by the Board. 111 6.C. Board Practices Terms of Directors and Officers Expiration of Term of Directors Our officers are appointed by and serve at the discretion of our board of directors and the shareholders voting by ordinary resolution.
All fees are subject to approval and/or change as deemed appropriate by the Board. 110 6.C. Board Practices Terms of Directors and Officers Expiration of Term of Directors Our officers are appointed by and serve at the discretion of our board of directors and the shareholders voting by ordinary resolution.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. 113 Incentive Compensation On April 24, 2024, we registered an aggregate of 58,817,092 ordinary shares, par value US$0.0001 per share, reserved for issuance under the UTime Limited 2024 Performance Incentive Plan (the “Plan”).
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. 112 Incentive Compensation On April 24, 2024, we registered an aggregate of 58,817,092 ordinary shares, par value US$0.0001 per share, reserved for issuance under the UTime Limited 2024 Performance Incentive Plan.
Compensation For the fiscal years ended March 31, 2024, we paid an aggregate of RMB 0.7 million (approximately $ 0.1 million) to our executive officers, and we paid an aggregate of US$ nil cash compensation to our non-executive directors.
Compensation For the fiscal years ended March 31, 2025, we paid an aggregate of RMB 0.7 million (approximately $ 0.1 million) to our executive officers, and we paid an aggregate of US$ nil cash compensation to our non-executive directors.
Ordinary shares beneficially owned Name Number % Directors and Executive Officers (1) : Hengcong Qiu - - Minfei Bao 4,380,000 0.97 Yihuang Chen - Honggang Cao - Shibin Yu - - Xiaoqian Jia - - Na Cai - - Hailin Xie - - All directors and executive officers as a group (eight persons) 4,380,000 0.97 Principal Shareholders: (1) Unless otherwise noted, the business address of each of the following entities or individuals is 7th Floor, Building 5A, Shenzhen Software Industry Base, Nanshan District, Shenzhen, People’s Republic of China, 518061.
Class A Ordinary shares beneficially owned Name Number % Directors and Executive Officers (1) : Hengcong Qiu - - Minfei Bao 17,520 0.97 Yihuang Chen - Honggang Cao - Xiaoqian Jia - - Na Cai - - Hailin Xie - - All directors and executive officers as a group (eight persons) 17,520 0.97 Principal Shareholders: (1) Unless otherwise noted, the business address of each of the following entities or individuals is 7th Floor, Building 5A, Shenzhen Software Industry Base, Nanshan District, Shenzhen, People’s Republic of China, 518061.
Equity Awards We have not granted any equity awards to our directors or executive officers during the fiscal year ended March 31, 2024. 110 Employment Agreements We have entered into employment agreements with each of our executive officers.
Equity Awards We have not granted any equity awards to our directors or executive officers during the fiscal year ended March 31, 2025. 109 Employment Agreements We have entered into employment agreements with each of our executive officers.
Employees See the section entitled “Employees” in Item 4.B above. 6.E. Share Ownership As of July 29, 2024, there are 450,930,953 ordinary shares issued and outstanding. Holders of our ordinary shares are entitled to vote together as a single class on all matters submitted to shareholders for approval.
Employees See the section entitled “Employees” in Item 4.B above. 6.E. Share Ownership As of July 29, 2025, there are 20,984,796 Class A Ordinary Shares issued and outstanding. Holders of our ordinary shares are entitled to vote together as a single class on all matters submitted to shareholders for approval.
Name Age Position Hengcong Qiu 39 Chief Executive Officer and Chairman of the Board of Directors Minfei Bao 51 Director Yihuang Chen 44 Chief Operating Officer Honggang Cao 43 Chief Manufacturing Officer Shibin Yu 40 Chief Financial Officer Xiaoqian Jia 41 Independent Director and Chair of Nominating and Corporate Governance Committee Na Cai 38 Independent Director and Chair of Audit Committee Hailin Xie 44 Independent Director and Chair of Compensation Committee There are no family relationships among our directors and officers.
Name Age Position Hengcong Qiu 40 Chief Executive Officer and Chairman of the Board of Directors, Interim Chief Financial Officer Minfei Bao 52 Director Yihuang Chen 45 Chief Operating Officer Honggang Cao 44 Chief Manufacturing Officer Xiaoqian Jia 42 Independent Director and Chair of Nominating and Corporate Governance Committee Na Cai 39 Independent Director and Chair of Audit Committee Hailin Xie 45 Independent Director and Chair of Compensation Committee There are no family relationships among our directors and officers.
No holder of ordinary shares has different voting rights from any other holders of ordinary shares. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. The percentages of shares beneficially owned in the table below are based on 450,930,953 ordinary shares outstanding as of July 29, 2024.
No holder of ordinary shares has different voting rights from any other holders of ordinary shares. Beneficial ownership is determined in accordance with the rules and regulations of the SEC. The percentages of shares beneficially owned in the table below are based on 20,984,796 Class A ordinary shares outstanding as of July 29, 2025.
Mr. Yu is also qualified as a Certified Public Accountants in China and is a CFA Charterholder. 109 Xiaoqian Jia has served as our director since May 2023. Mr. Jia has been serving as Chief Executive Officer of CORNS (Singapore)’s Thailand Operation Center since 2022. From 2021 to 2022, Mr. Jia served as COO and operating director of YD PLASTICS.
Cao received a B.A. from the North University of China. 108 Xiaoqian Jia has served as our director since May 2023. Mr. Jia has been serving as Chief Executive Officer of CORNS (Singapore)’s Thailand Operation Center since 2022. From 2021 to 2022, Mr. Jia served as COO and operating director of YD PLASTICS.
The Board or committees established by the Board will administer the Plan as Administrator. ● Ordinary Shares Subject to The Plan; Share Limits The shares that may be issued under this Plan shall be the Company’s authorized but unissued Ordinary Shares and any Ordinary Shares held as treasury shares.
The Board or committees established by the Board will administer the Plan as Administrator. ● Ordinary Shares Subject to The Plan; Share Limits The Plan provides for an aggregate of 540,000 Class A ordinary shares to be available for awards.
Removed
Cao received a B.A. from the North University of China. Shibin Yu has served as our Chief Financial Officer since December 2019 and has been the financial manager and controller of UTime SZ since March 2019. From June 2017 to March 2019, Mr. Yu served as a senior associate at BDO China Shu Lun Pan Certified Public Accountants LLP.
Added
On March 12, 2025, we adopted the UTime Limited 2025 Performance Incentive Plan (the “Plan”), but have not registered any shares under this Plan.
Removed
From November 2013 to April 2017, Mr. Yu served as the Taxation Supervisor at Edan Instruments, Inc, a Medical Electronic Equipment manufacturer (currently publicly traded on SZSE: 300326). From February 2012 to September 2013, Mr. Yu served as the Accounting Head at Shenzhen Dazu Photovoltaic Technology Co., Ltd, a photovoltaic equipment provider. Mr. Yu received a B.A. from Dezhou University.
Added
If an award is forfeited or if any option terminates, expires or lapses without being exercised, the Class A ordinary shares subject to such award will again be made available for future grant.
Removed
We have not issued any shares as of the date of this report.

Item 7. Management's Discussion & Analysis

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

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Biggest changeAs of the date of this annual report, the Company had no amounts due from Grandsky Phoenix Limited. Due to Related Parties As of March 31, 2023, the Company had amounts due to Mr. Bao of RMB4.8 million (US$0.7 million). In April and May 2020, Mr.
Biggest changeDue to Related Parties As of March 31, 2023, the Company had amounts due to Mr. Bao of RMB4.8 million (US$0.7 million). In April and May 2020, Mr. Bao provided loans of RMB0.9 million (US$0.1 million) to the Company and the Company paid RMB1.5 million (US$0.2 million) to Mr. Bao. On September 17, 2021, Mr.
The transactions are identified in accordance with the rules prescribed under Form 20-F and may not be considered as related party transactions under PRC law. Amounts due from/to Philectronics Inc. (“Philectronics”) As of the date of this annual report, the amount due from Philectronics was RMB0.5 million (US$0.1 million).
The transactions are identified in accordance with the rules prescribed under Form 20-F and may not be considered as related party transactions under PRC law. Amounts due from/to Philectronics Inc. (“Philectronics”) As of the date of this annual report, the amount due from Philectronics was RMB0.6 million (US$0.1 million).
As of the date of this annual report, the Company had no amounts due from Mr. Bao. As of March 31, 2022, the Company had amounts due from Grandsky Phoenix Limited of RMB0.9 million (US$0.1 million), which was received by the Company on August 26, 2022.
As of March 31, 2022, the Company had amounts due from Grandsky Phoenix Limited of RMB0.9 million (US$0.1 million), which was received by the Company on August 26, 2022. As of the date of this annual report, the Company had no amounts due from Grandsky Phoenix Limited.
As of the date of this annual report, the amount due to Philectronics was RMB0.5 million (US$0.1 million). Due from Related Parties As of March 31, 2022, the Company had amounts due from Mr. Bao of RMB0.05 million (US$0.01 million). which was received by the Company on August 15, 2022.
Due from Related Parties As of March 31, 2022, the Company had amounts due from Mr. Bao of RMB0.05 million (US$0.01 million). which was received by the Company on August 15, 2022. As of the date of this annual report, the Company had no amounts due from Mr. Bao.
He, through HMercury Capital Limited, own 4,380,000 ordinary shares, representing 1.12% of equity interest and 137,793 ordinary shares, representing 0.04% of equity interest of the Company, respectively, as of the date of this annual report. 115 7.C. Interests of Experts and Counsel Not applicable.
He, through HMercury Capital Limited, own 17,520 Class A ordinary shares, representing 0.49% of equity interest and 551 Class B ordinary shares, representing 0.02% of equity interest of the Company, respectively, as of the date of this annual report. 114 7.C. Interests of Experts and Counsel Not applicable.
The loan is restricted on purpose only to support daily operation for the Companies that is controlled by Mr. Bao. The loan was repaid on March 17, 2022 and the agreement was renewed on March 18, 2022. On September 19, 2022, this loan was repaid and renewed, total loan amount was reduced to RMB 2.0 million (US$0.3 million).
Bao entered into a loan agreement with China Resources Bank of Zhuhai Co., Ltd. and borrowed RMB3.0 million (US$0.5 million). The loan is restricted on purpose only to support daily operation for the Companies that is controlled by Mr. Bao. The loan was repaid on March 17, 2022 and the agreement was renewed on March 18, 2022.
As of the date of this annual report, the Company has amounts due to Mr. Bao of RMB11.8 million (US$1.7 million). Loans from Mr. Bao As of March 31, 2024, a loan balance of RMB 11.5 (US$ 1.6 million) was included in the total amounts due to Mr. Bao. See “Due to Related Parties” above.
Bao As of March 31, 2025, a loan balance of RMB 17.3 (US$ 2.4 million) was included in the total amounts due to Mr. Bao. See “Due to Related Parties” above.
Removed
Bao provided loans of RMB0.9 million (US$0.1 million) to the Company and the Company paid RMB1.5 million (US$0.2 million) to Mr. Bao. On September 17, 2021, Mr. Bao entered into a loan agreement with China Resources Bank of Zhuhai Co., Ltd. and borrowed RMB3.0 million (US$0.5 million).
Added
On September 19, 2022, this loan was repaid and renewed, total loan amount was reduced to RMB 2.0 million (US$0.3 million). As of the date of this annual report, the Company has amounts due to Mr. Bao of RMB17.3 million (US$2.4 million). Loans from Mr.