Ridgetech, Inc. Reports Fiscal Year 2025 Financial Results | RDGT Stock News

, /PRNewswire/ -- Ridgetech, Inc. (Nasdaq:RDGT) ("Ridgetech" or the "Company"), a wholesale distributor of pharmaceutical and other healthcare products inChina, today announced its financial results for the fiscal year endedMarch 31, 2025.Mr. Frank Zhao, Interim Chief Executive Officer and Chief Financial Officer of Ridgetech, commented, "We are pleased to present a relatively stable revenue outcome for fiscal year 2025, a year marked by significant transformation for the Company. During this period, we divested our retail pharmacy business and acquired Ridgeline and its subsidiary, Allright (Hangzhou) Internet Technology Co. Ltd ("Allright"), marking our strategic expansion into both online and offline wholesale distribution of pharmaceutical and healthcare products in China.This move reflects our commitment to shift our resources focus onto the wholesale pharmaceutical sector, aligning with the evolving landscape and intensifying competition in China's healthcare industry. We believe Allright's broad and growing online and offline distribution network will rapidly become an indispensable contributor to our revenue and open up new business opportunities through its multiple platforms.Despite the scale of change in fiscal year 2025, we maintained stable total revenue of approximately US$120 million, while securing healthy profit margins across both our offline wholesale operations and online platforms. Notably, revenue from Allright's own and third-party online platforms -- only reflecting activity from March 2025 following our acquisition on February 28, 2025 -- already contributed nearly 1% of our total revenue, with a gross margin of 7.4%.To support this strategic shift, we increased our investment in sales and marketing by 64.2%, primarily to build a stronger foundation for post-transformation growth.Looking ahead, with the completion of our strategic transformation and continued progress in integrating our business segments and internal resources, we believe Ridgetech is now better positioned to drive long-term sustainable growth and deliver improved financial performance."Fiscal Year 2025 Financial SummaryIn accordance with ASC 205, the Company has classified the historical retail operations, primarily conducted through Zhejiang Jiuxin Investment Management Co., Ltd. ("Jiuxin Investment") and its controlled entities, as discontinued operations and has re-presented prior periods accordingly. As a result, the comparative figures in this release reflect these adjustments and may differ from those previously reported.Revenue was$119.97 millionfor the fiscal year endedMarch 31, 2025, compared to$123.99 millionfor the same period of last year.Gross profit was$3.84 millionfor the fiscal year endedMarch 31, 2025, compared to$4.88 millionfor the same period of last year.Gross margin was 3.2% for the fiscal year endedMarch 31, 2025, compared to 3.9% for the same period of last year.Net income was$10.20 million, or$1.84per basic and diluted earnings per share, for the fiscal year endedMarch 31, 2025, compared to net loss of$4.23 million, or$2.93per basic and diluted loss per share, for the same period of last year.Fiscal Year 2025 Financial ResultsRevenueRevenue decreased by$4.02 million, or 3.2%, to$119.97 millionfor the fiscal year endedMarch 31, 2025, from$123.99 millionfor the same period of last year.Revenue from offline wholesale decreased by$5.13 million, or 4.3%, to$118.86 millionfor the fiscal year endedMarch 31, 2025, from$123.99 millionfor the same period of last year. As a local wholesale distributor in pharmaceutical products, the Company's sales are limited to local and neighborhood regions. As the market became competitive, to keep reasonable profitability, the Company abandoned certain wholesales with low gross profit margin in the year ended March 31, 2025.As a result, the wholesale revenue declined.Revenue from Online platform increased to$1.11 millionfor the fiscal year endedMarch 31, 2025, fromnilfor the same period of last year. The increased figure reflects Allright's online platform revenue for the month of March, 2025. On February 28, 2025, the Company acquired Ridgeline and its subsidiary, Allright, which is a rapidly growing online and offline wholesale distributor of pharmaceutical and other healthcare products such as health foods, cosmetics and daily necessities in China. Allright actively trades on popular online distribution platforms nationwide. Through these online platforms, the Company sell various medical products to retail pharmacies, clinics and other vendors across the country. Allright also has its own online distribution platform.Gross profit and gross marginTotal cost of goods sold decreased to$116.13 millionfor the fiscal year endedMarch 31, 2025, from$119.12 millionfor the same period of last year. Gross profit decreased by$1.04million, or 21.3%, to$3.84million for the fiscal year endedMarch 31, 2025,from$4.88 millionfor the same period of last year. Overall gross margin decreased by 0.7 percentage points to 3.2% for the fiscal year endedMarch 31, 2025, from 3.9% for the same period of last year.Gross margins for offline wholesale and online platform were 3.2% and 7.4%, respectively, for the fiscal year endedMarch 31, 2025, compared to gross margins for offline wholesale and online platform of 3.9% and nil%, respectively, for the same period of last year.Income (Loss) from operationsSales and marketing expenses increased by$0.60 million, or 64.2%, to$1.53 millionfor the fiscal year endedMarch 31, 2025,from$0.93 millionfor the same period of last year. The increase was primarily attributable to the increase in drug distribution service fee. Overall, such expenses as a percentage of the Company's revenue were 1.3% and 0.8% respectively, for the years ended March 31, 2025 and 2024.General and administrative expenses decreased by$8,158, or 0.2%, to$3.34million for the fiscal year endedMarch 31, 2025,from$3.35 millionfor the same period of last year. The decrease in general and administrative expenses was primarily due to the decrease in warehousing management fee, offset by the increase in exchange loss of approximately $0.51 million. Such expenses as a percentage of revenue increased for the year ended March 31, 2025 to 2.8% from 2.7% for the same period a year ago. In the year ended March 31, 2025, the Company recorded approximately $0.52 million in warehousing management fee as compared to approximately of $0.99 million in warehousing management fee in the year ended March 31, 2024.Loss from operations was$1.04 millionfor the fiscal year endedMarch 31, 2025, compared toincome from operations of $0.60 millionfor the same period of last year. Operating margin was (0.9)% and 0.5% for the fiscal year endedMarch 31, 2025and 2024, respectively.Net loss from continuing operationsNet loss from continuing operations was $1.45millionand $0.79 millionin the years ended March 31, 2025 and 2024.Net income (loss)Net income was$10.20 million, or$1.84per basic and diluted earnings per share for the fiscal year endedMarch 31, 2025, compared to net loss of$4.23 million, or$2.93per basic and diluted loss per share for the same period of last year.Financial ConditionAs of March 31, 2025, the Company had cash and cash equivalents of $12.78 million, compared to $2.30 million as of March 31, 2024. Net cash provided by operating activities was $1.25 million for the fiscal year ended March 31, 2025, compared to net cash used in operating activities of $3.16 million for the same period of last year. The change is primarily attributable to an increase in other payables and accrued liabilities of $27.88 million, an increase in accounts receivable of $11.84 million and an increase in net income (loss) of $14.43 million, offset by a decrease in accounts payable of $27.13 million, a decrease in other receivable of $11.09 million and a decrease in gain of divestiture of Jiuxin Investment of $15.76 million.Net cash used in investing activities was$18.14 millionfor the fiscal year endedMarch 31, 2025, compared to$2.04 millionfor the same period of last year. The change is primarily attributable to divestiture of Jiuxin Investment.Net cash provided by financing activities was$1.51 millionfor the fiscal year endedMarch 31, 2025, compared to$8.00 millionfor the same period of last year. The change is primarily due to proceeds from equity and debt financing and change in notes payables issued to Hangzhou United Bank.AboutRidgetech, Inc.Ridgetech, Inc., formerly known asChina Jo-JoDrugstores, Inc. ("Ridgetech" or the "Company"), is a growing online and offline wholesale distributor of pharmaceutical and other healthcare products in China. Ridgetech actively trades on popular online distribution platforms nationwide and has its own online distribution platform. The Company believes that trading on these platforms offers greater opportunities to distribute pharmaceutical products nationwide. For more information about the Company, please visitwww.ridgetch.com. The Company routinely posts important information on its website.Forward-Looking StatementsThis press release contains information about the Company's view of its future expectations, plans and prospects that constitute forward-looking statements. Forward-looking statements usually, but not always, contain the words "estimate," "anticipate," "believe," "expect," or similar expressions, or the negative of those words and expressions, as well as statements in future tense. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with the Company's ability to secure additional funding, execute its business strategy, and respond to changing market conditions; fluctuations in operating results; the Company's ability to maintain and grow its distribution platforms and customer base; the Company's dependence on key customers; the effectiveness of marketing and business development efforts; the integration of acquired businesses, technologies, or assets; intensifying competition within the pharmaceutical and healthcare distribution industry; evolving government regulations and macro-economic conditions in China and globally; its ability to attract, hire, and retain qualified management and employees; and the adequacy of its intellectual property protection. The Company encourages you to review other factors that may affect its future results in the Company's annual reports and in its other filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or publicly announce revisions to any forward-looking statements to reflect future events or developments, except as required by law.For more information, please contact:Company Contact:Frank ZhaoChief Financial Officer+86-571-88077108frank.zhao@ridgetch.comInvestor Relations Contact:Tina XiaoAscent Investor Relations LLC+1-646-932-7242investors@ascent-ir.comRIDGETECH, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSMarch31,March31,20252024ASSETSCURRENT ASSETS Cash and cash equivalents$12,779,781$2,297,256 Restricted cash5,761,2941,988,710 Trade accounts receivables27,811,8136,014,511 Inventories9,758,0719,076,734 Other receivables, net2,419,671218,765 Advances to suppliers433,140182,075 Due from related parties-19,737 Other current assets745,477- Current assets of discontinued operations-49,884,574Total current assets59,709,24769,682,362NON-CURRENT ASSETS Property and equipment, net8,9318,377 Intangible assets, net3,302,9611,276,737 Goodwill1,463,733- Non-current assets of discontinued operations-24,089,614Total non-current assets4,775,62525,374,728 Total assets$64,484,872$95,057,090LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES Accounts payable$19,666,664$30,576,909 Notes payable10,386,6126,594,442 Other payables2,319,139592,876 Due to related parties2,1302,140 Customer deposits264,068174,138 Taxes payable1,521,546543,081 Accrued liabilities196,210197,199 Current liabilities of discontinued operations-35,679,310Total current liabilities34,356,36974,360,095NON-CURRENT LIABILITIES Deferred tax liabilities492,121- Non-current liabilities of discontinued operations-6,403,858Total non-current liabilities492,1216,403,858 Total liabilities34,848,49080,763,953COMMITMENTS AND CONTINGENCIESSHAREHOLDERS' EQUITYOrdinary shares; $0.24 par value; 36,000,000,000 shares authorized; 5,855,009 and 1,743,362 shares issued and outstanding as of March 31, 2025 and 2024, respectively1,405,202418,407Preferred shares; $0.001 par value; 10,000,000 shares authorized; nil issued and outstanding as of March 31, 2025 and 2024-- Additional paid-in capital91,743,16386,413,978 Statutory reserves-1,309,109 Accumulated deficit(63,312,779)(73,507,246) Accumulated other comprehensive income(199,204)1,005,762Total shareholders' equity attributed to Ridgetech29,636,38215,640,010Noncontrolling interests-(1,346,873)Total shareholders' equity29,636,38214,293,137 Total liabilities and shareholders' equity$64,484,872$95,057,090RIDGETECH, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)For the years ended March 31,202520242023REVENUES, NET$119,971,638$123,994,053$120,199,193COST OF GOODS SOLD116,132,823119,115,636116,597,751GROSS PROFIT3,838,8154,878,4173,601,442SELLING EXPENSES1,534,200934,2231,266,025GENERAL AND ADMINISTRATIVE EXPENSES3,339,9543,348,1125,137,741STOCK BASED COMPENSATION--10,360,000TOTAL OPERATING EXPENSES4,874,1544,282,33516,763,766INCOME (LOSS) FROM OPERATIONS(1,035,339)596,082(13,162,324)OTHER INCOME (EXPENSES):INTEREST INCOME92,834197,76331,582INVESTMENT LOSS-(1,607,537)(2,402,376)OTHER INCOME (EXPENSES)(8,155)(13,377)92,358LOSS BEFORE INCOME TAXES(950,660)(827,069)(15,440,760)PROVISION FOR INCOME TAXES503,524(41,363)394,541NET LOSS FROM CONTINUING OPERATIONS(1,454,184)(785,706)(15,835,301)NET LOSS FROM DISCONTINUED OPERATIONS, NET OF TAXES(4,103,718)(3,448,536)(5,303,476)GAIN OF DIVESTITURE JIUXIN INVESTMENT15,757,753--NET GAIN(LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX11,654,035(3,448,536)(5,303,476)NET INCOME (LOSS)10,199,851(4,234,242)(21,138,777)LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST5,384(14)(252)NET INCOME (LOSS) ATTRIBUTABLE TO RIDGETECH, INC.10,194,467(4,234,228)(21,138,525)NET INCOME (LOSS) ATTRIBUTABLE TO RIDGETECH, INC. FROM CONTINUING OPERATIONS(1,454,184)(785,706)(15,835,301)NET INCOME (LOSS) ATTRIBUTABLE TO RIDGETECH, INC. FROM DISCONTINUED OPERATIONS11,648,651(3,448,522)(5,303,224)OTHER COMPREHENSIVE LOSSFOREIGN CURRENCY TRANSLATION ADJUSTMENTS(1,204,966)(729,373)(2,617,857)COMPREHENSIVE INCOME (LOSS)8,994,885(4,963,615)(23,756,634)WEIGHTED AVERAGE NUMBER OF SHARES: Basic5,543,1181,444,263509,828 Diluted5,543,1181,444,263509,828INCOME (LOSS) PER SHARE: Basic$1.84$(2.93)$(41.46) Diluted$1.84$(2.93)$(41.46)RIDGETECH, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFor the years ended March 31,202520242023 CASH FLOWS FROM OPERATING ACTIVITIES:Net loss$10,199,851$(4,234,242)$(21,138,777)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization1,137,240790,449718,002 Bad debt direct write-off and provision and reversal85,642(249,257)7,579,886 Amortization of right-of-use assets4,879,0124,594,172- Loss from disposal of property and equipment-107,251- Gain of divestiture Jiuxin Investment(15,757,753)-- Deferred tax expenses(benefits)(29,822) Share-based compensation--10,360,000 Investment loss-1,607,5372,402,376 Change in operating assets and liabilities: Accounts receivable10,040,414(1,804,440)(2,531,755) Notes receivable(29,271)19,943(20,861) Inventories and biological assets405,822(1,699,621)(522,550) Other receivables(11,758,658)(672,830)(958,671) Advances to suppliers(341,702)(839,221)201,984 Long term deposit(1,361,613)(132,568)589,653 Other current assets-19,076331,426 Other noncurrent assets(359,114)69,539(30,483) Amount due from related parties-(317,828)- Accounts payable(21,128,762)6,002,1861,765,488 Other payables and accrued liabilities28,752,570868,975(1,426,829) Customer deposits(162,940)(144,761)(1,035,456) Taxes payable1,314,644(948,277)433,054 Operating lease liabilities(4,637,790)(6,191,522)-Net cash provided by (used in) operating activities1,247,770(3,155,439)(3,283,513)CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of equipment and building(155,360)(330,677)(118,272) Investment in a joint venture-(1,116,212)(4,379) Purchases of intangible assets-(66,973)(12,774) Additions to leasehold improvements(459,907)(525,988)(180,672) Acquisition of Ridgeline, net of cash acquired4,833,439-- Divestiture Jiuxin Investment, net of cash disposed(22,353,250)--Net cash used in investing activities(18,135,078)(2,039,850)(316,097)CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from short-term bank loan-1,116,212- Repayment of short-term bank loan(277,266)(837,159)- Repayment of third parties loan--(1,811,558) Proceeds from notes payable51,689,53156,875,40357,965,013 Repayment of notes payable(56,365,693)(52,997,171)(60,273,598) Proceeds from issuance of shares and warrants in private placements7,633,0002,589,6007,325,000 Proceeds from other payable-related parties325,7841,257,40643,785 Repayment of other payable-related parties(1,499,764)-(882,486)Net cash provided by financing activities1,505,5928,004,2912,366,156EFFECT OF EXCHANGE RATE ON CASH1,048,620(1,505,475)(2,535,479)DECREASE (INCREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH(14,333,096)1,303,527(3,768,933)CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, beginning of year32,874,17131,570,64435,339,577CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, end of year$18,541,075$32,874,171$31,570,644SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for income taxes$137,456$149,023$63,668Cash paid for interest6,28913,60464,943NON-CASH ACTIVITIES：Cashless exercise of warrants$-$-$135,118Issuance of shares for acquisition of subsidiaries3,582,250--Cancellation of shares for disposal of subsidiaries4,102,848--(a)The cash flows related to discontinued operations have not been segregated. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations. SOURCE Ridgetech, Inc.