Ridgetech, Inc. Reports Fiscal Year 2025 Financial Results

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 Summary

In 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 Results

Revenue

Revenue 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 margin

Total 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 operations

Sales 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 operations

Net 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 Condition

As 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 Statements

This 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 Zhao Chief Financial Officer +86-571-88077108 frank.zhao@ridgetch.com

Investor Relations Contact:

Tina Xiao Ascent Investor Relations LLC +1-646-932-7242 investors@ascent-ir.com

RIDGETECH, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS March31, March31, 2025 2024ASSETSCURRENT ASSETSCash and cash equivalents $ 12,779,781 $ 2,297,256Restricted cash 5,761,294 1,988,710Trade accounts receivables 27,811,813 6,014,511Inventories 9,758,071 9,076,734Other receivables, net 2,419,671 218,765Advances to suppliers 433,140 182,075Due from related parties – 19,737Other current assets 745,477 -Current assets of discontinued operations – 49,884,574Total current assets 59,709,247 69,682,362NON-CURRENT ASSETSProperty and equipment, net 8,931 8,377Intangible assets, net 3,302,961 1,276,737Goodwill 1,463,733 -Non-current assets of discontinued operations – 24,089,614Total non-current assets 4,775,625 25,374,728Total assets $ 64,484,872 $ 95,057,090LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIESAccounts payable $ 19,666,664 $ 30,576,909Notes payable 10,386,612 6,594,442Other payables 2,319,139 592,876Due to related parties 2,130 2,140Customer deposits 264,068 174,138Taxes payable 1,521,546 543,081Accrued liabilities 196,210 197,199Current liabilities of discontinued operations – 35,679,310Total current liabilities 34,356,369 74,360,095NON-CURRENT LIABILITIESDeferred tax liabilities 492,121 -Non-current liabilities of discontinued operations – 6,403,858Total non-current liabilities 492,121 6,403,858Total liabilities 34,848,490 80,763,953COMMITMENTS AND CONTINGENCIESSHAREHOLDERS' EQUITYOrdinary shares; $0.24 par value; 36,000,000,000 shares authorized; 1,405,202 418,4075,855,009 and 1,743,362 shares issued and outstanding as ofMarch 31, 2025 and 2024, respectivelyPreferred shares; $0.001 par value; 10,000,000 shares authorized; nil – -issued and outstanding as of March 31, 2025 and 2024Additional paid-in capital 91,743,163 86,413,978Statutory reserves – 1,309,109Accumulated deficit (63,312,779) (73,507,246)Accumulated other comprehensive income (199,204) 1,005,762Total shareholders' equity attributed to Ridgetech 29,636,382 15,640,010Noncontrolling interests – (1,346,873)Total shareholders' equity 29,636,382 14,293,137Total 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, 2025 2024 2023REVENUES, NET $ 119,971,638 $ 123,994,053 $ 120,199,193COST OF GOODS SOLD 116,132,823 119,115,636 116,597,751GROSS PROFIT 3,838,815 4,878,417 3,601,442SELLING EXPENSES 1,534,200 934,223 1,266,025GENERAL AND ADMINISTRATIVE EXPENSES 3,339,954 3,348,112 5,137,741STOCK BASED COMPENSATION – – 10,360,000TOTAL OPERATING EXPENSES 4,874,154 4,282,335 16,763,766INCOME (LOSS) FROM OPERATIONS (1,035,339) 596,082 (13,162,324)OTHER INCOME (EXPENSES):INTEREST INCOME 92,834 197,763 31,582INVESTMENT 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 TAXES 503,524 (41,363) 394,541NET LOSS FROM CONTINUING OPERATIONS (1,454,184) (785,706) (15,835,301)NET LOSS FROM DISCONTINUED OPERATIONS, (4,103,718) (3,448,536) (5,303,476)NET OF TAXESGAIN OF DIVESTITURE JIUXIN INVESTMENT 15,757,753 – -NET GAIN(LOSS) FROM DISCONTINUED 11,654,035 (3,448,536) (5,303,476)OPERATIONS, NET OF TAXNET INCOME (LOSS) 10,199,851 (4,234,242) (21,138,777)LESS: NET LOSS ATTRIBUTABLE TO 5,384 (14) (252)NONCONTROLLING INTERESTNET INCOME (LOSS) ATTRIBUTABLE TO 10,194,467 (4,234,228) (21,138,525)RIDGETECH, INC.NET INCOME (LOSS) ATTRIBUTABLE TO (1,454,184) (785,706) (15,835,301)RIDGETECH, INC. FROM CONTINUINGOPERATIONSNET INCOME (LOSS) ATTRIBUTABLE TO 11,648,651 (3,448,522) (5,303,224)RIDGETECH, INC. FROM DISCONTINUEDOPERATIONSOTHER COMPREHENSIVE LOSSFOREIGN CURRENCY TRANSLATION (1,204,966) (729,373) (2,617,857)ADJUSTMENTSCOMPREHENSIVE INCOME (LOSS) 8,994,885 (4,963,615) (23,756,634)WEIGHTED AVERAGE NUMBER OF SHARES:Basic 5,543,118 1,444,263 509,828Diluted 5,543,118 1,444,263 509,828INCOME (LOSS) PER SHARE:Basic $ 1.84 $ (2.93) $ (41.46)Diluted $ 1.84 $ (2.93) $ (41.46)RIDGETECH, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended March 31, 2025 2024 2023CASH FLOWS FROM OPERATING ACTIVITIES:Net loss $ 10,199,851 $ (4,234,242) $ (21,138,777)Adjustments to reconcile net loss to net cash used inoperating activities:Depreciation and amortization 1,137,240 790,449 718,002Bad debt direct write-off and provision and reversal 85,642 (249,257) 7,579,886Amortization of right-of-use assets 4,879,012 4,594,172 -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 – – 10,360,000Investment loss – 1,607,537 2,402,376Change in operating assets and liabilities:Accounts receivable 10,040,414 (1,804,440) (2,531,755)Notes receivable (29,271) 19,943 (20,861)Inventories and biological assets 405,822 (1,699,621) (522,550)Other receivables (11,758,658) (672,830) (958,671)Advances to suppliers (341,702) (839,221) 201,984Long term deposit (1,361,613) (132,568) 589,653Other current assets – 19,076 331,426Other noncurrent assets (359,114) 69,539 (30,483)Amount due from related parties – (317,828) -Accounts payable (21,128,762) 6,002,186 1,765,488Other payables and accrued liabilities 28,752,570 868,975 (1,426,829)Customer deposits (162,940) (144,761) (1,035,456)Taxes payable 1,314,644 (948,277) 433,054Operating lease liabilities (4,637,790) (6,191,522) -Net cash provided by (used in) operating activities 1,247,770 (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 acquired 4,833,439 – -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 payable 51,689,531 56,875,403 57,965,013Repayment of notes payable (56,365,693) (52,997,171) (60,273,598)Proceeds from issuance of shares and warrants in private 7,633,000 2,589,600 7,325,000placementsProceeds from other payable-related parties 325,784 1,257,406 43,785Repayment of other payable-related parties (1,499,764) – (882,486)Net cash provided by financing activities 1,505,592 8,004,291 2,366,156EFFECT OF EXCHANGE RATE ON CASH 1,048,620 (1,505,475) (2,535,479)DECREASE (INCREASE) IN CASH AND CASH (14,333,096) 1,303,527 (3,768,933)EQUIVALENTS AND RESTRICTED CASHCASH AND CASH EQUIVALENTS AND 32,874,171 31,570,644 35,339,577RESTRICTED CASH, beginning of yearCASH AND CASH EQUIVALENTS AND $ 18,541,075 $ 32,874,171 $ 31,570,644RESTRICTED CASH, end of yearSUPPLEMENTAL DISCLOSURE OF CASH FLOWINFORMATION:Cash paid for income taxes $ 137,456 $ 149,023 $ 63,668Cash paid for interest 6,289 13,604 64,943NON-CASH ACTIVITIES:Cashless exercise of warrants $ – $ – $ 135,118Issuance of shares for acquisition of subsidiaries 3,582,250 – -Cancellation of shares for disposal of subsidiaries 4,102,848 – –(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.

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