CGA(CGA) - 2023 Q3 - Quarterly Report

Sales Performance - For the nine months ended March 31, 2023, the company sold approximately 135,467 metric tons of fertilizer products, a decrease of 43.0% compared to 237,493 metric tons for the same period in 2022[164]. - Jinong's fertilizer sales for the nine months ended March 31, 2023, were approximately 23,684 metric tons, down 52.1% from 49,487 metric tons in the prior year[164]. - Gufeng's fertilizer sales for the nine months ended March 31, 2023, were approximately 111,783 metric tons, a decrease of 40.5% from 188,006 metric tons in the same period of 2022[164]. - Sales of fertilizer products to customers in five provinces within China accounted for approximately 83.8% of fertilizer revenue for the three months ended March 31, 2023[165]. - Jinong's top five distributors accounted for 19.4% of its fertilizer revenues for the three months ended March 31, 2023, while Gufeng's top five distributors accounted for 82.8% of its revenues[165]. Financial Performance - Total net sales for Q1 2023 were $45,261,960, a decrease of$15,876,912 or 26.0% from $61,138,872 in Q1 2022[184]. - Jinong's net sales decreased by$3,778,845 or 28.2% to $9,606,177 in Q1 2023, with sales volume dropping by 63.7$33,457,644, a decrease of $11,747,823 or 26.0$97,398,492, a decrease of $35,938,404 or 27.0$133,336,896 for the same period in 2022[200]. - Jinong's net sales decreased by $11,916,355 or 27.4$31,596,928 for the nine months ended March 31, 2023, primarily due to lower sales volume[200]. - Gufeng's net sales for the nine months ended March 31, 2023 were $57,886,185, a decrease of$23,680,948 or 29.0% from $81,567,133 for the same period in 2022[201]. Profitability - Gross profit for Q1 2023 decreased by$2,361,935 or 24.3% to $7,375,956, with a gross profit margin of 16.3$900,757 or 24.6% to $2,754,689, with a gross profit margin of approximately 28.7$4,188,982, a decrease of $1,493,602 or 26.3$5,682,584 for the same period in 2022[189]. - Gross profit for the nine months ended March 31, 2023 decreased by $6,011,968 or 26.0$17,075,182 compared to $23,087,150 for the same period in 2022[205]. - Net income for Q1 2023 was$189,605, compared to a net loss of $38,078,827 in Q1 2022[182]. - For the nine months ended March 31, 2023, the net loss decreased to$(3,935,055), a reduction of $81,203,916, or 95.4$(85,138,971) for the same period in 2022[211]. - Jinong's net loss decreased by $9,240,024, or 80.7$(2,209,588) for the nine months ended March 31, 2023, from $(11,449,612) for the same period in 2022[216]. - Gufeng's net income increased by$57,017,779, or 100.2%, to $113,257 for the nine months ended March 31, 2023, from a net loss of$(56,904,522) for the same period in 2022[216]. Expenses - General and administrative expenses for Q1 2023 were $5,234,123, a significant decrease of$34,129,009 or 86.7% from $39,363,132 in Q1 2022[182]. - Selling expenses for the nine months ended March 31, 2023 were$6,054,463, a decrease of $2,690,010 or 30.8$8,744,473 for the same period in 2022[207]. - Total cost of goods sold for Q1 2023 was $37,886,004, a decrease of$13,514,977 or 26.3% from $51,400,981 in Q1 2022[186]. Strategic Initiatives - The company launched 5 new fertilizer products during the three months ended March 31, 2023, through Jinong, while Gufeng did not launch any new products[168]. - The company is developing an online platform to connect its physical distribution network, indicating a strategic move towards e-commerce in the agricultural sector[177]. - The company intends to use net proceeds from securities offerings to acquire new businesses and upgrade production lines, indicating a focus on growth and expansion[218]. - The company entered into strategic acquisition agreements with various agricultural companies, with total cash payments for acquisitions amounting to RMB 37 million and principal of notes for acquisitions totaling RMB 51 million[169]. Cash Flow and Financial Position - Cash and cash equivalents increased to$71,760,603 as of March 31, 2023, an increase of $13,990,300, or 24.2$57,770,303 as of June 30, 2022[217]. - Net cash used in operating activities was $(5,471,529) for the nine months ended March 31, 2023, a decrease of$40,298,073, or 88.0%, from cash provided by operating activities of $45,769,602 for the same period in 2022[222]. - Accounts receivable increased to$32,934,268 as of March 31, 2023, compared to $28,792,891 as of June 30, 2022, an increase of$4,141,377, or 14.4%[226]. - Inventories increased to $44,052,715 as of March 31, 2023, compared to$42,198,186 as of June 30, 2022, an increase of $1,854,529, or 4.4$8,045,641 as of March 31, 2023, from $20,711,891 as of June 30, 2022, representing a decrease of$12,666,250, or 61.2%[230]. - Customer deposits decreased to $7,111,862 as of March 31, 2023, from$7,994,669 as of June 30, 2022, a decrease of $882,807, or 11.0$17 million due to foreign exchange fluctuations[244]. - Between July 1, 2022, and March 31, 2023, the RMB depreciated by a cumulative 2.5% against the U.S. dollar, affecting trade dynamics[244]. - The short-term debt outstanding as of March 31, 2023, was $5.7 million, compared to$4.0 million as of June 30, 2022[245]. - The company is exposed to interest rate risk primarily related to short-term bank loans, which are subject to renewal[245]. - The average remaining life of short-term loans is approximately four months, with original loan terms averaging one year[245]. - The company has not entered any hedging transactions to mitigate foreign exchange or interest rate risks[244][246].