Ping An Biomedical Co., Ltd 6-K, filed Sep 11, 2026
Ping An Biomedical Co., Ltd. (PASW)
About this 6-K
Ping An Biomedical Co., Ltd filed this 6-K on September 11, 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of September,
Commission File Number:
(Registrant’s Name)
22/F, China United Plaza, 1002-1008, Tai Nan West Street,
Cheung Sha Wan, Kowloon, Hong Kong
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
When used in this Form 6-K, unless otherwise indicated, the terms “the Company,” “ Ping An Biomedical Co., Ltd. ,” “we,” “us” and “our” refer to Ping An Biomedical Co., Ltd. and its subsidiaries.
Financial Statements and Exhibits.
| Exhibit No. | Description | |
| 99.1 | Ping An Biomedical Co., Ltd. Announces First Half 2026 Unaudited Financial Results | |
| 101.INS | Inline XBRL Instance Document. | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PING AN BIOMEDICAL CO., LTD. | ||
| Date: September 11, 2026 | By: | /s/ Pijun Liu |
| Name: | Pijun Liu | |
| Title: | Chairperson of the Board of Directors | |
2
Exhibit 99.1
PING AN BIOMEDICAL CO., LTD
INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
TABLE OF CONTENTS
F-1
PING AN BIOMEDICAL CO., LTD
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30 | As of March 31, | |||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| ASSETS | ||||||||||||
| CURRENT ASSETS | ||||||||||||
| Cash and bank balances | ||||||||||||
| Restricted cash | ||||||||||||
| Accounts receivable, net | ||||||||||||
| Deposits, prepayments and other receivables | ||||||||||||
| Inventories | ||||||||||||
| Total current assets | ||||||||||||
| NON-CURRENT ASSETS | ||||||||||||
| Equity investments | ||||||||||||
| Right-of-use assets | ||||||||||||
| Deferred tax assets, net | ||||||||||||
| Total non-current assets | ||||||||||||
| Total assets | ||||||||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||||||
| CURRENT LIABILITIES | ||||||||||||
| Short-term bank borrowings | ||||||||||||
| Accounts payable | ||||||||||||
| Accruals and other payables | ||||||||||||
| Other payables – related parties | ||||||||||||
| Contract liabilities | ||||||||||||
| Lease liabilities | ||||||||||||
| Total current liabilities | ||||||||||||
| NON-CURRENT LIABILITIES | ||||||||||||
| Lease liabilities | ||||||||||||
| Total non-current liabilities | ||||||||||||
| Total liabilities | ||||||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||||
| SHAREHOLDERS’ DEFICIT | ||||||||||||
| Ordinary shares: US$ | ||||||||||||
| Additional paid in capital | ||||||||||||
| Deferred stock compensation | ( | ) | ( | ) | ||||||||
| Statutory reserves | ||||||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ( | ) | ||||||
| Total shareholders’ equity | ||||||||||||
| Total liabilities and shareholders’ equity | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
PING AN BIOMEDICAL CO., LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
| For the six months ended March 31, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Revenue | ||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ||||||
| Gross profit (loss) | ( | ) | ||||||||||
| Selling and marketing expenses | ( | ) | ( | ) | ( | ) | ||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||
| (Provision) reversal for credit losses | ( | ) | ||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ||||||
| INCOME (LOSS) FROM OPERATIONS | ( | ) | ||||||||||
| OTHER INCOME (EXPENSES) | ||||||||||||
| Interest income | ||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ||||||
| Fair value change on equity investment | ||||||||||||
| Other expense | ( | ) | ( | ) | ||||||||
| Other income, net | ||||||||||||
| Total other (expenses) income, net | ( | ) | ||||||||||
| (LOSS) INCOME BEFORE INCOME TAXES | ( | ) | ||||||||||
| INCOME TAX (EXPENSES) BENEFIT | ||||||||||||
| Current | ||||||||||||
| Deferred | ( | ) | ( | ) | ( | ) | ||||||
| PROVISION FOR INCOME TAXES | ( | ) | ( | ) | ( | ) | ||||||
| NET (LOSS) INCOME | ( | ) | ||||||||||
| FOREIGN CURRENCY TRANSLATION ADJUSTMENT | ( | ) | ( | ) | ( | ) | ||||||
| TOTAL COMPREHENSIVE (LOSS) INCOME | ( | ) | ||||||||||
| Weighted average number of ordinary shares: | ||||||||||||
| Basic and diluted | ||||||||||||
| (LOSS) EARNINGS PER SHARE – BASIC AND DILUTED | ( | ) | ||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-3
PING AN BIOMEDICAL CO., LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES OF SHAREHOLDERS’ EQUITY (DEFICIT)
| No. of Shares |
Par Value |
Addition paid-in capital |
Deferred stock compensation |
Statutory Reserves |
Accumulated other comprehensive loss |
Accumulated deficit |
Total (Deficit)/ Equity |
|||||||||||||||||||||||||
| RMB | RMB | RMB | RMB | RMB | RMB | RMB | ||||||||||||||||||||||||||
| BALANCE, October 1, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Foreign currency Translation | — | ( | ) | ( | ) | |||||||||||||||||||||||||||
| BALANCE, March 31, 2025 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| — | ||||||||||||||||||||||||||||||||
| BALANCE, October 1, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Private placement | ||||||||||||||||||||||||||||||||
| Option granted | — | ( | ) | |||||||||||||||||||||||||||||
| Amortization of deferred stock compensation | — | |||||||||||||||||||||||||||||||
| Options exercised | ||||||||||||||||||||||||||||||||
| Net income | — | |||||||||||||||||||||||||||||||
| Foreign currency Translation | — | ( | ) | ( | ) | |||||||||||||||||||||||||||
| BALANCE, March 31, 2026 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| BALANCE, March 31, 2026 (US$) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
PING AN BIOMEDICAL CO., LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the six months ended March 31, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Cash flows from operating activities | ||||||||||||
| Net income (loss) | ( | ) | ||||||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||||||||||||
| Depreciation of plant and equipment | ||||||||||||
| Amortization of deferred stock compensation | ||||||||||||
| Non-cash lease expense | ||||||||||||
| Provision (reversal) for credit losses | ( | ) | ( | ) | ||||||||
| Revaluation gain on equity investments | ( | ) | ( | ) | ||||||||
| Deferred tax expense | ||||||||||||
| Changes in operating assets and liabilities | ||||||||||||
| Accounts receivable | ||||||||||||
| Deposits, prepayments and other receivables | ( | ) | ( | ) | ( | ) | ||||||
| Due from related party | ( | ) | ||||||||||
| Inventories | ( | ) | ||||||||||
| Accounts payable | ( | ) | ( | ) | ( | ) | ||||||
| Accruals and other payables | ||||||||||||
| Contract liabilities | ( | ) | ( | ) | ( | ) | ||||||
| Advance from related parties | ||||||||||||
| Repayment of obligation under operating leases | ( | ) | ( | ) | ( | ) | ||||||
| Tax payable | ( | ) | ||||||||||
| Net cash provided by operating activities | ||||||||||||
| Cash flows from investing activities | ||||||||||||
| Equity investments | ( | ) | ( | ) | ||||||||
| Payment to related parties | ( | ) | ||||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ||||||
| Cash flows from financing activities | ||||||||||||
| Loan from other payables – related parties | ||||||||||||
| Repayment to other payables – related parties | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from issuance of shares | ||||||||||||
| Net cash provided by financing activities | ||||||||||||
| Net (decrease) increase in cash and bank balances | ( | ) | ||||||||||
| Effect of exchange rate on cash | ( | ) | ( | ) | ||||||||
| Cash and restricted cash at the beginning of the period | ||||||||||||
| Cash and restricted cash at the end of the period | ||||||||||||
| Supplementary cash flow information | ||||||||||||
| Interest paid | ( | ) | ( | ) | ( | ) | ||||||
| Non-cash transaction in financing activities | ||||||||||||
| Option granted for deferred stock compensation | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-5
PING AN BIOMEDICAL CO., LTD AND ITS SUBSIDIARIES
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. organization and principal activities
Ping An Biomedical Co., Ltd. (former name: “Majestic Ideal Holdings Ltd.”) (“We”, “us”, the “Company”, “PASW”, or “Ping An”) was incorporated in Cayman Islands on
Nifty Holdings Limited (“Nifty Holdings”) was incorporated in the BVI on November 23, 2021. It is a wholly owned subsidiary company of Ping An and is engaged in investment holding.
Multi Ridge (Asia) Limited (“Multi Ridge”) was incorporated in Hong Kong on October 11, 2013. It was also a wholly-owned subsidiary company of the Action Holding before a group reorganization as detailed below.
上海新骏羊绒服饰有限公司 (New Brand Cashmere Products Co., Ltd) (“New Brand”) was established as a wholly foreign owned entity (“WFOE”) on February 14, 2014 in the People’s Republic of China (the “PRC”). New Brand in principally engaged in trading of yarns and finished garments in the PRC and is a wholly-owned subsidiary company of Multi Ridge.
Pursuant to a group reorganization (the “Group Reorganization”) to rationalize the structure of PASW and PASW’s subsidiary companies (herein collectively referred to as the “Group”) in preparation for the listing of our shares, we become the holding company of the Group on November 26, 2021, which involves the interspersion of the Ping An and Nifty Holdings between Action Holdings, the immediate holding company, and Multi Ridge.
On August 27, 2025, Pingyuan Anjian Biotech (Hainan) Co., Ltd (“Pingyuan”) was established as a wholly foreign owned entity (“WFOE”) in the People’s Republic of China (the “PRC”). Pingyuan is a wholly-owned subsidiary company of Multi Ridge, without any operations.
As at the date of this report, details of the subsidiary companies are as follows:
| Name | Background | Ownership | |||
| Nifty Holdings | ● | A BVI company | |||
| ● | Incorporated on | ||||
| ● | |||||
| Multi Ridge | ● | A Hong Kong company | |||
| ● | Incorporated on | ||||
| ● | |||||
| New Brand | ● | A PRC limited liability company and a WFOE | |||
| ● | Incorporated on | ||||
| ● | Registered capital of $ | ||||
| ● | |||||
| Pingyuan | ● | A PRC limited liability company and a WFOE | |||
| ● | Incorporated on | ||||
| ● | Registered capital of $ | ||||
| ● | |||||
F-6
2. Summary of Significant Accounting Policies and Practices
Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for information pursuant to the rules and regulations of the Securities and Exchange Commission.
Principles of consolidation
The unaudited condensed consolidated financial statements include the financial statements of us and its subsidiaries. All transactions and balances among us and its subsidiaries have been eliminated upon consolidation.
Use of estimates and assumptions
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions. On an on-going basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include but not limited to the useful lives of property and equipment, impairment of long-lived assets, valuation of accounts receivables, prepayments, other receivable, inventory and deferred tax assets. Actual results could differ from these estimates.
Functional currency and foreign currency translation
New Brand and Pingyuan uses Renminbi (“RMB”) as its functional and reporting currency. Multi Ridge uses Hong Kong Dollar (“HKD”) as its functional and reporting currency. The functional and reporting currency of PASW and its subsidiaries incorporated in the BVI is United States dollars (“US$”). The determination of the respective functional currency is based on the criteria of Accounting Standards Codification (“ASC”) 830, Foreign Currency Matters.
Transactions denominated in currencies other than functional currency are translated into functional currency at the exchange rates quoted by authoritative banks prevailing at the dates of the transactions. Exchange gains and losses resulting from those foreign currency transactions denominated in a currency other than the functional currency are recorded as other income (loss), net in the consolidated statements of comprehensive loss.
The financial statements of us are translated from the functional currency into RMB. Assets and liabilities are translated at the exchange rates at the balance sheet date. Equity accounts other than earnings generated in the current period are translated into RMB using the appropriate historical rates. Revenues and expenses, gains and losses are translated into RMB using the periodic average exchange rate for the year. Translation adjustments are reported as foreign currency translation adjustments and are shown as a component of other comprehensive income (loss) in the consolidated statements of comprehensive loss.
Convenience translation
Translations of amounts in the consolidated balance sheet, consolidated statements of income and consolidated statements of cash flows from RMB into US$ as of and for the period ended March 31, 2025 and 2026, are solely for the convenience of the reader and were calculated at the noon buying rate of US$
F-7
Related parties
We adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.
Cash and bank balances
Cash and bank balances consist of cash on hand, demand deposits with banks, and short-term, highly liquid investments with original maturities of three months or less at the date of purchase. Cash equivalents are stated at cost, which approximates fair value due to their short-term nature.
Restricted cash
Restricted cash represents cash and cash equivalents whose use is contractually or legally restricted. Restricted cash is presented separately from cash and cash equivalents in the consolidated balance sheets and is classified as current or noncurrent based on the expected duration of the underlying restriction. The carrying amounts of restricted cash approximate their fair values due to the short-term nature of these instruments.
Accounts receivable, net, and allowance for credit losses
Accounts receivable is recorded at the net valueless estimates for allowance for credit losses. Management regularly reviews outstanding accounts and provides an allowance for credit losses. Many factors are considered in estimating the general allowance, including reviewing delinquent accounts receivable, performing an aging analysis and a customer credit analysis, and analyzing historical bad debt records and current economic trends.
On October 1, 2023, the Company adopted ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”). The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost including accounts receivable and other receivable. Results for reporting periods beginning after October 1, 2023 are presented under ASC Topic 326, while prior period amounts continue to be reported in accordance with previously applicable GAAP. No cumulative-effect adjustment to the Company’s equity was required upon adoption. The adoption of ASU 2016-13 did not have a material impact on our financial statements. Upon adoption, the Company recorded a credit loss of RMB
Prepayments
Prepayments are cash deposited or advanced to suppliers for future inventory purchases. This amount is refundable and bears no interest. For any advances to suppliers determined by management that such advances will not be in receipts of inventories or refundable, we will recognize an allowance account to reserve such balances. Management reviews its advances to suppliers on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary.
Deposits and other receivables, net
Deposits and other receivables, net primarily include deposits, VAT input, IPO deferred costs and others. Management regularly reviews the aging of receivables and changes in payment trends and records allowances when management believes collection of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made.
Inventories
Inventories, which are primarily comprised of merchandizes for sale, are stated at the lower of cost or net realizable value, using the weighted average method. We evaluate the need for reserves associated with obsolete, slow-moving and non-saleable inventory by reviewing net realizable values on a periodic basis. Only defects products can be return to our suppliers.
F-8
Property and equipment, net
Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:
| Category | Depreciation method | Estimated useful lives | ||
| Computer and office equipment |
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. We also re-evaluate the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.
Equity investments
Equity securities in public companies with a readily determinable fair value are measured at fair value on the consolidated balance sheets. Changes in fair value of these equity securities, including both realized and unrealized gains and losses, are recognized in net income in the consolidated statements of operations during the period in which the changes occur. Dividends received from equity securities are recognized in net income when declared by the investee.
For equity investments without readily-determinable fair values, the Company elects the practical measurement-alternative permitted under ASC 321-10-35-2. These investments are initially recorded at cost. The carrying amount is subsequently adjusted upwards or downwards upon observable price changes from orderly transactions in identical or similar securities issued by the same investee.
At each reporting period, the Company performs a qualitative impairment evaluation considering multiple impairment indicators, including the investee’s operating results, credit standing, industry-level adverse developments, regulatory shifts and bona-fide purchase offers. When impairment is indicated, an impairment loss is recorded equal to the excess of carrying value over the investment’s estimated fair-value, with the loss recognized in net income.
Impairment for long-lived assets
Long-lived assets, representing property and equipment with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. We assess the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, we would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of March 31, 2025 and 2026, impairment of long-lived assets was recognized.
Borrowings and cost of borrowings
Borrowings are initially recognized at fair value, net of directly attributable transaction costs and any discount or premium, and are subsequently measured at amortized cost using the effective interest method. Borrowings are classified as current or noncurrent based on the scheduled maturity and, where applicable, the entity’s right and intention to refinance obligations on a long-term basis. Borrowing costs, comprising interest expense on borrowings, are recognized in the consolidated statements of operations as incurred. Interest expense is recognized using the effective interest method and includes contractual interest, the amortization of debt issuance costs, and the amortization of discounts and premiums, each over the term of the related borrowing using the effective interest method.
F-9
Accounts payable
Accounts payable represent amounts owed to suppliers and vendors for goods received and services rendered that remain unpaid at the balance sheet date. Accounts payable are carried at the invoiced or stated amount, which approximates fair value due to their short-term nature.
Accruals and other payables
Accruals and other payables are recognized when incurred and represent obligations for goods or services received, or expenses incurred, that have not been invoiced or paid as of the balance sheet date. Accruals are recorded based on the best available estimates of the amounts owed and are adjusted when additional information becomes available.
Fair value measurement
The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by us.
The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow:
| Level 1 | inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
| Level 2 | inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. | |
| Level 3 | inputs to the valuation methodology are unobservable and significant to the fair value. |
The Company’s financial instruments primarily consist of cash and bank balances, accounts receivable, equity securities in public companies, accounts payable, other payables and accrued liabilities, short-term bank loans.
The carrying value of cash and bank balances, accounts receivable, accounts payable, short-term borrowings and other current assets and liabilities approximate fair value because of the short-term nature of these items. The estimated fair values of short-term bank loans were not materially different from their carrying value as presented due to the short maturities and that the interest rates on the borrowing approximate those that would have been available for loans of similar remaining maturity and risk profile. As the carrying amounts are reasonable estimates of the fair value, these financial instruments are classified within Level 1 of the fair value hierarchy.
Leases
Before October 1, 2019, we applied ASC Topic 840 (“ASC 840”), Leases, and each lease is classified at the inception date as either a capital lease or an operating lease.
We adopted ASC 842, “Leases” (“ASC 842”) on October 1, 2019, using the modified retrospective transition method through a cumulative-effect adjustment in the period of adoption rather than retrospectively adjusting prior periods and the package of practical expedient. We categorized leases with contractual terms longer than twelve months as either operating or finance lease.
Operating Right-of-use (“ROU”) assets represent our rights to use underlying assets for the lease terms and lease liabilities represent our obligation to make lease payments arising from the leases. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term, reduced by lease incentives received, plus any initial direct costs, using the discount rate for the lease at the commencement date. If the implicit rate in lease is not readily determinable for our operating leases, we generally use the incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We elected not to separate non-lease components from lease components; therefore, it will account for lease component and the non-lease components as a single lease component when there is only one vendor in the lease contract for the office leases. Lease payments are fixed.
F-10
For operating leases, lease expense is recognized on a straight-line basis in operations over the lease term. For finance leases, lease expense is recognized as depreciation and interest; depreciation on a straight-line basis over the lease term and interest using the effective interest method.
Any lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU asset and lease liabilities on the consolidated balance sheets. Consistent with all other operating leases, short-term lease expense is recorded on a straight-line basis over the lease term.
Statutory reserves
In accordance with the relevant regulations and their articles of association, PASW’s subsidiaries incorporated in the PRC are required to allocate at least
Revenue recognition
We adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC 606). The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that we (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy the performance obligation.
Our revenues consist of sales of yarns and finished garments to third party customers.
We recognize sales of yarns and finished garments at the point in time when we have transferred physical possession of the goods to the customer and the customer has accepted the goods. Meanwhile, customer’s acknowledgement of the receipt of goods indicates that control of the goods has been transferred to the customer. Goods are accepted by the customers if we have delivered the correct quantity and the delivered goods are in good quality. Generally, if the customer does not claim and return the goods within 15 days from acknowledgement of receipt, the goods are considered accepted Customer usually pays within 40 days to 90 days. The transaction price is determined and allocated to the product prior to the transfer of the goods to the customer.
We estimate potential returns and records such estimates against its gross revenue to arrive at its reported net sales revenue. We have not experienced any sales returns.
Cost of revenues
Cost of revenues, which are directly related to revenue generating transactions, primarily consists of purchase costs for yarns and finished garments.
F-11
General and administrative expenses
General and administrative expenses consist primarily of personnel-related compensation expenses, including salaries and related social insurance costs for our operations and support personnel, office rental and property management fees, professional services fees, depreciation, travelling expenses, office supplies, utilities, communication and expenses related to general operations.
Sales and marketing expenses
Sales and marketing expenses consist primarily of personnel-related compensation expenses, including salaries and related social insurance costs, promotion expenses, and testing fees.
Government grants
Government grants are recognized as income in other income, net or as a reduction of specific costs and expenses for which the grants are intended to compensate. Such amounts are recognized in the consolidated statements of comprehensive income upon receipt and when all conditions attached to the grants are fulfilled. We can get financial support from the Local Government if our tax contributions reach RMB
Income taxes
Income taxes are provided in accordance with ASC No. 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry-forwards. Deferred tax expense (benefit) results from the net change during the years of deferred tax assets and liabilities.
Cayman Islands
We are incorporated in the Cayman Islands. The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. The Cayman Islands does not impose a withholding tax on payments of dividends to shareholders.
BVI
Nifty Holdings is incorporated in the BVI and is not subject to tax on income or capital gains under current BVI law. In addition, upon payments of dividends by these entities to their shareholders, no BVI withholding tax will be imposed.
Hong Kong
Multi Ridge was incorporated in Hong Kong and is subject to Hong Kong profit tax at a rate of
China
New Brand and Pingyuan are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to a unified
Dividends paid by New Brand to Multi Ridge will be subject to a withholding tax rate of
F-12
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that the relevant taxing authority that has full knowledge of all relevant information will examine each uncertain tax position. Although we believe the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals.
Value added taxes
The products sold in the PRC are subject to a Chinese value-added tax (“VAT”). Revenue represents the invoiced value of service, net of VAT. The VAT is based on gross sales price and VAT rates range up to
Segment reporting
ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for detailing the Company’s business segments.
Comprehensive income (loss)
Comprehensive income (loss) is defined to include all changes in equity deficit of us during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. is also includes net loss and our currency translation adjustments.
Commitments and Contingencies
In the normal course of business, we are subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. We recognize a liability for such contingency if it determines it is probable that a loss has occurred, and a reasonable estimate of the loss can be made. We may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter.
Earnings per share
We compute earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the six months ended March 31, 2025 and 2026, there were no dilutive shares.
F-13
Financial Statement Reclassification
Certain balances in the prior year consolidated financial statements have been reclassified for comparison purposes to conform to the presentation in the current year unaudited condensed consolidated financial statements. These reclassifications had no effect on the reported results of operations or financial position.
Recently issued accounting pronouncements
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — codification amendments in response to SEC’s disclosure Update and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows — Overall, 250-10 Accounting Changes and Error Corrections — Overall, 260-10 Earnings Per Share — Overall, 270-10 Interim Reporting — Overall, 440-10 Commitments — Overall, 470-10 Debt — Overall, 505-10 Equity — Overall, 815-10 Derivatives and Hedging — Overall, 860-30 Transfers and Servicing — Secured Borrowing and Collateral, 932-235 Extractive Activities — Oil and Gas — Notes to Financial Statements, 946-20 Financial Services — Investment Companies — Investment Company Activities, and 974-10 Real Estate — Real Estate Investment Trusts — Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC’s removal. The Company is currently evaluating the impact of the update on the Company’s unaudited condensed consolidated financial statements and related disclosures.
In November 2023, the FASB issued ASU 2023-07, which is an update to Topic 280, Segment Reporting. The amendments in this Update improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The amendments in this update: (1) require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”), (2) Require that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. The other segment items category is the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss, (3) Require that a public entity provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Topic 280 in interim periods, and (4) Clarify that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit. However, at least one of the reported segment profit or loss measures (or the single reported measure, if only one is disclosed) should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity’s unaudited condensed consolidated financial statements. In other words, in addition to the measure that is most consistent with the measurement principles under generally accepted accounting principles (GAAP), a public entity is not precluded from reporting additional measures of a segment’s profit or loss that are used by the CODM in assessing segment performance and deciding how to allocate resources, (5) Require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources, and (6) Require that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this Update and all existing segment disclosures in Topic 280. The amendments in this Update also do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments in this Update retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company adopted this guidance on October 1, 2024, and the adoption did not have a material impact on its consolidated financial statements.
F-14
In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The amendments allow investors to better assess, in their capital allocation decisions, how an entity’s worldwide operations and related tax risks and tax planning and operational opportunities affect its income tax rate and prospects for future cash flows. The other amendments in this Update improve the effectiveness and comparability of disclosures by (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S. Securities and Exchange Commission (SEC) Regulation S-X 210.4-08(h), Rules of General Application — General Notes to Financial Statements: Income Tax Expense, and (2) removing disclosures that no longer are considered cost beneficial or relevant. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the impact of the update on Company’s consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, “Reporting Comprehensive Income — Expense Disaggregation Disclosures”, which focuses on improving the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development). ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. In January 6, 2025, the FASB issued ASU 2025-01, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date”, the amendment in this update clarifies the effective date of ASU 2024-03, which is that public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting the standard and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations and cash flows.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. ASU 2025-03 clarifies the guidance to determine the accounting acquirer in a business combination that is effected primarily by exchanging equity interests, when the legal acquiree is a variable interest entity (“VIE”) that meets the definition of a business. ASU 2025-03 requires entities to consider the same factors in ASC 805, Business Combinations, required for determining which entity is the accounting acquirer in other acquisition transactions. ASU 2025-03 is effective for the Company’s annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-03 is required to be applied on a prospective basis to any acquisition transaction that occurs after the initial application date. The Company does not expect a material effect on its consolidated financial statements upon adoption.
In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025-05 amends ASC 326, Financial Instruments—Credit Losses, and introduces a practical expedient available for all entities and an accounting policy election available for all entities, other than public business entities, that elect the practical expedient. These changes apply to the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue Recognition. Under the practical expedient, entities may assume that current conditions as of the balance sheet date remain unchanged for the remaining life of the asset when developing reasonable and supportable forecasts. This simplifies the estimation process for short-term financial assets. ASU 2025-05 is effective for the Company’s annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. ASU 2025-05 should be applied on a prospective basis. The Company does not expect a material effect on its consolidated financial statements upon adoption.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software by removing all references to a prescriptive and sequential software development method (commonly referred to as “project stages”) throughout Subtopic 350-40 and specifying new requirements for determining when capitalization of capitalizable project costs begins, including enhancing the guidance related to the “probable-to-complete” threshold. The amendments are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements, including the timing of capitalization of its internal-use software costs.
F-15
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract, which: (i) adds a scope exception to exclude from derivative accounting certain non-exchange-traded contracts with underlying that are based on operations or activities specific to one of the parties to the contract; and (ii) clarifies that an entity should apply the guidance in Topic 606, including the guidance on noncash consideration, to a contract with share-based noncash consideration from a customer for the transfer of goods or services. The amendments are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted. The amendments should be applied prospectively, with the modified retrospective transition method permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which: (i) clarifies that Topic 270 applies to all entities that provide interim financial statements and notes in accordance with GAAP; (ii) creates a comprehensive list of the disclosures that are required in interim financial statements and notes; and (iii) incorporates a disclosure principle, modeled after previous SEC guidance, requiring entities to disclose events and changes that occur after the end of the most recent annual reporting period that have a material impact on the entity. The amendments are effective for public business entities for interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted, and may be applied on either a prospective or retrospective basis. The Company is currently evaluating the impact of this guidance on its interim financial statement disclosures.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements, which makes 33 targeted improvements to a variety of Topics in the Codification, covering areas such as earnings per share, leases, treasury stock, and debt, primarily to clarify, correct, or improve the guidance or to make editorial changes. The amendments are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted on an issue-by-issue basis. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.
Except as mentioned above, we do not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on our consolidated balance sheets, statements of income and comprehensive income and statements of cash flows.
3. Segment information and revenue analysis
We follow ASC 280, Segment Reporting, which requires that companies to disclose segment data based on how management makes decision about allocating resources to each segment and evaluating their performances. We believe that we operate in two business segments which comprised of sales of yarns and sales of finished garments; and we operate in one geographical location China.
Revenues are recognized when control of the goods are transferred to our customers in an amount that reflects the considerations we expect to be entitled to and receive in exchange for good delivered.
F-16
We disaggregate our revenue into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
Sales revenues comprised the following:
| Six months ended March 31, | ||||||||||||||||||||
| 2025 | 2026 | |||||||||||||||||||
| RMB | % of total | RMB | US$ | % of total | ||||||||||||||||
| Sales of yarns | % | % | ||||||||||||||||||
| Sales of finished garments | % | % | ||||||||||||||||||
| % | % | |||||||||||||||||||
Direct costs comprised the following:
| Six months ended March 31, | ||||||||||||||||||||
| 2025 | 2026 | |||||||||||||||||||
| RMB | % of total | RMB | US$ | % of total | ||||||||||||||||
| Sales of yarns | % | % | ||||||||||||||||||
| Sales of finished garments | % | % | ||||||||||||||||||
| % | % | |||||||||||||||||||
Gross profit comprised the following:
| Six months ended March 31, | ||||||||||||||||||||
| 2025 | 2026 | |||||||||||||||||||
| RMB | % of total | RMB | US$ | % of total | ||||||||||||||||
| Sales of yarns | ( | ) | % | % | ||||||||||||||||
| Sales of finished garments | ( | )% | % | |||||||||||||||||
| ( | ) | % | % | |||||||||||||||||
4. INVENTORY
Inventory, net comprised the following:
| September 30 | As of March 31, | |||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Yarns | ||||||||||||
| Less: provision for inventory obsolescence | ||||||||||||
| Total | ||||||||||||
Inventory write-down expense was RMB and for the for the six months ended March 31, 2025 and 2026, respectively.
F-17
5. ACCOUNTS RECEIVABLE, NET
Accounts receivable, net comprised the following:
| September 30 | As of March 31， | |||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Accounts receivable | ||||||||||||
| Allowance for credit losses | ( | ) | ( | ) | ( | ) | ||||||
| Total | ||||||||||||
| Allowance for credit losses, net consists of the following: | ||||||||||||
| Beginning balance | ||||||||||||
| Allowance for credit losses | ( | ) | ( | ) | ||||||||
| Written-off | ( | ) | ||||||||||
| Ending balance | ||||||||||||
6. DEPOSITS, PAYMENTS AND OTHER RECEIVABLES, NET
Deposits, payments and other receivables, net consist of the following:
| September 30, | As of March 31, | |||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Payments for suppliers | ||||||||||||
| Deferred IPO costs | ||||||||||||
| Others | ||||||||||||
| Total | ||||||||||||
7. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consist of the following:
| September 30, | As of March 31， | |||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Computer and office equipment | ||||||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ( | ) | ||||||
| Total | ||||||||||||
Depreciation expenses recognized for the six months ended March 31, 2025 and 2026 were RMB
8. EQUITY INVESTMENTS
Equity investments consist of the following:
| September 30 | As of March 31, | |||||||||||||||
| Investees: | Invested shares or percentage | 2025 | 2026 | 2026 | ||||||||||||
| RMB | RMB | US$ | ||||||||||||||
| Equity securities in public companies: | ||||||||||||||||
| Direct Booking Technology Co., Ltd. | ||||||||||||||||
| Equity securities in private companies: | ||||||||||||||||
| Lanzhi Yunchuang Technology Beijing Co., Ltd. | % | |||||||||||||||
| Zhi Ding Group Co., Limited | % | |||||||||||||||
| Total | ||||||||||||||||
F-18
The movement of equity securities in public companies are as below:
| September 30, | As of March 31, | |||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Direct Booking Technology Co., Ltd.: | ||||||||||||
| Original investment cost | ||||||||||||
| Revaluation gain | ||||||||||||
| Foreign currency translation variance | ( | ) | ( | ) | ||||||||
| Fair value of the investment securities as of period end | ||||||||||||
9. ACCRUALS AND OTHER PAYABLES
Accruals and other payables consist of the following:
| September 30, | As of March 31, | |||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Paid on behalf payable * | ||||||||||||
| VAT output | ||||||||||||
| Other taxes | ||||||||||||
| Salaries | ||||||||||||
| Others | ||||||||||||
| Total | ||||||||||||
| * |
10. SHORT-TERM BANK BORROWINGS
Outstanding balances of short-term bank borrowings as of September 30, 2025 and March 31, 2026 consisted of the following:
| September 30 | As of March 31, | |||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Collateralized and guaranteed bank loans from Bank of China | ||||||||||||
Short-term borrowings were denominated in RMB by New Brand from Bank of China in the PRC drawn under a banking facility with details as follows:
| i) | Guaranteed by Suqin Li who is the Director and Chief Executive Officer of the Company, her husband and Shanghai Administration Center of Policy Financing Guarantee Funds for SMEs; |
| ii) | Secured by properties owned by Suqin Li and her husband. |
F-19
The average interest rates for short-term borrowings as of September 30, 2025 and March 31, 2026 were
Short-term bank borrowings as at March 31, 2026 are as follows:
| Maturity date | Type | Bank | Interest rate | Balance as at March 31, 2026 | ||||||||||||
| RMB | US$ | |||||||||||||||
| May 19, 2026 | Operating loan | % | ||||||||||||||
| May 19, 2026 | Operating loan | % | ||||||||||||||
11. Leases
Our operating leases primarily consist of leases of offices. The recognition of whether a contract arrangement contains a lease is made by evaluating whether the arrangement conveys the right to use an identified asset and whether we obtain substantially all the economic benefits from and has the ability to direct the use of the asset.
Operating lease assets and liabilities are included in the items of operating lease right-of-use assets, net, operating lease liabilities, current portion, and operating lease liabilities, non-current portion on the consolidated balance sheets.
We adopted ASU No. 2016-02 and related standards (collectively ASC 842, Leases), which replaced previous lease accounting guidance, on January 1, 2019 using the modified retrospective method of adoption. We elected the transition method expedient which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, prior periods have not been restated. We used the incremental borrowing rate of
Supplemental balance sheet information related to leases was as follows:
| September 30 | As of March 31, | |||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Operating lease: | ||||||||||||
| Operating lease right-of-use assets | ||||||||||||
| Current operating lease obligation | ||||||||||||
| Noncurrent operating lease obligation | ||||||||||||
| Total operating lease obligation | ||||||||||||
Operating lease expense for the six months ended March 31, 2025 and 2026 was RMB
The undiscounted future minimum lease payment schedule as follows:
| As of March 31, | RMB | US$ | ||||||
| By March 31, 2027 | ||||||||
| - | - | |||||||
| Total | ||||||||
| Less imputed interest | ( | ) | ( | ) | ||||
| Present value of operating lease liabilities | ||||||||
| Less current portion of lease obligation | ( | ) | ( | ) | ||||
F-20
Other supplemental information about the Company’s operating lease as of:
| March 31, 2026 | ||||
| Weighted average discount rate | % | |||
| Weighted average remaining lease term (years) | ||||
12. Related party balances and transactions
Other payables — related parties consist of the following:
| September 30 | As of March 31, | |||||||||||||
| Relationship | 2025 | 2026 | 2026 | |||||||||||
| RMB | RMB | US$ | ||||||||||||
| Ms. Li | ||||||||||||||
| Meridian Industries Limited (“MIL”) | ||||||||||||||
| Meridian Group Holdings Limited | ||||||||||||||
| Wisewing International Ltd (“Wisewing”) | ||||||||||||||
| Meridian (Shenzhen) Holdings Co., Ltd. (“MDSZ”) | ||||||||||||||
| Total | ||||||||||||||
The amount due to Ms. Li is unsecured, interest free with no specific repayment terms. The amount is of non-trade nature.
We rented an office premises in Hong Kong from Wisewing International Ltd. The amounts due to Wisewing International Ltd principally represent rental payable.
In addition to the guarantees and pledge of assets referred to in note 10, we have the following related party transaction representing rental expense paid to:
| For the six months ended March 31, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Wisewing International Ltd | ||||||||||||
13. TAXES
Income tax
Cayman Islands
Under the current laws of the Cayman Islands, we are not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.
BVI
Nifty Holdings is incorporated in the BVI and is not subject to tax on income or capital gains under current BVI law. In addition, upon payments of dividends by these entities to their shareholders, no BVI withholding tax will be imposed.
F-21
Hong Kong
Multi Ridge is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is
China
New Brand and Pingyuan are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to a unified
Dividend distribution out of the retained profits of foreign-invested enterprises in the PRC earned after January 1, 2008 is subject to withholding income tax at a tax rate of
Significant components of the provision for income taxes are as follows:
| For the six months ended March 31, | ||||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| Tax expense (benefit): | RMB | RMB | US$ | |||||||||
| Current: | ||||||||||||
| PRC | ( | ) | ||||||||||
| Total current | ( | ) | ||||||||||
| Deferred: | ||||||||||||
| PRC | ||||||||||||
| Total deferred | ||||||||||||
| Total provision for income taxes | ||||||||||||
The following table reconciles PRC statutory rates to our effective tax rate:
| For the six months ended March 31, | ||||||||
| 2025 | 2026 | |||||||
| Taxed at PRC statutory tax rates | % | % | ||||||
| Tax effect of expenses not deductible for tax purpose | ( | )% | % | |||||
| Tax effect of different tax rate for operating in another jurisdiction | ( | )% | ( | )% | ||||
| Valuation allowance | % | % | ||||||
| Others | ( | )% | % | |||||
| Total provision for income taxes | ( | )% | % | |||||
F-22
Deferred tax, net
Significant components of deferred tax assets were as follows:
| September 30, | March 31, | |||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Deferred tax assets: | ||||||||||||
| Provision for credit losses | ||||||||||||
| Net operating loss | ||||||||||||
| Less valuation allowance | ( | ) | ( | ) | ( | ) | ||||||
| Total deferred tax assets, net | ||||||||||||
The movement of deferred tax assets were as follows:
| September 30, | March 31, | |||||||||||
| 2025 | 2026 | 2026 | ||||||||||
| RMB | RMB | US$ | ||||||||||
| Deferred tax assets: | ||||||||||||
| Beginning balance | ||||||||||||
| Movement | ( | ) | ( | ) | ||||||||
| Ending balance | ||||||||||||
14. Concentration of risk
Credit risk
Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash. As of September 30, 2025 and March 31, 2026, RMB
We are also exposed to risk from its accounts receivable and other receivables. These assets are subjected to credit evaluations. An allowance, where applicable, would make for estimated unrecoverable amounts which have been determined by reference to past default experience and the current economic environment.
A majority of our expense transactions are denominated in RMB and a significant portion of us and our subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by us in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.
Customer concentration risk
For the six months ended March 31, 2025, three customers accounted for
As of September 30, 2025, three customers accounted for
Vendor concentration risk
For the six months ended March 31, 2025, three vendors accounted for
As of September 30, 2025, two vendors accounted for
F-23
15. LIQUIDITY
In assessing our liquidity, we monitor and evaluate our cash and bank balances and our operating and capital expenditure commitments. Our liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations.
As of March 31, 2026, we had accumulated loss of RMB
Based on the above considerations, we believe that we had sufficient funds to meet our operating and capital expenditure needs and obligations in the next 12 months. However, there is no assurance that the Company will be successful in implementing the foregoing plans or additional financing will be available to us on commercially reasonable terms. There are a number of factors that could potentially arise that could undermine our plans such as (i) changes in the demand for our SCM services, (ii) government policies, and (iii) economic conditions in China. Our inability to secure needed financing when required may require material changes to our business plan and could have a material impact on our financial conditions and result of operations.
16. Shareholders’ equity
Ordinary shares
Ping An was incorporated in Cayman Islands on November 3, 2021. The authorized number of ordinary shares is
On November 23, 2021, we effected a forward stock split of all issued and outstanding shares of
On July 3, 2023, we effected a share split at a ratio of
We believe it is appropriate to reflect the above transactions on a retroactive basis. According to the above transactions, we have retroactively adjusted the shares and per share data for all periods presented.
On July 22, 2025, the Company closed its initial public offering (“IPO”) of
On November 28, 2025, the Company issued
On February 9, 2026, the Company closed a private placement of $
On March 10, 2026, the Company closed a round of private placement of $
Restricted assets
Our ability to pay dividends is primarily dependent on us receiving distributions of funds from our subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by New Brand only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the accompanying unaudited condensed consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of New Brand.
New Brand and Pingyuan are required to set aside at least
As a result of the foregoing restrictions, New Brand and Pingyuan are restricted in their ability to transfer their assets to us. Foreign exchange and other regulation in the PRC may further restrict New Brand and Pingyuan from transferring funds to us in the form of dividends, loans and advances. As of September 30, 2025 and March 31, 2026, amounts restricted are the paid-in-capital and statutory reserve of New Brand and Pingyuan, which amounted to RMB
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Deferred stock compensation
On November 28, 2025, the Company granted
Statutory reserve
During the six months ended March 31, 2025 and 2026, New Brand attributed and of retained earnings for their statutory reserves, respectively.
Capital contributions
During the six months ended March 31, 2025 and 2026, Multi Ridge contributed and to New Brand, respectively.
Dividend distributions
During the six-month ended March 31, 2025 and 2026, Multi Ridge paid and to its shareholders, respectively.
Stock options
During the six-month ended March 31, 2026, the Company granted
17. SUBSEQUENT EVENTS
The Company evaluated all events and transactions that occurred after March 31, 2026 up through the date the Company issued the unaudited condensed consolidated financial statements. There were no other subsequent events occurred that would require recognition or disclosure in the Company’s unaudited condensed consolidated financial statements, unless as disclosed below.
On May 26, 2026, the Company received a letter from Nasdaq stating that, while the Company’s listed securities had not regained compliance with the Minimum Bid Price Requirement, Nasdaq had determined that the Company is eligible for an additional
On July 10, 2026, the Company, through its wholly owned subsidiary, Multi Ridge (Asia) Limited, purchased certain trademarks for the consideration of, in aggregate USD
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