SEC Form 6-K filed by Universe Pharmaceuticals Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of July 2025
Commission file number: 001-40231
Universe Pharmaceuticals INC
265 Jingjiu Avenue
Jinggangshan Economic and Technological Development Zone
Ji’an, Jiangxi, China 343100
+86-0796-8403309
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Financial Highlights for the Six Months Ended March 31, 2025
Universe Pharmaceuticals INC (the “Company”) hereby furnishes its financial results for the six months ended March 31, 2025.
| For the Six Months Ended March 31, | ||||||||||||
| ($ millions, except per share data) | 2025 | 2024 | % Change | |||||||||
| Revenues | 9.2 | 12.9 | (29.0 | )% | ||||||||
| Loss from operations | (2.3 | ) | (1.7 | ) | 33.7 | % | ||||||
| Net loss | (3.3 | ) | (2.4 | ) | 37.4 | % | ||||||
| Loss per share | (9.44 | ) | (393.26 | ) | (97.6 | )% | ||||||
| ● | Revenues decreased by 29.0% to $9.2 million for the six months ended March 31, 2025 from $12.9 million for the six months ended March 31, 2024, primarily attributable to the decreased average selling price and sales volume of Universe Pharmaceuticals INC’s (the “Company,” “we,” “our” and “us”)third-party products. |
| ● | Loss from operations was $2.3 million for the six months ended March 31, 2025, compared to a loss from operations of $1.7 million for the six months ended March 31, 2024, due to a decrease in revenue and an increase in general and administrative expenses. |
| ● | Net loss was $3.3 million for the six months ended March 31, 2025, compared to a net loss of $2.4 million for the six months ended March 31, 2024. |
| ● | Loss per share was $9.44 for the six months ended March 31, 2025, compared to loss per share of $393.26 for the six months ended March 31, 2024. |
Financial Results for the Six Months Ended March 31, 2025 Compared to the Six Months Ended March 31, 2024
Revenues
Total revenues decreased by $3,731,455, or 29.0%, to $9,152,915 for the six months ended March 31, 2025, from $12,884,370 for the six months ended March 31, 2024.
| For the Six Months Ended March 31, | ||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||
| Revenue | Cost of revenue | Gross margin | Revenue | Cost of revenue | Gross margin | |||||||||||||||||||
| TCMD products sales | $ | 6,978,932 | $ | 4,640,381 | 33.5 | % | $ | 6,870,591 | $ | 5,602,807 | 18.5 | % | ||||||||||||
| Third-party products sales | 2,173,983 | 1,348,004 | 38.0 | % | 6,013,779 | 3,912,232 | 34.9 | % | ||||||||||||||||
| Total | $ | 9,152,915 | $ | 5,988,385 | 34.6 | % | $ | 12,884,370 | $ | 9,515,039 | 26.2 | % | ||||||||||||
1
Sales of the Company’s traditional Chinese medicine derivatives (“TCMD”) products increased by $108,341, or 1.6%, to $6,978,932 for the six months ended March 31, 2025, from $6,870,591 for the six months ended March 31, 2024. The increase in the sales of TCMD products was mainly attributable to the following: (i) a 1.8% increase in the average selling price of TCMD products by $0.02 per unit, to $1.15 per unit for the six months ended March 31, 2025, from $1.13 per unit for the six months ended March 31, 2024 due to a change in product mix; and partially offset by (ii) a 0.8% decrease in the sales volume of TCMD products of 46,941 units, to 6,050,384 units sold in the six months ended March 31, 2025, from 6,097,325 units sold in the six months ended March 31, 2024 due to a decline in customer demand.
Sales of third-party products decreased by $3,839,796, or 63.8%, to $2,173,983 for the six months ended March 31, 2025, from $6,013,779 for the six months ended March 31, 2024. The decrease in the sales of third-party products was mainly attributable to the following: (i) a 46.0% decrease in the average selling price of third-party products by $0.69 per unit, to $0.81 per unit for the six months ended March 31, 2025, from $1.50 per unit for the six months ended March 31, 2024, due to China’s recently implemented nationwide centralized drug procurement policy; and (ii) a 33.3% decrease in sales volume of third-party products by 1,338,445 units, to 2,676,396 units sold in the six months ended March 31, 2025, from 4,014,841 units sold in the six months ended March 31, 2024 due to a decline in customer demand.
Cost of revenues and gross profit
Cost of revenues decreased by $3,526,654, or 37.1%, to $5,988,385 for the six months ended March 31, 2025, from $9,515,039 for the six months ended March 31, 2024, due to a decrease in sales volume of our third-party products and a decrease in the average cost of our third-party products by $0.47, or 48.3%, from $0.97 for the six months ended March 31, 2024 to $0.50 for the six months ended March 31, 2025 due to the nationwide centralized drug procurement policy discussed above.
Gross profit decreased by $204,801 to $3,164,530 for the six months ended March 31, 2025, from $3,369,331 for the six months ended March 31, 2024. Gross margin increased by 8.4% to 34.6% for the six months ended March 31, 2025, from 26.2% for the six months ended March 31, 2024.
Operating expenses
Selling expenses decreased by $1,777,629, or 43.8%, to $2,276,728 for the six months ended March 31, 2025, from $4,054,357 for the six months ended March 31, 2024, primarily attributable to (i) a decrease in advertising expenses by $1,524,517, from $2,773,300 in the six months ended March 31, 2024, to $1,248,783 in the six months ended March 31, 2025. The Company renewed its advertising service agreement with Health Headline to promote its brand on the Health Headline’s website and mobile app. The Company incurred significant publicity expenses for its products and brand during the six months ended March 31, 2024, and the advertising expenses returned to normal during the six months ended March 31, 2025; and (ii) a decrease in shipping and delivery expenses by $223,240, or 36.5%, which is in line with the decrease in sales volume.
General and administrative expenses increased by $2,149,119, or 221.9%, to $3,117,727 for the six months ended March 31, 2025 from $968,608 for the six months ended March 31, 2024, primarily attributable to an increase in consulting fees by $1,810,272 due to underwriting expense and legal fees in connection with the Company’s registered direct offering closed on December 6, 2024.
Research and development expenses increased by $10,333, or 11.9%, to $96,836 for the six months ended March 31, 2025, from $86,503 for the six months ended March 31, 2024, primarily attributable to (i) an increase in development expenditure on improving production process of our Chinese medicine products in the amount of $31,603; and partially offset by (ii) a decrease in the salary and employee benefit expenses by $19,376 as number of research and development staff decreased by five.
2
Other income (expenses), net
Total other expenses, net was $957,994 for the six months ended March 31, 2025, compared to total other income of $15,414 for the six months ended March 31, 2024. Exchange loss was $955,662 for the six months ended March 31, 2025, represented an increase of $854,816 from the exchange loss of $100,846 recorded for the six months ended March 31, 2024.
Income tax expense
Income tax expense was nil for the six months ended March 31, 2025, compared to $665,148 for the six months ended March 31, 2024. As the Company’s PRC principal subsidiaries, Jiangxi Universe Pharmaceuticals Co., Ltd. and Jiangxi Universe Pharmaceuticals Trade Co., Ltd., incurred net loss during the six months ended March 31, 2024, the Company evaluated the likelihood of the realization of deferred tax assets, determined that deferred tax assets arising from net operating loss carry-forwards in previous years might not be fully realized, and recognized $665,148 in valuation allowance for deferred tax assets during the six months ended March 31, 2024.
Net income
Net loss was $3,284,755 for the six months ended March 31, 2025, compared to a net loss of $2,389,871 for the six months ended March 31, 2024.
Basic and diluted loss per share were $9.44 for the six months ended March 31, 2025, compared to basic and diluted loss per share of $393.26 for the six months ended March 31, 2024.
Balance sheet
As of March 31, 2025, the Company had cash of $47,272,851, compared to $29,497,693 as of September 30, 2024.
Cash flow
Net cash provided by operating activities was $2,561,194 for the six months ended March 31, 2025, compared to cash used in operating activities of $2,430,477 for the six months ended March 31, 2024.
Net cash used in investing activities was $132,737 for the six months ended March 31, 2025, compared to $67,656 for the six months ended March 31, 2024.
Net cash provided by financing activities was $16,398,355 for the six months ended March 31, 2025, compared to $6,067,732 for the six months ended March 31, 2024.
3
UNIVERSE PHARMACEUTICALS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| As of | ||||||||
| March 31, 2025 | September 30, 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | 47,272,851 | $ | 29,497,693 | ||||
| Accounts receivable, net | 10,170,413 | 12,905,821 | ||||||
| Inventories, net | 3,565,953 | 1,737,054 | ||||||
| Advance to suppliers | 621,832 | 978,203 | ||||||
| Other receivable | 3,355,316 | 5,666,596 | ||||||
| Prepaid expenses and other current assets | 39,179 | 852,417 | ||||||
| TOTAL CURRENT ASSETS | 65,025,544 | 51,637,784 | ||||||
| Property, plant and equipment, net | 3,289,105 | 3,568,050 | ||||||
| Prepayments made to a related party for purchase of property | 2,204,859 | 2,279,982 | ||||||
| Prepayments for construction in progress | 9,191,850 | 9,492,205 | ||||||
| Intangible assets, net | 266,783 | 262,878 | ||||||
| Investment in equity securities | 689,018 | 712,494 | ||||||
| TOTAL NONCURRENT ASSETS | 15,641,615 | 16,315,609 | ||||||
| TOTAL ASSETS | $ | 80,667,159 | $ | 67,953,393 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Short-term bank loans | $ | 5,663,731 | $ | 5,856,703 | ||||
| Accounts payable | 7,400,655 | 4,914,762 | ||||||
| Taxes payable | 119,483 | 1,021,181 | ||||||
| Due to related parties | 8,585,187 | 6,900,584 | ||||||
| Accrued expenses and other current liabilities | 1,646,095 | 1,619,739 | ||||||
| TOTAL CURRENT LIABILITIES | 23,415,151 | 20,312,969 | ||||||
| Long-term bank loans | 2,067,055 | 2,137,483 | ||||||
| TOTAL LIABILITIES | 25,482,206 | 22,450,452 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Ordinary shares, $11.25 par value, 11,250,000 shares authorized, 563,338 and 42,880 shares issued and outstanding as of March 31, 2025 and September 30, 2024, respectively | 6,337,553 | 482,400 | ||||||
| Additional paid in capital | 63,009,567 | 53,864,720 | ||||||
| Statutory reserve | 2,439,535 | 2,439,535 | ||||||
| Accumulated deficit | (13,456,323 | ) | (10,171,568 | ) | ||||
| Accumulated other comprehensive loss | (3,145,379 | ) | (1,112,146 | ) | ||||
| TOTAL SHAREHOLDERS’ EQUITY | 55,184,953 | 45,502,941 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 80,667,159 | $ | 67,953,393 | ||||
4
UNIVERSE PHARMACEUTICALS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
| For the Six Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| REVENUE | $ | 9,152,915 | $ | 12,884,370 | ||||
| COST OF REVENUE AND RELATED TAX | 5,988,385 | 9,515,039 | ||||||
| GROSS PROFIT | 3,164,530 | 3,369,331 | ||||||
| OPERATING EXPENSES | ||||||||
| Selling expenses | 2,276,728 | 4,054,357 | ||||||
| General and administrative expenses | 3,117,727 | 968,608 | ||||||
| Research and development expenses | 96,836 | 86,503 | ||||||
| Total operating expenses | 5,491,291 | 5,109,468 | ||||||
| LOSS FROM OPERATIONS | (2,326,761 | ) | (1,740,137 | ) | ||||
| OTHER INCOME (EXPENSES) | ||||||||
| Interest expense, net | (128,745 | ) | (136,613 | ) | ||||
| Other (expense) income, net | (829,249 | ) | 152,027 | |||||
| Total other (expense) income, net | (957,994 | ) | 15,414 | |||||
| LOSS BEFORE INCOME TAX EXPENSE | (3,284,755 | ) | (1,724,723 | ) | ||||
| INCOME TAX EXPENSE | - | 665,148 | ||||||
| NET LOSS | (3,284,755 | ) | (2,389,871 | ) | ||||
| OTHER COMPREHENSIVE LOSS | ||||||||
| Foreign currency translation adjustment | (2,033,233 | ) | 296,558 | |||||
| COMPREHENSIVE LOSS | $ | (5,317,988 | ) | $ | (2,093,313 | ) | ||
| Net loss per share - Basic and diluted | $ | (9.44 | ) | $ | (393.26 | ) | ||
| Weighted average number of shares outstanding used in calculating basic and diluted loss per share | $ | 347,814 | $ | 6,077 | ||||
5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED MARCH 31, 2025 AND 2024
(UNAUDITED)
| Accumulated | ||||||||||||||||||||||||||||
| Additional | Other | |||||||||||||||||||||||||||
| Ordinary Share | Paid in | Statutory | Accumulated | Comprehensive | ||||||||||||||||||||||||
| Shares | Amount | Capital | Reserve | Deficit | Loss | Total | ||||||||||||||||||||||
| Balance as of September 30, 2023 | 6,042 | $ | 67,969 | $ | 29,279,159 | $ | 2,439,535 | $ | (1,444,270 | ) | $ | (2,372,240 | ) | $ | 27,970,153 | |||||||||||||
| Reverse share-split adjustment | 35 | 393 | (393 | ) | - | - | - | - | ||||||||||||||||||||
| Net loss for the period | - | - | - | - | (2,389,871 | ) | - | (2,389,871 | ) | |||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | 296,558 | 296,558 | |||||||||||||||||||||
| Balance as of March 31, 2024 | 6,077 | $ | 68,362 | $ | 29,278,766 | $ | 2,439,535 | $ | (3,834,141 | ) | $ | (2,075,682 | ) | $ | 25,876,840 | |||||||||||||
| Ordinary Share | Additional Paid in | Statutory | Accumulated | Accumulated Other Comprehensive | ||||||||||||||||||||||||
| Shares * | Amount | Capital | Reserve | Deficit | Loss | Total | ||||||||||||||||||||||
| Balance as of September 30, 2024 | 42,880 | $ | 482,400 | $ | 53,864,720 | $ | 2,439,535 | $ | (10,171,568 | ) | $ | (1,112,146 | ) | $ | 45,502,941 | |||||||||||||
| Issuance of ordinary shares | 468,750 | 5,273,438 | 9,726,562 | - | - | - | 15,000,000 | |||||||||||||||||||||
| Reverse share-split adjustment | 51,708 | 581,715 | (581,715 | ) | - | - | - | - | ||||||||||||||||||||
| Net loss for the period | - | - | - | - | (3,284,755 | ) | - | (3,284,755 | ) | |||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | (2,033,233 | ) | (2,033,233 | ) | |||||||||||||||||||
| Balance as of March 31, 2025 | 563,338 | $ | 6,337,553 | $ | 63,009,567 | $ | 2,439,535 | $ | (13,456,323 | ) | $ | (3,145,379 | ) | $ | 55,184,953 | |||||||||||||
6
UNIVERSE PHARMACEUTICALS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Six Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (3,284,755 | ) | $ | (2,389,871 | ) | ||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 269,639 | 248,860 | ||||||
| Reversal for credit loss | - | (265,530 | ) | |||||
| Reversal of inventory reserve | - | (34,303 | ) | |||||
| Deferred income tax expense | - | 665,148 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 2,318,451 | (3,346,205 | ) | |||||
| Inventories | (1,892,889 | ) | 26,553 | |||||
| Advance to suppliers, net | (1,057,671 | ) | (186,782 | ) | ||||
| Other receivable | 3,555,781 | - | ||||||
| Prepaid expenses and other current assets | 787,964 | 92,890 | ||||||
| Prepaid expenses-related party, non-current | - | (96,326 | ) | |||||
| Accounts payable | 2,657,313 | 3,136,661 | ||||||
| Taxes payable | (871,160 | ) | (267,456 | ) | ||||
| Accrued expenses and other current liabilities | 78,521 | (14,116 | ) | |||||
| Net cash provided by (used in) operating activities | 2,561,194 | (2,430,477 | ) | |||||
| Cash flows from investing activities: | ||||||||
| Purchases of property, plant and equipment | (84,333 | ) | (30,189 | ) | ||||
| Prepayments for construction in progress | (12,447 | ) | (37,467 | ) | ||||
| Purchase of intangible asset | (35,957 | ) | - | |||||
| Net cash used in investing activities | (132,737 | ) | (67,656 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Net proceeds from issuance of ordinary shares | 15,000,000 | - | ||||||
| Proceeds from bank loans | 691,486 | 2,081,483 | ||||||
| Repayment of bank loans | (691,486 | ) | (1,110,124 | ) | ||||
| Proceeds from related party borrowings | 1,398,355 | 5,096,373 | ||||||
| Net cash provided by financing activities | 16,398,355 | 6,067,732 | ||||||
| Effect of changes of foreign exchange rates on cash | (1,051,654 | ) | 6,744 | |||||
| Net increase in cash | 17,775,158 | 3,576,343 | ||||||
| Cash, beginning of period | 29,497,693 | 5,285,247 | ||||||
| Cash, end of period | $ | 47,272,851 | $ | 8,861,590 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | 150,009 | $ | 148,860 | ||||
| Cash paid for income tax | $ | - | $ | 969,914 | ||||
7
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Universe Pharmaceuticals INC | ||
| Date: July 3, 2025 | By: | /s/ Gang Lai |
| Gang Lai | ||
| Chief Executive Officer | ||
8