Jerash Holdings (US) (JRSH) risk factors, FY2025 10-K

Risks Related to Our Business and Our Industry

1. 01We rely on one key customer for a large portion of our revenue. We cannot assure you that this customer or any other customer will continue to buy our products in the same volumes or on the same terms
2. 02A material decrease in the quantity of sales made to our principal customers, a material adverse change in the terms of such sales or a material adverse change in the financial condition of our principal customers could significantly reduce our sales and our earnings
3. 03Any adverse change in our relationship with VF Corporation and its owned brands, or with their strategies or reputation, would have a material adverse effect on our results of operations
4. 04If we lose our key customer and are unable to attract new customers, then our business, results of operations, and financial condition would be adversely affected
5. 05If we lose our larger brand name customers, or the customers fail to purchase our products at anticipated levels, our sales and operating results will be adversely affected
6. 06If the market share of our customers declines, our sales and earnings may decline
7. 07A natural disaster, catastrophe, pandemic, or other unexpected events could adversely affect our financial conditions and business operations
8. 08We may require additional financing to fund our operations and capital expenditures
9. 09We may have conflicts of interest with our affiliates and related parties, and in the past we have engaged in transactions and entered into agreements with affiliates that were not negotiated at arms’ length
10. 10We are dependent on a product segment comprised of a limited number of products
11. 11Our revenue and cash requirements are affected by the seasonal nature of our business
12. 12Changes in our product mix and the geographic destination of our products or source of our supplies may impact our cost of goods sold, net income, and financial position
13. 13Our direct and indirect customers are in the clothing retail industry, which is subject to substantial cyclical variations and could have a material adverse effect on our results of operations
14. 14The clothing retail industry is subject to changes in fashion preferences. If our customers misjudge a fashion trend or the price which consumers are willing to pay for our products decreases, our revenue could be adversely affected
15. 15If we experience product quality or late delivery problems, or if we experience financial problems, our business will be negatively affected
16. 16We face intense competition in the worldwide apparel manufacturing industry
17. 17Our results of operations are subject to fluctuations in currency exchange rates
18. 18We are subject to the risks of doing business abroad
19. 19Our business could suffer if we violate labor laws or fail to conform to generally accepted labor standards or the ethical standards of our customers
20. 20Our products may not comply with various industry and governmental regulations and our customers may incur losses in their products or operations as a consequence of our non-compliance
21. 21We depend on our suppliers for machinery and maintenance of machinery. We may experience delays or additional costs satisfying our production requirements due to our reliance on these suppliers
22. 22We are a holding company and rely on dividends, distributions, and other payments, advances, and transfers of funds from our subsidiaries to meet our obligations
23. 23Periods of sustained economic adversity and uncertainty could negatively affect our business, results of operations, and financial condition

Risks Related to Operations in Jordan

1. 24We are affected by conditions to, and possible reduction of, free trade agreements
2. 25Because of the United States-Jordan Free Trade Agreement, we were able to sell our products manufactured at our facilities in Jordan to the U.S. free from customs duties and import quotas under certain conditions prior to April 2025
3. 26Our results of operations would be materially and adversely affected in the event we are unable to operate our principal production facilities in Jordan
4. 27Our operations in Jordan may be adversely affected by social and political uncertainties or change, military actions, health-related risks, acts of terrorism, or other geopolitical instability
5. 28We may face interruption of production and services due to increased security measures in response to terrorism
6. 29We conduct substantially all of our business and operations in Jordan. Consequently, government policies and regulations, including tax policies, in Jordan will impact our financial performance and the market price of our common stock
7. 30If we violate applicable anti-corruption laws or our internal policies designed to ensure ethical business practices, we could face financial penalties and reputational harm that would negatively impact our financial condition and results of operations
8. 31Our stockholders may face difficulties in protecting their interests and exercising their rights as a stockholder of ours because we conduct substantially all of our operations in Jordan and certain of our officers and directors reside outside of the United States
9. 32If we fail to comply with the continuing listing standards of the Nasdaq, our common stock could be delisted from the exchange
10. 33Future sales and issuances of our common stock or rights to purchase common stock could result in additional dilution of the percentage ownership of our stockholders and could cause the market price of our common stock to decline
11. 34If securities or industry analysts do not publish research or reports about us, or if they adversely change their recommendations regarding our common stock, our stock price and trading volume of our common stock could decline
12. 35If we fail to establish and maintain an effective system of internal controls, we may not be able to report our financial results accurately. Any inability to report and file our financial results accurately and timely could harm our business and adversely affect the trading price of our common stock
13. 36We incur and will continue to incur increased costs and demands upon management as a result of being a public company
14. 37We may be adversely affected by the effects of inflation and a potential recession