Financial Performance - Revenues for the three months ended April 30, 2025, were $250,000, up 25% from $200,000 in the same period of 2024[20] - Net loss for the nine months ended April 30, 2025, was $3,859,571, compared to a net loss of $1,840,689 for the same period in 2024, indicating an increase in losses of approximately 109%[20] - For the nine months ended April 30, 2025, the Company reported a net loss of approximately $3.9 million, compared to a net loss of $1.8 million for the same period in 2024, indicating a 116.67% increase in losses year-over-year[32] - Net loss for the three months ended April 30, 2025, was approximately $1.6 million, an increase of $781,452, or 97%, from a net loss of $807,588 in 2024[126] - Net loss for the nine months ended April 30, 2025, was approximately $3.9 million, an increase of $2.1 million, or 110%, from a net loss of $1.8 million in 2024[135] Assets and Liabilities - Total current assets increased to $8,687,975 as of April 30, 2025, compared to $2,898,748 as of July 31, 2024, representing a growth of 200%[19] - Cash and cash equivalents rose significantly to $6,681,402 as of April 30, 2025, from $1,249,376 as of July 31, 2024, marking a 435% increase[19] - Total liabilities decreased to $278,073 as of April 30, 2025, from $1,258,834 as of July 31, 2024, a reduction of approximately 78%[19] - As of April 30, 2025, the Company had cash of approximately $6.7 million and short-term investments in trading securities of approximately $1.1 million, which could cover current liabilities of approximately $0.3 million[35] Share Issuance and Capital - The company issued 5,400,000 ordinary shares during the nine months ended April 30, 2025, raising $5,456,769 in capital[22] - The Company issued and sold 3,820,000 ordinary shares at a price of $1.25 per share in January 2025, generating gross proceeds of $4.8 million[33] - In February 2025, the Company issued and sold 1,580,000 ordinary shares at a price of $1 per share, along with warrants, for gross proceeds of $2.5 million[34] - The Company had 100,000,000,000 authorized ordinary shares, with 17,317,452 ordinary shares issued and outstanding as of April 30, 2025[78] Operating Expenses - The company reported total operating expenses of $1,510,918 for the nine months ended April 30, 2025, down from $2,075,577 in the same period of 2024, a decrease of approximately 27%[20] - General and administrative expenses decreased by $196,270, or 31%, from approximately $635,282 for the three months ended April 30, 2024, to $439,012 for the same period in 2025[122] - Selling expenses for the nine months ended April 30, 2025, were $120,000, a decrease of $131,000, or 52%, from $251,000 in 2024[130] - Rent expenses for the nine months ended April 30, 2025, were $12,000 compared to $291,771 for the same period in 2024[75] Investment Losses - Loss from investment in trading securities for the nine months ended April 30, 2025, was $2,538,592, compared to $338,255 for the same period in 2024, reflecting a significant increase in losses[24] - The Company recognized a loss of $1,400,028 from investments in trading securities for the three months ended April 30, 2025, compared to a loss of $309,521 for the same period in 2024[41] - Loss from investment in trading securities increased by approximately $1.1 million, or 352%, from $309,521 in 2024 to $1.4 million in 2025 for the three months ended April 30[123] - Loss from investment in trading securities for the nine months ended April 30, 2025, was approximately $2.5 million, compared to $338,255 in 2024, representing an increase of $2.2 million, or 650%[133] Revenue Concentration Risk - One customer accounted for 100% of the Company's consolidated revenue for the three months ended April 30, 2025, highlighting significant revenue concentration risk[60] - For the nine months ended April 30, 2025, two customers accounted for 56% and 44% of the Company's consolidated revenue, indicating a high dependency on a limited customer base[60] - For the three and nine months ended April 30, 2025, substantially all of the Company's revenues were generated from going public related consulting services[62] Future Plans and Concerns - The company plans to transition its consulting services from PRC based customers to more international customers to mitigate risks[62] - The company plans to strategically expand into the Bitcoin sector with a five-year plan to accumulate 1,000 BTC, having purchased 0.19 BTC to date[110] - The company is currently facing uncertainties regarding its ability to continue as a going concern due to a history of net losses and cash outflows from operating activities[137] - The company plans to support future operations primarily from cash generated from operations and cash on hand, but may need to raise additional funds[136] Legal Matters - A settlement agreement with Boustead Securities, LLC requires the company to pay a total of $1,000,000, with $750,000 already paid in two installments[102] - The company is involved in a pending legal proceeding with J.P. Morgan Securities LLC, claiming damages of $5,064,160 related to a stock transaction[103] - The parties involved in a dispute have agreed to attempt mediation, but no resolution was reached as of May 6, 2024[165] - Defendants filed a Petition on May 15, 2024, seeking to compel arbitration and stay the underlying State Court action[165] Tax Matters - The company is subject to a federal tax rate of 21% and a state tax rate of 8.84% in the US, but did not incur any income tax expenses for the three and nine months ended April 30, 2025[91][92] - The company has a 100% valuation allowance against deferred tax assets, indicating uncertainty regarding their realization[93] - The company has no uncertain tax positions as of April 30, 2025, and does not expect changes in unrecognized tax benefits over the next twelve months[94] Cash Flow - Operating cash outflows for the nine months ended April 30, 2025, were approximately $2.1 million, significantly higher than approximately $0.08 million for the same period in 2024[32] - The company recorded net cash used in operating activities of approximately $2.1 million for the nine months ended April 30, 2025, primarily due to a net loss of approximately $3.9 million[143] - Net cash provided by financing activities was approximately $6.9 million for the nine months ended April 30, 2025, compared to $2.3 million for the same period in 2024, showing a significant increase in financing[147] Miscellaneous - The Company operates in one reporting segment, which is the consulting service business, as of April 30, 2025[57] - The Company recorded accrued litigation fees of $250,000 as current liabilities as of April 30, 2025[76] - The company is in the process of evaluating the impact of recent FASB updates on its consolidated financial statements[64][65][66][67] - The company is in the process of evaluating steps to improve its disclosure controls and procedures, including hiring qualified accounting personnel and implementing training programs[152] - The company extended a loan of $93,013 to Mr. Jun Liu during the nine months ended April 30, 2025, which was subsequently collected[86] - The company has a total of $600,000 due from Mr. Jun Liu as of April 30, 2025[88] - The Company recognized a decrease in fair value of investments of $1,400,028 for the three months and $2,538,592 for the nine months ended April 30, 2025[73] - The Company recorded a loss on disposal of property and equipment amounting to $53,765 due to the premature termination of a lease agreement[71] - As of April 30, 2025, the company had 3,355,106 outstanding and exercisable warrants, with a weighted average exercise price of $0.89[82]
ATIF (ATIF) - 2025 Q3 - Quarterly Report