Formation Minerals Reports $1.0 Million Net Loss for Quarter, Revenue Increases to $87,281

Formation Minerals, Inc. reported its financial results for the three and six months ended October 31, 2024, revealing a net loss of $1.0 million for the quarter, compared to a loss of $331,912 in the same period last year. For the six-month period, the company recorded a net loss of $727,615, slightly higher than the $648,708 loss reported in the prior year. Revenue for the quarter increased to $87,281, up from $59,496 in the previous year, while total revenue for the six months decreased to $123,420 from $135,190, attributed to lower production levels and oil prices.

The company’s total assets decreased to $329,674 as of October 31, 2024, down from $548,564 at the end of April 2024. This decline was primarily due to the sale of certain mineral properties. Current liabilities rose significantly to $3.25 million from $2.54 million, largely driven by an increase in accounts payable related to merger transaction expenses. The working capital deficit also widened to $3.12 million from $2.38 million, reflecting the company's ongoing cash flow challenges.

Strategically, Formation Minerals has shifted its focus from medical technology to energy-related businesses following a merger with Verde Bio Holdings, completed on May 9, 2024. This merger has positioned the company to acquire and exploit upstream energy assets, specifically targeting oil and gas mineral interests. The company has also been actively managing its portfolio, including the sale of non-core assets to reinvest in higher-performing properties. As part of this strategy, Formation Minerals sold certain mineral and royalty interests for $140,000 in cash during the reporting period.

Operationally, the company reported an increase in general and administrative expenses, which rose to $341,869 for the quarter, compared to $191,845 in the prior year, primarily due to higher professional fees associated with the merger. The company’s employee headcount and customer engagement metrics were not disclosed in the filing. However, management noted that over fourteen new wells were being brought online in its oil and gas properties, particularly in the Permian Basin and Haynesville Shales, which are expected to enhance production and revenue potential.

Looking ahead, Formation Minerals faces significant challenges, including an accumulated deficit of $21.3 million and ongoing cash flow issues. The company has indicated that its ability to continue as a going concern is contingent upon securing additional financing and generating profitable operations. Management plans to pursue equity financing and has received indications of support from certain stockholders for future capital raises. However, the company acknowledges that without sufficient funding, its operational capabilities may be severely constrained in the coming year.