Landbay Inc. Reports Revenue Decline, Losses Amid Rising Expenses and Cash Reserve Dwindling

Landbay Inc. reported its financial results for the three and six months ended September 30, 2024, revealing significant challenges in revenue generation and profitability. The company generated revenue of $2.1 million for both the three and six months periods, a decline from $3.2 million in the same periods of the previous year. This revenue was entirely derived from network equipment sales through its newly established subsidiary, Zhejiang Toumi Holding Co., Ltd., which commenced operations on July 17, 2024.

Despite the revenue decline, Landbay's gross profit for the three months increased to $401,000 from $306,000 year-over-year, attributed to a lower cost of goods sold of $1.7 million compared to $2.9 million in the prior year. However, the company faced rising general and administrative expenses, which increased to $8.5 million for the three months ended September 30, 2024, up from $8.1 million in the same period of 2023. This contributed to a loss from operations of $8.1 million for the three months, compared to a loss of $7.8 million in the prior year.

For the six-month period, total operating expenses surged to $57.4 million, significantly higher than $24.9 million in the previous year, leading to a net loss of $57.1 million, compared to a net loss of $24.6 million for the same period in 2023. The increase in losses was primarily driven by the substantial rise in operating expenses, which included costs associated with the new management team and strategic initiatives following a change in control on April 23, 2024.

As of September 30, 2024, Landbay's cash reserves dwindled to $370, down from $8.8 million at the end of the previous fiscal period. The company also reported a total stockholders’ deficit of $52.0 million, an improvement from $97.4 million as of March 31, 2024. Shareholder loans decreased to $52.4 million from $104.2 million, reflecting a strategic effort to manage liabilities.

Management has acknowledged adverse conditions that raise substantial doubt about the company's ability to continue as a going concern. Plans to improve profitability and secure additional working capital from shareholders are underway. The company has also noted that it has no off-balance sheet arrangements that could impact its financial condition.