Pacific Sports Exchange Reports No Revenue and Increased Losses in Latest Quarter

Pacific Sports Exchange Inc. reported significant financial challenges in its latest quarterly filing for the period ending November 30, 2024. The company recorded no revenue for the quarter, a stark decline from $2.3 million in the same period last year. This drop in revenue contributed to a net loss of $7,817, compared to a loss of $5,634 in the prior year. The increase in net loss was primarily attributed to a rise in operating expenses, which totaled $7,817, up from $6,194 in the previous year, driven largely by professional fees.

The company's balance sheet reflects a notable shift in its financial position. Total assets decreased to $1,189,000 from $1,264,000 as of August 31, 2024. However, total liabilities saw a significant reduction from $80,419,000 to $14,338,000, largely due to the forgiveness of a related party loan amounting to $73,823. This change in liabilities improved the company's working capital deficiency to $13,149,000 from $79,155,000, indicating a more favorable short-term financial outlook despite the ongoing losses.

Strategically, Pacific Sports Exchange underwent a change in control on September 23, 2024, when former majority shareholders Timothy Conte and Jennifer Whitesides sold approximately 70% of the company's common stock to Alpine Elite Holdings Ltd. Following this transaction, Huang Hua Shang was appointed as the new Chief Executive Officer and sole Director, marking a significant organizational shift. The company continues to focus on its core business of reselling new and used sports equipment, particularly tennis and golf products, through online platforms like eBay.

Operationally, the company has faced challenges in customer engagement and product sales. The absence of revenue during the latest quarter highlights difficulties in attracting customers, which is critical for its online-only retail model. The company has also reported a decrease in inventory levels, with current inventory valued at $1,169,000, down from $269,000 previously. This reduction in inventory may reflect a strategic pivot or a response to the lack of sales activity.

Looking ahead, Pacific Sports Exchange's management has indicated that the company's ability to achieve profitability is contingent upon securing additional financing and effectively executing its business plan. The company is exploring options for raising operating funds through equity or debt financing. However, there are no guarantees that such financing will be available or on favorable terms, raising concerns about the company's long-term viability. The management has cautioned that without adequate working capital, the company may need to curtail or cease operations, underscoring the precarious nature of its current financial situation.