Pacific Sports Exchange Reports Revenue Decline and Increased Net Losses for Nine Months Ending May 31, 2025

Pacific Sports Exchange Inc. reported its financial results for the nine months ending May 31, 2025, revealing a decline in revenue and an increase in net losses compared to the previous fiscal period. The company generated revenues of $3.3 million, down from $4.4 million in the same period last year. The cost of goods sold also decreased to $1.9 million from $3.34 million, resulting in a gross profit of $1.4 million, an increase from $1.06 million. However, operating expenses surged to $26.95 million from $20.38 million, leading to a net loss of $25.55 million, compared to a loss of $19.32 million in the prior year.

The company experienced significant changes in its financial position, with total assets rising to $9,993,000 from $1,264,000 as of August 31, 2024. This increase was primarily due to a rise in cash and inventory levels, which reached $2,224 and $7,769, respectively. Total liabilities decreased to $40,877,000 from $80,419,000, largely due to the forgiveness of a related party loan amounting to $73,823, which was recorded in additional paid-in capital. The working capital deficiency improved to $30,884,000 from $79,155,000, indicating a positive shift in the company's financial health.

Strategically, Pacific Sports Exchange has undergone a change in control, with Alpine Elite Holdings Ltd. acquiring approximately 70% of the company's shares in September 2024. This transition led to the resignation of former executives Timothy Conte and Jennifer Whitesides, with Huang Hua Shang appointed as the new CEO and CFO. The company continues to focus on its core business of reselling new and used tennis and golf equipment, as well as used golf carts, primarily through eBay. The management aims to enhance its online presence and customer engagement to drive sales.

Operationally, the company reported a slight increase in customer engagement, with revenues for the three months ending May 31, 2025, rising to $1,300 from $1,000 in the same period last year. However, the overall customer count and engagement metrics were not disclosed. The company remains reliant on a limited number of customers, with two customers accounting for 100% of revenue during the nine months ended May 31, 2025. This concentration poses a risk to revenue stability.

Looking ahead, Pacific Sports Exchange acknowledges the challenges it faces in achieving profitability and securing additional financing to support its operations. The management plans to raise funds through equity and debt financing, although there are no assurances that these efforts will be successful. The company emphasizes the need for improved financial controls and expertise to enhance its reporting processes and mitigate risks associated with its reliance on third-party platforms for sales.