PART I - FINANCIAL INFORMATION This section covers the unaudited financial statements, management's analysis, market risk disclosures, and internal controls Item 1. Financial Statements (unaudited) This section presents Enlightify, Inc.'s unaudited consolidated financial statements, highlighting going concern uncertainty and business segments Condensed Consolidated Balance Sheet Summary | Account | Dec 31, 2024 ($) | Jun 30, 2024 ($) | | :--- | :--- | :--- | | Total Current Assets | 120,484,340 | 127,685,890 | | Cash and cash equivalents | 49,141,355 | 58,772,587 | | Total Assets | 162,431,027 | 163,246,683 | | Total Current Liabilities | 62,736,919 | 61,291,253 | | Total Liabilities | 69,880,293 | 63,147,503 | | Total Stockholders' Equity | 92,550,734 | 100,099,180 | Condensed Consolidated Statements of Operations Summary (Six Months Ended Dec 31) | Metric | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Net Sales | 31,713,076 | 40,197,976 | | Gross Profit | 7,453,348 | 7,978,341 | | Loss from Operations | (6,557,630) | (7,176,090) | | Net Loss | (6,974,874) | (7,154,196) | | Basic & Diluted Net Loss Per Share | (0.47) | (0.53) | Condensed Consolidated Statements of Cash Flows Summary (Six Months Ended Dec 31) | Activity | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (3,778,264) | (2,066,674) | | Net cash used in investing activities | (8,740,910) | (1,607,163) | | Net cash provided by financing activities | 3,268,238 | 1,382,404 | | Net decrease in cash and cash equivalents | (9,631,232) | (739,452) | - The company's financial statements are prepared on a going concern basis, but management has identified substantial doubt about its ability to continue as a going concern due to recurring operating losses and negative operating cash flows45 - The company is primarily engaged in the research, development, production, and sale of various fertilizers and agricultural products through its subsidiaries in the PRC, and recently started mining Bitcoin through its U.S. subsidiary, Antaeus2025 - The company holds Bitcoin as digital assets, accounted for as indefinite-lived intangible assets, holding no digital assets as of December 31, 2024, down from $53,693 at June 30, 2024343658 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes the 21.1% net sales decrease and weakened liquidity, driven by lower fertilizer sales and increased cash usage Results of Operations Net sales decreased 21.1% due to lower fertilizer and Bitcoin mining sales, while net loss slightly narrowed Comparison of Operations (Six Months Ended December 31) | Metric | 2024 ($) | 2023 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | 31,713,076 | 40,197,976 | -21.1% | | Gross Profit | 7,453,348 | 7,978,341 | -6.6% | | Loss from Operations | (6,557,630) | (7,176,090) | -8.6% | | Net Loss | (6,974,874) | (7,154,196) | -2.5% | - The decrease in total net sales was primarily due to: Jinong sales decreased 15.6% ($2.5M) mainly due to a 38.1% lower revenue per ton; Gufeng sales decreased 29.2% ($5.4M) mainly due to a 29.2% decrease in sales volume; and Antaeus (Bitcoin) sales decreased 73.0% ($0.5M) due to a strategic adjustment157158159 - Total general and administrative (G&A) expenses decreased by 10.7% ($1.2M), driven by lower G&A at Gufeng and Yuxing, but partially offset by a 214% ($3.3M) increase in Jinong's G&A expenses, mainly due to higher bad debt expense174175176 - By segment, for the six months ended Dec 31, 2024 vs 2023: Jinong's net loss increased by 674.3% to $3.3M; Gufeng's net loss decreased by 13.9% to $2.7M; Yuxing's net income increased by 128.5% to $0.3M; and Antaeus's net loss increased by 201.3% to $0.2M186187188 Liquidity and Capital Resources Cash and cash equivalents decreased by $9.6 million due to operating and investing activities, partially offset by financing Summary of Cash Flows (Six Months Ended December 31) | Cash Flow Activity | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (3,778,264) | (2,066,674) | | Net cash used in investing activities | (8,740,910) | (1,607,163) | | Net cash provided by financing activities | 3,268,238 | 1,382,404 | - Cash and cash equivalents decreased by 16.4% from $58.8 million at June 30, 2024, to $49.1 million at December 31, 2024189 - Net cash used in investing activities increased significantly, mainly due to a new long-term equity investment of $8.5 million during the period194 - Accounts receivable increased by 18.9% to $19.6 million, while advances to suppliers increased by 30.9% to $15.8 million from June 30, 2024197201 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces market risks including foreign currency, interest rate, credit, and pandemic-related uncertainties, primarily from PRC operations - Foreign Currency Risk: Substantially all revenues and expenses are in RMB, but reporting is in USD, where a depreciating RMB would adversely affect the reported value of net assets and income, with no hedging transactions used215216 - Interest Rate Risk: The company is exposed to interest rate risk on its short-term bank loans, which have fixed rates but are subject to change upon renewal, with short-term debt at $5.4 million as of Dec 31, 2024217 - Credit Risk: The company has experienced higher credit risk since 2020 due to the impact of the COVID-19 pandemic on its customers in the PRC, leading to a significant increase in overdue accounts receivable219 - Pandemic Risk: The company acknowledges that the COVID-19 outbreak has adversely affected operations and that future outbreaks could disrupt supply chains, reduce demand, and increase credit losses221222 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report225 - There were no changes in internal control over financial reporting during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, these controls226 PART II - OTHER INFORMATION This section provides additional information, including legal proceedings and a list of exhibits filed with the report Item 1. Legal Proceedings The company is involved in a pending lawsuit alleging misuse of funds for cryptocurrency mining site purchases - On May 28, 2024, a lawsuit was filed against the Company and its former co-CEO, Mr. Zhibiao Pan, in Texas228 - The plaintiff alleges the Company used his funds, stored in crypto wallets related to Mr. Pan, to buy cryptocurrency mining sites, and a motion to dismiss the lawsuit is currently pending228 Item 6. Exhibits This section lists exhibits filed with the report, including CEO/CFO certifications and Inline XBRL data - The report includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act241 - Inline XBRL documents are filed as exhibits, providing interactive data for the financial statements241
CGA(CGA) - 2025 Q2 - Quarterly Report