Financial Performance - Total revenues for the six months ended March 31, 2025, were $1,225,912, a decrease of 40% compared to $2,047,889 for the same period in 2024[6] - Gross profit for the six months ended March 31, 2025, was $155,683, down from $554,875 in 2024, reflecting a gross margin decline[6] - Operating loss increased to $1,409,007 for the six months ended March 31, 2025, compared to a loss of $133,157 in 2024[6] - Net loss for the six months ended March 31, 2025, was $1,381,918, significantly higher than the net loss of $146,072 in 2024[6] - The company reported a basic and diluted loss per share of $0.08 for the six months ended March 31, 2025, compared to $0.01 in 2024[6] - For the six months ended March 31, 2025, the loss before tax expenses was $1,412,844, compared to a loss of $142,213 for the same period in 2024[94] Assets and Equity - Total assets decreased to $4,459,294 as of March 31, 2025, from $5,974,092 as of September 30, 2024, indicating a reduction of approximately 25%[4] - Total shareholders' equity decreased to $3,905,168 as of March 31, 2025, from $5,285,958 as of September 30, 2024, a reduction of approximately 26%[4] - Cash and cash equivalents dropped to $167,914 as of March 31, 2025, down from $497,993 as of September 30, 2024, representing a decline of about 66%[4] Operating Expenses - Operating expenses surged to $1,564,690 for the six months ended March 31, 2025, compared to $688,032 in 2024, primarily driven by increased selling and marketing expenses[6] - The Company incurred a net cash used in operating activities of $402,422 for the six months ended March 31, 2025, compared to $301,203 in 2024, indicating increased cash outflow[10] Revenue Recognition - The Company generates revenue primarily from digital media advertising and marketing production services, with service contracts typically completed within one year[47] - Revenue is recognized at a point in time when finished contents are accepted by customers, with approximately 40% of the contract sum collected upfront[47] - The Company adopted ASC 606 for revenue recognition effective October 1, 2020, using the modified retrospective method[44] Allowances and Receivables - The Company has made an allowance for doubtful accounts of $540 for deposit and other current assets as of March 31, 2025[29] - The allowance for expected credit losses for accounts receivable increased to $39,386 as of March 31, 2025, compared to $20,322 as of September 30, 2024[66] - Accounts receivable, net, rose to $303,767 as of March 31, 2025, from $266,379 as of September 30, 2024[66] Liabilities and Cash Flow - The Company incurred a net loss of $1,381,918 for the six months ended March 31, 2025, with an accumulated deficit of $3,895,665[17] - Net cash used in operating activities for the six months ended March 31, 2025, was $402,422, raising substantial doubt about the Company's ability to continue as a going concern[17] - Contract liabilities decreased to $0 as of March 31, 2025, from $1,673 as of September 30, 2024, after recognizing $1,016,585 to revenue during the period[78] Investments and Acquisitions - The Company prepaid $3,000,000 for the acquisition of an AI program on April 6, 2025, to enhance its competitive advantage in the advertising industry[117] - A deposit of $1,053,500 was made on May 29, 2025, for the acquisition of an existing advertising company to gain control over its advertising expenditures[118] Related Party Transactions - Related party transactions included salaries of $66,744 to Mr. Bun Kwai and $35,585 to Mr. Pak Lun Patrick Au for the six months ended March 31, 2025[113] - The total amount due to related parties increased to $117,879 as of March 31, 2025, from $35,928 as of September 30, 2024[111] Risk and Compliance - The Company does not currently have a foreign currency hedging policy, but it monitors foreign currency exposure closely[108] - Management has assessed that there are no pending or threatened claims and litigation as of March 31, 2025[114]
QMMM Holdings Limited(QMMM) - 2025 Q2 - Quarterly Report