Advanced Oxygen Technologies Reports Modest Revenue Growth, Wider Net Loss in Q3 2024

Advanced Oxygen Technologies, Inc. (AOXY) reported its financial results for the three months ended September 30, 2024, showing a modest increase in total revenues but a deeper net loss compared to the same period in 2023. Total revenues for the quarter reached $10,885,000, up from $10,633,000 in the prior year, primarily driven by rental income from its commercial real estate lease in Denmark. The company’s lease income specifically rose to $8,167,000 from $8,002,000 year-over-year.

Despite the revenue growth, total operating expenses increased significantly to $13,059,000 from $11,404,000 in 2023. This rise was attributed to higher professional expenses, which escalated to $11,019,000 from $9,500,000, largely due to increased audit fees and compliance costs. Consequently, the company reported an income loss before income taxes of $(2,174,000), worsening from $(849,000) in the previous year. The net loss for the quarter was $(4,475,000), compared to $(3,106,000) in 2023, reflecting challenges in managing costs amid rising operational expenses.

The company’s cash position also deteriorated, with cash and cash equivalents decreasing to $87,963,000 from $94,482,000 at the end of the previous fiscal period. The working capital deficit expanded to $236,535,000 from $110,622,000, indicating increased financial strain. Net cash provided by operating activities improved slightly to $9,559,000 from $9,043,000, while net cash used in financing activities surged to $(19,986,000) from $(8,993,000), primarily due to debt repayments.

Advanced Oxygen Technologies continues to operate through its subsidiaries, including Anton Nielsen Vojens, ApS, which manages the Danish real estate, and Sharx Inc., which handles administrative functions. The company is actively seeking capital to support its operations and growth, including potential acquisitions or mergers, and is in discussions with lending institutions for financing.

As of September 30, 2024, the company reported total assets of $693,896,000 and total stockholders’ equity of $368,206,000. The company has recognized a valuation allowance equal to the tax benefit of net operating losses due to uncertainty regarding the realization of these losses. Additionally, the Chief Executive Officer and Acting Chief Financial Officer noted that the company's disclosure controls and procedures were not effective in ensuring compliance with SEC rules.