CXJ Group Reports 77% Revenue Decline and Strategic Operational Changes

CXJ Group Co., Limited reported a significant decline in financial performance for the three months ended August 31, 2024, with total revenue of $114,382, a decrease of 77% from $504,517 in the same period last year. The company's gross profit also fell to $95,009 from $280,587, reflecting a drop of $185,578. The decline in revenue was attributed to reduced market activity, particularly in brand name administrative fees and sales of motor oil and auto parts, which saw a combined decrease of approximately $390,135.

In terms of expenses, CXJ Group managed to reduce its selling and distribution expenses to $56,129 from $156,563, a decrease of $100,434, and general and administrative expenses dropped significantly from $634,930 to $82,547, a reduction of $552,383. This reduction in expenses contributed to a smaller loss from operations of $43,832 compared to $506,324 in the previous year. The net loss attributable to shareholders was $41,567, down from $502,944 in the prior year, indicating a substantial improvement in operational efficiency despite the revenue decline.

Operationally, the company has made strategic moves, including the disposal of a 51% equity interest in Xishijie Automobile Industry Ecology Technology Co., Ltd for a nominal fee of RMB 1, which is expected to streamline operations and focus on core business areas. Additionally, CXJ Group has been actively engaging in subscription agreements to issue shares, raising approximately $369,728 in net proceeds from recent agreements with various purchasers, which will be utilized for working capital.

As of August 31, 2024, CXJ Group's total assets increased to $2,446,152 from $2,355,005 at the end of the previous fiscal period, primarily due to an increase in cash and cash equivalents, which rose to $72,054 from $2,521. The company reported current liabilities of $2,138,621, up from $1,979,652, indicating a growing financial obligation. The accumulated deficit also widened to $5,405,047 from $5,363,480, reflecting ongoing challenges in achieving profitability.

Looking ahead, CXJ Group plans to enhance its market share through strategic acquisitions in the automotive aftermarket industry and aims to diversify its product portfolio. The company is also focusing on improving its online and offline marketing platforms and internal enterprise resource planning systems. However, management cautioned that the ability to execute these plans successfully remains uncertain, and the company may require additional funding to support its operations and growth initiatives.