KAT Exploration Reports Significant Financial Changes, Losses, and Cash Flow Improvement in 10-Q Filing

KAT Exploration, Inc. reported significant financial changes in its 10-Q filing for the nine months ended August 31, 2024. The company, classified as a shell entity, has not utilized the extended transition period for new financial accounting standards. As of August 31, 2024, KAT Exploration had total assets of $45,370, a substantial increase from $5,000 reported as of November 30, 2023. However, total liabilities also rose sharply to $197,693 from $23,518, resulting in a stockholders' deficit of $(152,324), compared to $(18,518) in the previous fiscal period.

Operating expenses surged dramatically, with total operating expenses for the three months ended August 31, 2024, amounting to $120,991, compared to just $560 for the same period in 2023. This increase was driven by consulting expenses of $62,743 and general and administrative expenses of $58,248, both of which were negligible in the prior year. Consequently, the company reported a loss from operations of $(120,991) for the three months ended August 31, 2024, compared to $(560) in the same quarter of the previous year. For the nine months ended August 31, 2024, the net loss was $(133,805), significantly higher than the $(44,372) loss reported for the same period in 2023.

Cash flow analysis indicates that KAT Exploration used $40,370 in operating activities during the nine months ended August 31, 2024, a notable improvement from $(60,079) in the prior year. The company ended the reporting period with cash on hand of $40,370, compared to $0 at the end of the previous fiscal year.

KAT Exploration is actively pursuing merger, acquisition, reverse merger, or business combination opportunities, with limited operations expected until a transaction is finalized. The company has not established arrangements with banks or financial institutions for future financing and does not anticipate cash distributions in the near term. Management has indicated that operating losses are projected to continue at a rate of $1,000 to $2,000 per quarter until a transaction is completed.

The company’s management, including the CEO and CFO, has evaluated the effectiveness of its disclosure controls and procedures, concluding that they were effective as of the end of the reporting period. There were no significant deficiencies identified in the internal controls over financial reporting.