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Wall Street JournalBased on the provided financial report, the title of the article is: "ENLIGHTIFY, INC. (Form 10-Q) - Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Based on the provided financial report, the title of the article is: "ENLIGHTIFY, INC. (Form 10-Q) - Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Enlightify, Inc. filed its Form 10-Q for the quarterly period ended December 31, 2024, reporting unaudited financial statements. The company’s condensed consolidated balance sheets as of December 31, 2024, and June 30, 2024, showed total assets of $X and total liabilities of $Y. The condensed consolidated statements of operations and comprehensive loss for the three months and six months ended December 31, 2024, and 2023, reported a net loss of $Z and a comprehensive loss of $W. The company’s condensed consolidated statements of cash flows for the six months ended December 31, 2024, and 2023, showed a net cash used in operating activities of $X and a net cash used in investing activities of $Y. The company’s management’s discussion and analysis of financial condition and results of operations highlighted key financial figures, main events, and significant developments, including the company’s revenue growth, operating expenses, and cash flow.
Overview
We are engaged in the research, development, production, and sale of various types of fertilizers, agricultural products, and Bitcoin in the PRC and United States through our wholly owned Chinese subsidiaries, Jinong and Gufeng (including Gufeng’s subsidiary Tianjuyuan), Yuxing, a VIE associated with Jinong, and our wholly owned U.S. subsidiary Antaeus. Our primary business is fertilizer products, specifically humic-acid based compound fertilizer produced by Jinong and compound fertilizer, blended fertilizer, organic compound fertilizer, slow-release fertilizer, highly concentrated water-soluble fertilizer, and mixed organic-inorganic compound fertilizer produced by Gufeng. In addition, through Yuxing, we develop and produce various agricultural products, such as top-grade fruits, vegetables, flowers, and colored seedlings. We also engage in the mining of digital assets Bitcoin through Antaeus.
For financial reporting purposes, our operations are organized into four business segments: fertilizer products (Jinong), fertilizer products (Gufeng), agricultural products (Yuxing), and Bitcoin (Antaeus). The fertilizer business conducted by Jinong and Gufeng generated approximately 84.4% and 86.4% of our total revenues for the six months ended December 31, 2024 and 2023, respectively. Yuxing generated 15.0% and 11.9% of our revenues for the six months ended December 31, 2024 and 2023, respectively, and serves as a research and development base for our fertilizer products. Antaeus generated 0.6% and 1.7% of our revenues for the six months ended December 31, 2024 and 2023, respectively.
Fertilizer Products
As of December 31, 2024, we had developed and produced a total of 407 different fertilizer products, of which 71 were developed and produced by Jinong and 336 by Gufeng.
The table below shows the metric tons of fertilizer sold by Jinong and Gufeng and the revenue per ton for the periods indicated:
,,Three Months Ended,,,,,,,,,,,,,,, ,,December 31,,,,,,,,Change 2023 to 2024,,,,,,, ,,2024,,,,2023,,,,Amount,,,,%,,, ,,(metric tons),,,,,,,,,,,,,,, Jinong,,,8 095,,,,6 694,,,,1 400,,,,20.9,%, Gufeng,,,11 739,,,,16 869,,,,(5 130,),,,-30.4,%, ,,,19 834,,,,23 563,,,,(3 730,),,,-15.8,%,
,,Three Months Ended December 31,,,,,,, ,,2024,,,,2023,,, ,,(revenue per tons),,,,,,, Jinong,,$,778,,,$,1 014,, Gufeng,,,491,,,,485,,
,,Six Months Ended,,,,,,,,,,,,,,, ,,December 31,,,,,,,,Change 2023 to 2024,,,,,,, ,,2024,,,,2023,,,,Amount,,,,%,,, ,,(metric tons),,,,,,,,,,,,,,, Jinong,,,20 356,,,,14 748,,,,5 608,,,,38.0,%, Gufeng,,,26 679,,,,37 678,,,,(10 999,),,,-29.2,%, ,,,47 036,,,,52 426,,,,(5 391,),,,-10.3,%,
,,Six Months Ended December 31,,,,,,, ,,2024,,,,2023,,, ,,(revenue per tons),,,,,,, Jinong,,$,675,,,$,1 090,, Gufeng,,,496,,,,493,,
For the three months ended December 31, 2024, we sold approximately 19,834 tons of fertilizer products, compared to 23,563 metric tons for the three months ended December 31, 2023. Jinong’s sales increased by 20.9%, while Gufeng’s sales decreased by 30.4%.
For the six months ended December 31, 2024, we sold approximately 47,036 metric tons of fertilizer products, compared to 52,426 metric tons for the six months ended December 31, 2023. Jinong’s sales increased by 38.0%, while Gufeng’s sales decreased by 29.2%.
Our sales of fertilizer products to customers in five provinces within China accounted for approximately 58.5% of our fertilizer revenue for the three months ended December 31, 2024. As of December 31, 2024, we had a total of 950 distributors covering 22 provinces, 4 autonomous regions, and 4 central government-controlled municipalities in China.
Agricultural Products
Through Yuxing, we develop, produce, and sell high-quality flowers, green vegetables, and fruits to local marketplaces and various horticulture and planting companies. Yuxing also serves as a research and development base for our fertilizer products.
Digital Assets Bitcoin
In March 2023, we established Antaeus Tech Inc. (“Antaeus”) and purchased mining machines to mine digital assets Bitcoin in the State of Texas, expanding our activities in the mining of digital assets Bitcoin.
Recent Developments
During the three months ended December 31, 2024, Jinong launched two new fertilizer products and added one new distributor, while Gufeng neither launched any new fertilizer products nor added any new distributors.
Results of Operations
Three Months ended December 31, 2024 Compared to the Three Months ended December 31, 2023:
| 2024 | 2023 | Change $ | Change % | |
|---|---|---|---|---|
| Sales | ||||
| Jinong | $6,163,723 | $6,811,640 | $(647,917) | -9.5% |
| Gufeng | $5,753,312 | $8,209,157 | $(2,455,845) | -29.9% |
| Yuxing | $2,412,651 | $2,452,187 | $(39,536) | -1.6% |
| Antaeus | $18,452 | $327,130 | $(308,679) | -94.4% |
| Net sales | $14,348,138 | $17,800,114 | $(3,451,976) | -19.4% |
| Cost of goods sold | ||||
| Jinong | $3,855,063 | $4,982,284 | $(1,127,221) | -22.6% |
| Gufeng | $5,044,683 | $7,198,290 | $(2,153,607) | -29.9% |
| Yuxing | $1,967,551 | $2,042,241 | $(74,690) | -3.7% |
| Antaeus | $14,062 | $248,812 | $(234,750) | -94.3% |
| Cost of goods sold | $10,881,359 | $14,471,627 | $(3,590,268) | -24.8% |
| Gross profit | $3,466,779 | $3,328,487 | $138,292 | 4.2% |
| Operating expenses | ||||
| Selling expenses | $1,817,206 | $1,770,860 | $46,346 | 2.6% |
| General and administrative expenses | $6,442,440 | $6,947,810 | $(505,370) | -7.3% |
| Change in fair value of Bitcoin | $(262) | $- | $(262) | - |
| Total operating expenses | $8,259,384 | $8,718,670 | $(459,286) | -5.3% |
| Loss from operations | $(4,792,605) | $(5,390,183) | $597,578 | -11.1% |
| Other (expense) income | ||||
| Other (expense) income | $(268,594) | $30,926 | $(299,521) | -968.5% |
| Interest income | $39,346 | $51,125 | $(11,779) | -23.0% |
| Interest expense | $(121,189) | $(73,813) | $(47,376) | 64.2% |
| Total other (expense) income | $(350,437) | $8,238 | $(358,675) | -4354.1% |
| Loss before income taxes | $(5,143,043) | $(5,381,945) | $238,902 | -4.4% |
| Provision for income taxes | $(10,393) | $(11,942) | $1,549 | -13.0% |
| Net loss | $(5,132,650) | $(5,370,003) | $237,353 | -4.4% |
| Other comprehensive loss | ||||
| Foreign currency translation (loss) gain | $(5,314,813) | $4,705,400 | $(10,020,213) | -213.0% |
| Comprehensive loss | $(10,447,463) | $(664,603) | $(9,782,860) | 1472.0% |
Net Sales
Total net sales for the three months ended December 31, 2024 were $14,348,138, a decrease of $3,451,976 or 19.4%, from $17,800,114 for the three months ended December 31, 2023. This decrease was mainly due to the decrease in Gufeng’s net sales.
Jinong’s net sales decreased by 9.5% to $6,163,723, mainly due to lower unit sales price. Gufeng’s net sales decreased by 29.9% to $5,753,312, mainly due to lower sales volume. Yuxing’s net sales decreased by 1.6% to $2,412,651, and Antaeus’s net sales decreased by 94.4% to $18,452.
Cost of Goods Sold
Total cost of goods sold for the three months ended December 31, 2024 was $10,881,359, a decrease of $3,590,268 or 24.8%, from $14,471,627 for the three months ended December 31, 2023. The decrease was mainly due to lower sales.
Gross Profit
Total gross profit for the three months ended December 31, 2024 increased by $138,292 or 4.2% to $3,466,779, with a gross profit margin of 24.2% compared to 18.7% for the three months ended December 31, 2023.
Jinong’s gross profit increased by 26.2% to $2,308,660, with a gross margin of 37.5%. Gufeng’s gross profit decreased by 29.9% to $708,629, with a gross margin of 12.3%. Yuxing’s gross profit increased by 8.6% to $445,100, with a gross margin of 18.4%. Antaeus’s gross profit decreased by 94.4% to $4,389, with a gross margin of 23.8%.
Selling Expenses
Selling expenses were $1,817,206, or 12.7% of net sales, compared to $1,770,860, or 9.9% of net sales, for the three months ended December 31, 2023.
General and Administrative Expenses
General and administrative expenses were $6,442,440, or 44.9% of net sales, compared to $6,947,810, or 39.0% of net sales, for the three months ended December 31, 2023. The decrease was mainly due to lower expenses for Yuxing and Gufeng.
Total Other Income (Expenses)
Total other expense for the three months ended December 31, 2024 was $350,437, compared to other income of $8,238 for the three months ended December 31, 2023. The difference was mainly due to a decrease in other income.
Net Loss
Net loss for the three months ended December 31, 2024 was $5,132,650, a decrease of $237,353 or 4.4%, compared to net loss of $5,370,003 for the three months ended December 31, 2023.
Six Months ended December 31, 2024 Compared to the Six Months ended December 31, 2023:
| 2024 | 2023 | Change $ | Change % | |
|---|---|---|---|---|
| Net sales | $31,713,076 | $40,197,976 | $(8,484,900) | -21.1% |
| Cost of goods sold | $24,259,728 | $32,219,635 | $(7,959,907) | -24.7% |
| Gross profit | $7,453,348 | $7,978,341 | $(524,993) | -6.6% |
| Operating expenses | ||||
| Selling expenses | $3,741,634 | $3,650,014 | $91,620 | 2.5% |
| General and administrative expenses | $10,269,344 | $11,504,417 | $(1,235,073) | -10.7% |
| Total operating expenses | $14,010,978 | $15,154,431 | $(1,143,452) | -7.5% |
| Loss from operations | $(6,557,630) | $(7,176,090) | $618,460 | -8.6% |
| Total other (expense) income | $(466,516) | $5,539 | $(472,055) | -8522.1% |
| Loss before income taxes | $(7,024,146) | $(7,170,551) | $146,405 | -2.0% |
| Provision for income taxes | $(49,272) | $(16,355) | $(32,917) | 201.3% |
| Net loss | $(6,974,874) | $(7,154,196) | $179,321 | -2.5% |
| Other comprehensive loss | ||||
| Foreign currency translation (loss) gain | $(573,572) | $3,869,023 | $(4,442,595) | -114.8% |
| Comprehensive loss | $(7,548,446) | $(3,285,173) | $(4,263,274) | 129.8% |
Net Sales
Total net sales for the six months ended December 31, 2024 were $31,713,076, a decrease of $8,484,900 or 21.1%, from $40,197,976 for the six months ended December 31, 2023. This decrease was primarily due to decreases in Jinong and Gufeng’s net sales.
Cost of Goods Sold
Total cost of goods sold for the six months ended December 31, 2024 was $24,259,728, a decrease of $7,959,907 or 24.7%, from $32,219,635 for the six months ended December 31, 2023.
Gross Profit
Total gross profit for the six months ended December 31, 2024 decreased by $524,993 or 6.6% to $7,453,348, with a gross profit margin of 23.5% compared to 19.8% for the six months ended December 31, 2023.
Selling Expenses
Selling expenses were $3,741,634, or 11.8% of net sales, compared to $3,650,014, or 9.1% of net sales, for the six months ended December 31, 2023.
General and Administrative Expenses
General and administrative expenses were $10,269,344, or 32.4% of net sales, compared to $11,504,417, or 28.6% of net sales, for the six months ended December 31, 2023. The decrease was mainly due to lower expenses for Gufeng and Yuxing.
Total Other Income (Expenses)
Total other expense for the six months ended December 31, 2024 was $466,516, compared to other income of $5,539 for the six months ended December 31, 2023. The difference was mainly due to a decrease in other income.
Net Loss
Net loss for the six months ended December 31, 2024 was $6,974,874, a decrease of $179,321 or 2.5%, compared to net loss of $7,154,196 for the six months ended December 31, 2023.
**Discussion