2024 Q3 Form 10-Q Financial Statement

#000175392624001616 Filed on September 23, 2024

View on sec.gov

Income Statement

Concept 2024 Q3 2023 Q3
Revenue $228.5K
YoY Change
Cost Of Revenue
YoY Change
Gross Profit $228.5K
YoY Change
Gross Profit Margin 100.0%
Selling, General & Admin $329.8K $379.3K
YoY Change -13.06% 3310.97%
% of Gross Profit 165.98%
Research & Development $2.185M
YoY Change
% of Gross Profit 956.34%
Depreciation & Amortization $151.00 $0.00
YoY Change
% of Gross Profit 0.0%
Operating Expenses $329.8K $2.565M
YoY Change -87.14% 22959.84%
Operating Profit -$329.8K -$2.336M
YoY Change -85.88% 20905.19%
Interest Expense -$103.4K
YoY Change
% of Operating Profit
Other Income/Expense, Net $101.00 $334.7K
YoY Change -99.97%
Pretax Income -$433.3K -$2.001M
YoY Change -78.35% 17895.45%
Income Tax
% Of Pretax Income
Net Earnings -$433.3K $810.00
YoY Change -53589.63% -107.28%
Net Earnings / Revenue 0.35%
Basic Earnings Per Share $0.00 -$0.04
Diluted Earnings Per Share $0.00 -$0.01
COMMON SHARES
Basic Shares Outstanding 129.6M shares 51.30M shares
Diluted Shares Outstanding 151.3M shares

Balance Sheet

Concept 2024 Q3 2023 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $12.17K
YoY Change
Cash & Equivalents $12.17K $130.00
Short-Term Investments
Other Short-Term Assets $130.5K
YoY Change
Inventory
Prepaid Expenses
Receivables $755.6K $680.7K
Other Receivables $0.00 $0.00
Total Short-Term Assets $767.8K $130.5K
YoY Change 488.24%
LONG-TERM ASSETS
Property, Plant & Equipment $1.057K
YoY Change
Goodwill
YoY Change
Intangibles $268.0K
YoY Change
Long-Term Investments $18.82M
YoY Change
Other Assets $169.4K
YoY Change
Total Long-Term Assets $6.844M $19.50M
YoY Change -64.9%
TOTAL ASSETS
Total Short-Term Assets $767.8K $130.5K
Total Long-Term Assets $6.844M $19.50M
Total Assets $7.612M $19.63M
YoY Change -61.22%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $137.2K
YoY Change
Accrued Expenses $200.9K $171.1K
YoY Change 17.44% 624.24%
Deferred Revenue
YoY Change
Short-Term Debt $11.00K $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $506.9K $228.8K
YoY Change 121.51% 210.09%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00
YoY Change
Other Long-Term Liabilities $0.00
YoY Change
Total Long-Term Liabilities $0.00 $0.00
YoY Change
TOTAL LIABILITIES
Total Short-Term Liabilities $506.9K $228.8K
Total Long-Term Liabilities $0.00 $0.00
Total Liabilities $506.9K $228.8K
YoY Change 121.51% 210.09%
SHAREHOLDERS EQUITY
Retained Earnings -$23.50M -$4.205M
YoY Change 458.89% 440.33%
Common Stock $12.83K $117.6K
YoY Change -89.09% 1037.59%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $7.105M $19.40M
YoY Change
Total Liabilities & Shareholders Equity $7.612M $19.63M
YoY Change -61.22%

Cashflow Statement

Concept 2024 Q3 2023 Q3
OPERATING ACTIVITIES
Net Income -$433.3K $810.00
YoY Change -53589.63% -107.28%
Depreciation, Depletion And Amortization $151.00 $0.00
YoY Change
Cash From Operating Activities -$286.4K -$2.437M
YoY Change -88.25%
INVESTING ACTIVITIES
Capital Expenditures $107.5K
YoY Change
Acquisitions
YoY Change
Other Investing Activities -$268.0K
YoY Change
Cash From Investing Activities -$107.5K -$268.0K
YoY Change -59.89%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 311.0K 2.293M
YoY Change -86.43%
NET CHANGE
Cash From Operating Activities -286.4K -2.437M
Cash From Investing Activities -107.5K -268.0K
Cash From Financing Activities 311.0K 2.293M
Net Change In Cash -82.92K -412.4K
YoY Change -79.89%
FREE CASH FLOW
Cash From Operating Activities -$286.4K -$2.437M
Capital Expenditures $107.5K
Free Cash Flow -$393.9K
YoY Change

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CY2023Q4 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Including Disposal Group And Discontinued Operations
CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsIncludingDisposalGroupAndDiscontinuedOperations
1448769 usd
CY2024Q3 us-gaap Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents Including Disposal Group And Discontinued Operations
CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsIncludingDisposalGroupAndDiscontinuedOperations
12169 usd
us-gaap Fair Value Of Assets Acquired
FairValueOfAssetsAcquired
14778000 usd
us-gaap Notes Reduction
NotesReduction
540000 usd
us-gaap Notes Reduction
NotesReduction
1812769 usd
us-gaap Notes Assumed1
NotesAssumed1
522659 usd
arat Issuance Of Common Stock Upon Conversion Of Convertible Notes
IssuanceOfCommonStockUponConversionOfConvertibleNotes
352118 usd
arat Issuance Of Common Stock Upon Conversion Of Convertible Notes
IssuanceOfCommonStockUponConversionOfConvertibleNotes
3781478 usd
arat Issuance Of Common Stock Upon Settlement Of Debt
IssuanceOfCommonStockUponSettlementOfDebt
147400 usd
us-gaap Contribution Of Property
ContributionOfProperty
268000 usd
arat Issuance Of Common Stock For Intangible Assets Related To Cilandro Acquisition
IssuanceOfCommonStockForIntangibleAssetsRelatedToCilandroAcquisition
110000 usd
us-gaap Nature Of Operations
NatureOfOperations
<p id="xdx_846_eus-gaap--NatureOfOperations_zpjD6lVwMHS7" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span id="xdx_86C_zdA8LLg4Amx6">General</span></i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Arax Holdings Corp. (“the Company”) is a <span id="xdx_908_edei--EntityIncorporationStateCountryCode_c20231101__20240731__srt--OwnershipAxis__custom--AraxHoldingsCorpMember_zpurIFWCjCB1" title="Entity incorporation, state or country code">Nevada</span> corporation incorporated on <span id="xdx_90C_edei--EntityIncorporationDateOfIncorporation_c20231101__20240731__srt--OwnershipAxis__custom--AraxHoldingsCorpMember_zDrfYRMnKitl" title="Entity incorporation date">February 23, 2012</span>.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company currently has operations from a growing business in the software development and integration marketplace.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management intends to explore and identify business opportunities within North America, Europe, Asia and Africa including a potential acquisition of an operating entity through a reverse merger, asset purchase or similar transaction. Our executives have experience in business consulting, although no assurances can be given that they can identify and implement a viable business strategy or that any such strategy will result in profits. Our ability to effectively identify, develop and implement a viable plan for our business may be hindered by risks and uncertainties which are beyond our control, including without limitation, the continued negative effects of the coronavirus pandemic on the U.S. and global economies.</span></p>
us-gaap Use Of Estimates
UseOfEstimates
<p id="xdx_84D_eus-gaap--UseOfEstimates_zrEtha81LISl" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span id="xdx_863_zfuUK93lGqwh">Use of Estimates</span></i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and outcomes may differ from management’s estimates and assumptions. Included in these estimates are assumptions used to estimate collection of accounts receivable, fair value of intangible assets, fair value of capitalized software, deferred income tax asset valuation allowances.</span></p>
CY2024Q3 us-gaap Cash Equivalents At Carrying Value
CashEquivalentsAtCarryingValue
0 usd
CY2024Q3 us-gaap Depreciation
Depreciation
151 usd
us-gaap Depreciation
Depreciation
453 usd
us-gaap Concentration Risk Credit Risk
ConcentrationRiskCreditRisk
<p id="xdx_84D_eus-gaap--ConcentrationRiskCreditRisk_znyii1hUekI5" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span id="xdx_86E_zZ5UnIbkq6N">Concentration of Credit Risk and Significant Customers and Vendors</span></i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">As of July 31, 2024, and October 31, 2023 one customer accounted for all of the accounts receivable balance.</span></p>
us-gaap Derivative Excluded Component Loss Recognized In Earnings
DerivativeExcludedComponentLossRecognizedInEarnings
1047879 usd
us-gaap Liabilities Fair Value Adjustment
LiabilitiesFairValueAdjustment
-1047879 usd
CY2023Q3 arat Stock Price On Valuation Date
StockPriceOnValuationDate
0.70
CY2023Q3 us-gaap Derivative Floor Interest Rate
DerivativeFloorInterestRate
0.0553 pure
CY2023Q3 us-gaap Share Based Compensation Arrangement By Share Based Payment Award Per Share Weighted Average Price Of Shares Purchased
ShareBasedCompensationArrangementByShareBasedPaymentAwardPerShareWeightedAveragePriceOfSharesPurchased
307.56
CY2023Q3 us-gaap Debt Instrument Convertible Conversion Price1
DebtInstrumentConvertibleConversionPrice1
0.2
us-gaap Derivatives Methods Of Accounting Hedge Documentation
DerivativesMethodsOfAccountingHedgeDocumentation
<p id="xdx_848_eus-gaap--DerivativesMethodsOfAccountingHedgeDocumentation_zyjGkOkW1Gn3" style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><i><span id="xdx_867_zB6PbbwT6CAf">Convertible Instruments</span></i></span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #212529"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with various accounting standards.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #212529"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #212529"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ASC 480 “<i>Distinguishing Liabilities From Equity</i>” provides that instruments convertible predominantly at a fixed rate resulting in a fixed monetary amount due upon conversion with a variable quantity of shares (“stock settled debt”) be recorded as a liability at the fixed monetary amount.</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #212529"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #212529"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ASC 815 “<i>Derivatives and Hedging</i>” generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument.”</span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #212529"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"> </span></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #212529"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ASC 815-40 provides that generally if an event is not within the entity’s control and could require net cash settlement, then the contract shall be classified as an asset or a liability.</span></p>
us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
1042211 shares
us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
1000000 shares
CY2024Q3 us-gaap Convertible Notes Payable
ConvertibleNotesPayable
42211 usd
CY2024Q3 us-gaap Convertible Preferred Stock Nonredeemable Or Redeemable Issuer Option Value
ConvertiblePreferredStockNonredeemableOrRedeemableIssuerOptionValue
1000000 usd
CY2023Q3 us-gaap Convertible Preferred Stock Nonredeemable Or Redeemable Issuer Option Value
ConvertiblePreferredStockNonredeemableOrRedeemableIssuerOptionValue
1000000 usd
CY2024Q3 us-gaap Convertible Debt
ConvertibleDebt
1042211 usd
CY2023Q3 us-gaap Convertible Debt
ConvertibleDebt
1000000 usd
CY2024Q3 us-gaap Cash
Cash
470000 usd
CY2024Q3 arat Working Capital Deficit
WorkingCapitalDeficit
261000 usd
us-gaap Revenues And Gains Reporting Currency Denominated Value
RevenuesAndGainsReportingCurrencyDenominatedValue
682290 usd
us-gaap Revenue From Contract With Customer Including Assessed Tax
RevenueFromContractWithCustomerIncludingAssessedTax
528636 usd
CY2024Q3 us-gaap Business Combination Separately Recognized Transactions Liabilities Recognized
BusinessCombinationSeparatelyRecognizedTransactionsLiabilitiesRecognized
18550285 usd
us-gaap Proceeds From Issuance Of Common Stock
ProceedsFromIssuanceOfCommonStock
110000 usd
us-gaap Proceeds From Issuance Of Convertible Preferred Stock
ProceedsFromIssuanceOfConvertiblePreferredStock
58000 usd
us-gaap Liabilities Assumed1
LiabilitiesAssumed1
100000 usd
us-gaap Asset Acquisition Consideration Transferred Contingent Consideration
AssetAcquisitionConsiderationTransferredContingentConsideration
268000 usd
us-gaap Taxes And Licenses
TaxesAndLicenses
268000 usd
CY2024Q3 us-gaap Capitalized Computer Software Gross
CapitalizedComputerSoftwareGross
6405952 usd
CY2023Q4 us-gaap Capitalized Computer Software Gross
CapitalizedComputerSoftwareGross
5033332 usd
CY2024Q3 us-gaap Indefinite Lived Intangible Assets Excluding Goodwill
IndefiniteLivedIntangibleAssetsExcludingGoodwill
268000 usd
CY2023Q4 us-gaap Indefinite Lived Intangible Assets Excluding Goodwill
IndefiniteLivedIntangibleAssetsExcludingGoodwill
268000 usd
CY2024Q3 us-gaap Debt Instrument Issued Principal
DebtInstrumentIssuedPrincipal
267000 usd
us-gaap Debt Instrument Issued Principal
DebtInstrumentIssuedPrincipal
362000 usd
us-gaap Debt Instrument Redemption Price Percentage Of Principal Amount Redeemed
DebtInstrumentRedemptionPricePercentageOfPrincipalAmountRedeemed
0.10 pure
CY2024Q3 arat Outstanding Notes Amount
OutstandingNotesAmount
11000 usd
CY2024Q2 us-gaap Short Term Borrowings
ShortTermBorrowings
44000 usd
CY2024Q2 arat Settelment Of Outstanding Common Shares1
SettelmentOfOutstandingCommonShares1
110000 shares
CY2024Q2 arat Stock Price1
StockPrice1
1.34
CY2024Q3 arat Short Term Borrowing Loss On Extinguishment
ShortTermBorrowingLossOnExtinguishment
103400 usd
CY2021Q1 us-gaap Repayments Of Debt
RepaymentsOfDebt
16166 usd
CY2021Q1 us-gaap Share Based Compensation
ShareBasedCompensation
83834 usd
CY2024Q3 arat Equity Convertible Notes Payable
EquityConvertibleNotesPayable
95000 usd
CY2024Q3 arat Promissory Notes Stock Issued
PromissoryNotesStockIssued
404143 usd
CY2024Q2 arat Settelment Of Outstanding Common Shares
SettelmentOfOutstandingCommonShares
110000 shares
CY2024Q2 arat Stock Price
StockPrice
1.34
arat Stock Issued During Period Value Convertible Notes Payable
StockIssuedDuringPeriodValueConvertibleNotesPayable
550285 usd
arat Promissory Notes Stocks Issued
PromissoryNotesStocksIssued
3930768 usd
CY2024Q3 us-gaap Asset Acquisition Indemnification Asset Amount
AssetAcquisitionIndemnificationAssetAmount
0 usd
CY2023Q4 us-gaap Asset Acquisition Indemnification Asset Amount
AssetAcquisitionIndemnificationAssetAmount
0 usd
CY2024Q3 arat Advances Related Party Transaction Due From To Related Party
AdvancesRelatedPartyTransactionDueFromToRelatedParty
57756 usd
CY2023Q4 arat Advances Related Party Transaction Due From To Related Party
AdvancesRelatedPartyTransactionDueFromToRelatedParty
57756 usd

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