10-Q: Birdie Win Q1 Loss Widens Amid Revenue Drop, Governance Concerns
Quarterly Report
Birdie Win Corporation reported a significant increase in net loss for Q1 2025, driven by a 50% revenue decline and rising operating expenses, alongside disclosed material weaknesses in internal controls.
Summary
- Net loss for the three months ended October 31, 2025, was $8,247, a substantial increase from $83 for the same period in 2024.
- Revenue decreased by 50% to $5,000 for Q1 2025, down from $10,000 in Q1 2024.
- Operating expenses rose to $13,247 in Q1 2025 from $10,083 in Q1 2024, primarily due to increased consultancy fees.
- The company reported an accumulated deficit of $83,442 as of October 31, 2025, raising substantial doubt about its ability to continue as a going concern.
- Cash and cash equivalents increased slightly to $2,565 as of October 31, 2025, from $2,171 as of July 31, 2025.
- Total stockholders' equity decreased to $6,123 as of October 31, 2025, from $14,370 as of July 31, 2025.
Sentiment
Score: 2
Explanation: The company reported a substantial increase in net loss and a 50% drop in revenue, coupled with a 'going concern' warning and identified material weaknesses in internal controls. These factors indicate severe operational and financial challenges.
Positives
- Net cash provided by operating activities was $394 for the three months ended October 31, 2025, an increase from $83 in the prior year period.
- Cash and cash equivalents saw a slight increase from $2,171 to $2,565 during the quarter.
Negatives
- Net loss significantly widened to $8,247 for the three months ended October 31, 2025, compared to a net loss of $83 for the same period in 2024.
- Revenue declined by 50% to $5,000 for the three months ended October 31, 2025, from $10,000 in the prior year period.
- Operating expenses increased to $13,247, primarily due to higher consultancy fees, including $6,000 to a related party.
- The company has an accumulated deficit of $83,442 as of October 31, 2025.
- Total stockholders' equity decreased by over 57% from $14,370 on July 31, 2025, to $6,123 on October 31, 2025.
- 100% customer concentration risk, with revenue derived from a single customer in both reported periods.
Risks
- Substantial doubt about the company's ability to continue as a going concern due to recurring net losses and accumulated deficit.
- Material weaknesses in disclosure controls and internal control over financial reporting, including a lack of a functioning audit committee, inadequate segregation of duties, and insufficient written policies and procedures.
- High customer concentration, with 100% of revenue derived from one customer in both the current and prior year periods.
- Reliance on continuing financial support from a shareholder to finance operations.
- Exposure to changes in economic conditions in Malaysia and Hong Kong, where financial literacy seminar services are provided.
Future Outlook
The company expects to finance its operations primarily through cash flow from revenue and continuing financial support from a shareholder. The shareholder has indicated the intent and ability to provide additional financing if required to support growth and strategic objectives.
Management Comments
- Management believes that it is more likely than not that the deferred tax assets will not be fully realizable in the future.
- Management assessed the effectiveness of our internal control over financial reporting as of October 31, 2025... Based on such evaluation, the Company's management concluded that, during the period covered by this Report, our internal control over financial reporting were not effective due to the presence of material weaknesses.
Industry Context
Birdie Win Corporation operates in the financial literacy seminar services sector, primarily targeting individuals and families in Malaysia and Hong Kong. The significant decline in revenue and widening losses suggest challenges in market penetration or demand for its services, potentially indicating a struggle to compete or adapt to regional market dynamics in a competitive financial education landscape.
Comparison to Industry Standards
- NA
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| President, Chief Executive Officer | Yunyuan Chen | Shiyong Zhao | 2025-03-04 | Resignation of previous officer and subsequent appointment. |
| Chairman | NA | Shiyong Zhao | 2025-03-04 | Appointment. |
| Director | Yunyuan Chen | NA | 2025-06-05 | Resignation. |
| Director | NA | Fengjun Wang | 2025-03-04 | Appointment. |
| Director | NA | Yidong Bao | 2025-03-04 | Appointment. |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Internal Control Weakness | Lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on the board of directors, resulting in ineffective oversight. | 2025-10-31 | Material weakness in internal control over financial reporting. |
| Internal Control Weakness | Inadequate segregation of duties and effective risk assessment. | 2025-10-31 | Material weakness in internal control over financial reporting. |
| Internal Control Weakness | Insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines. | 2025-10-31 | Material weakness in internal control over financial reporting. |
Related Party Transactions
- Prepayments to related party (directors) were $8,000 as of October 31, 2025, down from $14,000 as of July 31, 2025.
- General and administrative expenses to a related party amounted to $6,000 for the three months ended October 31, 2025, compared to nil in the prior year period.
- An amount of $5,300 is owing to director Yiding Bao as of October 31, 2025, which is unsecured, non-interest bearing, and repayable on demand.
- During the year ended July 31, 2025, 960,000 shares ($24,000) were issued for consulting services provided by three newly appointed directors (Shiyong Zhao, Yidong Bao, and Fengjun Wang), with $6,000 recognized as expense in the current quarter.
Stakeholder Impact
- Shareholders: Significant decrease in equity and widening losses could negatively impact shareholder value. The 'going concern' warning adds substantial risk.
- Creditors: The increase in total liabilities and the 'going concern' warning could raise concerns about the company's ability to meet its obligations.
- Management/Directors: New management is in place, but they are associated with related-party transactions and the identified internal control weaknesses.
Next Steps
- The company needs to address the material weaknesses in internal controls over financial reporting.
- The company plans to continue financing operations through cash flow from revenue and shareholder support.
Key Dates
| Date | Description |
|---|---|
| 2021-04-16 | Company incorporated in Nevada; Mr. Chee Yong Yee appointed President, Secretary, Treasurer, CEO, and Director; 3,600,000 shares issued to Mr. Yee. |
| 2021-08-27 | Initial Form S-1 Registration Statement submitted to SEC. |
| 2021-09-23 | Form S-1 Registration Statement declared effective. |
| 2021-10-11 | Public offering pursuant to Form S-1 closed, resulting in 1,440,000 shares sold for $36,000. |
| 2023-07-27 | Mr. Chee Yong Yee resigned from all officer and director positions; Mr. Zonghan Wu appointed new President, CEO, Secretary, Treasurer, and Director. |
| 2024-07-18 | Mr. Zonghan Wu resigned from all officer and director positions; Yunyuan Chen appointed new President, CEO, Secretary, Treasurer, and Director. |
| 2025-03-01 | Agreement entered into with 3 new directors for consulting services. |
| 2025-03-04 | Yunyuan Chen resigned as President and Chief Executive Officer; Shiyong Zhao appointed CEO and Chairman; Fengjun Wang and Yidong Bao appointed Directors. |
| 2025-03-24 | Shiyong Zhao purchased 2,640,000 common shares from TOPP Holdings Group Ltd. |
| 2025-06-05 | Yunyuan Chen resigned as Director. |
| 2025-07-31 | Fiscal year end for the company. |
| 2025-10-31 | End of the quarterly period covered by this report. |
| 2025-12-05 | Date of signing for the Form 10-Q and certifications. |
Recommendation
strong sellThe company faces severe financial distress, evidenced by a substantial increase in net loss, a 50% revenue decline, and an explicit 'going concern' warning. Material weaknesses in internal controls over financial reporting, including a lack of an independent audit committee and inadequate segregation of duties, highlight significant governance and operational risks. High customer concentration further exacerbates the precarious financial position. These factors collectively indicate a high probability of continued financial deterioration and significant risk to investors.
Keywords
Financial Literacy, SEC Filing, 10-Q, Quarterly Report, Birdie Win Corporation, Financial Services, Hong Kong, Malaysia, Going Concern, Internal Controls, Revenue Decline, Net Loss, Corporate Governance
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