10-Q: Pacific Sports Exchange Q2 2026 Financial Results

Pacific Sports Exchange reports a net loss of $21,923 for the six months ended February 28, 2026, amid ongoing liquidity challenges.

Summary

• The company reported a net loss of $21,923 for the six months ended February 28, 2026, compared to a $14,990 loss in the prior year period.
• Revenue for the six-month period was $2,200, up slightly from $2,000 in the same period last year.
• Operating expenses increased to $22,123 for the six months ended February 28, 2026, driven primarily by professional fees.
• The company maintains a working capital deficiency of $64,000 as of February 28, 2026.
• The company continues to rely on advances from shareholders to fund operations, with $63,592 currently owed to related parties.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as a distressed financial situation characterized by a going concern warning, zero cash, and material weaknesses in internal controls.

Positives

• Revenue showed a modest year-over-year increase of $200 for the six-month period.
• The company has successfully maintained operations through continued shareholder financial support.

Negatives

• The company reported a net loss of $21,923 for the six months ended February 28, 2026.
• Cash balance as of February 28, 2026, is $0.
• The company has an accumulated deficit of $214,889.
• Operating expenses significantly outweigh revenue, indicating an unsustainable business model in its current state.
• Management identified material weaknesses in internal controls over financial reporting.

Risks

• Substantial doubt exists regarding the company's ability to continue as a going concern.
• Heavy reliance on eBay as the primary sales channel creates significant operational risk if selling privileges are revoked or technical issues occur.
• Lack of sufficient personnel with accounting expertise and inadequate segregation of duties.
• Dependence on shareholder advances for working capital with no formal written commitment for continued support.
• Concentration risk: 100% of revenue is derived from a single customer.

Future Outlook

Management intends to raise additional operating funds through equity and/or debt financing, though there is no assurance of success. The company aims to improve the marketing and functionality of its own website to reduce reliance on third-party platforms like eBay.

Management Comments

• Management acknowledges that the company's ability to achieve profitability is dependent on obtaining additional financing and developing its business plan.
• Management confirms that disclosure controls and procedures were not effective as of February 28, 2026, due to material weaknesses.

Industry Context

StockSavvy.ai notes that Pacific Sports Exchange operates as a micro-cap online reseller in a highly fragmented and competitive e-commerce space. The company's reliance on a single third-party platform (eBay) and a single customer highlights significant vulnerability compared to larger, diversified e-commerce retailers.

Comparison to Industry Standards

• The company's revenue scale is negligible compared to established online sports retailers like Dick's Sporting Goods or specialized e-commerce platforms.
• The lack of internal controls and reliance on shareholder funding is typical of early-stage shell companies rather than established industry participants.

Management Changes

Corporate Governance

Legal Proceedings

• None reported.

Related Party Transactions

• The company owes $63,592 to the current shareholder as of February 28, 2026, for advances used to fund operations.

Stakeholder Impact

• Shareholders face significant dilution risk if the company pursues equity financing to address its working capital deficiency.
• Creditors face risk given the company's going concern status and lack of cash.

Next Steps

• Seek additional equity or debt financing to support working capital requirements.
• Improve marketing and functionality of the company's own website.
• Address material weaknesses in internal controls over financial reporting.

Key Dates

Recommendation

The company is a distressed entity with no cash, a significant working capital deficit, and a going concern warning. The reliance on shareholder loans and the lack of a viable path to profitability make this a high-risk investment.

Keywords

Pacific Sports Exchange, sports equipment, online retail, eBay, going concern, small-cap