10-Q: Peregrine Industries Reports Q3 2024 Results: Revenue Declines Amidst Efforts to Revitalize Business Plan

Peregrine Industries reports a decrease in revenue for the nine months ended April 30, 2024, while continuing to develop a new business plan and address going concern issues.

Summary

• Peregrine Industries, Inc. filed its Form 10-Q for the quarterly period ended April 30, 2024.
• The company was initially formed in 1995 to manufacture residential pool heaters but currently has no business operations and is considered a shell company.
• New management is developing a business plan focused on manufacturing and selling baby products.
• For the nine months ended April 30, 2024, revenue was $11,055, compared to $12,183 for the same period in 2023.
• The company reported a net loss of $174,054 for the nine months ended April 30, 2024, compared to a net loss of $344,509 for the same period in 2023.
• As of April 30, 2024, the company had $258,136 in cash and cash equivalents, compared to $397,465 as of July 31, 2023.
• The company's disclosure controls and procedures were deemed ineffective as of April 30, 2024, and corrective actions are being implemented.
• The company's financial statements have been prepared on a going concern basis, despite accumulated losses of $5,002,208 as of April 30, 2024.
• The SBA loan payments have been extended until August 1, 2024.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to declining revenue, accumulated losses, and ineffective disclosure controls, although the net loss has decreased. The company's future depends on the successful implementation of its new business plan and raising equity financing.

Positives

• The company's net loss decreased compared to the same period last year, from $344,509 to $174,054.
• Gross profit increased from $9,215 to $9,956 for the nine months ended April 30, 2024.
• The SBA loan payments have been extended until August 1, 2024.

Negatives

• Revenue decreased from $12,183 to $11,055 for the nine months ended April 30, 2024.
• The company has accumulated losses of $5,002,208 as of April 30, 2024.
• Cash and cash equivalents decreased from $397,465 to $258,136.
• The company's disclosure controls and procedures were deemed ineffective as of April 30, 2024.

Risks

• The company's ability to continue as a going concern is dependent on raising equity financing and reducing costs.
• The company's disclosure controls and procedures are ineffective, which could lead to errors in financial reporting.
• The company faces the risk of not being able to successfully implement its new business plan.
• The company has a history of accumulated losses, which raises concerns about its long-term financial viability.

Future Outlook

New management is developing a business plan, based on the manufacture and sale of its products, in addition to those possessed by the target acquisition, designed for use by babies, which it intends to implement within the current fiscal year.

Management Comments

• Management has identified corrective actions for the weakness and will periodically re-evaluate the need to add personnel and implement improved review procedures during the fiscal year ended July 31, 2024.

Industry Context

The company is transitioning from being a shell company to developing a business plan focused on manufacturing and selling baby products, which could position it in the competitive baby products market.

Comparison to Industry Standards

• It's difficult to compare Peregrine Industries to industry standards due to its recent transition from a shell company and its limited revenue.
• Companies like Gerber, Johnson & Johnson, and Procter & Gamble dominate the baby products market, with significantly higher revenues and established distribution networks.
• Peregrine Industries will need to demonstrate significant growth and market penetration to compete effectively.

Management Changes

Related Party Transactions

• Subsequent to the maturity of that lease the Company entered into an agreement, with a related party, to share their office space, at no cost to Peregrine.

Stakeholder Impact

• Shareholders face the risk of further dilution if the company raises equity financing.
• Employees' job security depends on the successful implementation of the new business plan.
• Customers may benefit from the company's new focus on baby products.
• Suppliers may see increased business if the company's new business plan is successful.
• Creditors face the risk of non-payment if the company is unable to continue as a going concern.

Next Steps

• The company plans to implement a new business plan focused on manufacturing and selling baby products.
• Management will periodically re-evaluate the need to add personnel and implement improved review procedures during the fiscal year ended July 31, 2024.
• The company is taking appropriate action to provide the necessary capital to continue its operations, including raising equity financing and reducing costs.

Key Dates

Keywords

financial statements, quarterly report, Peregrine Industries, revenue, net loss, going concern, disclosure controls, baby products, SBA loan