JAAG Enterprises Ltd. 2024 Annual Report Review

Introduction

JAAG Enterprises Ltd., a Nevada-based company, has recently filed its annual report for the fiscal year ending June 30, 2024. The company, which operates through its wholly-owned subsidiary JAAG Uniform Limited in Hong Kong, specializes in the design, supply, and distribution of uniform garments and accessories. This review will delve into the key aspects of the company's 10-K filing, including its business operations, financial performance, risk factors, and overall investment potential.

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Business Overview

JAAG Enterprises Ltd. was incorporated in January 2022 and acquired JAAG Uniform Limited in May 2022. The subsidiary, established in November 2021, collaborates with manufacturers in Hong Kong and China to produce its uniform products. The company has not undergone any significant mergers or acquisitions beyond this and has not been involved in any bankruptcy or similar proceedings.

Financial Performance

Revenue and Expenses

For the fiscal year ending June 30, 2024, JAAG Enterprises reported revenues of $33,547, a slight decrease from $33,914 in the previous year. The cost of sales increased to $24,626 from $18,993, resulting in a reduced gross profit of $8,921 compared to $14,921 in 2023. Selling, general, and administrative expenses were $71,269, down from $76,732 the previous year.

Net Loss

The company reported a net loss of $62,459 for the year, a slight improvement from the $65,076 loss in 2023. This ongoing loss trend raises concerns about the company's ability to achieve profitability in the near future.

Cash Flow

JAAG Enterprises used $54,744 in operating activities, a decrease from $64,837 in 2023. Financing activities provided $57,442, primarily from a $50,000 stock issuance and $7,442 in advances from related parties. The company's cash position improved slightly to $4,836 from $2,138.

Balance Sheet

As of June 30, 2024, the company had total assets of $4,836 and total liabilities of $27,825, resulting in a stockholders' deficit of $22,989. This represents a deterioration from the previous year's deficit of $10,530.

Risk Factors

JAAG Enterprises faces several risk factors, including its reliance on a small number of major customers and suppliers. In 2024, 82% of its products were sold to four major customers, and all supplies were sourced from two major suppliers. This concentration risk could impact the company's operations if any of these relationships were disrupted.

The company also has a significant working capital deficiency and limited cash reserves, raising substantial doubt about its ability to continue as a going concern. Management plans to seek additional financing, but there is no assurance of success.

Legal Proceedings

The company is not involved in any material legal proceedings, which is a positive aspect of its risk profile.

Management and Governance

JAAG Enterprises is led by CEO Jeffrey Chau and Secretary Billy Chan. The company does not have a formal audit committee, and its board of directors lacks independent members, which may raise concerns about governance and oversight.

Conclusion

JAAG Enterprises Ltd. is a small, emerging company with a niche focus on uniform supply. While it has managed to slightly reduce its net loss, the company's financial position remains precarious, with a significant working capital deficit and reliance on a few key customers and suppliers. The lack of a formal governance structure and independent board members further complicates its investment appeal.

Investment Potential

Given the company's ongoing losses, limited cash reserves, and concentration risks, JAAG Enterprises Ltd. presents a high-risk investment opportunity. Potential investors should carefully consider these factors and the company's ability to secure additional financing before making an investment decision.

Overall, JAAG Enterprises Ltd. receives an investment score of 3.5 out of 10, indicating limited investment potential at this time. Investors should monitor the company's efforts to improve its financial position and governance practices in the coming year.