Keemo Fashion Group Limited: A Comprehensive Review of the 2024 10-K Filing

Introduction

Keemo Fashion Group Limited, a Nevada corporation, operates in the apparel and garment trade industry, primarily focusing on wholesaling men's and women's apparel to retailers in Asian countries. The company, incorporated in April 2022, is headquartered in Shenzhen, China. This review delves into the company's 10-K filing for the fiscal year ending July 31, 2024, to assess its investment potential.

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Business Overview

Keemo Fashion Group Limited targets small to medium apparel and garment retailers by wholesaling low to mid-range apparel. The company does not maintain any production facilities, relying instead on suppliers for production and packaging. The business model is a virtual network structure, focusing on procurement, sales, marketing, and finance functions internally.

The company aims to penetrate the market through brand building and online marketing strategies, although these plans are still under development. Currently, the company operates with a single employee, Ms. Liu Lu, who serves as the CEO, President, Secretary, Treasurer, and Director.

Financial Performance

Revenue and Profitability

For the fiscal year ending July 31, 2024, Keemo Fashion Group Limited reported revenues of $21,522, an increase from $16,945 in the previous year. Despite the revenue growth, the company incurred a net loss of $42,275, compared to a net loss of $22,196 in 2023. The increase in net loss is attributed to higher general and administrative expenses, which rose from $30,605 in 2023 to $52,861 in 2024.

Cash Flow and Liquidity

The company's cash and cash equivalents decreased from $28,743 in 2023 to $19,421 in 2024. The cash used in operating activities was $9,322, primarily due to the net loss and changes in working capital. The company did not engage in any financing activities during the year.

Balance Sheet

As of July 31, 2024, Keemo Fashion Group Limited had total assets of $28,474, down from $43,035 in 2023. The liabilities increased to $77,419 from $49,705, primarily due to an increase in the amount due to the director. The company's stockholders' equity turned negative, with a deficit of $48,945.

Risk Factors

The company faces several risk factors, including:

• Going Concern: The financial statements raise substantial doubt about the company's ability to continue as a going concern due to recurring losses and negative cash flows.
• Customer Concentration: The company relies heavily on a few customers, with four customers accounting for 100% of the revenue in 2024.
• Supplier Dependence: The cost of revenue is concentrated among a few vendors, posing a risk if any supplier relationship is disrupted.
• Market Competition: The apparel industry is highly competitive, with numerous established players.

Management and Governance

The company is managed by Ms. Liu Lu, who holds multiple roles. The lack of a functioning audit committee and independent directors is a concern, as it may lead to ineffective oversight of internal controls.

Conclusion

Keemo Fashion Group Limited presents a mixed investment opportunity. While the company has shown revenue growth, the increasing net loss and liquidity concerns are significant red flags. The heavy reliance on a few customers and suppliers, coupled with intense market competition, adds to the risk profile. The company's ability to continue as a going concern is uncertain, and potential investors should approach with caution.

Investment Score

Based on the analysis of the 10-K filing, Keemo Fashion Group Limited receives an investment score of 3.5 out of 10. The score reflects the company's current financial challenges and the risks associated with its business model and market environment.