OPERATING AND FINANCIAL REVIEW AND PROSPECTS
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" and elsewhere in this Report.
A. Operating Results
Overview
We are an international provider of ocean transportation services. We are engaged in seaborne transportation services under voyage contracts as well as vessel services for and on behalf of ship owners. We conduct this business through the Topsheen Companies. For the fiscal years ended October 31, 2025, 2024 and 2023, our revenues were approximately $214.4 million, $108.2 million and $95.3 million, respectively and we incurred net losses of $20.1 million, $21.2 million and $15.8 million, respectively.
In 2025, we decided to investigate our entry into the business of providing carbon neutrality solutions for the shipping industry. To that end, we began to provide OCC consulting services in 2025, providing advisory support for clients with needs for full-vessel carbon capture or energy-saving retrofitting projects. For the fiscal year ended October 31, 2025, we generated approximately $0.4 million of revenue from providing OCC consulting services to customers. Due to the uncertainty about the viability of this technology and the underdeveloped OCC technologies and their applications, we decided not to aggressively pursue this opportunity at this time.
Recent Developments
Effective March 13, 2025, Mr. Jinyu Chang resigned as the chairman of our Board of Directors but continued to serve as a director of the Company. Also, effective March 13, 2025, Mr. Christopher Nixon Cox was elected to serve as a director and the Chairman of the Board of our company. We also named Mr. Bo Cui as its new Chief Legal Officer. Effective June 3, 2025, Mr. Christopher Renn resigned as the chairman of the Compensation Committee of our Board of Directors but remains an independent director. Effective the same date, Mr. Brian B. Su was elected to serve as an independent director and the Chairman of the Compensation Committee.
On July 16, 2025, an Extraordinary General Meeting of Shareholders was held where the shareholders voted to approve a twenty-five-for-one share consolidation.
Key Factors that Affect Operating Results
We primarily derive our revenues from voyage contracts and provide vessel services. We intend to enhance our freight transportation revenues and services and acquire new customers by increasing our market penetration with deeper market coverage and a broader geographical reach.
Quantitative and Qualitative Disclosures About Market Risk
Market risk represents the risk of changes in value of a financial instrument, derivative or non-derivative, caused by fluctuations in foreign exchange rates and interest rates. Changes in these factors could cause fluctuations in our results of operations and cash flows. We are exposed to the market risks described below.
Foreign Exchange Rate Risk
We generate all of our revenues in U.S. dollars but currently incur some of our costs and operating expenses (around 5% for the fiscal years ended October 31, 2025, 2024 and 2023) in currencies other than the U.S. dollar, primarily the Euro and Singapore Dollar. For accounting purposes, expenses incurred in Euros and Singapore Dollars are converted into U.S. dollars at the exchange rate prevailing on the date of each transaction. The amount and frequency of some of these expenses, such as vessel repairs, supplies and stores, may fluctuate from period to period. Depreciation in the value of the dollar relative to other currencies increases the dollar cost to us of paying such expenses. The portion of our expenses incurred in other currencies could increase in the future, which could expand our exposure to losses arising from currency fluctuations. Currently, we do not consider the risk from exchange rate fluctuations to be material for our results of operations and therefore, we are not engaged in derivative instruments to hedge part of those expenses.
Inflation risk
Our operations expose us to the effects of inflation. For the fiscal years ended October 31, 2025, we experienced increased average market prices for ship leases, oil and port charges. In the event that inflation becomes a more significant factor in the world economy, inflationary pressures could result in increased operating and financing costs. Although historically the ocean shipping industry has been able to largely offset the inflationary pressure by passing the costs of inflation onto its customers, the industry as a whole and we in particular may not be able to offset such costs sufficiently, in which case our cash flows and results would be negatively impacted.
Results of Operations
For the fiscal years ended October 31, 2025 and 2024
The following table summarizes the results of our operations for the fiscal years ended October 31, 2025 and 2024 and provides information regarding the dollar and percentage changes during such periods.
| For the Years Ended | ||||||||||||||||
| October 31, | % | |||||||||||||||
| 2025 | 2024 | Change | Change | |||||||||||||
| REVENUE: | ||||||||||||||||
| Ocean freight revenue | $ | 213,993,072 | $ | 105,387,225 | $ | 108,605,847 | 103.1 | % | ||||||||
| Vessel service revenue and others | 422,840 | 2,789,458 | (2,366,618 | ) | (84.8 | )% | ||||||||||
| Total revenue | 214,415,912 | 108,176,683 | 106,239,229 | 98.2 | % | |||||||||||
| COST OF REVENUE: | ||||||||||||||||
| Cost of revenues | 207,612,961 | 100,076,361 | 107,536,600 | 107.5 | % | |||||||||||
| GROSS PROFIT | 6,802,951 | 8,100,322 | (1,297,371 | ) | (16.0 | )% | ||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Share-based compensation | 21,922,261 | 1,200,562 | 20,721,699 | 1,726.0 | % | |||||||||||
| General and administrative expenses | 4,792,925 | 4,595,206 | 197,719 | 4.3 | % | |||||||||||
| Total operating expenses | 26,715,186 | 5,795,768 | 20,919,418 | 360.9 | % | |||||||||||
| (LOSS) INCOME FROM OPERATIONS | (19,912,235 | ) | 2,304,554 | (22,216,789 | ) | (964.0 | )% | |||||||||
| OTHER INCOME (EXPENSE), NET | ||||||||||||||||
| Interest income | 60,833 | 3,444 | 57,389 | 1,666.3 | % | |||||||||||
| Interest expense | (45,935 | ) | (90,203 | ) | 44,268 | (49.1 | )% | |||||||||
| Change in fair value of convertible notes | - | (23,213,031 | ) | 23,213,031 | (100.0 | )% | ||||||||||
| Loss on settlement of convertible notes | - | (306,793 | ) | 306,793 | (100.0 | )% | ||||||||||
| Other income, net | (203,984 | ) | 91,318 | (295,302 | ) | (323.4 | )% | |||||||||
| Total other expense, net | (189,086 | ) | (23,515,265 | ) | 23,326,179 | (99.2 | )% | |||||||||
| LOSS BEFORE INCOME TAXES | (20,101,321 | ) | (21,210,711 | ) | 1,109,390 | (5.2 | )% | |||||||||
| PROVISION FOR INCOME TAXES | 9,106 | 4,139 | 4,967 | 120.0 | % | |||||||||||
| NET LOSS | $ | (20,110,427 | ) | $ | (21,214,850 | ) | $ | 1,104,423 | (5.2 | )% | ||||||
Revenues
For the fiscal year ended October 31, 2025, our total revenue was approximately $214.4 million compared to approximately $108.2 million for the fiscal year ended October 31, 2024. This represents a revenue increase of approximately $106.2 million, or 98.2%. The overall increase in revenue was primarily attributable to the Company's entry into the coal transportation business, with routes covering key regions such as Australia to China, Indonesia to Southeast Asia and Vietnam, significantly expanding our dry bulk cargo transportation business. At the same time, the global demand for coal imports and exports surged, further driving business growth.
Revenue from ocean freight increased by approximately $108.6 million or 103.1%, from approximately $105.4 million in the fiscal year ended October 31, 2024 to approximately $214.4 million in the fiscal year ended October 31, 2025, due to increased ocean freight market demand. The total number of voyage days was 7,470 days for the fiscal year ended October 31, 2025, an increase of 3,974 days from 3,496 days for the fiscal year ended October 31, 2024. The average charge per day was approximately $28,645 per day for the fiscal year ended October 31, 2025, a decrease of approximately $1,499 from $30,144 per day for the fiscal year ended October 31, 2024 as the Baltic Dry Index (BDI) weakened compared to 2024.
Revenue from vessel services decreased from approximately $2.8 million in the fiscal year ended October 31, 2024, to $nil in the fiscal year ended October 31, 2025, as we determined to allocate our resources to our ocean freight business as market demand increased. We started to provide consulting services related to onboard carbon capture technologies in February 2025. Revenue from these consulting services was approximately $0.4 million during the fiscal year 2025.
Cost of Revenues
Our cost of revenues mainly consists of ship lease expenses, fuel expenses, port fees and other related costs. Such costs amounted to approximately $207.6 million for the fiscal year ended October 31, 2025, representing an increase of approximately $107.5 million, or 107.5%, compared to approximately $100.1 million for the fiscal year ended October 31, 2024 due to increased shipping volumes. This drove costs upward through several interconnected factors including, increased sailing days which led to substantially higher ship lease and fuel expenses. Furthermore, the heavier shipping traffic caused widespread port congestion, resulting in longer vessel docking and berthing times, which in turn caused port charges to rise accordingly. As a result, our ship lease expenses were approximately $96.8 million for the fiscal year ended October 31, 2025, representing an increase of approximately $52.1 million compared to approximately $44.7 million for the year ended October 31, 2024. Marine fuel expenses were approximately $49.3 million for the fiscal year ended October 31, 2025, representing an increase of approximately $20.9 million compared to approximately $28.4 million for the fiscal year ended October 31, 2024. Port fees were approximately $50.7 million for the fiscal year ended October 31, 2025, representing an increase of approximately $26.6 million compared to approximately $24.1 million for the fiscal year ended October 31, 2024.
Gross profit
Our gross profit amounted to approximately $6.8 million for the fiscal year ended October 31, 2025 compared to approximately $8.1 million for the fiscal year ended October 31, 2024. The gross margin as a percentage of overall revenue for the fiscal year ended October 31, 2025 and 2024, was 3.2% and 7.5%, respectively. The decrease in gross profit margin was mainly driven by higher costs, which outpaced the growth in revenues.
Operating Expenses
| For the Years Ended | ||||||||||||||||
| October 31, | % | |||||||||||||||
| 2025 | 2024 | Change | Change | |||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Share-based compensation | $ | 21,922,261 | $ | 1,200,562 | $ | 20,721,699 | 1,726.0 | % | ||||||||
| General and administrative | 4,792,925 | 4,595,206 | 197,719 | 4.3 | % | |||||||||||
| Total | $ | 26,715,186 | $ | 5,795,768 | $ | 20,919,418 | 360.9 | % | ||||||||
Our operating expenses consist of share-based compensation and general and administrative expenses. Operating expenses increased by approximately $20.9 million, or 360.9% from approximately $5.8 million for the fiscal year ended October 31, 2024 to approximately $26.7 million for the fiscal year ended October 31, 2025, mainly due to an increase of approximately $20.7 million in share-based compensation.
Share-based compensation consists of shares issued to certain executive office, directors, managers and consultants instead of cash salaries. In the fiscal year ended October 31, 2025, we issued an aggregate of 495,169 Class A Ordinary Shares and 500,000 options to purchase Class A Ordinary Shares to certain executive officers, directors, managers and consultant as compensation to replace their cash salaries and related compensations as well as to provide incentives for future business development. For the fiscal years ended October 31, 2025 and 2024, the Company recorded total share-based compensation expenses of approximately $21.9 million and $1.2 million included in the general and administrative expenses of our consolidated statement of operations, respectively. The $21.9 million of share-based compensation expenses for the fiscal year ended October 31, 2025, consisted of (i) approximately $1.5 million attributable to executive officers, (ii) approximately $0.7 million attributable to directors, (iii) approximately $11.8 million attributable to employees other than executive officers, and (iv) approximately $8.0 million attributable to consultants, including $3.3 million attributable to the vesting of 471,836 restricted ordinary shares issued to seven consultants in fiscal year 2024 for OCC business development and capital markets-related services, $3.8 million attributable to 500,000 stock options granted to two consultants for market development services related to the our ocean transportation business, and $0.9 million attributable to the issuance of an aggregate of 80,000 ordinary shares to four consultants for capital financing and related business development services.
General and administrative expenses primarily consisted of salary and compensation expenses related to our accounting, human resources and executive office personnel, and included rental, depreciation and amortization expenses, office overhead, professional service fees and travel and transportation costs. General and administrative expenses increased by approximately or 4.3% from approximately $4.6 million for the fiscal year ended October 31, 2024 to approximately $4.8 million for the fiscal year ended October 31, 2025, mainly due to an increase of approximately $0.2 million in consulting and professional service fee.
Other Expenses, net
Other expense, net primarily consists of interest expense, change in fair value of convertible notes, loss on settlement of convertible notes and other items. Other income, net was approximately $0.2 million for the fiscal year ended October 31, 2025, compared to other expense, net of approximately $23.5 million for the fiscal year ended October 31, 2024. The change was primarily attributable to a loss of $23.2 million from the change in fair value of convertible notes and $0.3 million from the loss on settlement of convertible notes during the fiscal year ended October 31, 2024. The Company elected the fair value option to account for its convertible notes. The fair value of the convertible notes is re-measured at each reporting period, and the change in fair value is recognized as either income or expense.
Provision for Income Taxes
Our provision for income taxes was $9,106 and $4,139 for the fiscal years ended October 31, 2025 and 2024, respectively. The Topsheen Companies are eligible for and participate under the Maritime Sector Incentive-Approved International Shipping Enterprise (MSI-AIS) award program in Singapore. We renewed for an additional 10 years in November 6, 2025, and commencing on 1 December 2025. All qualified shipping income derived from the shipping activity of Topsheen Companies is exempt from taxation for the duration of our subsidiaries MSI-AIS participation in this program.
Net Loss
As a result of the foregoing, our net loss amounted to approximately $20.1 million for the fiscal year ended October 31, 2025, compared to a net loss of approximately $21.2 million for the fiscal year ended October 31, 2024.
For the fiscal years ended October 31, 2024 and 2023
The following table summarizes the results of our operations for the fiscal years ended October 31, 2024 and 2023 and provides information regarding the dollar and percentage changes during such periods.
| For the Years Ended | ||||||||||||||||
| October 31, | % | |||||||||||||||
| 2024 | 2023 | Change | Change | |||||||||||||
| REVENUE: | ||||||||||||||||
| Ocean freight revenue | $ | 105,387,225 | $ | 94,523,562 | $ | 10,863,663 | 11.5 | % | ||||||||
| Vessel service revenue | 2,789,458 | 733,976 | 2,055,482 | 280.0 | % | |||||||||||
| Total revenue | 108,176,683 | 95,257,538 | 12,919,145 | 13.6 | % | |||||||||||
| COST OF REVENUE: | ||||||||||||||||
| Cost of revenues | 100,076,361 | 107,142,741 | (7,066,380 | ) | (6.6 | )% | ||||||||||
| GROSS PROFIT(LOSS) | 8,100,322 | (11,885,203 | ) | 19,985,525 | (168.2 | )% | ||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Share-based compensation | 1,200,562 | - | 1,200,562 | 100.0 | % | |||||||||||
| General and administrative expenses | 4,595,206 | 3,742,728 | 852,478 | 22.8 | % | |||||||||||
| Total operating expenses | 5,795,768 | 3,742,728 | 2,053,040 | 54.9 | % | |||||||||||
| INCOME (LOSS) FROM OPERATIONS | 2,304,554 | (15,627,931 | ) | 17,932,485 | (114.7 | )% | ||||||||||
| OTHER INCOME (EXPENSE), NET | ||||||||||||||||
| Interest income | 3,444 | 7,738 | (4,294 | ) | (55.5 | )% | ||||||||||
| Interest expense | (90,203 | ) | (112,022 | ) | 21,819 | (19.5 | )% | |||||||||
| Change in fair value of convertible notes | (23,213,031 | ) | - | (23,213,031 | ) | (100.0 | )% | |||||||||
| Loss on settlement of convertible notes | (306,793 | ) | - | (306,793 | ) | (100.0 | )% | |||||||||
| Other income (expense), net | 91,318 | (42,947 | ) | 134,265 | (312.6 | )% | ||||||||||
| Total other expense, net | (23,515,265 | ) | (147,231 | ) | (23,368,034 | ) | 15,871.7 | % | ||||||||
| LOSS BEFORE INCOME TAXES | (21,210,711 | ) | (15,775,162 | ) | (5,435,549 | ) | 34.5 | % | ||||||||
| PROVISION FOR INCOME TAXES | 4,139 | 2,542 | 1,597 | 62.8 | % | |||||||||||
| NET LOSS | $ | (21,214,850 | ) | $ | (15,777,704 | ) | $ | (5,437,146 | ) | 34.5 | % | |||||
Revenues
For the fiscal year ended October 31, 2024, our total revenue was approximately $108.2 million, compared to approximately $95.3 million for the fiscal year ended October 31, 2023. This represents a revenue increase of approximately $12.9 million, or 13.6%. Revenue from ocean freight increased by approximately $10.9 million or 11.5%, from approximately $94.5 million in the fiscal year ended October 31, 2023 to approximately $105.4 million in the fiscal year ended October 31, 2024. This increase was primarily attributable to an increase in ocean freight prices during the fiscal year ended October 31, 2024. The total number of voyage days was 3,496 days for the fiscal year ended October 31, 2024, an increase of 44 days from 3,452 days for the fiscal year ended October 31, 2023. The average charge per day was approximately $30,144 per day for the fiscal year ended October 31, 2024, an increase of approximately $2,800 from $27,344 per day for the fiscal year ended October 31, 2023, which was due to increased shipping prices.
Revenue from vessel services increased by approximately $2.1 million or 280.0% from approximately $0.7 million in the fiscal year ended October 31, 2023, to approximately $2.8 million in the fiscal year ended October 31, 2024. The total number of voyage days was 759 days for the fiscal year ended October 31, 2024, a decrease of 307 days from 1,066 days for the fiscal year ended October 31, 2023. The average charge per day was $3,675 per day for the fiscal year ended October 31, 2024 compared to the average charge per day of $688 for the fiscal year ended October 31, 2023, due to increased freight revenue.
Cost of Revenues
Our cost of revenues mainly consists of ship lease expenses, fuel expenses, port fees and other related costs. Our costs amounted to approximately $100.1 million for the fiscal year ended October 31, 2024, representing a decrease of approximately $7.1 million, or 6.6%, compared to approximately $107.1 million for the fiscal year ended October 31, 2023, because the average Asian market prices for ship leases, fuel and port charges all decreased in the fiscal year ended October 31, 2024 as compared to the fiscal year ended October 31, 2023. As a result, our ship lease expenses were approximately $44.7 million for the fiscal year ended October 31, 2024, representing a decrease of approximately $1.1 million from approximately $45.8 million for the fiscal year ended October 31, 2023. Fuel expenses were approximately $28.4 million for the fiscal year ended October 31, 2024, representing a decrease of approximately $2.1 million from approximately $30.5 million for the fiscal year ended October 31, 2023. Port fees were approximately $24.1 million for the fiscal year ended October 31, 2024, representing a decrease of approximately $2.2 million from approximately $26.3 million for the fiscal year ended October 31, 2023.
Gross profit (loss)
| For the Years Ended October 31, | ||||||||||||||||
| 2024 | 2023 | |||||||||||||||
| GROSS PROFIT(LOSS) |
Gross Profit |
Gross Margin |
Gross Loss |
Gross Margin | ||||||||||||
| Total gross profit (loss) | $ | 8,100,322 | 7.5 | % | $ | (11,885,203 | ) | (12.5 | )% | |||||||
Our gross profit amounted to approximately $8.1 million for the fiscal year ended October 31, 2024 compared to a gross loss of approximately $11.9 million for the fiscal year ended October 31, 2023. Our gross margin as a percentage of overall revenue for the fiscal year ended October 31, 2024 and 2023, was 7.5% and negative 12.5%, respectively. The increase in gross margin was primarily due to the significant increase in revenue and decrease in costs due to the market-wide decrease in vessel lease costs as a result of the BDI point (Baltic Dry Index point) decrease (which impacts vessel lease costs), as well as the decline in oil prices and port charges.
Operating Expenses
| For the Years Ended | ||||||||||||||||
| October 31, | % | |||||||||||||||
| 2024 | 2023 | Change | Change | |||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Share-based compensation | $ | 1,200,562 | $ | - | $ | 1,200,562 | 100.0 | % | ||||||||
| General and administrative | 4,595,206 | 3,742,728 | 852,478 | 22.8 | % | |||||||||||
| Total | $ | 5,795,768 | $ | 3,742,728 | $ | 2,053,040 | 54.9 | % | ||||||||
Our operating expenses consist of share-based compensation and general and administrative expenses. Operating expenses increased by approximately $2.1 million, or 54.9% from approximately $3.7 million for the fiscal year ended October 31, 2023 to approximately $5.8 million for the fiscal year ended October 31, 2024, mainly due to an increase of approximately $1.2 million in share-based compensation and an increase of approximately $0.9 million in general and administrative expenses.
Share-based compensation consists of shares issued to certain executive office, directors, managers and consultants instead of cash salaries. During the fiscal year ended October 31, 2024, we issued 460,000 Class A ordinary Shares to third party consultants for market development, assistance in entering the onboard carbon capture business and market branding and development. On March 10, 2024, we entered into a two-year consulting agreement with a third party for capital market financing and business development services. Pursuant to the agreement, we issued 60,000 Class A Ordinary Shares to the third party. The fair value of the 60,000 Class A Ordinary Shares was $800,100, based on our share price on date of grant. On April 24, 2024, we entered into a one-year consulting agreement with a third party for branding and marketing services. Pursuant to the agreement, we issued 60,000 Class A Ordinary Shares to the third party. The fair value of the 60,000 Class A Ordinary Shares was $1,537,500, based on our share price on the date of grant. On October 15, 2024, we entered into a one-year consulting agreement with a third party for business development services for our entry into the onboard carbon capture business. Pursuant to the agreement, we agreed to issue 60,000 Class A Ordinary Shares to the third party. The shares had a fair value of $799,500 based on our share price on the date of grant. On October 15, 2024, we entered into a three-year consulting agreement with a third party for business development services for our new onboard carbon capture business. Pursuant to the agreement, we agreed to issue 104,000 Class A Ordinary Shares to the third party. The shares had a fair value of $1,385,800, based on our share price on the date of grant. On October 15, 2024 we entered into a one-year consulting agreement with a third party for business development services in the PRC. Pursuant to the agreement, we paid a cash fee of $30,000 and issued 16,000 Class A Ordinary Shares to the third party. The fair value of the 16,000 Class A Ordinary Shares was $213,200, based on our share price on the date of grant. On October 21, 2024, we entered into a three-year consulting agreement with a third party for investor relations advisory services. Pursuant to the agreement, we agreed to issue 160,000 Class A Ordinary Shares to the third party. The shares had a fair value of $2,132,000, based on our share price on the date of grant. For the fiscal years ended October 31, 2024 and 2023, the Company recorded share-based compensation expenses of approximately $1.2 million and $nil, respectively.
General and administrative expenses primarily consisted of salary and compensation expenses related to our accounting, human resources and executive office personnel, and included rental, depreciation and amortization expenses, office overhead, professional service fees and travel and transportation costs. General and administrative expenses increased by approximately $0.9 million or 22.8% from approximately $3.7 million for the fiscal year ended October 31, 2023 to approximately $4.6 million for the fiscal year ended October 31, 2024, mainly due to an increase of approximately $0.5 million in brokerage fees, an increase of approximately $0.5 million in salary expenses due to an increase in the salaries paid to employees and an increase of approximately $0.1 million in consulting and professional service fee, offset by a decrease of approximately $0.4 million in D&O insurance covers directors and officers.
Other Expenses, net
Other expense, net primarily consists of interest expense, change in fair value of convertible notes, loss on settlement of convertible notes and other items. Other expense, net was approximately $23.5 million for the fiscal year ended October 31, 2024, representing an increase of approximately $23.4 million compared to $0.1 million for the fiscal year ended October 31, 2023. The increase was primarily attributable to a loss of $23.2 million from change in fair value of convertible notes and $0.3 million from the loss on settlement of convertible notes during the fiscal year ended October 31, 2024. The Company elected the fair value option to account for its convertible notes (excluding freestanding warrants if applicable). The fair value of the convertible notes is re-measured at each reporting period, and the change in fair value is recognized as either income or expense.
Provision for Income Taxes
Our provision for income taxes was $4,139 and $2,542 for the fiscal years ended October 31, 2024 and 2023, respectively. The Topsheen Companies are eligible for and participate under the Maritime Sector Incentive-Approved International Shipping Enterprise (MSI-AIS) award program in Singapore. All qualified shipping income derived from the shipping activity of Topsheen Companies is exempt from taxation for the duration of our subsidiaries MSI-AIS participation in this program.
Net Loss
As a result of the foregoing, our net loss amounted to approximately $21.2 million for the fiscal year ended October 31, 2024, compared to a net loss of approximately $15.8 million for the fiscal year ended October 31, 2023.
B. Liquidity and Capital Resources
We are a holding company with no material operations of our own. We conduct our operations primarily through our subsidiaries in Singapore. Our ability to pay dividends depends upon dividends paid by our subsidiaries in Singapore. These subsidiaries are permitted to pay dividends to only out of their retained earnings, if any, as determined in accordance with Singapore accounting standards and regulations. We would need to accrue and pay withholding taxes if we were to distribute funds from our subsidiaries in Singapore to us.
In assessing our liquidity, we monitor and analyze our cash on hand, ability to generate sufficient revenue sources in the future, and our operating and capital expenditure commitments. We have historically funded our working capital needs primarily from operations, bank loans, and advances from shareholders and intends to continue doing so in the near future to ensure sufficient working capital. As of October 31, 2025, we had cash of $10.1 million. Advances from customers included in current liabilities amounted to $7.4 million mainly representing the advances from customers that will be recognized as revenue in the next fiscal year when the services are provided. We intend to finance our future working capital requirements and capital expenditures from financing activities.
On March 10, 2025, we closed a private placement with Speed Wealthy Ltd ("Speed Wealthy"), a related party. We issued 67,985 Class A Ordinary Shares to Speed Wealthy at a price of $65.5 per share for consideration of approximately $4.5 million. We entered into an agreement with Speed Wealthy and Topsheen Shipping Limited on 2025, pursuant to which Speed Wealthy's payment obligation for the shares issued in the above private placement was fully satisfied by extinguishing our debt obligations to Topsheen Shipping Limited.
The following summarizes the key components of our cash flows for the fiscal years ended October 31, 2025, 2024 and 2023.
|
For the Year Ended October 31, 2025 |
For the Year Ended October 31, 2024 |
For the Year Ended October 31, 2023 | ||||||||||
| Net cash provided by (used in) operating activities | $ | 4,631,918 | $ | (3,328,206 | ) | $ | (17,773,998 | ) | ||||
| Net cash used in investing activities | (5,071 | ) | - | - | ||||||||
| Net cash (used in) provided by financing activities | (1,349,785 | ) | 7,971,203 | (1,578,365 | ) | |||||||
| Net increase (decrease) in cash and cash equivalents | $ | 3,277,062 | $ | 4,642,997 | (19,352,363 | ) | ||||||
Operating Activities
Net cash provided by operating activities was approximately $4.6 million for the fiscal year ended October 31, 2025. Cash used in operating activities for the fiscal year ended October 31, 2025 was mainly attributable to a net loss of approximately $20.1 million, adjusted for certain non-cash items primarily consisting of share-based compensation of approximately $21.9 million, and changes in certain working capital accounts that primarily consisting of cash provided by accrued expenses and other liabilities of approximately $3.4 million due to slow payments, cash provided by advances from customers of approximately $1.6 million, offset by accounts receivable of approximately $1.1 million and cash due from related parties of approximately $1.2 million.
Net cash used in operating activities was approximately $3.3 million for the fiscal year ended October 31, 2024. Cash used in operating activities for the fiscal year ended October 31, 2024 mainly consisted of a net loss of approximately $21.2 million, adjusted for certain non-cash items primarily consisting of fair value loss of approximately $23.2 million in the change in fair value of convertible notes issued in fiscal 2024, issuance of shares for services of approximately $1.2 million and loss on settlement of convertible notes of approximately $0.3 million, and changes in certain working capital accounts that primarily consisted of accounts receivable of approximately $6.6 million due to increased revenue, prepayment and other assets of approximately $4.5 million due to increased fuel and other costs, offset by cash provided by advances from customers of approximately $2.3 million, cash provided by accrued expenses and other liabilities of approximately $1.7 million due to longer credit terms with service providers and increased accounts payable of approximately $0.3 million.
Net cash used in operating activities was approximately $17.8 million for the fiscal year ended October 31, 2023. Cash used in operating activities mainly consisted of a net loss of approximately $15.8 million, changes in certain working capital accounts that primarily consisted of advances from customers of approximately $6.6 million, increased accrued expenses and other liabilities of approximately $3.1 million, a reduction in accounts receivable of approximately $3.0 million due to faster collection, prepayments and other assets of approximately $4.1 million offset by prepayments for fuel advances from related parties of approximately $1.1 million.
Investing Activities
Cash used by investing activities was approximately $0.01 million for the fiscal years ended October 31, 2025. Our expenditures or the fiscal years ended October 31, 2025 were for the purchase of office and electronic equipment. Cash used by investing activities was $nil for the fiscal years ended October 31, 2024 and 2023.
Financing Activities
Net cash used in financing activities was approximately $1.3 million for the fiscal year ended October 31, 2025, mainly consisting of repayment of advances made by related parties of approximately $1.1 million and repayment of long-term bank loans of approximately $1.5 million, offset by loans from related parties of approximately $0.9 million and cash received from warrants exercised of approximately $0.4 million.
Net cash provided by financing activities was approximately $8.0 million for the fiscal year ended October 31, 2024, mainly consisting of loans from related parties of approximately $10.7 million, proceeds from convertible notes of approximately $5.3 million, capital contributed by non-controlling shareholders of approximately $2.8 million, offset by repayment of related-party loans of approximately $8.5 million, repayment of convertible notes of approximately $1.4 million and repayment of long-term bank loans of approximately $0.9 million.
Net cash used in financing activities was approximately $1.6 million for the fiscal year ended October 31, 2023, mainly consisting of repayment of related parties' loans of approximately $13.2 million, dividends paid to shareholders of our subsidiaries of approximately $0.9 million, and repayment of a long-term bank loan of approximately $0.8 million, offset by loan proceeds from related parties of approximately $13.4 million.
Capital Expenditures
We had capital expenditures of approximately $0.01 million, $nil and $nil for office and electronic equipment during the fiscal years ended October 31, 2025, 2024 and 2023, respectively.
Contractual Obligations
We have entered into non-cancellable operating lease agreements to rent our office space in Singapore. The lease agreement, which will expire on March 14, 2027.
The following table sets forth our contractual obligations and commercial commitments as of October 31, 2025:
| Payment Due by Period | ||||||||||||||||||||
| Total |
Less than 1 Year | 1 - 3 Years | 3 - 5 Years |
More than 5 Years | ||||||||||||||||
| Lease | $ | 104,129 | $ | 77,596 | $ | 26,533 | $ | - | $ | - | ||||||||||
| Total | $ | 104,129 | $ | 77,596 | $ | 26,533 | $ | - | $ | - | ||||||||||
Off-Balance Sheet Arrangements
There were no off-balance sheet arrangements for the fiscal years ended October 31, 2025, 2024 and 2023 that have, or that in the opinion of management are likely to have, a current or future material effect on our financial condition or results of operations.
C. Research and Development, Patents and Licenses, etc.
Not applicable
D. Trend Information
Other than as described elsewhere in this Report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material adverse effect on our revenue, income from continuing operations, profitability, liquidity or capital resources, or that would cause our reported financial information to not necessarily be indicative of future operating results or financial condition.
E. Critical Accounting Estimates
We prepare our consolidated financial statements in conformity with U.S. GAAP. The preparation of these financial statements requires us to make estimates, judgments, and assumptions that can have a meaningful effect on the reporting of consolidated financial statements. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.
Critical accounting estimates are defined as those reflective of significant judgments, estimates and uncertainties, which may result in materially different results under different assumptions and conditions. The following descriptions of critical accounting estimates should be read in conjunction with our consolidated financial statements and accompanying notes and other disclosures included in this report.
When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. Our critical accounting policies and practices include revenue recognition. We believe the following accounting estimates involve the most significant judgments used in the preparation of our consolidated financial statements.
Accounting estimates used in revenue recognition
Under a voyage contract, we are engaged to provide the transportation of cargo between specific ports in return for an ocean freight payment of an agreed upon freight per ton of cargo. Our voyage contracts generally do not contain cancelable provisions. A voyage is deemed to commence when a vessel was available for loading and is deemed to end upon the completion of the discharge of the current cargo. For voyage contracts, the customer simultaneously receives and consumes the benefits provided by our performance over the voyage period because of the continuous service to the customer. Customers receive the benefit of our services as the goods are transported from one location to another. If we were unable to complete delivery to the final location, another entity would not need to reperform the transportation service already performed. As control transfers over time, we recognize revenue ratably from the port of loading to when the charterer's cargo is discharged based on the relative transit time completed in each reporting period. For unfinished voyages, the related revenue is recognized based on the estimated transit time-based portion completed of each voyage at the reporting date. Estimated losses on voyages are provided for in full at the time such losses become evident. Voyage expenses and other ocean transportation operating costs are charged to operating costs as incurred.
Recent Accounting Pronouncements
A recitation of recent relevant accounting pronouncements is included in Note 2 "Summary of Significant Accounting Policies" of our Consolidated Financial Statements.