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CLOSED · 03:00 ET
Market ClerkRecap
Tue Oct 27 · markets closed1 signal on Oct 26140 insider buys this week · $73.9MCIRO short report next: Oct 30The week ahead

ECXJ

CXJ GROUP CO., Ltd
OTC · CONSUMER DISCRETIONARY · MOTOR VEHICLE PARTS & ACCESSORIES
1.29
+0.00 +0.00%
USD · close Oct 23

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How ECXJ rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026
Text kept
93%
of sentences unchanged
Added
27
new sentences
Dropped
26
sentences removed
Length
+16
words, now 28,067

New in FY2026

  • Our business mainly divided into two sectors, namely sales of automobile aftermarket products and authorization fee on our brand name “Chejiangling / Teenage Hero Car”.
  • As of May 31, 2026, more than 85 active franchise auto detailing stores use our brand name, the store network has reached 23 provinces in China.
  • We aim to increase 400 stores with our customers across China in the next five years.
  • Currently we sell about two different brands of engine/machine oil, most of which are purchased from distributor from Germany and Malaysia, and the auto parts purchased from domestic, currently we have 40 SKU of auto parts.
  • We lease the building which has over 466 square meters.
  • As of May 31, 2026, the Company has total two separate operating lease agreements for an office space and a warehouse in PRC with remaining lease terms of from 3 to 22 months.
  • Our customers Our customers refer to 85 active auto detailing store owners or persons who are going to start the stores.
  • As of May 31, 2026, we had 110 registered trademarks, 11 patents, 17 registered software copyrights with the PRC State Copyright Bureau, and 2 registered domain names.
  • During the year ended May 31, 2026, we were not a party to any material disputes relating to intellectual property infringement or misappropriation.
  • Employees As of May 31, 2026, the Company has 17 employees, all of which were on a full-time basis.
  • The following table sets forth the number of our full-time employees categorized by function as of May 31, 2026: Function Number of Employees Finance Operation center IT and Engineering General and Administrative Supply Chain Total C There are 16 employees based in HZ CXJ and a employee in SZ CXJ respectively, where our operations are located.
  • As discussed in Note 3 to the consolidated financial statements included herein, we incurred a net loss $9,680 for the financial year ended May 31, 2026, and had an accumulated deficit of $7,657,185 and negative net assets of $1,624,018 as of May 31, 2026.
  • These conditions raise substantial doubt about our ability to continue as a going concern.
  • With the viability of business strategy plans such as Tik Tok’s short videos e-commerce sales model, and the financial support from the substantial shareholder and director (supported by a financial support letter) will generate sufficient fund to cover next 12 months cash demands.
  • The Company incurred a net loss of $9,680 and $2,284,025 for the years ended May 31, 2026 and 2025, respectively.
  • The Company continues to focus on increasing its revenue through the sale of motor oil and auto parts products on e-commerce sales model such as Tik Tok to reduce its costs of goods sold, streamlining its overhead costs, or obtaining financing from its stockholders or directors.
  • For the years ended May 31, 2026 and 2025, we have generated $531,606 and $458,632 respectively in revenues and incurred net loss of $9,680 and $2,284,025 respectively.
  • If any of the above factors work negatively against us, our sales will likely decline and our results of operations will be adversely affected. 1.11) Because most of our retail customers and distributors are not required to place minimum orders with us, we need to manage our inventory levels, and it is difficult to predict the timing and amount of our sales.
  • Most of our customers are not required to place minimum monthly or annual orders for our products, only a small number of customers under an old brand name management service contract is required to place minimum monthly or annual orders.
  • There is no assurance as to the timing or quantity of purchases by any of our customers or that any of our distributors will continue to purchase products from us at the same frequencies and volumes as they may have in the past.
  • We purchase most of our engine oil from distributors of Germany and Malaysia, and contract with local suppliers to supply auto parts and other products.
  • This intellectual property has allowed our products to earn market share in the current and future automotive industry.
  • For the years ended May 31, 2026 and 2025, the consolidated VIE was in an accumulated deficit position.
  • The consolidated VIE had accumulated deficits of $2,213,665 and $2,015,260 as of May 31, 2026 and 2025 respectively.
  • In light of that, SZ CXJ did not charge the consolidated VIE for any consulting service fees, and consequently, the consolidated VIE had not paid any consulting service fees to SZ CXJ as of May 31, 2026.
  • For the years ended May 31, 2026 and 2025, ECXJ did not receive any cash dividends from its PRC subsidiaries.
  • Wenbin Mao direct and indirect beneficially owns 8.69% of our outstanding shares of Common Stock.

Gone since FY2025

  • Our business mainly divided into three sectors, namely sales of automobile aftermarket products, authorization fee on our brand name “Chejiangling / Teenage Hero Car” and provision of auto detailing store consultancy services.
  • As of May 31, 2025, more than 160 active franchise auto detailing stores use our brand name, the store network has reached 23 provinces and 132 cities in China.
  • We aim to increase 1,000 stores with our customers across China in the next five years.
  • Currently we sell about two different brands of engine/machine oil, most of which are imported from Germany and Malaysia, and the auto parts purchased from domestic, currently we have 285 SKU of auto parts.
  • We lease the building which has over 270 square meters.
  • As of May 31, 2025, the Company has total three separate operating lease agreements for two office space and one warehouse in PRC with remaining lease terms of from 1 months to 6 months.
  • Our customers Our customers refer to 160 active auto detailing store owners or persons who are going to start the stores.
  • As of May 31, 2025, we had 118 registered trademarks, 11 patents, 23 registered software copyrights and 3 registered works copyrights with the PRC State Copyright Bureau, and 3 registered domain names.
  • During the year ended May 31, 2025, we were not a party to any material disputes relating to intellectual property infringement or misappropriation.
  • Employees As of May 31, 2025, the Company has 19 employees, all of which were on a full-time basis.
  • The following table sets forth the number of our full-time employees categorized by function as of May 31, 2025: Function Number of Employees Finance Operation center IT and Engineering General and Administrative Supply Chain Total There are 15 employees based in HZ CXJ, 1 employee in SZ CXJ and 3 employees in Longkou CXJ respectively, where our operations are located.
  • As discussed in Note 3 to the consolidated financial statements included herein, we had negative cash flows from operating activities $418,525, accumulated deficit from recurring net losses $2,284,025 incurred for the financial year ended May 31, 2025.These conditions raise substantial doubt about our ability to continue as a going concern.
  • We believe with the viability of business strategy plans such as Flash Lion e-commerce sales model, Cloud chain (including Wechat, REDnote and Tik Tok’s short videos e-commerce sales model), will generate sufficient fund to meet our daily cash demands.
  • The Company incurred a net loss of $2,284,025 and $2,135,674, for the years ended May 31, 2025 and 2024, respectively.
  • The Company continues to focus on increasing its revenue through the sale of motor oil and auto parts products on its online platform “Flash Lion Mall”, and to reduce its costs of goods sold, streamlining its overhead costs, or obtaining financing from its stockholders or directors.
  • For the years ended May 31, 2025 and 2024, we have generated $458,632 and $2,318,712 respectively in revenues and incurred net loss of $2,284,025 and $2,135,674 respectively.
  • If any of the above factors work negatively against us, our sales will likely decline and our results of operations will be adversely affected. 1.11) Because our retail customers and distributors are not required to place minimum orders with us, we need to manage our inventory levels, and it is difficult to predict the timing and amount of our sales.
  • Our customers are not required to place minimum monthly or annual orders for our products.
  • There is no assurance as to the timing or quantity of purchases by any of our customers or that any of our distributors will continue to purchase products from us in the same frequencies and volumes as they may have in the past.
  • We acquire and import most of our engine oil from Germany and Malaysia, and contract with local suppliers to supply auto parts and other products.
  • This intellectual property has allowed our products to earn market share in the financial services and supply chain solutions industries.
  • For the years ended May 31, 2025 and 2024, the consolidated VIE was in an accumulated deficit position.
  • The consolidated VIE had accumulated deficits of $1,970,303 and $1,900,986 as of May 31, 2025 and 2024 respectively.
  • In light of that, SZ CXJ did not charge the consolidated VIE for any consulting service fees, and consequently, the consolidated VIE had not paid any consulting service fees to SZ CXJ as of May 31, 2024.
  • For the years ended May 31, 2025 and 2024, ECXJ did not receive any cash dividends from its PRC subsidiaries.
  • Wenbin Mao direct and indirect beneficially owns 11.63% of our outstanding shares of Common Stock.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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