Fitell Corporation Announces First Half-Year Financial Results


TAREN POINT, Australia, March 05, 2024 (GLOBE NEWSWIRE) -- Fitell Corporation (Nasdaq: FTEL) ("Fitell" or the "Company"), an online retailer of gym and fitness equipment in Australia, today announced its half-year financial results for the six months ended December 31, 2023.

Six-month Period ended December 31, 2023 Financial Highlights

  • Revenue was $2.1 million, a decrease of $0.9 million or 30.5% compared to the same period in 2022.
  • Gross profit was $0.85 million, a decrease of $745,555 or 46.8% from the same period in 2022.

Revenue by Categories vs. Same Period of Prior Year

 RevenueChange from Six-month Period ended December 31, 2022
Merchandise revenue2,007,56294.6%(144,310)-6.7%
Sales of consumable products00(605,415)-100.0%
Revenue from licensing customers115,5575.4%(181,308)-61.1%
  • Merchandise revenue decreased by 6.7% or $144,310 to $2,007,562. The decrease was primarily attributable to: (i) a 34.3% increase in sales orders, primarily due to promotional campaigns and new marketing channels; and (ii) a decrease of 30.5% in the average revenue per order, mainly due to consumer spending changes in response to recent economic conditions in Australia. Management believes that the market will gradually recover, and the fitness and wellness industry in Australia is still promising in the long-term.
  • In the three months ended December 2023, merchandise revenue increased $103,849 or 10.9% compared to the same period in 2022.
  • Sales of consumable products represents the revenue generated by selling various lifestyle products. There were no sales of consumable products, and management plans to develop this business segment again whenever business opportunity arises.
  • Revenue from licensing customers represents the services provided to gym studios in overseas markets. Revenue from licensing customers decreased by 61.4% or $181,308 to $115,557. The decrease was due to management suspending overseas expansions recently due to market sentiment from inflation and rising interest rates in the global market, Management plans to expand these services again, especially to the Asia market, when the time is right.

Cost of goods sold was $1,275,967, representing a decrease by approximately $185,478, or 12.7% from the same period in 2022.

Gross profit was $847,152, a decrease of $745,555, or 46.8% from the same period in 2022. The decrease was due to the drop in merchandise revenue, sales of consumable products, and licensing income. Gross profit margin was 39.9%, a decrease from 52.1% for the six-month period ended December 31, 2022, due to the decline of the high-margin consumable products and licensing segments.

Consulting fees were $1,272,468 for the six-month period ended December 31, 2023, compared to nil in the same period of 2022. Since the successful listing on Nasdaq, the management has proactively engaged various consulting firms to assist the company in setting long-term business development plans and identifying new business growth opportunities.

General and administrative expenses were $1,268,545, an increase of $1,099,110, or 648.6% from $169,445 for the same period of 2022. The increase was mainly due to (i) research and development expenses on mobile app of $798,684; (ii) an $99,801 increase of insurance expense related to D&O insurance coverage post-Nasdaq listing; and (iii) an $71,945 increase of audit fees due to the Company’s listing.

Net loss was $2,661,707, a decrease of $2,602,382 from the same period in 2022. The net loss was mainly due to the aforesaid decrease in total revenues and the increase in consulting fees and general and administrative expenses.

About Fitell Corporation

Fitell Corporation, through GD Wellness Pty Ltd (“GD”), its wholly owned subsidiary, is an online retailer of gym and fitness equipment both under its proprietary brands and other brand names in Australia. The company’s mission is to build an ecosystem with a whole fitness and wellness experience powered by technology to our customers. GD has served over 100,000 customers with large portions of sales from repeat customers over the years. The Company’s brand portfolio can be categorized into three proprietary brands under its Gym Direct brand: Muscle Motion, Rapid Motion, and FleetX, in over 2,000 stock-keeping units (SKUs). For additional information, please visit the Company’s website at

Forward-Looking Statements

This press release contains “forward-looking statements”. Forward-looking statements reflect our current view about future events. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “could,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “propose,” “potential,” “continue” or similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC.

For more information, please contact:

Chief Financial OfficerJamarson


 December 31, June 30,
 2023 2023
Current assets     
Cash and cash equivalents$4,163,217  $236,821 
Investment in marketable securities 166,136   494,275 
Accounts receivable, net 233,785   174,341 
Inventory, at cost 2,102,835   525,786 
Note receivables 2,500,000   - 
Deposits and prepaids 223,662   13,412 
Prepaid offering costs 549,749   5,317,866 
Total current assets 9,939,384   6,762,501 
Property and equipment, net 31,904   38,743 
Operating right of use asset 703,550   605,794 
Deferred tax asset 214,663   132,354 
Other non-current assets 81,092   - 
Brand names 337,504   337,504 
Goodwill 1,161,052   1,161,052 
Total assets$12,469,149  $9,037,948 
Current liabilities     
Accounts payable and accrued expenses$1,071,378  $1,168,723 
Deferred revenue 232,014   238,351 
Income tax payable 433,075   486,058 
Due to related parties 32,430   24,386 
Current portion of operating lease liability 289,065   212,062 
Total current liabilities 2,057,962   2,129,580 
Accrued employee benefits, non-current 19,736   18,430 
Operating lease liability, less current portion 426,597   473,015 
Total liabilities 2,504,295   2,621,025 
Commitments and contingencies (Note 6)     
Stockholders' equity     
Common stock, $0.0001 par value; no authorization limit, 11,120,000 shares and 8,120,000 shares issued and outstanding at December 31, 2023 and June 30, 2023, respectively 1,112   812 
Additional paid-in capital 13,395,164   7,097,822 
Accumulated other comprehensive loss (88,068)  (64)
Retained earnings (3,343,354)  (681,647)
Total stockholders' equity 9,964,854   6,416,923 
Total liabilities and stockholders' equity$12,469,149  $9,037,948 

 For the six months ended
 December 31, December 31,
 2023  2022 
Merchandise revenues$2,007,562  $2,151,872 
Sales of consumable products -   605,415 
Licensing income 115,557   296,865 
Total revenues 2,123,119   3,054,152 
Cost of goods sold 1,275,967   1,461,445 
Gross profit 847,152   1,592,707 
Operating expenses     
Personnel expenses 421,364   448,402 
Consulting fees 1,272,468   - 
General and administrative expenses 1,268,545   169,445 
Sales and marketing expenses 175,705   227,355 
Amortization of operating right of use asset 132,867   98,661 
Depreciation expenses 4,469   6,135 
Total operating expenses 3,275,418   949,998 
Income (loss) from operations (2,428,266)  642,709 
Other income (expenses):     
IPO related-expenses (50,286)  (281,686)
Unrealized gain (loss) from marketable securities (312,831)  (193,015)
Other income (expenses) 115,190   9,806 
Interest income 764   831 
Interest expense (66,844)  (43,738)
Total net other income (expenses) (314,007)  (507,802)
Income (loss) before taxes (2,742,273)  134,907 
Income tax expense (credit) (80,566)  194,232 
Net loss (2,661,707)  (59,325)
Foreign currency adjustment (88,004)  (36,238)
Comprehensive loss$(2,749,711) $(95,563)
Basic and diluted net loss per share$(0.25) $(0.01)
Weighted average shares outstanding - basic and diluted 10,487,568   8,120,000 

 Common Stock Subscription Receivable AdditionalPaid-in Capital Accumulated OtherComprehensive Income  RetainedEarnings  Total
 Shares  Amount  Shares  Amount         
Balance June 30, 20238,120,000 $812 - - $7,097,822 $(64) $(681,647)$6,416,923 
Fund raised in IPO3,000,000  300 - -  6,297,342  -   -  6,297,642 
Foreign currency translation adjustment-  - - -  -  (88,004)  -  (88,004)
Net loss-  - - -  -  -   (2,661,707) (2,661,707)
Balance December 31, 202311,120,000  $ 1,112  -  -  $13,395,164 $(88,068) $ (3,343,354)$9,964,854 

 Common Stock Subscription Receivable AdditionalPaid-in Capital Accumulated OtherComprehensive Income  RetainedEarnings  Total
 Shares  Amount  Shares  Amount         
Balance June 30, 20227,000,000 $700 - $(56) $1,497,990  26,999 $911,747 $2,437,380 
Stock issued for services1,120,000  112 -  (112)  2,240,000  -  -  2,240,000 
Foreign currency translation adjustment-  - -  -   -  (36,238) -  (36,238)
Net loss-  - -  -   -  -  (59,325) (59,325)
Balance December 31, 20228,120,000  $ 812  -  $(168 ) $3,737,990 $(9,239)$852,422 $4,581,817 

 For the six months ended
 December 31,December 31,
 2023 2022 
Cash Flows from Operating Activities    
Net loss$(2,661,707)$(59,325)
Adjustments to reconcile net loss to net    
cash from operating activities:    
Depreciation 6,839  6,135 
Stock based compensation -  2,240,000 
Unrealized loss on investments 328,139  193,015 
Changes in operating assets and liabilities    
Accounts receivable (59,444) (696,922)
Inventory (1,577,049) 245,673 
Deposits and prepaids (210,250) (23,170)
Prepaid offering costs (2,549,524) (2,129,659)
Operating right of use asset (67,171) (3,248)
Deferred tax asset (82,309) 64,520 
Other non-current assets (81,092) - 
Accounts payable and accrued expenses (97,345) 118,376 
Deferred revenue (6,337) (316,645)
Income taxes payable (52,983) 121,736 
Accrued employee benefits 1,306  12,045 
Net cash from operating activities (7,108,927) (227,469)
Cash Flows from Investing Activities    
Investment in note receivables (2,500,000) - 
Net cash from investing activities (2,500,000) - 
Cash Flows from Financing Activities    
Net activity on due to related parties 8,044  (50,513)
Fund raised in IPO, gross 13,615,283  - 
Net from financing activities 13,623,327  (50,513)
Foreign currency adjustment (88,004) (28,245)
Change in cash and cash equivalents 3,926,396  (306,227)
Cash and cash equivalents at beginning of period 236,821  716,052 
Cash and cash equivalents at end of period$4,163,217 $409,825 
Supplemental Cash Flow Information    
Cash paid for interest$- $- 
Cash paid for income taxes$122,652 $16,763 
Source: Fitell Corporation

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