The financial statements showed $38,252 in cash and raised doubt about whether the company could keep operating without new money — what auditors call a going-concern warning. Three days later, MKDWELL Tech opened a program to sell up to $100 million of new shares into the market.
The half-year results, filed as a 6-K on September 8, showed a net loss of $6.52 million for the six months ended June 30 — nearly four times the $1.70 million loss in the same period a year earlier. The filing says $5.22 million of that came from share-based compensation paid to four consultants in April. Revenue for the period was about $1.5 million.
For anyone holding the stock, the share-sale program is the part that affects them directly. In an at-the-market offering, a company can sell new shares into the trading session on any day it chooses, at prevailing prices — every new share issued makes the existing ones a smaller slice of the same company. With a free float of roughly 3.1 million shares, even a fraction of the $100 million ceiling would be large relative to what already trades.
Shares closed 51.96% higher at $7.75 on September 12, on dollar volume of about $10.6 million, after the results and the at-the-market offering agreement with Maxim Group LLC were filed.
Working capital was in deficit by about $6 million as of June 30, and accumulated losses stood at $22.6 million. The filing says the company has historically depended on bank borrowing and related-party financing to keep running, and cannot assure profitability.
The September 11 filing says proceeds are intended for general corporate purposes, including working capital, with no current plans for specific acquisitions or investments disclosed.
One balance sheet item from June 30 had not resolved when the results were filed: a $3.3 million unsecured loan to a Chinese manufacturing firm, with repayment due July 31. The September 8 filing noted the loan had not been collected.