Financial Performance - Total revenue for Q2 2024 was 195,198 in Q2 2023[94] - Total revenue for the first half of 2024 was 395,760 in the same period of 2023[94] - Net loss for Q2 2024 was 62,935 in Q2 2023[94] - Net loss for the first half of 2024 was 108,914 in the first half of 2023[94] - Membership fee revenue for the three months ended June 30, 2024, was 6 for the same period in 2023, representing a significant increase[100] - Product sales for the six months ended June 30, 2024, totaled 395,760 in the same period of 2023, indicating a growth of approximately 57%[100] - Total food and beverage revenue for the six months ended June 30, 2024, was 195,198 for the same period in 2023, reflecting an increase of about 71%[100] Operating Expenses and Margins - Operating expenses increased from 654,740 in Q2 2024, primarily due to increased general and administrative expenses[99] - The gross margin increased from 164,913 in Q2 2024, attributed to higher food and beverage revenue[99] Cash Flow and Liabilities - Net cash used in operating activities decreased to 1,379,468 in the same period of 2023, a reduction of approximately 18%[102] - Net cash provided by investing activities was 69,023,066 in the same period of 2023, a decline of about 70%[102] - The company’s cash decreased from 821,353 as of June 30, 2024, a drop of approximately 29%[101] - Total liabilities increased from 6,567,743 at June 30, 2024, an increase of about 6%[101] Membership and Expansion Plans - The company has 9,811 founding members, with a cap of 10,000, who will enjoy continuous membership benefits[91] - The company plans to implement a new yearly subscription-based membership model, with exclusive discounts and passive income opportunities for members[91] - Hapi Cafés are positioned as integral to the business model, with locations opened in Seoul and Singapore, and plans for further expansion[93] - The company has plans to expand by taking over leases of existing Hapi Cafes over the next two years, although execution is not guaranteed[101] Financial Support and Credit Facilities - A Credit Facility Agreement was established with Alset Inc. providing a maximum credit line of $1,000,000 at a simple interest rate of 3% per annum[101] - The company has received letters of financial support from Alset International Limited and Alset Inc. to provide additional funding as needed for the next 12 months[101] Internal Controls and Compliance - The company is not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act[114] - As of December 31, 2023, management assessed that the company did not maintain effective controls over financial reporting, constituting a material weakness[114] - The company plans to appoint additional qualified personnel with financial accounting, GAAP, and SEC experience to remediate identified weaknesses[114] - The financial statements have been prepared in conformity with U.S. GAAP and reflect management's judgment and estimates[114] - The company intends to take advantage of exemptions from various reporting requirements applicable to other public companies as an emerging growth company[114] - Management regularly assesses internal controls, with the most recent assessment conducted as of December 31, 2023[114] - The company does not include an attestation report from its registered public accounting firm regarding internal control over financial reporting[114] - The effectiveness of internal control over financial reporting may vary over time due to changes in conditions[114] - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[114] - Management recognizes inherent limitations in the effectiveness of internal controls, including human error and circumvention[114]
Alset Capital Acquisition (ACAX) - 2024 Q2 - Quarterly Report