Financial Performance - Total revenue for the six months ended June 30, 2024, was 39,966 for the same period in 2023, representing a decline of approximately 75%[4] - Net loss for the six months ended June 30, 2024, was 793,699 for the same period in 2023, marking an increase in loss of about 67%[4] - Basic and diluted net loss per ordinary share for the six months ended June 30, 2024, was (0.07) for the same period in 2023[4] - Operating expenses for the six months ended June 30, 2024, totaled 934,148 in the same period of 2023, representing an increase of about 43%[4] - For the six months ended June 30, 2024, the net loss attributable to ordinary shareholders was 793,699 for the same period in 2023, resulting in a per share loss of 0.07[52] Assets and Liabilities - Total current assets increased to 682,509 as of December 31, 2023, reflecting a growth of about 52%[2] - Total liabilities rose to 122,037 as of December 31, 2023, indicating an increase of approximately 130%[2] - Total assets increased to 3,999,242 as of December 31, 2023, reflecting a growth of about 8%[2] - Cash and cash equivalents decreased to 503,505 as of December 31, 2023, a decline of approximately 83%[2] - Accounts receivable as of June 30, 2024, amounted to 211,369 as of December 31, 2023, with a net accounts receivable of 4,041,691 as of June 30, 2024, from 404,554, an increase of 52% from 761,580 at the end of June 2023 to 84,241, down from $761,580, reflecting a decrease of approximately 89%[9] Taxation - The Group's operations in China are subject to a corporate income tax rate of 25%[46] - The UK corporation tax rate is 25% for the fiscal year beginning April 1, 2023, up from 19% in the previous year[47] - The Group recognizes deferred income taxes for temporary differences and net operating loss carryforwards, applying statutory tax rates expected to be in effect when the amounts are recovered or settled[48] - The Group's tax rate in the PRC is 25%, with potential reductions for small businesses under specific income thresholds, which may impact future profitability[72] Revenue Sources - The Group's major revenue is generated from commission fees for selling real estate properties, with revenue recognized upon the completion of sales contracts[37] - The Group started engaging in hotel operations in May 2023, recognizing revenue from room sales, food and beverage services, and event space rentals based on ASC 606[42] - For the six months ended June 30, 2024, hotel income accounted for 100% of total revenue, while real estate agent income accounted for 0%[116] - Real estate agent income declined by 90.34% in 2023 compared to 2022, and 89.71% in 2022 compared to 2021, primarily due to tightening policies in the PRC real estate market[97] Operational Developments - MDJM has expanded its operations by incorporating a new subsidiary, Fernie Castle Culture Limited, in the UK on August 22, 2023, focusing on brand management and development[14] - The company has remodeled properties in the UK into a multi-functional cultural venue and hotel, with ongoing renovations[98] - The company has faced challenges in the UK market due to factors such as labor shortages and rising energy costs[99] Agreements and Future Plans - The Company entered into a Securities Purchase Agreement with investors, requiring a resale registration statement to be filed with the SEC within 30 days after the Closing Date[119] - The Company will incur liquidated damages of 2% of the aggregate subscription amount if it fails to file or maintain the effectiveness of the Registration Statement as per the Registration Rights Agreement[119] - The company intends to use net cash proceeds from the recent offering for working capital and general corporate purposes[118]
MDJM(MDJH) - 2024 Q2 - Quarterly Report