Alset Capital Acquisition (ACAX) - 2024 Q4 - Annual Report

Revenue and Financial Performance - Total revenue for the years ended December 31, 2024, and 2023 was $1,253,577 and$830,519, respectively, indicating a significant increase in revenue [103]. - Total revenue increased from $830,519 in 2023 to$1,253,577 in 2024, representing a growth of 51% [117]. - Food and Beverage revenue rose significantly from $817,761 in 2023 to$1,253,577 in 2024, indicating a substantial increase in sales [117]. - The net loss for the years ended December 31, 2024, and 2023 was $2,606,504 and$1,076,662, respectively, reflecting a worsening financial position [115]. - The net loss widened from $1,076,662 in 2023 to$2,606,504 in 2024, highlighting ongoing financial challenges [122]. - The company reported a net loss attributable to common stockholders for the year ended December 31, 2023, was $2,590,731, compared to a loss of$1,080,492 in 2024, reflecting a significant increase in losses [171]. - The company’s comprehensive loss for the year was $1,129,537, reflecting a significant impact from foreign exchange translation adjustments [258]. Membership and Customer Base - The company had approximately 9,811 members, primarily in South Korea, with a new membership model planned to operate on a yearly subscription basis [87][93]. - The company currently has approximately 9,811 founding members, with a cap of 10,000, and plans to resume membership sales under a new yearly subscription model [184]. - The company is in the process of restructuring its membership model to enhance member benefits and engagement [184]. - The business model is shifting towards a tiered membership structure with a broader range of products and services available to members [182]. Operational Developments - Hapi Marketplace, launched on November 4, 2024, features over 47 product categories and aims for expansion across Asia [95]. - Hapi Cafés opened in Seoul and Singapore in 2022, with plans for further openings to enhance community engagement and membership growth [97]. - The company plans to expand by taking over leases of existing Hapi Cafes over the next two years, although execution is not guaranteed [124]. - The company plans to expand its travel business, offering exclusive access to discounts on various travel services for members [98]. - Hapi Wealth Builder program is set to launch in 2025, focusing on education in equity investment and wealth-building strategies [101]. Financial Position and Assets - Cash increased significantly from$1,159,201 at the end of 2023 to $4,341,746 at the end of 2024, indicating improved liquidity [123]. - Total current assets as of December 31, 2023, were$5,474,997, a substantial rise from $1,337,854 in 2024 [169]. - Total liabilities as of December 31, 2023, amounted to$3,311,274, compared to $6,024,798 in 2024, indicating a decrease in liabilities [169]. - Cash and marketable securities held in the Trust Account were$21,346,768 as of December 31, 2024, indicating a significant asset position [169]. - The total cash at the end of 2024 was $4,341,746, up from$1,159,201 at the end of 2023 [175]. Expenses and Cost Management - Cost of revenue doubled from $334,825 in 2023 to$651,721 in 2024, primarily due to increased sales in the Food and Beverage business [118]. - Operating expenses decreased from $3,402,793 in 2023 to$3,027,024 in 2024, mainly due to reduced general and administrative expenses [120]. - Advertising expenses increased from $4,191 in 2023 to$19,472 in 2024, showing a significant investment in marketing [234]. - The Company incurred Delaware franchise tax of $48,180 and$205,000 for the years ended December 31, 2024 and 2023, respectively, showing a decrease in tax liability [238]. Compliance and Regulatory Matters - The company received a notice from Nasdaq regarding non-compliance with the minimum market value requirement, with a compliance period until September 3, 2024 [133]. - The Company is classified as an "emerging growth company" and is taking advantage of certain exemptions from various reporting requirements under the JOBS Act [152]. - The Company has determined that it did not maintain effective controls over financial reporting as of December 31, 2024, constituting a material weakness, and plans to appoint additional qualified personnel to address this issue [156]. Related Party Transactions and Financing - The Company has significant transactions with related parties, which may not be conducted on an arm's length basis, as noted in the consolidated financial statements [167]. - The company entered into a Credit Facility Agreement with Alset Inc. for a maximum credit line of $1,000,000, with$700,000 available for draw as of December 31, 2024 [125]. - The company has drawn $300,000 from the Credit Facility, which was converted to equity, impacting the cash flow statement [245]. - Amounts due to Alset Inc. at December 31, 2024 and 2023 were$209,614 and $202,645 respectively, classified as current liabilities [275]. - A debt of$300,000 due to Alset Inc. was converted into 476,190 shares at a price of $0.63 per share on September 24, 2024 [278]. Impairments and Write-offs - The company recorded an impairment loss on goodwill of$323,864 for the year ended December 31, 2023, with no such loss reported in 2024 [171]. - As of December 31, 2024, the company recorded an impairment of 14,205 related to its investment in Ideal Food & Beverage Pte. Ltd. [270]. - The impairment loss on goodwill for 2024 was 323,864, indicating a potential decline in asset value [175]. - The company ceased operations of its subsidiary Alset F&B (PLQ) Pte. Ltd. in Q2 2024, resulting in a write-off of $5,878 in fixed assets [198].