Venu Holding Corp(VENU) - 2025 Q1 - Quarterly Report

Financial Performance - Total revenues for Q1 2025 were $3,499,159, a decrease of 11.2% from$ 3,939,743 in Q1 2024[20] - Net loss for Q1 2025 was $19,432,750, compared to a net loss of$ 15,816,019 in Q1 2024, representing a 23.5% increase in losses[20] - Operating costs increased significantly to $22,041,523 in Q1 2025, up from$ 16,906,528 in Q1 2024, marking a 30.5% rise[20] - The company reported a significant increase in general and administrative expenses, which rose to $6,740,311 in Q1 2025 from$ 4,174,817 in Q1 2024, a 61.3% increase[20] - Equity compensation expenses also increased to $11,340,620 in Q1 2025, compared to$ 9,565,554 in Q1 2024, representing an 18.6% rise[20] - The net loss for the period ending March 31, 2024, was $(15,598,938), reflecting a significant decrease compared to previous periods[23] - For the three months ended March 31, 2025, the net loss was$ 19,432,750, compared to a net loss of $15,816,019 for the same period in 2024, representing a 23% increase in losses[25] - Net cash used in operating activities was$ 9,036,985 for Q1 2025, significantly higher than $2,711,868 in Q1 2024, indicating a 233% increase in cash outflow[25] Assets and Liabilities - Cash and cash equivalents decreased to$ 24,663,106 as of March 31, 2025, down from $37,969,454 as of December 31, 2024, a decline of 34.9%[17] - Total assets increased to$ 212,882,187 as of March 31, 2025, compared to $178,417,515 as of December 31, 2024, reflecting a growth of 19.3%[17] - Total liabilities rose to$ 73,550,166 as of March 31, 2025, up from $47,600,277 as of December 31, 2024, an increase of 54.5%[17] - The company’s accumulated deficit increased to$ (65,424,938) as of March 31, 2025, compared to $(47,361,208) as of December 31, 2024, indicating a worsening financial position[17] - As of March 31, 2025, total equity amounted to$ 139,332,021, with an accumulated deficit of $(65,424,938)[23] Cash Flow and Investments - Cash flows from investing activities totaled$ 24,048,942 in Q1 2025, compared to $8,946,836 in Q1 2024, reflecting a 168% increase in cash used for investments[25] - The company made an investment of$ 1,999,999 in EIGHT Brewing during Q1 2025[25] - Proceeds from the sale of non-controlling interest equity were $15,967,250 in Q1 2025, compared to$ 10,375,000 in Q1 2024, representing a 54% increase[25] - The company accepted cash deposits of $3,431,250 for fractional ownership of Luxe FireSuites, with total investments of$ 13,720,000 recorded as of March 31, 2025[133] Expansion Plans - The company plans to open Roth's Seafood and Chophouse, LLC in fall 2025, which is adjacent to the Ford Amphitheater[45] - The Company plans to open the Sunset amphitheater in McKinney, TX, in Q3 2026 and the Sunset amphitheater in El Paso, TX, in Q4 2026, expanding its operational footprint[50][51] - The company is focusing on market expansion into new areas such as Oklahoma and Texas, with plans for new venues while not anticipating operational profits until these venues are opened[197] - The Company plans to develop a mid-size indoor music venue and a full-size restaurant in Centennial, Colorado, with the acquisition expected to close around July 1, 2025[145] Equity and Financing - The company issued 2,008,750 shares, resulting in an increase of $20,087,500 in equity[23] - The Company completed a private placement offering in 2024, selling 3,300,341 shares of Common Stock for gross proceeds of$ 32,059,550[130] - An initial public offering on November 26, 2024, generated gross proceeds of $12,000,000 from the sale of 1,200,000 shares at$ 10.00 per share[131] - The Company issued a $6,000,000 principal amount convertible promissory note on February 28, 2025, with a 12% annual interest rate[116] - The Company issued two convertible promissory notes totaling$ 6,000,000 on April 4, 2025, with a 12% annual interest rate[144] Operational Challenges - The Company incurred negative cash flows from operations for both the three months ended March 31, 2025, and 2024, raising concerns about operational sustainability[60] - The Company has not recognized any impairment losses during the periods ending March 31, 2025, and March 31, 2024, indicating stable asset valuations[72] - The company is evaluating the impact of ASU No. 2024-03, which requires expanded expense disclosures, to be adopted for fiscal years commencing after December 15, 2026[99] Revenue Generation - Venu generated total revenue of $3,299,226 for the three months ended March 31, 2025, with$ 2,044,916 (58%) from Restaurant Operations, $1,264,910 (36%) from Event Operations, and$ 189,333 (5%) from Amphitheater Operations[167][169][170] - The Ford Amphitheater, which opened in August 2024, has a capacity of 8,000 and includes 92 VIP firepit suites accommodating a total of 736 guests[158] - Venu's partnership with AEG for the operation of Ford Amphitheater is expected to enhance revenue through ticket sales, venue rentals, and sponsorship sales[170] Cost Management - Total advertising expenses increased to approximately $1,494,456 for Q1 2025, up from$ 713,125 in Q1 2024, representing a growth of 109%[79] - The company experienced a significant increase in rental costs, which rose by $67,919 or 23% during the three months ended March 31, 2025, compared to the same period in 2024[182] - Depreciation and amortization expenses for property and equipment were$ 1,358,685 for the three months ended March 31, 2025, compared to $589,784 for the same period in 2024, indicating a significant increase of 130%[101]