Core Viewpoint - Society Pass Incorporated (SOPA) reported a quarterly loss of $0.48 per share, which was better than the Zacks Consensus Estimate of a loss of $0.61, marking an earnings surprise of 21.31% [1] - The company’s revenues for the quarter ended September 2024 were $1.68 million, missing the Zacks Consensus Estimate by 32.01% and down from $2.27 million a year ago [2] Financial Performance - The company has surpassed consensus EPS estimates two times over the last four quarters [2] - The stock has lost approximately 78.9% since the beginning of the year, contrasting with the S&P 500's gain of 24.7% [3] Future Outlook - The earnings outlook for Society Pass Incorporated is mixed, with the current consensus EPS estimate for the coming quarter at -$0.44 on revenues of $3.17 million, and -$2.84 on revenues of $9.16 million for the current fiscal year [7] - The company currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Technology Services industry, to which Society Pass Incorporated belongs, is currently in the top 25% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Another company in the same industry, Duos Technologies Group, Inc. (DUOT), is expected to report a quarterly loss of $0.25 per share, with revenues projected to be $2.8 million, reflecting an 83% increase from the year-ago quarter [9][10]

Revenue Performance - Revenue for the three months ended September 30, 2024, was $1,675,894, a decrease of 26.1% from $2,269,066 in the same period of 2023[308]. - Revenue for the nine months ended September 30, 2024, was $5,233,483, down 19.5% from $6,498,878 in the same period of 2023[308]. - Revenue from the Lifestyle sector for the three months ended September 30, 2024, was $4,931, a significant decline from $87,201 for the same period in 2023, representing a decrease of approximately 94.4%[360]. - For the nine months ended September 30, 2024, revenue in the Lifestyle sector was $29,360, down from $456,972 in the same period in 2023, indicating a decrease of approximately 93.6%[360]. - Revenue from grocery and food delivery services was $0 for the three months ended September 30, 2024, compared to $54,762 in 2023, marking a 100% decrease[368]. - For the nine months ended September 30, 2024, grocery and food delivery revenue was $0, down from $88,847 in 2023, also a 100% decline[368]. - Telecommunications revenue for the three months ended September 30, 2024, was $106, a decrease of 96.4% from $2,977 in 2023[369]. - For the nine months ended September 30, 2024, telecommunications revenue was $4,849, down 79.5% from $23,648 in 2023[370]. - Digital marketing revenue for the three months ended September 30, 2024, was $1,461,480, compared to $1,784,695 in 2023, reflecting an 18.1% decrease[379]. - For the nine months ended September 30, 2024, digital marketing revenue was $4,542,073, slightly down from $4,579,429 in 2023, a decrease of 0.8%[379]. Operating Expenses and Losses - Gross income for the three months ended September 30, 2024, was $365,646, compared to $562,564 in the same period of 2023, reflecting a decrease of 35.0%[308]. - Total operating expenses for the three months ended September 30, 2024, were $1,540,260, a significant reduction from $4,705,069 in the same period of 2023[308]. - Net loss for the three months ended September 30, 2024, was $1,380,578, compared to a net loss of $3,918,046 in the same period of 2023, indicating an improvement[308]. - The net loss for Q3 2024 was $1,380,578, a reduction from $3,918,046 in Q3 2023, primarily due to decreased G&A expenses[318]. - For the three months ended September 30, 2024, the net loss attributable to Society Pass Incorporated was $1,377,885, compared to a net loss of $3,861,929 for the same period in 2023, indicating an improvement of approximately 64.3%[419]. - The net loss per share for the nine months ended September 30, 2024, was $2.25, a significant improvement from $6.70 for the same period in 2023[419]. Cash and Financing Activities - As of September 30, 2024, cash and cash equivalents totaled $4,220,371, an increase from $3,628,670 at the end of 2023[319][320]. - Net cash used in operating activities for the nine months ended September 30, 2024, was $1,178,148, significantly lower than $9,817,965 for the same period in 2023[324][325]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was $1,786,943, compared to a net cash outflow of $650,525 in 2023[329]. - The company expects to continue relying on cash generated through financing for operations and future acquisitions[323]. Acquisitions and Market Operations - The Nusatrip acquisition has onboarded over 1.2 million registered users and connected with over 80 million unique visitors[300]. - The company has made several acquisitions to expand its e-commerce ecosystem, including online grocery and food delivery platforms in the Philippines and Vietnam[288][289]. - The acquisition of NusaTrip Group expanded the Company's reach into the Southeast Asian travel industry, with over 1.2 million registered users and connections to over 80 million unique visitors[358]. - The company scaled back operations in the food and beverage delivery market in 2024[293]. - The company’s telecommunications platform, Gorilla, ceased local mobile data service operations to refocus on overseas internet data[297]. Cost Management - Cost of revenue decreased to $1,310,248 in Q3 2024 from $1,706,502 in Q3 2023, and for the nine months, it decreased from $4,672,918 to $3,910,883[311]. - Sales and marketing expenses decreased significantly to $40,263 in Q3 2024 from $236,874 in Q3 2023, reflecting a strategic redesign[314]. - General and administrative expenses dropped to $1,486,362 in Q3 2024 from $4,455,546 in Q3 2023, attributed to improved cost control[316]. - Advertising expense for the nine months ended September 30, 2024, was $311,096, compared to $466,252 for the same period in 2023, reflecting a decrease of approximately 33.3%[401]. Assets and Liabilities - As of September 30, 2024, the right of use asset recorded by the company was $917,836, down from $1,407,956 as of December 31, 2023, indicating a decrease of approximately 34.7%[426]. - The Company reported no allowance for doubtful accounts as of September 30, 2024, indicating effective credit management and collection practices[343]. - Inventories decreased to $294,487 as of September 30, 2024, from $431,483 as of December 31, 2023, reflecting a reduction of approximately 31.7%[344]. - Contract liabilities increased to $1,326,384 on September 30, 2024, from $1,265,753 on December 31, 2023, indicating a growth of 4.8%[393]. - The Company has uninsured bank deposits of $3,989,977 as of September 30, 2024, with a previous amount of $3,262,161 as of December 31, 2023, indicating an increase of approximately 22.3%[340]. Regulatory and Compliance - The Company follows ASC 850 for related party disclosures, which includes affiliates, management, and other parties that can significantly influence operations[429]. - The Company assesses loss contingencies related to legal proceedings and unasserted claims, accruing estimated liabilities when probable and estimable[433]. - The Company maintains disclosure controls and procedures but concluded they are not effective at the reasonable assurance level[445]. - There were no changes in the Company's internal control over financial reporting that materially affected its effectiveness during the period ended September 30, 2024[446]. - The Company does not anticipate that ongoing legal proceedings will have a material effect on its financial condition or results of operations[448]. Future Outlook and Changes - The company is evaluating the impact of ASU No. 2023-01 on its consolidated financial statements, effective for fiscal years beginning after December 15, 2023[440]. - ASU No. 2023-07, effective after December 15, 2024, aims to improve reportable segment disclosures, which the Company is currently evaluating[442]. - ASU No. 2023-09, effective after December 15, 2024, requires additional disclosures for income tax reconciliations, which the Company is assessing[443].

Group 1 - Society Pass Incorporated (SOPA) reported a quarterly loss of $0.73 per share, which was better than the Zacks Consensus Estimate of a loss of $0.84, and an improvement from a loss of $1.80 per share a year ago, resulting in an earnings surprise of 13.10% [1] - The company posted revenues of $1.71 million for the quarter ended June 2024, missing the Zacks Consensus Estimate by 26.57%, and a decline from year-ago revenues of $2.19 million [2] - Society Pass Incorporated shares have decreased by approximately 76.5% since the beginning of the year, contrasting with the S&P 500's gain of 16.4% [3] Group 2 - The earnings outlook for Society Pass Incorporated is mixed, with the current consensus EPS estimate for the coming quarter at -$1.05 on revenues of $2.93 million, and -$3.34 on revenues of $10.92 million for the current fiscal year [7] - The Zacks Industry Rank indicates that the Technology Services sector is currently in the top 29% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8]

Revenue Performance - Revenue for the three months ended June 30, 2024, was $1,710,510, a decrease of 21.7% compared to $2,187,232 for the same period in 2023[249]. - Revenue for the six months ended June 30, 2024, was $3,557,589, down 16.0% from $4,229,812 in the same period of 2023[249]. - The decrease in revenue was primarily due to reduced sales from the travel vertical, attributed to platform system upgrades and increased competition[249]. - Revenue for the three months ended June 30, 2024, was $963,208, representing a 56.31% increase compared to $1,074,406 for the same period in 2023[250]. - Revenue from the Lifestyle sector for the three months ended June 30, 2024, was $3,701, a significant decrease from $57,407 in the same period of 2023[288]. - For the six months ended June 30, 2024, the Company generated $0 in revenue from telecommunications, compared to $88,847 in the same period of 2023, representing a decline of 100%[293]. - During the three months ended June 30, 2024, telecommunications revenue was $177, a decrease of 97.2% from $6,369 in the same period of 2023[295]. - For the six months ended June 30, 2024, the Company generated $3,080,593 from online ticketing and reservation services, an increase of 10.3% from $2,794,734 in the same period of 2023[301]. - The Company’s revenue from hotel technology platform software services for the six months ended June 30, 2024, was $6,217, a significant increase from $1,142 in the same period of 2023[308]. Operating Expenses and Losses - Operating expenses for the three months ended June 30, 2024, totaled $2,619,499, a decrease from $3,992,972 in the same period of 2023[249]. - The net loss for the three months ended June 30, 2024, was $1,943,754, compared to a net loss of $3,309,230 for the same period in 2023[249]. - The company has scaled back operations in the food and beverage delivery market in 2024 to refocus on its core business areas[235]. - The company incurred a net loss of $1,943,754 for the three months ended June 30, 2024, an improvement from a net loss of $3,309,230 for the same period in 2023[257]. - For the six months ended June 30, 2024, the net loss attributable to Society Pass Incorporated was $4,778,268, down from $8,610,185 in the same period of 2023, reflecting a 44.5% decrease[331]. - The net loss per share for the three months ended June 30, 2024, was $0.73, compared to $1.77 for the same period in 2023, indicating a 58.8% reduction in loss per share[329]. - The net loss per share for the six months ended June 30, 2024, was $1.91, a significant decrease from $4.67 in the same period of 2023, representing a 59.0% improvement[331]. Strategic Acquisitions and Business Expansion - The company has made several strategic acquisitions, including 100% equity interests in New Retail Experience Incorporated and Dream Space Trading Company Limited, enhancing its online grocery and food delivery services in the Philippines and Vietnam[231]. - The Nusatrip acquisition has expanded the company's presence in the Southeast Asian travel industry, with over 1.2 million registered users and connections to over 80 million unique visitors[241]. - The acquisition of NusaTrip Group expanded the Company's reach into the SEA travel industry, with over 1.2 million registered users and connections to over 80 million unique visitors[286]. Financial Position and Cash Flow - As of June 30, 2024, cash and cash equivalents totaled $833,937, with accounts receivable at $776,181[258]. - For the six months ended June 30, 2024, net cash used in operating activities was $3,226,057, a decrease from $6,886,251 for the same period in 2023[260]. - The company expects to continue relying on cash generated through financing activities to support its operations and growth strategy[259]. - As of June 30, 2024, cash and cash equivalents amounted to $833,937, a decrease from $3,628,670 as of December 31, 2023[272]. - Restricted cash was reported at $53,900 as of June 30, 2024, down from $95,312 as of December 31, 2023[273]. Cost Management - The cost of revenue for the three months ended June 30, 2024, was $1,246,205, down from $1,610,073 in 2023, indicating consistent cost management[253]. - General and administrative expenses decreased significantly to $2,461,968 for the three months ended June 30, 2024, from $3,879,049 in 2023, due to effective cost control measures[256]. - The company recorded a gross income of $956,954 for the six months ended June 30, 2024, compared to $1,263,396 for the same period in 2023, reflecting challenges in maintaining gross margins[254]. Shareholder Information - The weighted average common shares outstanding for the three months ended June 30, 2024, was 2,656,697, an increase from 1,878,102 in the same period of 2023[329]. - The weighted average common shares outstanding for the six months ended June 30, 2024, was 2,498,998, compared to 1,842,013 in the same period of 2023[331]. - The Company has issued 454,434 common stock equivalents, which were excluded from the computation of diluted weighted-average shares outstanding due to their antidilutive impact[332]. Accounting Standards and Contingencies - The Company adopted ASC Topic 842 for leases, recognizing operating lease right-of-use assets and liabilities based on the present value of lease payments[333]. - The Company follows ASC Topic 718 for share-based compensation, measuring and recognizing compensation expense for all share-based payment awards at grant-date fair value[338]. - The Company follows ASC 450 for accounting contingencies, assessing potential losses based on future events[344]. - Management believes that current contingencies will not materially affect the Company's financial position, but future changes could alter this assessment[346]. - The Company measures fair value of financial instruments according to FASB standards, prioritizing quoted market prices in active markets[350]. - The Company is evaluating the impact of ASU No. 2023-01 on its financial statements, effective after December 15, 2023[351]. - ASU No. 2023-07, effective after December 15, 2024, will enhance segment expense disclosures for all public entities[352]. - ASU No. 2023-09, effective after December 15, 2024, requires improved disclosures for income tax components and reconciliation[353]. - The Company does not expect other recently issued accounting standards to affect its financial statements[353].

Group 1: NusaTrip.com - NusaTrip.com is undergoing a technical re-platforming to enhance platform stability, improve UI/UX, and integrate with leading payment gateways in Southeast Asia, potentially increasing its market size by up to 800% [1] - The platform will offer linguistic localization for over 700 million users in Southeast Asia, aiming to become a leading travel booking platform by market share by 2026 [1][7] Group 2: Thoughtful Media Group - Thoughtful Media Group plans to launch proprietary technical products to support its Multi-Channel-Network and influencer marketing growth in Southeast Asia [2] - The in-house tech solutions will enable efficient identification and collaboration with Key Opinion Leaders, enhancing campaign effectiveness for brands [2] Group 3: Society Pass Inc. - Society Pass Inc. operates a data-driven e-commerce ecosystem across Southeast Asia, focusing on interconnected verticals such as loyalty, digital media, travel, telecommunications, and lifestyle [3][7] - The company is preparing for the IPOs of its subsidiaries, NusaTrip.com and Thoughtful Media Group, to enhance customer engagement and market reach [7][8] - CEO Raynauld Liang emphasized the commitment to becoming the preferred solutions provider for travel and marketing needs in Southeast Asia [8]

Group 1: Company Overview - Society Pass Inc. operates as a data-driven e-commerce ecosystem across Southeast Asia, including Vietnam, Indonesia, Philippines, Singapore, and Thailand, focusing on interconnected verticals such as loyalty, digital media, travel, telecommunications, and lifestyle [5] Group 2: Upcoming IPOs and Subsidiaries - Society Pass is preparing for the IPOs of its key subsidiaries, NusaTrip.com and Thoughtful Media Group, aimed at enhancing customer engagement and expanding market reach [1][4] - NusaTrip.com is a leading travel platform in Indonesia, undergoing significant upgrades to improve platform stability and user experience, potentially increasing its market size by up to 800% [2] - Thoughtful Media Group plans to launch technical products to support its Multi-Channel-Network and Influencer marketing efforts across Southeast Asia [3] Group 3: Strategic Goals and Future Plans - The company aims to position NusaTrip.com as a leading travel booking platform by market share in Southeast Asia by 2026, with linguistic localization available to over 700 million users [2] - Society Pass is focused on implementing changes that will positively impact business operations, clients, and shareholders [4]

Core Insights - Ascendiant Capital reports Society Pass (NASDAQ: SOPA) fiscal Q4 2023 results with adjusted revenue estimated at $10 million, highlighting strong economic expansion and urbanization as growth drivers [1] - Society Pass plans to spin off two businesses, Thoughtful Media Group Inc and NusaTrip Inc, via IPOs in 2024, which are expected to create significant shareholder value [2] - Ascendiant maintains a BUY rating for Society Pass but has lowered the 12-month price target from $41.25 to $21, indicating a substantial upside potential from the current share price [3] Company Overview - Society Pass Inc., established in 2018, operates a data-driven e-commerce ecosystem across Southeast Asia, focusing on interconnected verticals such as loyalty, digital media, travel, telecommunications, and lifestyle [6] - The company aims to innovate and reshape the digital commerce landscape in the region, serving both consumers and merchants/brands [6] Leadership Commentary - CEO Raynauld Liang expressed enthusiasm regarding Ascendiant's positive growth outlook for Society Pass in 2024, emphasizing the importance of the upcoming IPOs for shareholder value [4] - Liang also mentioned the company's strong financing and compliance with Nasdaq as factors contributing to a positive future outlook [5]

Core Insights - Ascendiant Capital reports Society Pass (NASDAQ: SOPA) fiscal Q4 2023 results with adjusted revenue estimated at $10 million, highlighting strong economic expansion and urbanization as growth drivers [1] - Society Pass plans to spin off two businesses, Thoughtful Media Group Inc and NusaTrip Inc, via IPOs in 2024, which are expected to create significant shareholder value [2] - Ascendiant maintains a BUY rating for Society Pass but has lowered the 12-month price target from $41.25 to $21, indicating a substantial upside potential from the current share price [3] Company Strategy - CEO Raynauld Liang expresses optimism regarding Ascendiant's positive growth outlook for Society Pass in 2024, emphasizing the importance of the upcoming IPOs for shareholder value [4] - Liang also mentions the company's recent strong financing and compliance with Nasdaq, reinforcing confidence in future goals [5] Company Overview - Society Pass Inc., established in 2018, operates a data-driven e-commerce ecosystem across Southeast Asia, focusing on interconnected verticals such as loyalty, digital media, travel, telecommunications, and lifestyle [6]

PART I FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents Society Pass Incorporated's unaudited Q1 2024 condensed consolidated financial statements, detailing balance sheets, operations, and cash flows [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets declined to $13.3 million, liabilities to $10.0 million, and equity to $3.2 million | Balance Sheet Highlights | March 31, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | **Current Assets** | | | | Cash and cash equivalents | $1,619,232 | $3,628,670 | | Total current assets | $5,541,140 | $8,098,635 | | **Total Assets** | **$13,276,105** | **$16,363,174** | | **Current Liabilities** | | | | Total current liabilities | $9,374,608 | $10,486,062 | | **Total Liabilities** | **$10,029,823** | **$11,334,012** | | **Total Equity** | **$3,246,282** | **$5,029,162** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2024 saw total revenue of $1.85 million and a reduced net loss of $2.8 million, driven by lower general and administrative expenses | Income Statement Highlights | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Total revenue | $1,847,079 | $1,966,103 | | Gross income | $492,649 | $686,237 | | General and administrative expenses | ($3,243,671) | ($5,991,886) | | Loss from operations | ($2,891,661) | ($5,450,232) | | **Net Loss** | **($2,839,224)** | **($5,390,213)** | | **Net Loss Per Share (Basic & Diluted)** | **($1.21)** | **($3.00)** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to $2.4 million in Q1 2024, with total cash decreasing by $2.1 million to $1.7 million | Cash Flow Summary | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($2,361,485) | ($4,015,201) | | Net cash used in investing activities | $0 | ($190,061) | | Net cash used in financing activities | ($10,279) | ($541,988) | | **Net Change in Cash and Cash Equivalents** | **($2,050,750)** | **($5,175,395)** | | **Cash at End of Period** | **$1,673,232** | **$13,827,941** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures include a going concern warning, segment revenue breakdown, and subsequent events like a reverse stock split - The company's financial statements have been prepared on a going concern basis, but management has identified substantial doubt about its ability to continue as a going concern due to a net loss of **$2.8 million**, negative operating cash flow of **$2.5 million**, a working capital deficit of **$3.8 million**, and an accumulated deficit of **$102.7 million** as of March 31, 2024[39](index=39&type=chunk) - The company operates in six reportable segments: e-Commerce, Merchant POS, Online grocery and food deliveries, Telecommunication reseller, Digital marketing, and Online ticketing and reservation[126](index=126&type=chunk) - The company is involved in **three litigation cases** with former employees concerning compensation, stock, and alleged misappropriation of intellectual property, with ultimate outcome and potential damages not probable nor estimable at this time[233](index=233&type=chunk)[235](index=235&type=chunk)[236](index=236&type=chunk) - Subsequent to the quarter end, the company effected a **1-for-15 reverse stock split** of its common stock on May 1, 2024, and increased the authorized shares of Series X Super Voting Preferred Stock from **3,500 to 10,000** on May 9, 2024[242](index=242&type=chunk)[244](index=244&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's digital ecosystem strategy, Q1 2024 financial performance, and reliance on future financing for operations and growth - The company is building a digital ecosystem and loyalty platform in Southeast Asia (SEA) through acquisitions, focusing on verticals like lifestyle, telecommunications, digital marketing, and travel[249](index=249&type=chunk)[252](index=252&type=chunk) | Key Operational Data | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Revenue, net | $1,847,079 | $1,966,103 | | Gross income | $492,649 | $686,237 | | General and administrative expenses | ($3,243,671) | ($5,991,886) | | Net Loss | ($2,839,224) | ($5,390,213) | - The decrease in revenue was mainly due to lower sales from the e-commerce platform facing higher competition and the travel vertical experiencing interruptions from a system upgrade, while the improvement in net loss was primarily due to a significant decrease in G&A expenses resulting from cost restructuring and no new acquisition-related costs[267](index=267&type=chunk)[272](index=272&type=chunk)[274](index=274&type=chunk) - The company expects to continue to rely on cash generated through financing from public or private offerings to finance its operations and future acquisitions, but believes it has sufficient liquidity for at least the next year[277](index=277&type=chunk)[281](index=281&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=76&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the company qualifies as a "smaller reporting company" and is therefore not required to provide these disclosures - Disclosure is not required for "smaller reporting companies"[369](index=369&type=chunk) [Controls and Procedures](index=76&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of March 31, 2024, with no material changes to internal controls during the quarter - Based on an evaluation as of the end of the period, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are **not effective** at the reasonable assurance level[370](index=370&type=chunk) - No changes in the company's internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[371](index=371&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=77&type=section&id=Item%201.%20Legal%20Proceedings) The company states that it may be involved in various legal proceedings in the ordinary course of business, with material details in Note 20 - Material legal proceedings are detailed in Note 20, "Commitments and Contingencies," within the financial statements section of this report[374](index=374&type=chunk) [Risk Factors](index=77&type=section&id=Item%201A.%20Risk%20Factors) The company reports that there have been no material changes to the risk factors previously disclosed in its Form 10-K filed on April 15, 2024 - There have been no material changes to the risk factors disclosed in the Company's Form 10-K for the year ended December 31, 2023[375](index=375&type=chunk) [Other Information](index=77&type=section&id=Item%205.%20Other%20Information) This section discloses a corporate action taken after the reporting period, specifically an increase in authorized Series X Super Voting Preferred Stock - On May 9, 2024, the company increased the number of authorized shares of Series X Super Voting Preferred Stock from **3,500 to 10,000**[379](index=379&type=chunk)

PART I [Item 1. Business](index=7&type=section&id=Item%201.%20Business) Society Pass is building a digital ecosystem and loyalty platform in Southeast Asia through strategic acquisitions across various verticals - The company's primary business is building a **digital ecosystem and loyalty platform** in Southeast Asian (SEA) countries through the acquisition and operation of e-commerce platforms and mobile applications[58](index=58&type=chunk)[288](index=288&type=chunk) - The company operates across five main verticals: **loyalty, lifestyle, telecommunications, digital media, and travel**, having scaled back its food and beverage delivery operations in 2023[61](index=61&type=chunk)[318](index=318&type=chunk) - A key growth strategy is the continued **opportunistic acquisition of regional e-commerce companies** to expand service offerings and increase registered consumers and merchants[45](index=45&type=chunk) - The company plans to market its universal **"Society Points" loyalty program** in 2024 to generate additional merchant revenue and create customer loyalty[46](index=46&type=chunk) - The company owns multiple registered trademarks, including **"Society Pass", "SOPA", "Leflair", and "HOTTAB"**, central to its brand identity and intellectual property strategy[52](index=52&type=chunk)[89](index=89&type=chunk) [Item 1A. Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks including limited operating history, capital needs, intense competition, international operations, evolving regulations, and potential Nasdaq delisting - The company has a **limited operating history** in an evolving industry, increasing the risk of failure[54](index=54&type=chunk)[91](index=91&type=chunk) - A failure to **raise additional capital** would materially adversely affect the company's business, financial condition, and results of operations[55](index=55&type=chunk)[93](index=93&type=chunk) - The business is subject to risks from its **international operations in Southeast Asia**, including economic and political instability, currency exchange rate fluctuations, and complex legal environments[185](index=185&type=chunk)[162](index=162&type=chunk)[188](index=188&type=chunk) - The company received a Nasdaq notice on May 25, 2023, for failing to maintain the **minimum $1.00 bid price**, requiring compliance by May 20, 2024, to avoid delisting[205](index=205&type=chunk)[230](index=230&type=chunk) - The founder, Dennis Nguyen, beneficially owns stock providing approximately **52.0% of the voting power**, making the company a "controlled company" with significant influence over corporate matters[211](index=211&type=chunk)[237](index=237&type=chunk)[218](index=218&type=chunk) - As an **"emerging growth company,"** the company is subject to reduced disclosure requirements, potentially making its common stock less attractive to some investors[215](index=215&type=chunk)[242](index=242&type=chunk) [Item 1B. Unresolved Staff Comments](index=30&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved comments from the Securities and Exchange Commission staff - **No unresolved staff comments**[221](index=221&type=chunk) [Item 1C. Cybersecurity](index=30&type=section&id=Item%201C.%20Cybersecurity) The Board of Directors oversees cybersecurity risks, managed daily by the Group Chief Technology Officer, with no material incidents reported to date - The **Board of Directors oversees cybersecurity risk management**, with the audit committee monitoring major financial risk exposures[273](index=273&type=chunk) - The **Group Chief Technology Officer** is primarily responsible for day-to-day cybersecurity risk assessment and management[224](index=224&type=chunk) - The company has not been aware of any cybersecurity threats that have **materially affected** its business strategy, operations, or financial condition[250](index=250&type=chunk)[274](index=274&type=chunk) [Item 2. Properties](index=32&type=section&id=Item%202.%20Properties) The company operates from leased office spaces across Southeast Asia, recording a **$1,411,226** Right-of-Use asset and lease obligation as of December 31, 2023 - The company **does not own any real estate** and leases all its office properties across Singapore, Vietnam, Philippines, Thailand, and Indonesia[275](index=275&type=chunk)[252](index=252&type=chunk) - As of December 31, 2023, the company recorded a **Right-of-Use (ROU) asset and lease obligation of $1,411,226**[275](index=275&type=chunk) [Item 3. Legal Proceedings](index=32&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in three significant New York legal cases, including employment actions by former employees and counterclaims for intellectual property misappropriation - The company is involved in **three pending lawsuits** in the Supreme Court of the State of New York, New York County[252](index=252&type=chunk)[276](index=276&type=chunk) - Former employee Rahul Narain has claims for compensation and stock damages, with a court entering a judgment of **$1,082,078.91** against the company, which is under appeal[277](index=277&type=chunk) - Former employee Thomas O'Connor has claims for salary, expenses, and significant damages related to undelivered stock valued at **$9.9 million**, plus an entity claim for **$8 million** in preferred stock, with the case in discovery[254](index=254&type=chunk) - The company has filed its own lawsuit against former employees Narain and O'Connor, alleging **misappropriation of intellectual property** and other related torts[278](index=278&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business operations - **Not applicable**[257](index=257&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=35&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "SOPA", with **110 stockholders** as of March 31, 2024, and no cash dividends paid or share repurchases in Q4 2023 - The company's common stock trades on the **Nasdaq Capital Market** under the symbol **"SOPA"**[282](index=282&type=chunk) - As of March 31, 2024, there were **110 stockholders of record**[282](index=282&type=chunk) - The company has **never declared or paid cash dividends** and does not anticipate doing so, intending to retain earnings for business operations and expansion[283](index=283&type=chunk) - The company **did not repurchase any equity securities** during the fourth quarter ended December 31, 2023[285](index=285&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In FY2023, revenue increased to **$8.17 million**, net loss reduced to **$18.1 million**, but cash declined to **$3.6 million**, indicating continued reliance on external financing [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "Smaller Reporting Company," the company is not required to provide disclosures for this item - Disclosure for this item is **not required** as the company qualifies as a "Smaller Reporting Company"[469](index=469&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=57&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Audited financial statements for 2023 and 2022 are presented, with the auditor's report highlighting **"going concern" doubt** due to significant net losses and negative operating cash flow [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=119&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting principles, financial disclosure, or auditing scope - **None reported**[969](index=969&type=chunk) [Item 9A. Controls and Procedures](index=119&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of December 31, 2023, management concluded that both disclosure controls and internal control over financial reporting were effective, with no material changes in Q4 2023 - Management concluded that the company's **disclosure controls and procedures were effective** as of the end of the reporting period[970](index=970&type=chunk) - Management assessed and concluded that **internal control over financial reporting was effective** as of December 31, 2023[971](index=971&type=chunk) - There were **no material changes in internal control over financial reporting** during the fourth quarter of 2023[972](index=972&type=chunk) [Item 9B. Other Information](index=119&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - **None**[973](index=973&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=119&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - **Not applicable**[974](index=974&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=120&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section details the company's executive officers and five-member Board of Directors, including its four established committees and adopted Code of Ethics - The report lists executive officers and directors, including **Raynauld Liang (Group CEO)**, **Tan Yee Siong (Group CFO)**, and **Tan Bien Kiat (Vice Chairman of the Board)**[949](index=949&type=chunk)[976](index=976&type=chunk) - The Board of Directors has established an **Audit Committee, a Remuneration Committee, a Nominating and Corporate Governance Committee, and an Executive Committee**[956](index=956&type=chunk) - The company has adopted a **Code of Ethics** applicable to all employees and directors, designed to deter wrongdoing and promote ethical conduct[1008](index=1008&type=chunk) [Item 11. Executive Compensation](index=126&type=section&id=Item%2011.%20Executive%20Compensation) This section details executive compensation for FY2023 and FY2022, including former CEO Dennis Nguyen's **$2.08 million** and current CEO Raynauld Liang's **$755,571** total compensation Summary Compensation Table (2023) | Name and Principal Position | Salary/Bonus ($) | Stock Awards ($) | Option Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | | Dennis Nguyen, Former CEO | 547,500 | — | 1,530,642 | 2,078,142 | | Raynauld Liang, CEO | 310,281 | — | 445,290 | 755,571 | | Tan Yee Siong, CFO | 119,533 | 22,500 | 35,000 | 177,033 | - Dennis Nguyen resigned as CEO on **October 5, 2023**, and entered into a consulting agreement through December 31, 2025[1013](index=1013&type=chunk) - Raynauld Liang was appointed CEO on **October 5, 2023**, with a 5-year employment agreement including an annual base salary of **$600,000** and **250,000 incentive stock options**[994](index=994&type=chunk) Director Compensation (2023) | Name | Fees Paid in Cash ($) | Stock Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | | Tan Bien Kiat | 50,000 | 100,000 | 150,000 | | Jeremy Miller | 50,000 | 100,000 | 150,000 | | Linda Cutler | 50,000 | 100,000 | 150,000 | | John Mackay | 50,000 | 100,000 | 150,000 | [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=128&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of March 31, 2024, founder Dennis Nguyen beneficially owned **55.4%** of total voting stock, primarily via Series X Super Voting Preferred Stock, with **1,188,490 shares** available for future issuance - As of March 31, 2024, there were **37,762,362 shares of common stock outstanding**[1017](index=1017&type=chunk)[1041](index=1041&type=chunk) - Founder and former CEO Dennis Nguyen beneficially owns **94.3% of Series X Super Voting Preferred Stock**, equating to **55.4% of the company's total voting power**[1042](index=1042&type=chunk)[1043](index=1043&type=chunk) - All officers and directors as a group beneficially own **14.9% of the common stock** and **7.7% of the total voting stock**[1042](index=1042&type=chunk) - Under the 2021 Equity Incentive Plan, **1,188,490 securities remained available** for future issuance as of December 31, 2023[1045](index=1045&type=chunk)[1023](index=1023&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=130&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company discloses several related party transactions, primarily involving founder Dennis Nguyen and director Tan Bien Kiat, including a software development agreement and stock issuances - The company entered a software development agreement with CVO Advisors Pte. Ltd., an entity for which former CEO Dennis Nguyen holds a call option, with parties currently in litigation over its exercise[1024](index=1024&type=chunk) - In 2021, entities controlled by director Tan Bien Kiat and former CEO Dennis Nguyen were issued shares of **Series C-1 Preferred Stock**[1047](index=1047&type=chunk)[1025](index=1025&type=chunk) - In August and September 2021, the company issued **3,300 shares of Super Voting Preferred Stock** to Dennis Nguyen and **200 shares** to Raynauld Liang, with each share carrying **10,000 votes**[1048](index=1048&type=chunk) [Item 14. Principal Accountant Fees and Services](index=131&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) The company's independent auditor, Onestop Assurance PAC, billed **$432,237** in total fees for FY2023, a decrease from 2022, with all services subject to Audit Committee pre-approval Accountant Fees (2023 vs. 2022) | Fee Category | 2023 | 2022 | | :--- | :--- | :--- | | Audit fees | $420,737 | $364,600 | | Audit-related fees | $11,500 | $25,000 | | All other fees | $0 | $90,000 | | **Total fees** | **$432,237** | **$479,600** | - The Audit Committee's policy is to **pre-approve all audit and non-audit services** performed by the independent registered public accounting firm[1066](index=1066&type=chunk)[1028](index=1028&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=132&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section provides an index of all exhibits filed with the Annual Report on Form 10-K, including governance documents, material contracts, and required certifications - The report includes an **index of all filed exhibits**, such as governance documents, material contracts, and required certifications[1030](index=1030&type=chunk) - Key exhibits listed include various **share and asset purchase agreements**, employment agreements, and the **2021 Equity Incentive Plan**[1056](index=1056&type=chunk)[1032](index=1032&type=chunk) [Item 16. Form 10-K Summary](index=135&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has elected not to provide a summary for this item - The company has **elected not to include summary information**[1057](index=1057&type=chunk)[1070](index=1070&type=chunk)