PART I. FINANCIAL INFORMATION Financial Statements The unaudited condensed consolidated financial statements for the six months ended June 30, 2024, reflect a developmental stage company with minimal revenue, significant operating losses, and heavy reliance on debt and equity financing, raising going concern doubts Condensed Consolidated Balance Sheets As of June 30, 2024, total assets increased to $12.65 million from $9.56 million at year-end 2023, while total liabilities rose to $10.64 million from $7.67 million, and the accumulated deficit worsened to $(12.17) million Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | June 30, 2024 ($) | Dec 31, 2023 ($) | | :--- | :--- | :--- | | Total Assets | 12,654,237 | 9,559,966 | | Goodwill | 1,810,787 | 22,210 | | Intangible assets | 538,769 | - | | Total Liabilities | 10,636,074 | 7,672,189 | | Short term notes payable, net | 8,425,937 | 6,810,897 | | Contingent consideration liability | 945,000 | - | | Total Stockholder's Equity | 2,018,163 | 1,887,777 | | Accumulated deficit | (12,167,009) | (7,130,547) | Condensed Consolidated Statements of Operations For the six months ended June 30, 2024, the company reported its first sales revenue of $91,978, but operating expenses surged to $3.50 million, resulting in a widened net loss of $(5.04) million from $(1.69) million year-over-year Statement of Operations Summary (Unaudited) | Metric | Three Months Ended June 30, 2024 ($) | Three Months Ended June 30, 2023 ($) | Six Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2023 ($) | | :--- | :--- | :--- | :--- | :--- | | Sales | 42,162 | - | 91,978 | - | | Operating Loss | (902,973) | (496,464) | (3,404,649) | (1,217,376) | | Interest Expense | (1,065,818) | (291,456) | (1,631,814) | (475,046) | | Net Loss | (1,968,791) | (787,920) | (5,036,463) | (1,692,422) | | Net Loss Per Share (Basic & Diluted) | (0.13) | (787.92) | (0.37) | (1,692.42) | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2024, net cash used in operating activities was $(1.27) million, an improvement from $(2.29) million in 2023, while net cash provided by financing activities was $1.32 million, resulting in a slight increase in the cash balance to $24,238 Cash Flow Summary for Six Months Ended June 30 (Unaudited) | Cash Flow Activity | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (1,270,494) | (2,289,957) | | Net cash used in investing activities | (30,820) | (40,879) | | Net cash provided by financing activities | 1,322,316 | 3,412,559 | | Net change in cash | 21,002 | 1,081,723 | | Cash – end of period | 24,238 | 1,082,443 | Notes to Condensed Consolidated Financial Statements The notes detail the company's business focus on real estate and new prop-tech/AI ventures, highlighting a significant 'Going Concern' issue due to recurring net losses and dependency on extensive financing arrangements and acquisitions - The company's business focus includes real property development, an AI-powered real estate marketplace (Majestic World Holdings), and an AI-powered personal assistant (MyVONIA)10 - The company has incurred net losses since its inception in 2021, raising substantial doubt about its ability to continue as a going concern, relying on financing and strategic monetization of properties to fund operations11 - On February 7, 2024, the company acquired Majestic World Holdings LLC for 500,000 shares of restricted stock and $500,000 in cash, plus a 50% profit-sharing agreement for five years, adding $1.81 million in goodwill6872 - On June 6, 2024, the company acquired the AI technology MyVONIA for up to 500,000 shares of common stock (200,000 issued at closing), treated as an asset acquisition75 - Subsequent to the quarter end, in August 2024, the company entered into a major financing agreement with Arena Investors for up to $10.28 million in secured convertible debentures and a separate equity line of credit (ELOC) for up to $50 million108132 Management's Discussion and Analysis of Financial Condition and Result of Operations Management discusses the company's strategic shift to include prop-tech and AI acquisitions alongside real estate development, highlighting minimal revenue, a significant net loss of $(5.0) million, and heavy reliance on complex debt and equity financing, raising substantial doubt about its going concern ability Overview The company's business model focuses on acquiring and developing green real estate projects, expanding in 2024 into prop-tech and AI through acquisitions of MWH and MyVONIA, while also strategically monetizing existing real estate holdings - The company's business focus is on direct acquisition and investment in properties for future development into green single or multi-family projects151 - In 2024, the company acquired a majority interest in prop-tech company Majestic World Holdings LLC (MWH) and purchased the AI technology MyVONIA153 - The company plans to strategically monetize its real estate holdings in 2024 and has entered into agreements to sell its St. Mary's and Lago Vista sites152 Results of Operations For the six months ended June 30, 2024, the company reported its first sales revenue of $91,978, but the net loss increased significantly to $(5.04) million from $(1.69) million, primarily due to a surge in payroll and related expenses, including $1.93 million in stock-based compensation, and higher interest expense Comparison of Operations for the Six Months Ended June 30 | Item | 2024 ($) | 2023 ($) | Change ($) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Sales | 91,978 | - | +91,978 | New lines of business from 2024 acquisitions | | Payroll & Related Expenses | 2,611,732 | 670,098 | +1,941,634 | Primarily due to $1.93M in stock-based compensation | | Other Operating Expenses | 884,895 | 547,278 | +337,617 | Increased professional and consulting fees related to being a public company | | Interest Expense | 1,631,814 | 475,046 | +1,156,768 | Increase in the balance of notes payable | | Net Loss | (5,036,463) | (1,692,422) | (3,344,041) | Higher operating and interest expenses | Liquidity and Capital Resources The company faces significant liquidity challenges with a cash balance of only $24,238 and a history of net losses, relying heavily on complex debt and equity financing arrangements, which raises substantial doubt about its ability to continue as a going concern - The company has a cash balance of $24,238 as of June 30, 2024, and incurred a net loss of $5.04 million for the six months then ended, raising substantial doubt about its ability to continue as a going concern247 - The company is heavily reliant on external financing, funding operations through bridge notes, project-level financing, and issuances of equity and debt securities, including multiple agreements with Peak One and a new agreement with Arena Investors247254255 - The company has an Equity Purchase Agreement (ELOC) with Peak One, allowing it to sell up to $10 million in common stock, with approximately $9.24 million remaining available257 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, the registrant is not required to provide the information under this item272 Controls and Procedures Management concluded that the company's disclosure controls and procedures were ineffective as of June 30, 2024, due to a material weakness in the design of management review controls over financial reporting, despite which the financial statements are fairly presented - Management concluded that as of June 30, 2024, the company's disclosure controls and procedures were ineffective at a reasonable assurance level273 - A material weakness was identified relating to the ineffective design of management review controls over reports and analyses from outside consultants used in the financial reporting process274 - Despite the material weakness, management concluded that the financial statements for the quarter ended June 30, 2024, are presented fairly in all material respects in conformity with GAAP275 PART II. OTHER INFORMATION Legal Proceedings The company is not currently involved in any legal proceedings, though it may be subject to claims arising in the normal course of business - The company is not currently involved in any legal proceedings96278 Risk Factors The company highlights several material risks, including substantial doubt about its going concern ability, a material weakness in internal controls, and the risk of Nasdaq delisting due to non-compliance with listing requirements - Auditors have expressed substantial doubt about the company's ability to continue as a going concern due to a history of limited revenue and significant net losses280 - A material weakness in internal control over financial reporting was identified as of June 30, 2024, which could lead to material errors in financial statements281282 - The company is at risk of being delisted from Nasdaq for failing to meet the minimum $2.5 million stockholders' equity requirement and its stock trading below the $1.00 minimum bid price285286288 Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities during the quarter ended June 30, 2024, beyond those previously disclosed in SEC filings - No unregistered sales of equity securities occurred during the quarter ended June 30, 2024, other than those previously disclosed in SEC filings293 Other Information During the second quarter of 2024, no directors or executive officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the second quarter of 2024294 Exhibits This section lists all exhibits filed with the Form 10-Q, including various agreements related to financing, acquisitions, and certifications by the CEO and CFO
SG DevCo(SGD) - 2024 Q2 - Quarterly Report