Chanson International (CHSN) - 2024 Q2 - Quarterly Report

Financial Performance - Revenue for the six months ended June 30, 2024, was $7,542,682, a decrease of 14.4% compared to$ 8,811,287 for the same period in 2023[8] - Gross profit for the same period was $3,127,275, down 27.8% from$ 4,332,571 in 2023[8] - Net income for the six months ended June 30, 2024, was $23,412, compared to$ 284,760 in 2023, reflecting a significant decline[8] - For the six months ended June 30, 2024, net revenue was $4,246,441, a decrease of 6.9% compared to$ 4,562,762 for the same period in 2023[39] - Net income for the six months ended June 30, 2024, was $552,045, down 54.5% from$ 1,213,299 in the prior year[39] - Total income before provision for income taxes for the six months ended June 30, 2024, was $88,277, a decrease from$ 287,640 in 2023[162] Assets and Liabilities - Total assets as of June 30, 2024, increased to $38,723,717 from$ 38,434,296 as of December 31, 2023[6] - Total liabilities rose to $26,669,742 as of June 30, 2024, compared to$ 26,419,940 at the end of 2023[6] - As of June 30, 2024, total assets amounted to $15,685,520, an increase of 17.0% from$ 13,403,468 as of December 31, 2023[41] - Current liabilities increased to $9,092,890 as of June 30, 2024, compared to$ 7,730,323 as of December 31, 2023, reflecting a rise of 17.6%[41] - The Company had total assets of $21,951,991 as of June 30, 2024, down from$ 25,479,568 as of December 31, 2023[189] Cash Flow and Liquidity - Cash and cash equivalents increased to $4,107,830 from$ 1,481,302, indicating improved liquidity[5] - Cash provided by operating activities increased to $806,144 for the period ending June 30, 2024, compared to$ 610,154 for the same period in 2023, reflecting a growth of about 32.2%[17] - Total cash and cash equivalents increased by $2.6 million to$ 4.1 million as of June 30, 2024, compared to $1.5 million as of December 31, 2023[110] - The company has not experienced any losses in its cash accounts and believes the risk of bank failure is remote[100] Operating Expenses and Cost Management - Operating expenses decreased to$ 3,687,404 for the six months ended June 30, 2024, down from $4,218,711 in 2023, showing cost management efforts[8] - The company incurred total operating lease expenses of$ 1,708,117 for the six months ended June 30, 2024, compared to $1,734,513 for the same period in 2023, a decrease of 1.5%[131] Shareholder and Equity Information - The balance of Class A ordinary shares as of June 30, 2024, was$ 6,755,319, compared to $6,450,000 as of June 30, 2023, showing an increase of approximately 4.7%[15] - The Company has 44,000,000 authorized Class A Ordinary Shares, with 6,755,319 shares issued and outstanding as of June 30, 2024[178] Taxation and Compliance - The company's subsidiary in the PRC was subject to a 25% income tax rate for the six months ended June 30, 2024, compared to a reduced rate of 5% for the same period in 2023[160] - The company did not generate any assessable profits in Hong Kong for the six months ended June 30, 2024, and thus made no provision for Hong Kong profits tax[157] - The company's deferred tax assets were fully offset by a valuation allowance of$ 3,182,120 as of June 30, 2024, indicating uncertainty in future earnings[169] Future Outlook and Strategic Initiatives - The company continues to focus on product development and market expansion strategies to enhance future growth prospects[8] - Management anticipates revenue and net income to increase in the second half of fiscal year 2024 compared to the same period last year[111] - The company expects to open five additional stores in the PRC in fiscal year 2024[111] Other Financial Metrics - The company recorded interest income of $44,877 for the six months ended June 30, 2024, compared to$ 21,452 for the same period in 2023, an increase of 109.5%[123] - Investment income from long-term debt investment was $359,014 for the six months ended June 30, 2024, compared to$ 171,616 for the same period in 2023, an increase of 109.5%[142]