Revenue and Cost of Revenue - Revenue decreased by $243,125, or 100%, to $75 for the six months ended June 30, 2024 compared to $243,200 for the same period in 2023, primarily due to the suspension of DISA product sales[90] - Cost of revenue decreased by $127,110, or 69%, to $56,259 for the six months ended June 30, 2024 from $183,369 in 2023, mainly due to reduced DISA deployment costs[91] - Revenues increased by $75 million, representing a 100% growth compared to the previous year[101] Gross Profit and Operating Expenses - Gross profit turned into a loss of $56,184 for the six months ended June 30, 2024, compared to a profit of $59,831 in 2023, primarily due to suspended DISA sales while server expenses continued[92] - Operating expenses increased by $687,058, or 19%, to $4,399,453 for the six months ended June 30, 2024, driven by higher public company costs and software development expenses[95] - Operating expenses increased by $329,201 (26%) to $1,609,883, driven by higher general and administrative expenses and software development costs[102] General and Administrative Expenses - General and administrative expenses surged by $1,676,549, or 217%, to $2,448,256 for the six months ended June 30, 2024, mainly due to public company-related costs[95] - General and administrative expenses rose by $371,150 (80%) to $834,244 due to increased costs related to being a public company[103] Salaries and Wages - Salaries and wages decreased by $1,054,219, or 56%, to $829,307 for the six months ended June 30, 2024, due to staff reductions and lower stock-based compensation[96] - Salaries and wages decreased by $35,938 (7%) to $446,924 due to staff reductions and lower stock-based compensation[103] Research and Development Expenses - Research and development expenses increased by $64,728, or 6%, to $1,121,890 for the six months ended June 30, 2024, driven by investments in next-generation AI platform development[96] - Research and development expenses decreased by $6,011 (2%) to $328,715 due to the elimination of certain software costs[103] - All research and development costs are expensed as incurred, including internal and third-party R&D costs[124] Net Loss and Financial Performance - Net loss widened by $3,163,542, or 59%, to $8,504,362 for the six months ended June 30, 2024 compared to the same period in 2023[89] - The company has a working capital deficiency of $776,256 and total cash of $627,847, raising substantial doubt about its ability to continue as a going concern[106] - Net cash used in operating activities was $4,557,406 for the six months ended June 30, 2024, compared to $1,602,982 in the same period in 2023[109] IPO and Financing Activities - The company completed its IPO on February 26, 2024, raising approximately $5.95 million gross proceeds by offering 1.4 million units at $4.25 per unit[88] - Cash provided by financing activities was $5,187,384, primarily from the sale of common stock units and preferred shares[112] - Current assets increased by $861,157 (6744%) to $873,927, primarily due to the initial public offering[105] - Current liabilities decreased by $6,243,946 (79%) to $1,650,183, mainly due to the settlement of convertible notes and trade liabilities[106] Product Development and Future Plans - The company anticipates launching its improved DISA product in the third quarter of 2024[90] Stock-Based Compensation and Accounting Policies - Stock-based compensation is measured using the fair value-based method and recognized over the vesting period[125] - The Black-Scholes model is used to measure the fair value of stock-based compensation, considering exercise price, expected dividends, volatility, risk-free rate, and expected life of options[126] FASB Updates and Accounting Standards - FASB issued ASU 2020-06, simplifying accounting for convertible instruments, effective for fiscal years beginning after December 15, 2023[127] - The adoption of ASU 2020-06 is not expected to have a material effect on the company's financial statements[128] - FASB issued ASU 2023-07, enhancing segment reporting disclosures, effective for annual periods beginning after December 15, 2023[129] - FASB issued ASU 2023-09, improving income tax disclosures, effective for fiscal years beginning after February 1, 2025[130] - The company does not expect ASU 2023-09 to have a material impact on its financial statements[130] - The company is currently evaluating the impact of ASU 2023-07 on its financial statements and disclosures[129] - As a smaller reporting company, the company is not required to provide certain market risk disclosures[130]
Vocodia Holdings(VHAI) - 2024 Q2 - Quarterly Report