Financial Performance - The company's total revenues for the three months ended September 30, 2024, were $nil, indicating no revenue generation during this period[209]. - The loss from operations for the three months ended September 30, 2024, was $1,093,476, a reduction of 31.5% from the loss of $1,596,340 in the prior year[209]. - The net loss for the three months ended September 30, 2024, was $3,839,333, which represents an increase of 8.7% compared to the net loss of $3,530,760 for the same period in 2023[209]. - The company's net loss for the three months ended September 30, 2024, was approximately $3.8 million, an increase of 8.7% from approximately $3.5 million for the same period in 2023[213]. - Loss from continuing operations for the nine months ended September 30, 2024, was approximately $11.6 million, an increase of 635.8% from approximately $1.6 million for the same period in 2023[219]. - Net loss for the nine months ended September 30, 2024, was approximately $11.5 million, compared to approximately $3.7 million for the same period in 2023[240]. Operating Expenses - Total operating expenses decreased by 31.5% to $1,093,476 for the three months ended September 30, 2024, compared to $1,596,340 for the same period in 2023[209]. - Operating expenses for the three months ended September 30, 2024, increased to approximately $7.4 million, a rise of 295.3% from approximately $1.9 million for the same period in 2023[214]. - Selling and marketing expenses surged to approximately $2.9 million for the three months ended September 30, 2024, compared to approximately $nil for the same period in 2023[210]. - General and administrative expenses rose by approximately $2.5 million, from approximately $1.6 million for the three months ended September 30, 2023, to approximately $4.3 million for the same period in 2024, marking an increase of 132.1%[214]. - Research and development expenses increased to approximately $0.7 million for the nine months ended September 30, 2024, compared to approximately $nil for the same period in 2023[217]. Impairment and Other Losses - The company reported a significant other-than-temporary impairment loss of $2,756,986 for the three months ended September 30, 2024[209]. - The company recognized impairment losses of $2.8 million for the nine months ended September 30, 2024, related to software copyrights[227]. - The total other income (expenses) for the three months ended September 30, 2024, was approximately $(4.2) million, a decrease of 2964.7% from $147,018 for the same period in 2023[214]. - Other income decreased by approximately $4.4 million during the nine months ended September 30, 2024, compared to $147,018 for the same period in 2023[218]. Cash Flow and Financing - Net cash used in operating activities for the nine months ended September 30, 2024, was approximately $5.3 million, a decrease from $6.5 million for the same period in 2023[240]. - Net cash used in investing activities was approximately $0.7 million for the nine months ended September 30, 2024, down from approximately $5.0 million in 2023[241]. - Net cash provided by financing activities was approximately $0.8 million for the nine months ended September 30, 2024, a decrease of approximately $11.9 million from $12.7 million in 2023[242]. - The Company received a total of $309,500 in loans from the CEO for working capital purposes, with loans due between September 2025 and October 2025[235]. - The Company plans to raise additional debt or equity capital to fund future operations, with no assurance of obtaining sufficient funds[236]. Strategic Initiatives - The company aims to generate revenue from service revenue and advertising from digital human creation, product sales from social live streaming e-commerce, and virtual paid gifts from live streaming interactive gaming[197]. - The company is focusing on expanding its market presence through social media and enhancing its digital human technology applications in various sectors[207]. - The company has invested in Shanghai Xianzhui, increasing its equity interest to 73.33% as of September 30, 2024[200]. - The company entered into a software purchase agreement for $1,248,000, to be paid with 1,560,000 shares of common stock, to enhance its AI business[205]. Risk Factors - The Company assesses that current working capital, along with the CEO's financial support, will be sufficient to meet obligations for the next 12 months[236]. - The Company is exposed to inflation risk, which could impair operating results if raw material and overhead costs increase significantly[250]. - The Company has implemented cost-cutting measures to reduce operating expenditures and loss[236]. - The company received a notice from Nasdaq regarding non-compliance with the minimum bid price requirement, but later regained compliance[203][204].
GD Culture Group(GDC) - 2024 Q3 - Quarterly Report