CBL International (BANL) - 2024 Q2 - Quarterly Report

Unaudited Condensed Consolidated Financial Statements This section presents the company's unaudited condensed consolidated financial statements, including balance sheets, income statements, statements of changes in shareholders' equity, cash flows, and detailed explanatory notes for the interim period Unaudited Condensed Consolidated Balance Sheets As of June 30, 2024, total assets increased to $68.2 million from $53.5 million at year-end 2023, driven by a rise in accounts receivable, while total liabilities grew to $44.5 million from $28.2 million, primarily due to increased accounts payable, resulting in a slight decrease in total shareholders' equity from $25.3 million to $23.8 million Condensed Consolidated Balance Sheet Summary (in USD) | Account | June 30, 2024 (Unaudited) | December 31, 2023 (Unaudited) | | :--- | :--- | :--- | | Total Current Assets | $67,130,891 | $52,126,915 | | Total Assets | $68,219,855 | $53,461,908 | | Total Current Liabilities | $44,446,064 | $27,974,389 | | Total Liabilities | $44,546,240 | $28,168,762 | | Total Shareholders' Equity | $23,765,574 | $25,299,675 | Unaudited Condensed Consolidated Statements of Income and Comprehensive Income For the six months ended June 30, 2024, revenue significantly increased to $277.2 million from $192.0 million in the prior year, but gross profit declined to $2.7 million from $4.0 million, leading to an operating loss of $1.4 million and a net loss of $1.6 million, or ($0.06) per share, compared to a net income of $1.2 million, or $0.05 per share, in 2023 Income Statement Summary (in USD) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Revenue | $277,231,636 | $191,955,811 | | Gross Profit | $2,715,618 | $4,005,818 | | (Loss) / Income from Operations | $(1,401,746) | $1,494,747 | | Net (Loss) / Income | $(1,619,531) | $1,153,445 | | Basic and Diluted EPS | $(0.06) | $0.05 | Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity For the six months ended June 30, 2024, total shareholders' equity decreased from $25.3 million to $23.7 million, primarily due to a net loss of $1.6 million, while the number of ordinary shares outstanding remained constant at 25,000,000 Shareholders' Equity Movement - H1 2024 (in USD) | Description | Amount | | :--- | :--- | | Balance as of December 31, 2023 | $25,293,146 | | Net Loss | $(1,619,531) | | Balance as of June 30, 2024 | $23,673,615 | Unaudited Condensed Consolidated Statements of Cash Flows In the first six months of 2024, the company generated $2.3 million in cash from operating activities, a significant improvement from the $7.2 million used in 2023, with minimal investing activities and no financing activities, leading to a $2.3 million increase in cash, ending the period at $9.7 million Cash Flow Summary (in USD) | Cash Flow Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $2,302,241 | $(7,236,872) | | Net Cash from Investing Activities | $(17,415) | $(541,750) | | Net Cash from Financing Activities | $0 | $13,176,716 | | Net Increase in Cash | $2,284,826 | $5,398,094 | | Cash at End of Period | $9,687,716 | $10,430,984 | Notes to the Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations of the company's accounting policies and specific financial statement items, covering business operations, basis of presentation, accounts receivable, derivative instruments, property and equipment, leases, income taxes, revenue by geography, and a significant subsequent private placement event 1. Organization and Principal Business CBL International Limited is a marine fuel logistics company providing one-stop vessel refueling solutions, detailing its corporate structure, 2022 reorganization, and March 2023 Nasdaq Capital Market IPO under the ticker 'BANL' - The Company operates as a marine fuel logistics firm, facilitating vessel refueling between ship operators and fuel suppliers in the Asia Pacific, Europe, and other regions[15] - The company's ordinary shares began trading on the Nasdaq Capital Market on March 23, 2023, under the ticker symbol "BANL" following an IPO of 3,325,000 ordinary shares[18][37] 2. Basis of Presentation, New Accounting Standards, and Significant Accounting Policies The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP, with consistent accounting policies from the 2023 annual financial statements, and the adoption of new standards had no material impact - The financial statements are prepared in accordance with U.S. GAAP for the purpose of filing the Form 6-K interim report[20] - Accounting policies are consistent with the 2023 annual report, and the adoption of new standards effective March 1, 2024, did not have a material impact on the Group's financial statements[42] 3. Accounts Receivable Accounts receivable increased to $38.6 million as of June 30, 2024, from $25.1 million at year-end 2023, with 68.9% concentrated among the top five customers, and $11.6 million of receivables sold under a non-recourse factoring facility, all of which have since been collected Accounts Receivable (in USD) | Date | Total Accounts Receivable | % from Top 5 Customers | | :--- | :--- | :--- | | June 30, 2024 | $38,646,165 | 68.9% | | Dec 31, 2023 | $25,125,851 | 57.7% | - The company sold accounts receivable of $11,632,225 to a bank under a non-recourse factoring arrangement as of June 30, 2024[63] - As of the reporting date, all accounts receivable outstanding as of June 30, 2024 have been collected[44] 4. Derivative Instruments The company uses commodity contracts for risk management, not designated as hedging instruments, with their fair value increasing to $118,055 as of June 30, 2024, from $28,776 at year-end 2023, valued using Level 2 inputs Fair Value of Derivative Assets (in USD) | Date | Total Fair Value | | :--- | :--- | | June 30, 2024 | $118,055 | | Dec 31, 2023 | $28,776 | Notional Values of Commodity Contracts (Metric Tons) | Position | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Long | 4,700 | 16,750 | | Short | 13,120 | 0 | 5. Prepayment and other current assets Prepayments and other current assets totaled $18.2 million as of June 30, 2024, a slight decrease from $19.3 million at year-end 2023, primarily comprising $17.6 million in deposits with suppliers to secure credit lines for marine fuel purchases Prepayment and Other Current Assets Breakdown (in USD) | Component | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Prepayments | $594,475 | $1,686,014 | | Deposit | $17,638,634 | $17,631,175 | | Total | $18,233,109 | $19,317,189 | - Deposits of approximately $17.5 million were placed with suppliers to secure credit lines for purchasing marine fuels[26] 6. Property, Plant and Equipment This note details the company's property, plant, and equipment, with a net book value of $835,513 as of June 30, 2024, primarily consisting of office equipment, motor vehicles, and computer software, along with their respective accumulated depreciation and amortization Property, Plant and Equipment, Net (in USD) | Asset Class | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Office equipment, furniture and fixtures, net | $362,374 | $429,511 | | Motor vehicle, net | $69,117 | $78,332 | | Computer software costs, net | $404,022 | $488,669 | 7. Interest Income and Interest Expense Net interest expense for the first six months of 2024 significantly increased to $227,752 from $116,434 in 2023, driven by higher interest expense on the factoring arrangement, which grew to $238,845, while unused financing facilities decreased to $5.9 million from $13.6 million Net Interest Expense Breakdown (in USD) | Component | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Interest income | $17,813 | $21,652 | | Interest expense on lease liabilities | $(6,720) | $(4,987) | | Interest expense on factoring arrangement | $(238,845) | $(133,099) | | Total Net Interest Expense | $(227,752) | $(116,434) | - The unused portion of financing facilities was approximately $5.9 million as of June 30, 2024, down from $13.6 million as of December 31, 2023[51] 8. Commitments and Contingencies In the ordinary course of business, the company enters into purchase commitments for marine fuel, and as of June 30, 2024, it was not a party to any material legal or administrative proceedings and had no significant contingencies - The company has purchase commitments for marine fuel as part of its normal business operations and risk management program[53] - As of June 30, 2024, and December 31, 2023, the Company is not a party to any material legal proceedings and did not have any significant contingencies[54] 9. Income Taxes The company's income tax provision was only $205 for the first six months of 2024, a steep decline from $246,686 in the prior-year period, reflecting the shift from pre-tax income to a pre-tax loss, with tax regimes outlined for the British Virgin Islands, Hong Kong, and Malaysia Income Tax Provision by Jurisdiction (in USD) | Jurisdiction | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Hong Kong | $0 | $242,070 | | Malaysia | $205 | $4,616 | | Total | $205 | $246,686 | - The reconciliation of income tax expense shows a shift from a tax expense of $246,686 on pre-tax income of $1.4 million in H1 2023 to a tax expense of $205 on a pre-tax loss of $1.6 million in H1 2024[76] 10. Revenue Disaggregation Revenue is disaggregated by the geographic location of marine fuel delivery, with China being the largest market at $142.2 million for the six months ended June 30, 2024, followed by Hong Kong with $96.5 million, and all listed geographic segments showing year-over-year revenue growth Revenue by Geographic Location (in USD) | Location | H1 2024 | H1 2023 | | :--- | :--- | :--- | | China | $142,231,627 | $102,789,336 | | Hong Kong | $96,483,443 | $63,594,042 | | Malaysia | $30,083,114 | $21,358,117 | | Singapore | $6,429,651 | $2,989,753 | | South Korea | $944,380 | $757,320 | | Others | $1,059,421 | $467,243 | | Total | $277,231,636 | $191,955,811 | 11. Finance and Operating Leases The company leases offices with terms of two to five years, reporting right-of-use lease assets of $253,451 and total lease liabilities of $286,666 as of June 30, 2024, with a weighted-average remaining lease term of 1.65 years and total future undiscounted lease commitments of $296,711 Schedule of Remaining Lease Payments (Undiscounted, in USD) | Year | Lease Payments | | :--- | :--- | | 2024 | $97,310 | | 2025 | $163,550 | | 2026 | $35,851 | | Total | $296,711 | Lease Balances on Balance Sheet (in USD) | Account | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Right-of-use lease assets | $253,451 | $338,481 | | Current lease liabilities | $186,490 | $177,761 | | Non-current lease liabilities | $100,176 | $194,373 | 12. Subsequent event Subsequent to the reporting period, on August 22, 2024, the company closed a private placement, issuing 2,500,000 ordinary shares at $0.55 per share, raising approximately $1.375 million in gross proceeds for network development, alternative energy initiatives, future acquisitions, and general corporate purposes - On July 22, 2024, the company entered into a Securities Purchase Agreement for a private placement of 2,500,000 ordinary shares at $0.55 per share[84] - The private placement closed on August 22, 2024, generating gross proceeds of approximately $1.375 million and increasing the total number of outstanding shares to 27,500,000[82]