ABRI SPAC I(ASPA) - 2024 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Presents the company's unaudited consolidated financial statements as of September 30, 2024, detailing a deteriorating financial position and significant net loss - The accompanying unaudited consolidated financial statements contain all normal recurring adjustments and should be read with the 2023 Form 10-K[8][9] Consolidated Balance Sheets The balance sheet as of September 30, 2024, shows a significant deterioration in financial position due to asset impairments and increased liabilities Consolidated Balance Sheet Highlights (Unaudited) | Metric | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $7,984,072 | $12,230,012 | | Goodwill | $4,304,419 | $5,991,208 | | Intangible Assets | $– | $5,244,437 | | Total Liabilities | $15,238,716 | $9,354,635 | | Total Stockholders' (Deficit) Equity | $(7,254,644) | $2,875,377 | Unaudited Consolidated Statements of Operations The company's net loss substantially increased to $(13.7) million for the nine months ended September 30, 2024, driven by impairment charges and declining revenue Statement of Operations Summary (Unaudited) | Metric (Nine Months Ended Sep 30) | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | $3,128,238 | $11,663,762 | | Gross Income | $2,774,420 | $11,663,762 | | Loss from operations | $(2,862,587) | $(4,159,218) | | Loss on impairments | $(10,480,209) | $0 | | Net Loss | $(13,687,476) | $(4,291,281) | | Net Loss per Share (Basic & Diluted) | $(0.93) | $(0.38) | Unaudited Consolidated Statements of Cash Flows Cash flows for the nine months ended September 30, 2024, show a surge in cash used for operations and a significant drop in the ending cash balance Cash Flow Summary (Unaudited) | Cash Flow (Nine Months Ended Sep 30) | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,463,010) | $(2,266,958) | | Net cash provided by financing activities | $399,999 | $7,116,631 | | Cash - End of period | $568,607 | $5,262,539 | - Significant non-cash activities in 2024 included stock issuance for the DSL ($3.56M) and BeOP acquisitions[22] Notes to Unaudited Consolidated Financial Statements The notes detail recent acquisitions, significant liquidity issues raising going concern doubts, and a major impairment charge - The company acquired DSL Digital LLC and The Odyssey SAS (BeOp) in mid-2024 to expand its AI-driven marketing capabilities[31][32] - The company's significant operating losses and negative cash flows raise substantial doubt about its ability to continue as a going concern[56][57] - An impairment charge of $4,489,000 was recorded, writing down the intangible assets from the DLQ and Push Interactive acquisitions to zero[65][81] - The company dismissed its auditor, Yusufali & Associates, LLC, and appointed GreenGrowth CPAs in November 2024[119][123] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations MD&A details recent acquisitions, analyzes operational results, and highlights severe liquidity issues that raise going concern doubts - The company completed the acquisitions of BeOp and DSL in mid-2024 to enhance its AI-driven advertising and data platform capabilities[129][134] - The company was delisted from Nasdaq on August 16, 2024, and now trades on the OTCQB Market under the symbol "CAUD"[141][142] - As of September 30, 2024, the company had cash of $568,607 and a working capital deficiency of $(5,415,946), raising substantial doubt about its going concern status[150][153] Q3 2024 vs Q3 2023 Operating Results | Metric (Three Months Ended Sep 30) | 2024 | 2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $3,128,238 | $3,265,674 | $(137,436) | -4.2% | | General and Administrative | $2,514,056 | $1,325,256 | $1,188,800 | 90% | | Total Other Expenses, net | $(10,480,209) | $(46,390) | $(10,433,819) | -22,492% | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company indicates it does not have significant exposure to market risks requiring disclosure - The company has determined that quantitative and qualitative disclosures about market risk are not applicable[166] Item 4. Controls and Procedures Management acknowledges material weaknesses in internal controls, concluding that disclosure controls were not effective as of September 30, 2024 - Material weaknesses in internal control over financial reporting were previously identified in the 2023 Annual Report on Form 10-K[168] - The CEO and CFO concluded that the company's disclosure controls and procedures were not effective as of September 30, 2024[168] - Management is implementing a remediation plan but cannot provide assurance on the timing of its completion[170] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company faces a judgment against a subsidiary and an ongoing arbitration with a former employee - A judgment of $35,240 was entered against subsidiary Push Interactive, LLC for an unpaid settlement balance[111] - The company is in arbitration with a former employee over claims of breach of contract and wage violations[112] Item 1A. Risk Factors This section refers investors to the risk factors detailed in the Annual Report on Form 10-K for the year ended December 31, 2023 - Readers are advised to refer to the risk factors section in the Annual Report on Form 10-K for the year ended December 31, 2023[176] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred during the quarter that were not previously reported - There were no unregistered sales of securities during the quarter ended September 30, 2024, that were not already reported on a Form 8-K[177] Item 3. Defaults Upon Senior Securities The company reports no defaults upon its senior securities during the period - The company reports None[178] Item 4. Mine Safety Disclosures This item is not applicable as the company is not in the mining industry - The company reports Not Applicable[179] Item 5. Other Information No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter - During the third quarter of 2024, no directors or officers entered into, modified, or terminated a Rule 10b5-1 trading arrangement[180] Item 6. Exhibits This section lists all exhibits filed with the report, including merger agreements and officer certifications - The exhibit index lists key agreements for recent business combinations, including those for Abri SPAC I, DSL, and BeOp[182] - Officer certifications pursuant to the Sarbanes-Oxley Act of 2002 are filed as exhibits[183] Signatures