Financial Performance - For the three months ended June 30, 2025, the Gross Booking Value (GBV) was approximately $6.47 million, an increase of 3.9% from $6.23 million in the same period of 2024[269]. - Booking Days totaled approximately 190,931 for the three months ended June 30, 2025, compared to 170,125 in the same period of 2024, reflecting a growth of 12.2%[266]. - Net revenue for the three months ended June 30, 2025, was $2.31 million, a 3% increase from $2.24 million in the same period of 2024[288]. - The company reported a net loss of $4.21 million for the three months ended June 30, 2025, compared to a net loss of $2.53 million in the same period of 2024[286]. - Contribution profit improved to $1.14 million, compared to a contribution loss of $0.46 million in the same period last year, driven by reduced costs and improved gross profit[305]. - Adjusted EBITDA loss decreased to $1.73 million, an improvement from a loss of $3.26 million in the prior year, due to broad-based cost reduction initiatives[311]. - Gross profit increased to $0.99 million, with a gross margin of 43%, compared to $0.73 million and a 33% margin in the same period last year[301]. - Adjusted EBITDA for the three months ended June 30, 2025, was $(3.26) million, compared to $(1.73) million for the same period in 2024, indicating a worsening performance[314]. Cost Management - The cost of revenue decreased to $1.31 million for the three months ended June 30, 2025, from $1.51 million in the same period of 2024, resulting in a cost of revenue as a percentage of net revenue dropping from 67% to 57%[286][287]. - Technology and development expenses were $709,331 for the three months ended June 30, 2025, down from $901,781 in the same period of 2024, representing a decrease of 21.4%[286]. - Sales and marketing expenses significantly decreased to $176,963 for the three months ended June 30, 2025, from $802,571 in the same period of 2024, a reduction of 77%[286]. - General and administrative expenses were $1.87 million for the three months ended June 30, 2025, down from $2.40 million in the same period of 2024, indicating a decrease of 22%[286]. - Cost of revenue decreased to $1.31 million for the three months ended June 30, 2025, down 13% from $1.51 million in the same period of 2024, driven by operational efficiency improvements[290]. - Technology and development expenses totaled $0.71 million, a 21% decrease from $0.90 million in the prior year, primarily due to reductions in employee benefits and IT support costs[291]. - Sales and marketing expenses dropped significantly to $0.18 million, a 78% decrease from $0.80 million in the previous year, mainly due to a reduction in performance marketing expenses[292]. - General and administrative expenses were $1.87 million, down 22% from $2.40 million in the same period last year, attributed to headcount reductions and decreased rent costs[293]. - Finance costs reduced to $0.30 million, a 46% decrease from $0.55 million in the prior year, due to repayment of promissory notes and restructuring of liabilities[294]. Cash Flow and Liquidity - Cash flows from operations improved to $0.09 million for the three months ended June 30, 2025, compared to $(1.78) million in the same period of 2024, driven by greater operating cost efficiencies[316][335]. - As of June 30, 2025, the company's cash and cash equivalents totaled $0.39 million, indicating a critically deficient cash position[317][318]. - The company reported a net decrease in cash and cash equivalents of $(737,809) for the three months ended June 30, 2025, compared to an increase of $101,955 in the same period of 2024[334]. Future Outlook - The company expects to continue incurring net losses and significant cash outflows from operating activities for at least the next 12 months, raising substantial doubt about its ability to continue as a going concern[322][323]. - The company has implemented measures to improve profitability, including reducing cash incentives paid to Hosts and introducing cancellation fees for both Hosts and Guests[288]. Debt and Liabilities - Total lease liabilities as of June 30, 2025, amounted to $4.10 million, including $1.07 million in operating leases and $3.03 million in finance leases[339]. - Total borrowings as of June 30, 2025, amount to $2,629,635, with significant contributions from TATA Motors Finance Limited at $1,721,566[341]. - Legal claims against the company not acknowledged as liability totaled $4,804,120 as of June 30, 2025, an increase from $4,503,122 on March 31, 2025[342]. - The company is involved in tax disputes totaling $9,799,311 related to indirect tax credits and GST dues for the period between 2014 and 2023[342]. - The company issued Bridge Notes during the three months ended June 30, 2025, with a principal value repayable at a 12% annual interest rate[348]. Corporate Governance - The company received a notice from OTCQX regarding its Global Market Capitalization falling below the required $5 million for over 30 consecutive days[350]. - The company dismissed its independent registered public accounting firm, Grant Thornton Bharat LLP, and engaged Bansal & Co LLP as the new firm[350]. - A former employee has filed a suit claiming damages of $395,772 and stock options against the company, which it believes are baseless[342]. - The company has accrued for losses associated with legal claims when such losses are probable and can be reasonably estimated[342]. - The company’s debt issuance costs are being amortized to interest expense over the term of the related debt instruments[349].
Innovative International Acquisition (IOAC) - 2025 Q2 - Quarterly Report