Financial Performance - Total revenue for the years ended December 31, 2025, and 2024 was $866,926 and $1,253,577, respectively, reflecting a decrease of approximately 30.8%[102]. - The net loss for the years ended December 31, 2025, and 2024 was $2,657,929 and $2,765,767, respectively, indicating a slight improvement in loss[102]. - The gross margin decreased from $601,856 in 2024 to $459,727 in 2025, attributed to the cessation of operations of cafes in Singapore and Korea[115]. - Net loss decreased slightly from $2,765,767 in 2024 to $2,657,929 in 2025, indicating a marginal improvement in financial performance[118]. - Food & Beverage Revenue decreased to $866,926 in 2025 from $1,253,577 in 2024, representing a decline of approximately 30.8%[170]. - Gross profit for 2025 was $459,727, down from $601,856 in 2024, indicating a decrease of about 23.6%[170]. - Net loss attributable to common stockholders improved to $2,630,620 in 2025 compared to $2,749,994 in 2024, a reduction of about 4.3%[170]. - Total comprehensive loss attributable to common stockholders was $3,277,631 in 2025, compared to $2,810,541 in 2024, an increase of approximately 16.6%[170]. Operating Expenses - Operating expenses increased from $3,186,287 in 2024 to $3,648,405 in 2025, primarily due to an increase in general and administrative expenses[116]. - Total Operating expenses increased to $3,648,405 in 2025 from $3,186,287 in 2024, reflecting a rise of approximately 14.5%[170]. Cash Flow and Assets - Cash decreased significantly from $4,341,746 as of December 31, 2024, to $2,085,918 as of December 31, 2025, while total assets also fell from $6,408,722 to $4,567,858 during the same period[119]. - Net cash used in operating activities was $1,750,290 in 2025, a decrease from $1,819,262 in 2024, attributed to gains from the disposal of a subsidiary and foreign exchange transaction gains[126][127]. - Net cash used in investing activities was $1,188,686 in 2025, a significant drop from net cash provided of $20,452,029 in 2024, due to various payments for convertible notes and marketable securities[126][128]. - Net cash provided by financing activities was $934,714 in 2025, a turnaround from net cash used of $15,597,681 in 2024, primarily from the issuance of common stock and warrants[126][129]. - Current assets fell from $5,474,997 in 2024 to $2,972,037 in 2025, a decrease of about 45.1%[168]. - Total assets decreased from $6,408,722 in 2024 to $4,567,858 in 2025, representing a decline of approximately 28.7%[168]. - The company's stockholders' equity decreased from $2,877,199 in 2024 to $2,684,725 in 2025, a decline of about 6.7%[168]. Business Operations and Strategy - Hapi Marketplace was launched on November 4, 2024, featuring over 47 product categories, with plans for expansion into South Korea and Hong Kong[95]. - Hapi Wealth Builder program is set to launch in selected regions later in 2026, focusing on education in equity investment and wealth-building strategies[100]. - The company closed cafes in Singapore and Korea in August and September 2025 due to unsustainable revenue, refocusing efforts on more promising ventures[97]. - The company is currently developing Hapi Marketplace and Hapi Wealth Builder, with digital content and partner collaborations underway[89]. - The company plans to expand by taking over leases of existing Hapi Cafes, requiring a minimum investment for each location, although there is no guarantee of achieving these plans[239]. Compliance and Regulatory Issues - The company received a notice from Nasdaq regarding non-compliance with the minimum market value of listed securities, with a compliance period until September 3, 2024, to regain compliance[130][131]. - The company executed a 1-for-5 reverse stock split effective February 24, 2025, to comply with Nasdaq listing requirements[135]. Related Party Transactions and Internal Controls - The company reported a material weakness in internal controls over financial reporting, primarily due to limited accounting personnel and inadequate segregation of duties[151]. - The company has significant transactions with related parties, which may not be conducted at arm's length[159]. - Management's assessment of internal controls was last conducted as of December 31, 2025, indicating ongoing concerns regarding effectiveness[149]. Impairments and Write-offs - The company reported an impairment loss on goodwill of $116,648 in 2025, down from $323,864 in 2024, indicating a reduction of about 64.0%[170]. - The Company incurred a bad debt write-off of $158,036 in 2025, compared to $11,177 in 2024, indicating a significant increase in uncollectible accounts[175]. - The Company recorded impairment of property and equipment of $17,686 for the year ended December 31, 2025, compared to $69,293 in 2024[255]. Financing and Debt - The company has a credit facility agreement with Alset Inc. providing a maximum credit line of $1,000,000, with $700,000 available for draw as of December 31, 2025[122]. - The amount due to Alset Inc. at December 31, 2025, is $569,614, an increase from $209,614 in 2024[263]. - The Company has entered into multiple convertible promissory notes with Sharing Services Global Corporation, totaling $1,250,000, with various conversion terms and interest rates[274][275][276][277][278][279].
Alset Capital Acquisition (ACAX) - 2025 Q4 - Annual Report