AGBA (AGBA) - 2024 Q1 - Quarterly Report

Financial Performance - Total revenues for the first quarter of 2024 were $7.656 million, a decrease of 30.85% compared to $11.073 million in the same period of 2023[221] - The Distribution Business generated $6.415 million, accounting for 83.79% of total revenue, down $3.273 million or 33.78% from $9.688 million in 2023, primarily due to economic recession and outward migration in Hong Kong[226] - Life insurance revenue decreased by $2.866 million or 32.10%, from $8.926 million in 2023 to $6.060 million in 2024[227] - Net loss for the three months ended March 31, 2024, was $8.060 million, down $4.013 million or 33.23% from $12.073 million in 2023[240] - Loss before income taxes was $8.022 million, a reduction of $4.078 million or 33.70% compared to $12.100 million in 2023[240] - Total revenue for the three months ended March 31, 2024, was approximately US$7.66 million, down from US$11.07 million in the same period in 2023[262] Operating Expenses - Operating expenses decreased by 39.51% to $15.518 million in Q1 2024 from $25.657 million in Q1 2023, primarily due to reductions in commission and personnel expenses[221] - Total commission expense decreased by $2.849 million or 39.05%, from $7.295 million in 2023 to $4.446 million in 2024[231] - Personnel and benefit costs decreased by $3.761 million or 45.38%, from $8.287 million in 2023 to $4.526 million in 2024[234] - Sales and marketing expenses decreased by $1.4 million, attributed to lower spending on corporate branding and product campaigns[232] - Legal and professional fees decreased by $2.520 million or 74.22%, from $3.395 million in 2023 to $875 thousand in 2024[236] Cash Flow and Working Capital - As of March 31, 2024, the cash balance was US$2.1 million, with a reported net loss of US$8.1 million and negative operating cash flow of US$6.9 million[245] - The working capital deficit increased to approximately US$24.96 million as of March 31, 2024, from US$22.22 million at December 31, 2023, an increase of US$2.74 million or 12.33%[255] - Net cash used in operating activities was US$6.86 million for the three months ended March 31, 2024, compared to US$10.20 million for the same period in 2023[256] Business Operations and Strategy - The Company aims to transform JFA into the best medical care institution in Asia by 2025, focusing on technology and consumerization of healthcare[219] - The Company holds a 4% equity stake in HCMPS, which manages healthcare schemes for over 500 corporate clients and more than 300,000 scheme members[217] - The Platform Business offers over 1,800 financial products, including 1,104 insurance products from 91 providers and 1,137 asset management products from 53 fund houses[212] - The Distribution Business has approximately 1,030 financial advisors organized into 22 sales teams as of March 31, 2024[205] - The company expects sales volumes to return to pre-pandemic levels with the reopening of the Mainland border and integration into the Greater Bay Area[209] Investments and Financial Position - The Fintech Business includes investments in Tandem Money Limited valued at $16.732 million and CurrencyFair Limited valued at $5.691 million as of March 31, 2024[214] - Investment loss increased by $1.760 million or 102.14%, totaling $(37) million compared to $1.723 million in 2023[241] - The company is committed to purchasing 100% equity interest in Sony Life Financial Advisers Pte. Ltd. for a cash consideration of SGD2,500,000 (approximately US$1,882,000)[265] Compliance and Governance - Nasdaq granted an additional 180 days until September 16, 2024, for the company to regain compliance with the minimum bid price requirement, which was achieved on May 3, 2024[266] - The Board of Directors approved a share repurchase program for 1,000,000 ordinary shares at a maximum price of $10 per share, valid until April 18, 2024[269] - There have been no material changes to critical accounting policies and estimates as reported in the 2023 Annual Report on Form 10-K[270] - As a "smaller reporting company," the company is not required to provide additional market risk disclosures[271] Taxation - Income tax expense increased by US$0.7 million, or 240.74%, for the three months ended March 31, 2024, primarily due to the provision of income tax during the period[243] - Net loss decreased by US$4.0 million, or 33.23%, for the three months ended March 31, 2024, attributed to a decrease in operating expenses of US$10.1 million[244]