Society Pass rporated(SOPA) - 2024 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Financial Statements (Unaudited) Presents Society Pass Incorporated's unaudited Q1 2024 condensed consolidated financial statements, detailing balance sheets, operations, and cash flows Condensed Consolidated Balance Sheets As of March 31, 2024, total assets declined to $13.3 million, liabilities to $10.0 million, and equity to $3.2 million | Balance Sheet Highlights | March 31, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Current Assets | | | | Cash and cash equivalents | $1,619,232 | $3,628,670 | | Total current assets | $5,541,140 | $8,098,635 | | Total Assets | $13,276,105 | $16,363,174 | | Current Liabilities | | | | Total current liabilities | $9,374,608 | $10,486,062 | | Total Liabilities | $10,029,823 | $11,334,012 | | Total Equity | $3,246,282 | $5,029,162 | Condensed Consolidated Statements of Operations Q1 2024 saw total revenue of $1.85 million and a reduced net loss of $2.8 million, driven by lower general and administrative expenses | Income Statement Highlights | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Total revenue | $1,847,079 | $1,966,103 | | Gross income | $492,649 | $686,237 | | General and administrative expenses | ($3,243,671) | ($5,991,886) | | Loss from operations | ($2,891,661) | ($5,450,232) | | Net Loss | ($2,839,224) | ($5,390,213) | | Net Loss Per Share (Basic & Diluted) | ($1.21) | ($3.00) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities improved to $2.4 million in Q1 2024, with total cash decreasing by $2.1 million to $1.7 million | Cash Flow Summary | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($2,361,485) | ($4,015,201) | | Net cash used in investing activities | $0 | ($190,061) | | Net cash used in financing activities | ($10,279) | ($541,988) | | Net Change in Cash and Cash Equivalents | ($2,050,750) | ($5,175,395) | | Cash at End of Period | $1,673,232 | $13,827,941 | Notes to Condensed Consolidated Financial Statements Key disclosures include a going concern warning, segment revenue breakdown, and subsequent events like a reverse stock split - The company's financial statements have been prepared on a going concern basis, but management has identified substantial doubt about its ability to continue as a going concern due to a net loss of $2.8 million, negative operating cash flow of $2.5 million, a working capital deficit of $3.8 million, and an accumulated deficit of $102.7 million as of March 31, 2024[39] - The company operates in six reportable segments: e-Commerce, Merchant POS, Online grocery and food deliveries, Telecommunication reseller, Digital marketing, and Online ticketing and reservation[126] - The company is involved in three litigation cases with former employees concerning compensation, stock, and alleged misappropriation of intellectual property, with ultimate outcome and potential damages not probable nor estimable at this time[233][235][236] - Subsequent to the quarter end, the company effected a 1-for-15 reverse stock split of its common stock on May 1, 2024, and increased the authorized shares of Series X Super Voting Preferred Stock from 3,500 to 10,000 on May 9, 2024[242][244] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's digital ecosystem strategy, Q1 2024 financial performance, and reliance on future financing for operations and growth - The company is building a digital ecosystem and loyalty platform in Southeast Asia (SEA) through acquisitions, focusing on verticals like lifestyle, telecommunications, digital marketing, and travel[249][252] | Key Operational Data | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Revenue, net | $1,847,079 | $1,966,103 | | Gross income | $492,649 | $686,237 | | General and administrative expenses | ($3,243,671) | ($5,991,886) | | Net Loss | ($2,839,224) | ($5,390,213) | - The decrease in revenue was mainly due to lower sales from the e-commerce platform facing higher competition and the travel vertical experiencing interruptions from a system upgrade, while the improvement in net loss was primarily due to a significant decrease in G&A expenses resulting from cost restructuring and no new acquisition-related costs[267][272][274] - The company expects to continue to rely on cash generated through financing from public or private offerings to finance its operations and future acquisitions, but believes it has sufficient liquidity for at least the next year[277][281] Quantitative and Qualitative Disclosures About Market Risk This section is not applicable as the company qualifies as a "smaller reporting company" and is therefore not required to provide these disclosures - Disclosure is not required for "smaller reporting companies"[369] Controls and Procedures Management concluded that disclosure controls and procedures were not effective as of March 31, 2024, with no material changes to internal controls during the quarter - Based on an evaluation as of the end of the period, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are not effective at the reasonable assurance level[370] - No changes in the company's internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[371] PART II OTHER INFORMATION Legal Proceedings The company states that it may be involved in various legal proceedings in the ordinary course of business, with material details in Note 20 - Material legal proceedings are detailed in Note 20, "Commitments and Contingencies," within the financial statements section of this report[374] Risk Factors The company reports that there have been no material changes to the risk factors previously disclosed in its Form 10-K filed on April 15, 2024 - There have been no material changes to the risk factors disclosed in the Company's Form 10-K for the year ended December 31, 2023[375] Other Information This section discloses a corporate action taken after the reporting period, specifically an increase in authorized Series X Super Voting Preferred Stock - On May 9, 2024, the company increased the number of authorized shares of Series X Super Voting Preferred Stock from 3,500 to 10,000[379]