MGO Global Inc 8-K, filed Aug 13, 2024

MGO Global Inc. (MGOL)

8-K 2024-08-13 For: 2024-08-13

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Added on October 14, 2026

About this 8-K

MGO Global Inc filed this 8-K on August 13, 2024.

Items reported

Item 8.01: Other events
Item 9.01: Financial statements and exhibits

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Delaware		001-41592		83-1833607
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.00001 par value		MGOL		The Nasdaq Stock Market LLC

Exhibit No.		Description

23.1		Consent of Assurance Dimensions, LLC

99.1		Press Release titled MGO Global Releases Preliminary Second Quarter 2024 Results and Comments on Key Business Highlights, dated July 16, 2024

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		The cover page from this Current Report on Form 8-K, formatted in Inline XBRL

Date: August 13, 2024	MGO Global Inc.

	By:	/s/ Maximiliano Ojeda
	Name:	Maximiliano Ojeda
	Title:	Chief Executive Officer

PART II		2
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	7
PART III
PART IV		7
ITEM 15.	EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES	7
INDEX TO FINANCIAL STATEMENTS		F-1

Classification		Useful Life
Computer		3 years
Equipment		3 years
Internal use software		3 years

	December 31, 2023			December 31, 2022			$ Change			% Change
Revenue, net	$	3,668,926		$	–		$	3,668,926			100	%
Cost of sales		969,045			–			969,045			100	%
Gross profit		2,699,881			–			2,699,881			100	%
Gross profit percentage		73.58	%		0	%
Total operating expenses		8,220,788			177,742			8,043,046			4,525	%
Operating loss		(5,520,907	)		(177,742	)		(5,343,165	)		3,006	%
Total other (income) expenses		(37,281	)		186,760			(224,401	)		(120	)%
Net loss from continuing operations	$	(5,483,626	)	$	(364,502	)	$	(5,119,124	)		1,404	%
Net loss from discontinued operations		(1,886,839	)		(2,512,855	)		626,016			25	%
Net loss		(7,370,465	)		(2,877,357	)		(4,493,108	)		156	%
Less: net loss attributable to non-controlling interest		(227,061	)		(294,411	)		67,350			(23	)%
Net loss attributable to MGO stockholders	$	(7,143,404	)	$	(2,582,946	)	$	(4,560,458	)		177	%

Contents		Page No.

Report of Independent Registered Public Accounting Firm (PCAOB ID: 5036)		F-2

Consolidated Balance Sheets as of December 31, 2023 and 2022		F-4

Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022		F-5

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2023 and 2022		F-6

Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022		F-7

Notes to the Consolidated Financial Statements		F-8

	As of December 31,			As of December 31,
	2023			2022
Assets
Current assets:
Cash and cash equivalents	$	836,446		$	32,275
Accounts receivable		25,352			–
Inventories		607,022			–
Prepaid expenses		178,425			–
Other current assets		7,500			–
Current assets from discontinued operations		267,703			408,693
Total current assets		1,922,448			440,968

Property and equipment, net		319,462			–
Total assets	$	2,241,910		$	440,968

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		184,677			–
Accounts payable - related party		5,678			–
Accounts payable		5,678			-
Accrued liabilities		216,297			9,972
Accrued payroll		533,643			–
Current liabilities from discontinued operations		379,867			1,625,557
Total current liabilities		1,320,162			1,635,529
Total liabilities		1,320,162			1,635,529

Commitments and contingencies (Note 11)		-			-

Stockholders’ equity:
Preferred stock, par value, $.00001, authorized 20,000,000 shares, nil outstanding		-			-
Common stock, par value $0.00001, authorized 150,000,000 shares; 1,426,613 and 1,168,923 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively		14			12
Additional paid- in capital		14,450,217			4,963,445
Accumulated deficit		(12,940,040	)		(5,796,636	)
Total MGO stockholders’ equity		1,510,191			(833,179	)
Non-controlling interest		(588,443	)		(361,382	)
Total stockholder’s equity		921,747			(1,194,561	)
Total liabilities and stockholders’ equity	$	2,241,910		$	440,968


	For the Years Ended
	December 31, 2023			December 31, 2022
Revenues, net	$	3,668,926		$	–
Cost of sales		969,045			–
Gross profit		2,699,881			–

Operating expenses:
Selling, general and administrative expenses		5,080,417			177,742
Marketing and e-commerce expenses		3,140,371			–
Total operating expenses		8,220,788			177,742

Operating loss		(5,520,907	)		(177,742	)

Other (income) expenses:
Interest expense		–			186,760
Interest income		(40,576	)		–
Other (income) expenses, net		3,295			–
Total other (income) expenses		(37,281	)		186,760

Net loss from continuing operations		(5,483,626	)		(364,502	)
Net income (loss) from discontinued operations		(1,886,839	)		(2,512,855	)
Net loss	$	(7,370,465	)	$	(2,877,357	)
Less: net income (loss) attributable to noncontrolling interest		227,061			(294,411	)
Net loss attributable to MGO stockholders	$	(7,143,404	)	$	(2,582,946	)

Basic and diluted weighted average shares outstanding		1,426,613			1,054,242
Basic and diluted net loss per share to MGO stockholders on continuing operations	$	(5.01	)	$	(2.45	)
Basic and diluted net loss per share to MGO stockholders on discontinued operations	$	(1.32	)	$	(2.38	)

	Shares		Amount		Capital		Deficit			(deficit)			Interests			(deficit)
	Common Stock				Additional Paid-In		Accumulated			Total MGO Stockholders’ Equity			Non- controlling			Total Stockholders’ Equity
	Shares		Amount		Capital		Deficit			(deficit)			Interests			(deficit)
Balance at December 31, 2021		959,300	$	9	$	2,866,648	$	(3,213,690	)	$	(347,036	)	$	(66,971	)	$	(414,007	)
Share issuance for cash, net		192,500		2		1,712,561		-			1,712,564			-			1,712,564
Stock compensation expense		14,123		1		141,730		-			141,731			-			141,731
Stock issued to settle accounts payable		3,000		-		30,000		-			30,000			-			30,000
Capital contributions by founders		-		-		15,400		-			15,400			-			15,400
Warrants issued for financing expenses		-		-		183,686		-			183,686			-			183,686
Imputed interest		-		-		13,420		-			13,420			-			13,420
Net loss		-		-		-		(2,582,946	)		(2,582,946	)		(294,411	)		(2,877,357	)
Balance at December 31, 2022		1,168,923	$	12	$	4,963,445	$	(5,796,636	)	$	(833,181	)	$	(361,382	)	$	(1,194,561	)
Balance		1,168,923	$	12	$	4,963,445	$	(5,796,636	)	$	(833,181	)	$	(361,382	)	$	(1,194,561	)

Share issuance for cash, net of transaction costs		172,500		1		7,560,353		-			7,560,354			-			7,560,354
Cashless exercise of warrants		12,731		-		-		-			-			-			-
Cash received from exercise of warrants		70,000		1		699,999		-			700,000			-			700,000
Shares issuance for services rendered		1,125		-		5,281		-			5,281			-			5,281
Shares issued for vested restricted stock awards		1,334		-		6,666		-			6,666			-			6,666
Stock compensation expenses		-		-		1,214,473		-			1,214,473			-			1,214,473
Net loss		-		-		-		(7,143,404	)		(7,143,404	)		(227,061	)		(7,370,465	)
Balance at December 31, 2023		1,426,613	$	14	$	14,450,217	$	(12,940,040	)	$	1,510,191		$	(588,443	)	$	921,747
Balance		1,426,613	$	14	$	14,450,217	$	(12,940,040	)	$	1,510,191		$	(588,443	)	$	921,747

	2023			2022
	For the Years Ended December 31,
	2023			2022
Cash flows from operating activities:
Net loss	$	(7,370,465	)	$	(2,877,357	)
Net loss from discontinued operations		(1,886,839	)		(2,512,855	)
Net loss from continuing operations		(5,483,626	)		(364,502	)

Adjustments to reconcile net loss to net cash used in operating activities:
Imputed interest		-			13,420
Stock compensation expenses		1,226,420			141,731
Warrants issued for financing expenses		-			183,686
Inventory obsolescence impairment		25,000			-
Depreciation expenses		6,502			-

Net changes in operating assets & liabilities:
Accounts receivable		(25,353	)		-
Inventory		(678,867	)		-
Prepaid expenses		(178,425	)		-
Other current assets		(7,500	)		-
Accounts payable - related party		28,348			(1,645	)
Accrued payroll		(396,820	)		746,050
Accounts payable and accrued liabilities		(1,806,829	)		(2,394,311	)
Net cash used in continuing operating activities		(7,244,305	)		(1,675,571	)
Net cash provided by discontinued operating activities		265,517			(7,702	)
Net cash used in operating activities		(6,978,788	)		(1,683,273	)

Cash flows from investing activities:
Purchases of property, plant, and equipment		(325,964	)		-
Net cash used in investing activities		(325,964	)		-

Cash flows from financing activities:
Shares issued for cash, net		7,560,354			1,712,564
Cash received from exercise of warrants		700,000			-
Repayments to loans payable - related party		-			(25,931	)
Repayments to loans payable		-			(48,822	)
Proceeds from loans payable - related party		4,197			45,556
Proceeds from loans payable		-			25,000
Net cash provided by continuing financing activities		8,264,551			1,708,348
Net cash used in discontinued financing activities		(138,840	)		955
Net cash provided by financing activities		8,125,711			1,709,303

Net increase in cash and cash equivalents		820,959			26,030
Cash and cash equivalents at beginning of period, including discontinued operations		113,952			87,922
Cash and cash equivalents at end of period, including discontinued operations		934,911			113,952
Less cash from discontinued operations		(98,466	)		(81,677	)
Cash and cash equivalents at end of period	$	836,446			32,275
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest	$	456		$	6,514

Non-cash financing activities
Stock issued for financing expenses	$	30,000		$	-

	Useful Life	December 31, 2023			December 31, 2022
Computer equipment and software	3 years	$	308,774		$	-
Furniture	3 years		17,191			-
Total property and equipment			325,965
Less: Accumulated depreciation			(6,503	)		-
Property and equipment, net		$	319,462		$	-

Year Ended December 31, 2023	Total
United States	$	3,667,176
Rest of the World		1,750
Total Revenues	$	3,668,926

Year Ended December 31, 2022	Total
United States	$	-
Rest of the World		-
Total Revenues	$	-

	December 31, 2023		December 31, 2022
Finished goods	$	607,022	$	–
Total	$	607,022	$	–

	For the Year Ended December 31, 2022
Expected term		5 years
Expected average volatility		328% - 339	%
Expected dividend yield		-
Risk-free interest rate		1.76% - 2.89	%

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding, December 31, 2022		70,000		$	10.00		4.70	$	-
Granted		8,625			10.00		-		-
Forfeited		-			-		-		-
Exercised		(78,625	)		10.00		-		-
Outstanding, December 31, 2023		-		$	-		-	$	-
Exercisable, December 31, 2023		-		$	-		-	$	-

	For the Year Ended December 31, 2022
Expected term	5 years
Expected average volatility	328% - 339	%
Expected dividend yield	-
Risk-free interest rate	1.76% - 2.89	%

	Number of Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding, December 31, 2022		-		$	-		-	$	-
Granted		135,500			50.00		5.00		-
Forfeited		(21,500	)		-		-		-
Exercised		-			-		-		-
Outstanding, December 31, 2023		114,000		$	50.00		4.04	$	-
Exercisable, December 31, 2023		74,000		$	50.00		4.04	$	-

Expected life of the options	4.35-5.0
Fair value of Common Stock on grant date	$	9.80 - $10.70
Expected volatility		95	%
Expected dividend rate		0	%
Risk-free interest rate		4.24% - 4.41	%

	Number of Shares			Weighted Average Grant Date Fair Value
Outstanding as of December 31, 2022		-		$	-
Granted		50,604			1.41
Cancelled		(7,973	)		-
Vested		(2,458	)		-
Outstanding as of December 31, 2023		40,172		$	1.41

	December 31, 2023			December 31, 2022
Deferred tax asset
Net operating loss carry forwards	$	2,549,650		$	632,385
Total deferred tax asset		2,549,650			632,385
Less: valuation allowance		(2,549,650	)		(632,385	)
Total deferred tax asset		-			-
Total deferred tax liabilities		-			-
Net deferred tax asset (liabilities)	$	-		$	-

	Amount			Percent			Amount			Percent
	Year Ended December 31,
	2023						2022
	Amount			Percent			Amount			Percent
Federal provision at statutory rate	$	(1,409,660	)		21.0	%	$	(604,245	)		21.0	%
State income taxes		(390,684	)		5.5	%		-			-
Non-deductible expenses		(116,921	)		-			21,226			(0.7	)%
Change in valuation allowance		1,917,265			-			583,019			(20.3	)%
Effective tax rate	$	-			0	%	$	-			0.0	%

Summary reconciliation of Discontinued Operations	December 31, 2023			December 31, 2022
Revenues	$	1,690,949		$	1,048,014
Cost of sales		1,044,048			419,573
Gross profit		646,901			628,441

Operating expenses
Selling, general, administrative expenses		250,899			1,336,176
Marketing and e-commerce expenses		988,399			515,673
Royalty expenses		1,269,556			1,273,105
Total operating expenses		2,508,854			3,125,451

Operating income (loss)		(1,861,953	)		(2,497,513	)

Interest expense		456			13,181
Gain on settlement of debt		(3,500	)		-
Other expense		27,930			2,161
Total other expense		24,886			15,342

Net income (loss)	$	(1,886,839	)	$	(2,512,855	)
Less: net income (loss) attributable to non-controlling interest		(227,061	)		(294,411	)
Net income (loss) attributable to MGO stockholders	$	(1,659,778	)	$	(2,217,444	)

	December 31, 2023		December 31, 2022
Current assets
Cash	$	98,466	$	81,677
Accounts receivable		39,121		101,837
Inventories		117,531		69,546
Other current assets		7,864		7,864
Prepaid royalties				147,769
Prepaid expenses		4,721		-
Total current assets		267,703		408,693
Current liabilities
Accounts payable		115,333		684,466
Accrued liabilities		264,534		802,251
Current portion of loan payable		-		138,840
Total current liabilities		379,867		1,625,557

	●	a base prospectus that covers the potential offering, issuance, and sale from time to time of our common stock, preferred stock, warrants, debt securities, and units in one or more offerings with a total value of up to $100,000,000; and

	●	a sales agreement prospectus covering the potential offering, issuance, and sale from time to time of shares of our common stock having an aggregate gross sales price of up to $1,650,000 pursuant to an equity distribution agreement with Maxim Group LLC.

	(a)	Merger Sub will merge (the “Merger”) with and into the MGO, with MGO continuing as the surviving entity and a wholly owned subsidiary of Holdings;
	(b)	all of the issued and outstanding shares of common stock of MGO (the “MGO Common Stock”) prior to the effective time of the Merger will be converted into the right to receive common shares of Holdings (the “Holdings Common Shares”) on a one-for-one basis;
	(c)	immediately after the effective time of the Merger, the HMI Shareholders will transfer all the outstanding shares of common stock of HMI (the “HMI Shares”) to Holdings (the “HMI Share Acquisition”), with HMI becoming a wholly owned subsidiary of Holdings; and
	(d)	Holdings shall issue to the HMI Shareholders (i) at the closing of the Business Combination (the “Closing”), a number of Holdings Common Shares equal to (x) the number of the Company’s outstanding shares of common stock on a fully diluted and as-converted basis immediately prior to the effective time of the Merger, times (y) 16.6667, divided by (z) the number of outstanding HMI Shares immediately prior to the HMI Share Acquisition and (ii) after the Closing and upon the satisfaction of certain earnout conditions set forth in the Business Combination Agreement, additional Holdings Common Shares equal to 10% of the shares issued to the Heidmar Shareholders on the Closing.