AWCA 10-K
Awaysis Capital, Inc. (AWCA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
For
the fiscal year ended
For the transition period from ____ to _____
Commission
file number:
(Exact name of registrant as specified in its charter)
| (State or Other Jurisdiction | (I.R.S. Employer | |
| of Incorporation or Organization) | Identification No.) |
(Address including zip code of registrant’s Principal Executive Offices)
(Registrant’s Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Securities registered under Section 12(g) of the Act: Common Stock, par value $0.01
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes
☐
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data file required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller
reporting company | ||
| Emerging
Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
State
the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s
most recently completed second fiscal quarter: approximately $
As of September 30, 2024 there were shares of common stock, par value $ per share, outstanding.
TABLE OF CONTENTS
| i |
NOTE REGARDING REFERENCES TO OUR COMPANY
Throughout this Form 10-K, the words “we,” “us,” “our,” the “Company” and “Awaysis” refer to Awaysis Capital, Inc., a Delaware corporation, and, unless the context otherwise requires, our directly and indirectly wholly owned subsidiaries.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements. Forward-looking statements convey management’s expectations as to the future of Awaysis, and are based on management’s beliefs, expectations, assumptions and such plans, estimates, projections and other information available to management at the time Awaysis makes such statements. Forward-looking statements include all statements that are not historical facts and may be identified by terminology such as the words “outlook,” “believe,” “expect,” “potential,” “goal,” “continues,” “may,” “will,” “should,” “could,”, “would”, “seeks,” “approximately,” “projects,” predicts,” “intends,” “plans,” “estimates,” “anticipates” “future,” “guidance,” “target,” or the negative version of these words or other comparable words, although not all forward-looking statements may contain such words. The forward-looking statements contained in this Annual Report on Form 10-K may include statements related to Awaysis’ revenues, earnings, taxes, cash flow and related financial and operating measures, and expectations with respect to future operating, financial and business performance, and other anticipated future events and expectations that are not historical facts.
Awaysis cautions you that our forward-looking statements involve known and unknown risks, uncertainties and other factors, including those that are beyond Awaysis’ control, which may cause the actual results, performance or achievements to be materially different from the future results. Factors that could cause Awaysis’ actual results to differ materially from those contemplated by its forward-looking statements include: risks that there may be significant costs and expenses associated with liabilities related to the development of its business that were either unknown or are greater than those anticipated at the time of the acquisition of its assets; risks that Awaysis may not be successful in integrating new properties into all aspects of our business and operations or that the integration will take longer than anticipated; the operational risks as a result of acquiring undeveloped or underdeveloped assets and real estate and integration of those assets into our business; risks related to disruption of management’s attention from Awaysis’ ongoing business operations due to its efforts to identify, acquire, develop and manage new resort properties into Awaysis; any adverse effect of an acquired asset on Awaysis’ reputation, relationships, operating results and business generally; any lingering impact of the COVID-19 pandemic on Awaysis’ business, operating results, and financial condition or on global economic conditions; Awaysis’ ability to meet its liquidity needs; risks related to Awaysis’ indebtedness, especially in light of the significant amount of indebtedness we expect to incurred to complete various identified properties for our resort portfolio; inherent business risks, market trends and competition within the resort and hospitality industries; compliance with and changes to United States, Belize and global laws and regulations, including those related to anti-corruption and privacy; risks related to Awaysis’ planned acquisitions, joint ventures, and other partnerships; Awaysis’ dependence on third-party development activities; the performance of Awaysis’ information technology systems and our ability to maintain data security; regulatory proceedings or litigation; adequacy of our workforce to meet Awaysis’ business and operation needs; Awaysis’ ability to attract and retain key executives and employees with skills and capacity to meet our needs; and natural disasters or adverse geo-political conditions. Any one or more of the foregoing factors could adversely impact Awaysis’ operations, revenue, operating profits and margins, financial condition or credit rating.
For additional information regarding factors that could cause Awaysis’ actual results to differ materially from those expressed or implied in the forward-looking statements in this Annual Report on Form 10-K, please see the risk factors discussed in “Part I—Item 1A. Risk Factors” of this Annual Report on Form 10-K and those described from time to time in other periodic reports that we file with the SEC. There may be other risks and uncertainties that we are unable to predict at this time or we currently do not expect to have a material adverse effect on our business. Except for Awaysis’ ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, changes in management’s expectations, or otherwise.
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Risk Factor Summary
Our business is subject to a number of risks of which you should be aware before making an investment decision. These risks include, but are not limited to, the following:
| ● | We are a development stage company with a limited operating history and have not yet achieved profitability, making it difficult for you to evaluate our business and your investment. |
| ● | Since inception of our new business model, we have not established any material and recurring revenues or operations that will provide financial stability in the long term or achieve profitability, and there can be no assurance that we will realize our plans on our projected timetable (or at all) in order to reach sustainable or profitable operations. |
| ● | We have incurred net losses to date, we anticipate that we will continue to incur significant losses for the foreseeable future, and even if we were to generate revenue, we may never achieve or maintain profitability. We had a net loss of $7,093,476 and $4,295,446 for the fiscal years ended June 30, 2024 and 2023, respectively, and as of June 30, 2024 and 2023, we had an accumulated deficit of $12,642,933 and $5,549,457, respectively. |
| ● | We are dependent on management; |
| ● | The expansion of our operations can have a significant impact on our profitability; |
| ● | Our financial success is dependent on general economic conditions; |
| ● | Our operating results are subject to significant fluctuations; |
| ● | Our proposed objectives are capital intensive and subject to change; |
| ● | There is a limited trading market for our common stock, which could make it difficult for you to liquidate an investment in our common stock, in a timely manner; |
| ● | Our success will partially depend upon the acquisition and re-development of hospitality properties in varying stages of development, and we may be unable to consummate acquisitions on advantageous terms, the acquired properties may not perform as expected, or we may be unable to efficiently integrate assets into our existing operations; |
| ● | Investors are reliant on management’s assessment, selection, and development of appropriate properties; |
| ● | We face significant competition that may increase costs; |
| ● | Our profitability may be impacted by delays in the selection, acquisition, and re-development of properties; |
| ● | Supply chain disruptions could create unexpected renovation or maintenance costs or delays and/or could impact our development projects, any of which could adversely impact our results of operations. |
| ● | Our properties may be subject to environmental laws and regulations that have the potential to impose liability; |
| ● | We may be unable to sell a property if or when we decide to do so, including as a result of uncertain market conditions, which could adversely affect our ability to respond to market conditions; |
| ● | We may not succeed in creating a portfolio enclave strategy; |
| ● | Our properties may be subject to liabilities or other problems; |
| ● | The failure to successfully execute and integrate properties that support our planned business model could adversely affect our growth rate and consequently our revenues and results of operations; |
| ● | There are significant risks associated with “value-add” and properties in need of re-positioning; |
| ● | Uninsured losses relating to real property may adversely affect our performance; |
| ● | Competition for investment assets may increase costs and reduce returns; |
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| ● | Environmental regulations and issues, certain of which we may have no control over, may adversely impact our business; |
| ● | Real estate may develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem; |
| ● | Terrorist attacks or other acts of violence or war may adversely affect our industry, operations, and profitability; |
| ● | We will be subject to risks related to the geographic locations of the properties we develop and manage; |
| ● | There may be several conflicts of interest that arise as we implement our business plan; |
| ● | The market price and trading volume of our common stock may be volatile, which may adversely affect its market price; |
| ● | Your interest in us may be diluted if we issue additional shares of common stock. |
| ● | The sale of our common stock may cause its market price to drop significantly, regardless of the Company’s performance. |
| ● | We cannot assure you that our common stock will become listed on a national securities exchange and the failure to do so may adversely affect your ability to dispose of our common stock in a timely fashion. |
| ● | Our common stock is subject to the “penny stock” rules of the SEC, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock. |
| ● | Certain of our executive officers and directors, through their direct and indirect ownership of common stock, can substantially influence the outcome of matters requiring shareholder approval and may prevent you and other stockholders from influencing significant corporate decisions, which could result in conflicts of interest that could cause the Company’s stock price to decline. |
| ● | Anti-takeover provisions in the Company’s charter and bylaws under Delaware law may prevent or frustrate attempts by stockholders to change the board of directors or current management and could make a third-party acquisition of the Company difficult |
| ● | Investments in our common stock may provide you with limited rights, and we do not expect to pay cash dividends in the short term. |
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PART I
Item 1. Business.
The Company
Awaysis Capital, Inc. (the “Company”, “we”, “us” or “our”) is a real estate management and hospitality company focused on acquisition, redevelopment, sales, and managing rentals of residential vacation home communities in desirable travel destinations. We seek to create value through the targeting and acquisition, development, and up-cycling, rebranding, and repositioning of currently undervalued operating and shovel ready residential/resort communities in global travel destinations, with the intention to relaunch these assets under the “Awaysis” brand with the goals of creating a network of residential and resort enclave communities that will optimize both sales and rental revenues, providing attractive returns to owners and exceptional vacation experiences to travelers.
Increased global trends towards “work from home” opportunities have impacted both residency and travel. We believe that more people are seeking comfortable and convenient places to travel, visit, and live for extended durations. We seek to capitalize on these trends by transforming residential resort properties in desirable locations into convenient enclaves that facilitate this type of travel or residency. We define an enclave as a gated community that has all the amenities that will allow a person to live, work and play without having to leave the community.
At least initially, our target acquisitions are resorts that have not been completed nor have a prior operational history. As such we intend to purchase the real estate and finish the development, then we would sell the finished units to individual buyers and put them in a rental pool that we would manage.
The Company seeks to own, grow and manage a stable, cash generating, diversified portfolio of single-family and luxury resort/residence properties in the Caribbean, Europe, South America, and the United States.
We are a licensed real estate corporation in the State of Florida and maintain compliance with the Florida Real Estate Commission, the entity that regulates companies providing real estate services such as rentals, management, and sales. Additionally, our business is subject to federal, state, local and foreign laws, rules, and regulations that may vary depending on the geographical location and classification of our individual properties. Hospitality operations are also subject to compliance with the U.S. Americans with Disabilities Act and other laws and regulations relating to accessibility, and to laws, regulations and standards in other areas such as zoning and land use, licensing, permitting and registrations, safety, environmental and other property condition matters, staffing and employee training, and cleanliness/sanitation protocols.
Our business strategy entails targeting and identifying undervalued assets in emerging markets located in proximity to high demand travel destinations. The Company intends to focus these efforts on shovel-ready properties and/or other assets that we believe can be used to optimize sales and rental revenues. We have currently identified five properties in Belize, all of which are expected to constitute our initial real estate portfolio. To that effect, on June 30, 2022, we closed on the acquisition of certain real estate assets in San Pedro, Belize (the “Casamora Awaysis Assets”), pursuant to our previously announced series of Agreements of Purchase and Sale, all dated April 15, 2022. The total consideration paid by us for the properties subject to the agreements was at the appraisal value of $11.4 million (excluding transaction costs and fees) and was settled in a combination of a Purchase Money Mortgage of $2.6 million at 0% interest rate, payable on demand, a Purchase Money Mortgage of $280,000 at 0% interest rate that was paid on August 8, 2022 and 56.8 million shares of the Company’s common stock based on a per share price equal to the market price on the date of appraisal of $0.150. As the first acquisition by the Company in Belize and an important milestone, the Company expects to rebrand the Casamora Awaysis Asset, so it is easily identifiable as an Awaysis Property and fit perfectly with its strategy of creating a countrywide network of Awaysis residential enclave communities in the country.
The Casamora Awaysis Assets is in San Pedro, Belize, minutes away from the town core and is a 22 unit property, representing 45,206 square feet, and is expected to feature a wellness spa and fitness facility, restaurant, executive remote work center, private rooftop lounge, lap pool, beach bar, and waterfront esplanade. It consists of the following:
| ● | A rectangular shaped parcel with 100.0 feet of street frontage containing a 9,100 sq. ft. two story reinforced concrete building, with 2,173 sq. ft. of basement, a 1,600 sq. ft. porch/deck and a 3,062 sq. ft. terrace. The plan for this building is to have: (a) on the ground floor, a state-of-the-art fitness facility and wellness spa; (b) on the second floor, an executive conference center, a Yoga/Pilates studio with individual massage rooms associated with a planned wellness spa, and access to the porch/deck; and (c) on the third floor, a members-only roof-top patio and lounge. The project is targeted for completion by June 2025. | |
| ● | A rectangular shaped parcel with 100.0 ft. of frontage on the beach reserve and the Caribbean Sea having a total square footage of 13,590 sq. ft. The lot is elevated, sandy, has a reinforced concrete sea wall and currently contains two double-story concrete buildings. The northernmost building has four 1-bedroom, 1-bath units, each with a living room, kitchen, and covered porches. The southernmost building has two 1-bedroom, 1 bath units, each with a living room and kitchen on the ground floor and one 3-bedroom, 2-bath unfinished unit on the second floor, each with their own covered porches. Currently these existing units, while pending renovations, are available to be rented and generate hospitality revenues. The plan is to eventually renovate all these units into more modern, luxury boutique waterfront villas. This project is targeted for completion by June 2024. |
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| ● | 3,825 sq. ft. of raw open land with 105 feet of street frontage. Currently there is a main single-level concrete building having dimensions of 14.0 ft. by 14.0 ft. and consisting of a reinforced concrete foundation and reinforced concrete floors. In addition, there is a wooden bar open area with shade, having dimensions of 14.0 ft. by 16.0 ft., as well a single-level wooden structure having dimensions of 16.0 ft. by 24.0 ft. plus a 10 ft. by 24 ft. front shade that are currently rented by third-party proprietors contributing to the hospitality revenues. The planned use for this land is expected to serve both the patio extension and parking area for a planned ground floor café. | |
| ● | 1,717.83 sq. ft. of elevated land containing a three-story concrete building having dimensions of approximately 31.0 ft. by 41.0 ft. plus covered concrete porches on each floor of approximately 15.0 ft. by 18 ft. The ground floor unit is approximately 80% complete and we have executed a letter of intent from a real estate brokerage firm to lease unit as a sales office. The second-floor unit is under renovations and is currently planned for residential use as a 2 bedroom, 2 bath unit. The penthouse unit is a 3-bedroom, 2-bath that we currently plan to remodel with a dining room, living room, kitchen and small balcony facing the ocean. There is also an open-air patio situated above the covered patio of the penthouse which provides sweeping views of the ocean as well as sunset views over the lagoon side. This is targeted to be completed by June 2024. | |
| ● | A four-story condominium complex that sits atop 20,995 sq. ft. of oceanfront land and comprises twenty individual 2-bedroom, 2-bathroom ocean view condo suites of which twelve are owned by Awaysis. Our units are being fully renovated and targeted for completion by the end of 2024. Of the remaining eight units that are owned by third-parties, five units are still being renovated while the other three are fully furnished and under rental agreements and Homeowner’s Association (HOA) management agreements with their owners to generate hospitality revenues. The twelve units owned by Awaysis are further described below: |
| ○ | Two 1,380 sq. ft. ground floor units including a covered balcony/porch, the plan of which is to renovate each into a 2-bedroom, 2-bath high-end condominium unit with a living room, dining area and kitchen. The units have an unobstructed view of the ocean and overlook the pool and main ground garden landscape. | |
| ○ | Two 1,455 sq. ft. ground floor units including a covered balcony/porch, the plan of which is to renovate each into a 2-bedroom, 2-bath high-end condominium unit with a living room, dining area and kitchen. The units have an unobstructed view of the ocean and overlooks the pool and main ground garden landscape. | |
| ○ | A 1,380 sq. ft. second floor unit including a covered balcony/porch, the plan of which is to renovate into a 2-bedroom, 2-bath high-end condominium unit with a living room, dining area and kitchen. The unit has an unobstructed view of the ocean and overlooks the pool and main ground garden landscape. | |
| ○ | Three 1,455 sq. ft. second floor units including a covered balcony/porch, the plan of which is to renovate each into a 2-bedroom, 2-bath high-end condominium unit with a living room, dining area and kitchen. The units have an unobstructed view of the ocean and overlooks the pool and main ground garden landscape. | |
| ○ | Three 1,455 sq. ft. third floor units including a covered balcony/porch, the plan of which is to renovate each into a 2-bedroom, 2-bath high-end condominium unit with a living room, dining area and kitchen. The units have an unobstructed view of the ocean and overlooks the pool and main ground garden landscape. | |
| ○ | A 1,380 sq. ft. third floor unit including a covered balcony/porch, the plan of which is to renovate into a 2-bedroom, 2-bath high-end condominium unit with a living room, dining area and kitchen. The unit has an unobstructed view of the ocean and overlooks the pool and main ground garden landscape. |
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History
The Company was formed in Delaware on September 29, 2008, under the name ASPI, Inc (“ASPI”).
On April 25, 2012, ASPI filed an amendment to its Certificate of Incorporation to change its name from ASPI, Inc. to JV Group, Inc. and to increase the number of its authorized common shares from One Hundred Million (100,000,000) shares to One Billion (1,000,000,000) shares.
From its formation on September 28, 2008, through September 7, 2011, the Company was a publicly quoted shell company seeking to merge with an entity with experienced management and opportunities for growth in return for shares of common stock to create value for the Company’s shareholders.
From September 8, 2011, through October 2015, through the Company’s wholly owned subsidiary, Prestige Prime Office, Limited (“Prestige”), a Hong Kong Special Administrative Region Corporation, the Company operated as a serviced office provider in the Far East. Prestige ceased serviced office provider operations in October 2015, and effective September 30, 2017, the Company disposed of Prestige and its assets and liabilities.
As of November 23, 2021, Michael A. Littman ATTY, Defined Benefit Plan, MAL as trustee, an affiliate of Michael A. Littman, the then secretary and a director of the Company and the owner of 98,108,000 shares of the Company’s common stock representing approximately 99.2% of the Company’s issued and outstanding common stock, sold 98,008,000 shares to Harthorne Capital Inc., a Delaware corporation (“Harthorne”), for aggregate consideration of $500,000, or approximately $0.0051 per share. This transaction was deemed a change of control, and effective as of November 23, 2021, (a) Calvin D. Smiley, Sr., the Company’s Chief Executive Officer and President, resigned from all officer and employment positions with the Company and its subsidiaries, (b) Michael A. Littman resigned from all officer and employment positions with the Company and its subsidiaries, (c) Michael Singh was appointed Chief Executive Officer, (d) Andrew Trumbach was appointed President, Chief Financial Officer, Secretary and Treasurer and (e) Lisa Marie Iannitelli was appointed Executive Vice President, Director-Investor Relations.
Contemporaneously, the size of the Board of Directors of the Company was increased from three directors to six directors. Michael Singh was appointed as Chairman of the Board and Andrew Trumbach and Lisa Marie Iannitelli were each appointed as a director, filling the vacancies on the Board resulting from the increase to the size of the Board.
Effective as of January 7, 2022, Messrs. Littman, Smiley and Green each resigned as directors of the Company. Subsequently, Tyler A Trumbach, Claude Stuart and Narendra Kini were appointed to the Board to fill the vacancies resulting from such January 7, 2022 resignations.
In February 2022, the Board of Directors of the Company determined to pursue a business strategy of acquiring, developing, and managing residential vacation home communities in desirable travel destinations.
On May 18, 2022, we changed our name from JV Group, Inc. to Awaysis Capital, Inc. In connection with this name change, we changed our ticker symbol from “ASZP” to “AWCA” and effective May 25, 2022, we began trading on the OTC Market under our new symbol.
In September 2024, our Board of Directors and holders of a majority of our outstanding voting securities, approved of a reverse split of up to 1-for-20 of our issued and outstanding shares of common stock (the “Reverse Split”) and authorized our Co-CEOs, in their sole discretion, to determine the final ratio and effect the Reverse Split any time before the one year anniversary of the approval date. We do not yet have an effective date for the Reverse Split, but expect the Reverse Split to take effect in the second half of our 2025 fiscal year.
Our principal executive offices are located at 3400 Lakeside Drive, Suite 100, Miramar, Florida 33027. Our main telephone number is (855) 795-3311. Our website is www.awaysisgroup.com. The information contained on, or that can be accessed through, our website is not incorporated by reference and is not a part of this Annual Report on Form 10-K.
Our Business
Our business is expected to include real estate development and sales, hospitality rentals, resort operations and club management. Revenues are expected to come from:
| ● | selling our own developed resort inventory that includes condominiums, single family homes, and villas. |
| ● | providing management services to our branded resorts under HOA management agreements; and |
| ● | manage short-term unit rentals of sold and unsold inventory at the resorts we own or manage. |
The Casamora Awaysis development, our first property, has started its hospitality operations and has commenced sales operations on or about June 1, 2023.
As of June 30, 2024, Awaysis has a total of six units available for rent. Four of these units consist of Company owned villas. The Company maintains a rental agreement with the owners of the other two units, both of which are a part of the Company’s rental pool. Awaysis has also entered into a one-year lease agreement, effective April 1, 2024, on a three bedroom condominium located in the commercial building adjacent to the Casamora Resort Property. This unit has been listed for sale.
As of June 30, 2024, we estimate approximately $3,000,000 in construction cost projections for the remaining portions of the Casamora property. As development progresses, and more units are expected to become rentable, we expect an increased in hospitality revenues.
In September 2024 the Company entered into leases for the renting out of commercial space at Casamora, enabling an increase in rental income of $16,000 per month in the aggregate.
Inventory and Development Activities
We intend to acquire real estate assets to develop into resorts, starting in Belize and then expand into other resort markets as funds allow, including building additional phases at existing resorts, including re-acquiring inventory from owners in default and in the open market and sourcing other real estate assets from third parties.
Our development activities involving the acquisition of real estate are expected to be followed by construction or renovation to create integrated resorts under the “Awaysis” banner and brand. These development activities, and the related management of construction activities, are expected to be performed by us as developers and under a cost-plus construction contract with other construction companies. The development and construction of the resorts require a large upfront investment of capital and can take several years to complete in the case of a ground-up or partially completed project.
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On March 24, 2022, we executed a non-binding letter of intent with Chial Mountain Ltd., an affiliate of Michael Singh, our Chairman and CEO. Subject to the terms and conditions of a definitive purchase agreement we expect that we will enter into among the parties, we intend to acquire approximately thirty-five villas consisting of an estimated 59,000 sq. ft. located in Cayo, Belize, for an aggregate purchase price of approximately $5,500,000 payable in a combination of cash and shares of our Common Stock (the “Chial Acquisition”). We can make no assurances that the Chial Acquisition will ever be consummated.
On August 10, 2023, we executed a non-binding letter of intent with W2 Enterprises S.R.L. Subject to the terms and conditions of a definitive purchase agreement we expect that we will enter into among the parties, we intend to acquire approximately thirty-eight units consisting of an estimated 44,527 sq. ft. located in Cabarete, Dominican Republic, for an aggregate purchase price of approximately $1,500,000 payable in a combination of cash and shares of our Common Stock (the “La Bocca Acquisition”). We can make no assurances that the La Bocca Acquisition will ever be consummated.
On January 4, 2024, we executed a non-binding letter of intent with Boca Chica Resorts Limited. Subject to the terms and conditions of a definitive purchase agreement we expect that we will enter into among the parties, we intend to acquire approximately 126 units consisting of an estimated 286,312 sq. ft. located in San Pedro, Belize, for an aggregate purchase price of approximately $42,000,000 payable in a combination of cash and shares of our Common Stock (the “La Sirene Acquisition”). We can make no assurances that the La Sirene Acquisition will ever be consummated.
Marketing and Sales Activities
Our planned marketing and sales activities are expected to be based on targeted direct marketing and a highly personalized sales approach. We intend to use targeted direct marketing to reach potential purchasers of units or sell through a licensed distribution network of both in-market and off-site sales centers. Our products are expected to be marketed for sale or rent globally. We intend to offer owner financing up to 50% of the price of the units. In its current form, the offering of owner financing allows a buyer to pay a minimum of 50% of the purchase price at closing. The remaining balance is to be paid off by giving a mortgage to Awaysis that is registered on title at an interest rate that is slightly higher than commercially available interest rates and amortized over five, ten or twenty-five years where the buyer agrees to make monthly payments to Awaysis until the term is complete and the balance is paid in full.
Resort Management Activities
Resort Management
For each resort property we acquire and develop, we intend for Awaysis Capital, LLC, our management company subsidiary to enter into a management agreement. The management company is expected to ensure that the resorts are well-maintained and financially stable, and the services provided are expected to include day-to-day operations of the resort, maintenance of the resort, preparation of reports, budgets and projections and employee training and oversight. The management agreements are expected to provide for a cost-plus management fee, which means we would generally earn a fee over and above the cost to operate the applicable resort. As a result, the management fees we expect to earn would be predictable, unlike traditional revenue-based hotel management fees, and our management fees generally would be unaffected by changes in rental rate or occupancy. We also expect to be reimbursed for the costs incurred to perform our management services, principally related to personnel providing on-site services.
Rental of Available Inventory
We intend to rent unsold inventory at our resorts as well as to rent inventory that is sold on behalf of the owners. By using our websites and other direct booking channels to rent available inventory, we intend to be able to reach potential new customers and introduce them to our resorts. Inventory rentals would allow us to utilize otherwise unoccupied inventory to generate additional revenues and provision of ancillary services. We expect that we will earn a fee from rentals of third-party inventory. Additionally, we intend to provide ancillary offerings including food and beverage, retail, and spa offerings at our planned resorts.
Competition
The resort and hotel industry are highly competitive and comprised of several national and regional companies that develop, finance and operate resorts and hotels.
Our planned business will compete with other entities engaged in the leisure and vacation industry, including resorts, hotels, cruises, and other accommodation alternatives, such as condominium and single-family home rentals. We also intend to compete with home and apartment sharing services that operate websites that market available privately-owned residential properties that can be rented on a nightly, weekly, or monthly basis. In certain markets, we may compete with timeshare operators, and it is possible that other potential competitors may develop properties near our resort locations once acquired, developed, and marketed.
Our planned business will compete with the virtually thousands of other hotels, resorts and timeshare operators vying for vacation travelers, in all cases based principally on location, quality of accommodations, price, service levels and amenities, financing terms, quality of service, terms of property use, reservation systems, flexibility, as well as brand name recognition and reputation. We also compete for property acquisitions and partnerships with entities that have similar investment and development objectives to us.
We believe that, in the competitive industry in which we intend to operate, trademarks, service marks, trade names and logos are very important to the marketing and sales of products. While we have trademarked the name and logo “Awaysis”, which we believe is compelling, it is a new brand and there are many other trademarks, service marks, trade names and logos that have much greater brand identification.
There is also significant competition for talent at all levels within the industry, especially in sales and management.
Seasonality and Cyclicality
We expect to experience seasonality in the rental segment of our planned business, with stronger revenue generation during traditional vacation periods for those expected locations. Our business of selling units may be moderately cyclical as the demand for vacation units for sale is affected by the availability and cost of financing for purchasers, as well as general economic conditions and the relative health of the travel industry.
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Government Regulation
Our proposed business is subject to various international, national, federal, state, and local laws, regulations and policies in jurisdictions in which we intend to operate. Some laws, regulations and policies would impact multiple areas of our business, such as securities, anti-discrimination, anti-fraud, data protection and security and anti-corruption and bribery laws and regulations or government economic sanctions, including applicable regulations under the U.S. Treasury’s Office of Foreign Asset Control and the U.S. Foreign Corrupt Practices Act (“FCPA”). The FCPA and similar anti-corruption and bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or generating business. Other laws, regulations and policies primarily affect one of our areas of business: real estate development activities; marketing and sales activities; financial services activities; and resort management activities. We will continue to be subject to applicable new legislation, rules and regulations that have been proposed, or may be proposed, by federal, state and local authorities relating to the origination, servicing and securitization of mortgage loans.
Real Estate Development Regulation
Our planned real estate development activities are regulated under a number of different statutes in the jurisdictions we intend to operate, including Belize. We would generally be subject to laws and regulations typically applicable to real estate development, subdivision, and construction activities, such as laws relating to zoning, land use restrictions, environmental regulation, accessibility, title transfers, title insurance and taxation. In Belize, these include the equivalent to the U.S. Americans with Disabilities Act of 1990 and the Accessibility Guidelines promulgated thereunder. In addition, we may be subject to laws in some jurisdictions that impose liability on property developers for construction defects discovered or repairs made by future owners of property developed by the developer.
Marketing and Sales Regulation
Our marketing and sales activities are expected to be highly regulated. A wide variety of laws and regulations govern our marketing and sales activities, including regulations implementing the USA PATRIOT Act, Foreign Investment In Real Property Tax Act, the Federal Interstate Land Sales Full Disclosure Act and fair housing statutes, U.S. Federal Trade Commission (“FTC”) and state “Little FTC Act” and other regulations governing unfair, deceptive or abusive acts or practices including unfair or deceptive trade practices and unfair competition, state attorney general regulations, anti-fraud laws, prize, gift and sweepstakes laws, real estate, title agency or insurance and other licensing or registration laws and regulations, anti-money laundering, consumer information privacy and security, breach notification, information sharing and telemarketing laws, home solicitation sales laws, tour operator laws, lodging certificate and seller of travel laws and other consumer protection laws.
We expect that we must obtain the approval of numerous governmental authorities for our planned marketing and sales activities. Changes in circumstances or applicable law may necessitate the application for or modification of existing approvals.
Resort Management Regulation
Our planned resort management activities are expected to be subject to laws and regulations regarding community association management, public lodging, food and beverage services, liquor licensing, labor, employment, health care, health and safety, accessibility, discrimination, immigration, gaming, and the environment (including climate change).
Environmental Matters
We expect to be subject to certain requirements and potential liabilities under various U.S. federal, state and local and foreign environmental, health and safety laws and regulations and incur costs in complying with such requirements. These laws and regulations govern actions including air emissions, the use, storage and disposal of hazardous and toxic substances, and wastewater disposal. In addition to investigation and remediation liabilities that could arise under such laws, we may also face personal injury, property damage, fines, or other claims by third parties concerning environmental compliance or contamination. We expect to use and store hazardous and toxic substances, such as cleaning materials, pool chemicals, heating oil and fuel for back-up generators at some of our planned facilities, and we expect to generate certain wastes in connection with our planned operations. We may, from time to time, be responsible for investigating and remediating contamination at some of our developed facilities, such as contamination that has been discovered when we have removed underground storage tanks, and we could be held responsible for any contamination resulting from the disposal of wastes that we generate, including at locations where such wastes have been sent for disposal. In some cases, we may be entitled to indemnification from the party that caused the contamination pursuant to our management, construction, or renovation agreements, but there can be no assurance that we would be able to recover all or any costs we incur in addressing such problems. From time to time, we may also be required to manage, abate, remove, or contain mold, lead, asbestos-containing materials, radon gas or other hazardous conditions found in or on our planned properties.
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Human Capital
Currently, we have four full-time employees, including our executives. We presently do not have pension, health, annuity or, insurance; however, we intend to adopt some or all of such employee benefits in the future. There are presently no personal benefits available to any officers, directors, or employees. Our employees are all based in the United States, at our office located in Miramar, Florida. These employees oversee day-to-day operations of the Company. As required, we also engage consultants to provide services to the Company both in the U.S. and Belize, including real estate, regulatory, legal and corporate services. We are subject to labor laws and regulations that apply to our locations in the U.S. and Belize. These laws and regulations principally concern matters such as pensions, paid annual vacation, paid sick days, length of the workday and work week, minimum wages, overtime pay, insurance for work-related accidents, severance pay and other conditions of employment. We have no unionized employees.
We believe we are able to attract and retain top talent by creating a culture that challenges and engages our employees, offering them opportunities to learn, grow and achieve their career goals.
We believe that we provide competitive compensation for our employees. We may also offer annual bonuses and stock-based compensation for eligible employees.
We aim to provide our employees with advanced professional and development skills, so that they can perform effectively in their roles and build their capabilities and career prospects for the future.
We strive to encourage a diversity of views and to create an equal opportunity workplace.
Where You Can Find More Information
Our website address is https://awaysisgroup.com. Information on our website is not incorporated by reference herein.
Risk Factors
We are subject to various risks that could materially and adversely affect our business, financial condition, results of operations, liquidity, and stock price. You should carefully consider the risk factors discussed below, in addition to the other information in this Annual Report on Form 10-K. Further, other risks and uncertainties not presently known to management or that management currently deems less significant also may result in material and adverse effects on our business, financial condition, results of operations, liquidity, and stock price. The risks below also include forward-looking statements; and actual results and events may differ substantially from those discussed or highlighted in these forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements.”
We are a development stage company with a limited operating history and have not yet achieved profitability, making it difficult for you to evaluate our business and your investment.
Our operations are subject to all of the risks inherent in the establishment of a new business enterprise, including but not limited to the absence of an operating history, lack of fully-developed or commercialized properties, insufficient capital, limited assets, expected substantial and continual losses for the foreseeable future, limited experience in dealing with regulatory issues, lack of marketing experience, need to rely on third parties for the development and commercialization of our proposed properties, a competitive environment characterized by well-established and well-capitalized competitors and reliance on key personnel.
We may not be successful in carrying out our business objectives. The revenue and income potential of our business and operations are unproven as the lack of operating history makes it difficult to evaluate the future prospects of our business. There is nothing at this time on which to base an assumption that our business operations will prove to be successful or that we will ever be able to operate profitably. We have incurred net losses since our inception. Accordingly, we have no track record of successful business activities, strategic decision-making by management, fund-raising ability, and other factors that would allow an investor to assess the likelihood that we will be successful in our business. There is a substantial risk that we will not be successful in fully implementing our business plan, or if initially successful, in thereafter generating material operating revenues or in achieving profitable operations.
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Since inception of our new business model, we have not established any material and recurring revenues or operations that will provide financial stability in the long term or achieve profitability, and there can be no assurance that we will realize our plans on our projected timetable (or at all) in order to reach sustainable or profitable operations.
Investors are subject to all the risks incident to the creation and development of a new business and each investor should be prepared to withstand a complete loss of his, her or its investment. Furthermore, the accompanying financial statements have been prepared assuming that we will continue as a going concern. We have not emerged from the development stage and may be unable to raise further equity. Additionally, we have not generated material and recurring revenues to date, have sustained losses and have accumulated a significant deficit since our inception. As of June 30, 2023, we had cash of approximately $746,000 and total current liabilities of approximately $3,552,000. These factors raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Even if we successfully develop and market our business plan, we may not generate sufficient or sustainable revenue to achieve or sustain profitability, which could cause us to cease operations and cause you to lose all of your investment. Because we are subject to these risks, you may have a difficult time evaluating our business and your investment in our Company.
We have incurred net losses to date, we anticipate that we will continue to incur significant losses for the foreseeable future, and even if we were to generate revenue, we may never achieve or maintain profitability.
During the fiscal years ended June 30, 2024 and 2023, we recognized a net loss of $7,093,476 and $4,295,446, respectively. We had an accumulated deficit as of June 30, 2024 and 2023 of $12,642,933 and $5,549,457, respectively. We expect to incur significant losses for the foreseeable future as we continue to implement our business plan and acquire, develop and operate a range of hospitality properties. In the future, acquisition and development of such additional properties, together with anticipated general and administrative expenses, will likely result in the Company incurring further significant losses.
To become profitable, we must successfully implement our proposed business plan and strategies, either alone or in conjunction with possible collaborators. We may never have any significant recurring revenues or become profitable.
We are dependent on management.
Our business is and will continue to be significantly dependent on our management team, including Michael Singh and Andrew Trumbach, our Co-CEOs. The loss of any member of our management team could have a materially adverse effect on the Company.
The expansion of our operations can have a significant impact on our profitability.
We intend on expanding our business through the acquisition, development, and maintenance of real estate assets. Any expansion of operations that we may undertake will entail risks, such actions may involve specific operational activities which may negatively impact our profitability. Consequently, investors must assume the risk that (i) such expansion may ultimately involve expenditures of funds beyond the resources available to us at that time, and (ii) management of such expanded operations may divert management’s attention and resources away from our existing operations, all of which may have a material adverse effect on our present and prospective business activities.
Our financial success is dependent on general economic conditions.
Our financial success may be sensitive to adverse changes in general economic conditions in the United States, Belize and any other jurisdiction in which our assets are located, such as recession, inflation, unemployment, geopolitical situations, and interest rates. Such changing conditions could reduce demand in the marketplace for our planned real estate portfolio. We have no control over these changes.
Our operating results are subject to significant fluctuations.
Our operating results may fluctuate significantly from period to period as a result of a variety of factors, including purchasing patterns of customers, competitive pricing, debt service and principal reduction payments, and general economic conditions. Consequently, our revenues may vary by quarter, and our operating results may experience fluctuations.
Our proposed objectives are capital intensive and subject to change.
Our proposed business plans may change. Many of our potential business endeavors are capital intensive and may be subject to statutory or regulatory requirements. Management reserves the right, at any time, to make significant modifications to the Company’s stated strategies depending on future events.
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There is a limited trading market for our common stock, which could make it difficult for you to liquidate an investment in our common stock, in a timely manner.
Our common stock is currently traded on the OTC Pink market. Because there is a limited public market for our common stock, you may not be able to liquidate your investment when you want. We cannot assure you that an active trading market for our common stock will ever develop. There is limited trading in our common stock, and we cannot assure you that an active public market for our common stock will ever develop. The lack of an active public trading market means that you may not be able to sell your shares of common stock when you want, thereby increasing your market risk. Until our common stock is listed on a national securities exchange, which we can provide no assurance, we expect that it will continue to be listed on the OTC Pink market. An investor may find it difficult to obtain accurate quotations as to the market value of the common stock and the trading of our common stock may be extremely sporadic. For example, several days may pass before any shares may be traded. A more active market for our common stock may never develop. In addition, if we failed to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending or selling the common stock, which may further affect its liquidity. This would also make it more difficult for us to raise additional capital.
Our success will partially depend upon acquiring and redevelopment of hospitality properties in varying stages of development, and we may be unable to consummate acquisitions on advantageous terms, the acquired properties may not perform as expected, or we may be unable to efficiently develop or integrate assets into our existing operations.
We intend to acquire hospitality properties in varying stages of development which we would then re-develop, operate, maintain, sell, rent and/or manage. The acquisition of such properties entails various risks, including the risks that they may not perform as expected, that we may be unable to integrate assets quickly and efficiently into our existing operations and that the cost estimates for the development of a property may prove inaccurate.
Investors are reliant on management’s assessment, selection, and development of appropriate properties.
Our ability to achieve our current objectives is dependent upon the performance of our management team in the quality and timeliness of our acquisition and development of hospitality properties. Subject to requirements of applicable law, our stockholders are not expected to have an opportunity to evaluate the terms of transactions or other economic or financial data concerning any particular property we may acquire and re-develop. Investors must rely entirely on the decisions of the management team and the oversight of our principals.
We face significant competition that may increase costs.
We will experience significant competition from other buyers and sellers of real estate and other real estate hospitality projects. Competition may have the effect of increasing our acquisition costs, making it more difficult to identify and close on the acquisition of desirable real estate properties, and decrease the sales price or lease rates of developed assets.
Our profitability may be impacted by delays in the selection, acquisition, and development of properties.
We may encounter delays in the selection, acquisition and development of properties that could adversely affect our profitability. We may experience delays in identifying properties that satisfy ideal purchase parameters.
Supply chain disruptions could create unexpected renovation or maintenance costs or delays and/or could impact our development projects, any of which could adversely impact our results of operations.
Supply chain disruptions and the cost of materials, parts and labor have progressively increased, and may continue to do so over the long-term. Our construction projects, including renovations and/or maintenance are a routine and necessary part of our business. We may incur costs for these projects or routine maintenance at our properties that exceeds our original estimates due to increased costs for materials or labor or other costs that we do not anticipate. We also may be unable to complete our development projects on schedule due to supply chain disruptions or labor shortages.
Our properties may be subject to environmental laws and regulations that have the potential to impose liability.
Under various local environmental laws, ordinances, and regulations, a current or previous owner or operator of real property may be liable for the cost of removal or remediation of hazardous or toxic substances on, under or in such property. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require expenditures. Environmental laws provide for sanctions in the event of non-compliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. In connection with the acquisition and ownership of its properties, we may be potentially liable for such costs. The cost of defending against claims of liability, complying with environmental regulatory requirements or remediation of any contaminated property could have a materially adverse effect on our business, assets or results of operations.
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We may be unable to sell a property if or when we decide to do so, including as a result of uncertain market conditions, which could adversely affect our ability to respond to market conditions.
Although we expect to develop, operate, manage and hold the various properties we acquire as part of our business plan, there may be times when it would be appropriate to instead sell or otherwise divest one or more properties. Our ability to dispose of properties on advantageous terms depends on factors, some of which are beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers of the properties acquired. We cannot predict the various market conditions affecting real estate and hospitality properties which will exist at any particular time in the future. Due to the uncertainty of market conditions, which may affect the future disposition of the properties acquired, we cannot assure our shareholders that we will be able to sell such properties at a profit in the future. Furthermore, we may be required to expend funds to correct defects or to make improvements to our real estate assets and hospitality properties if we otherwise would want to dispose of a property but the market to do so is not positive. Funds may not be available to correct such defects or to make such improvements. In acquiring a property, we may agree to restrictions that prohibit the sale of that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. These provisions would restrict our ability to sell a property.
We may not succeed in creating a portfolio enclave strategy.
We believe that the acquisition of assets will be critical to our ability to enter new emerging markets and build local market density. This strategy is expected to contribute to our ability to grow sales and rental revenues and increase profitability over time. In order to build on this concept of creating vacation-remote work enclave communities, we must be able to identify and maintain a pipeline of locally managed vacation homes and condominiums in new and emerging markets. We have had initial success in identifying existing shovel ready resorts and vacation properties by giving developers and owners an exit strategy and providing market and developmental expertise to reposition the acquired assets to maximize revenues, but that may not continue. Our ability to maintain this momentum depends on our ability to provide a unique travel experience to both owners and guests and to be able to consistently generate income to the residence owners. Our ability to provide this level of income and expectations are likely to be partially dependent on the labor cost of our local markets and our ability to hire teams for a diversity of roles at a reasonable cost given the constraints of each particular local market environment.
Our properties may be subject to liabilities or other problems.
We intend to perform certain due diligence for each property or other real estate related asset that we acquire. We will also seek to obtain appropriate representations and indemnities from sellers with respect to such properties. We may, nevertheless, acquire properties that are subject to uninsured liabilities or that otherwise have problems. In some instances, we may have only limited or perhaps even no recourse for any such liabilities or other problems or, if we received indemnification from a seller, the resources of such seller may not be adequate to fulfill its indemnity obligation. As a result, we could be required to resolve or cure any such liability or other problems, and such payment could have an adverse effect on our cash flow available to meet other expenses or to make dividend payments to shareholders.
The failure to successfully execute and integrate properties that support our business model could adversely affect our growth rate and consequently our revenues and results of operations.
We expect that we may acquire multiple properties for development or redevelopment at any given time, from time to time. If we are not able to consummate these acquisitions, it could negatively impact our projected growth rate, revenue results, results of operations and the trading prices of our common stock. Furthermore, such transactions involve a number of financial, accounting, operational, legal, compliance and other risks and challenges, any of which could negatively affect our projected growth rate revenue results, results of operations and the trading price of our common stock and may have a material adverse effect on our business, results of operations and financial condition.
There are significant risks associated with “value-add” and properties in need of re-positioning.
Our targeting of financially distressed properties (and, in some cases, raw land) is expected to result in properties which are partially leased or completely vacant and thus not generating positive cash flow (or any cash flow). Similarly, under-performing and value-add properties that we are targeting may experience unanticipated delays in, or increases of the cost to improve or reposition those properties that may be beyond our control. There is no assurance we will be successful in stabilizing such properties given the significant number of factors beyond our control, including general or local economic conditions and local market demand that may come into play, which could materially adversely affect our results of operations and financial condition.
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Uninsured losses relating to real property may adversely affect our performance.
We will attempt to ensure that all of our properties are comprehensively insured (including liability, fire, storm and extended coverage) in amounts sufficient to permit replacement in the event of a total loss, subject to applicable deductibles. However, in the event such insurance is not sufficient, or if we do not have a sufficient external source of funding to repair or reconstruct a damaged property our results of operations and financial condition could be adversely affected. There can be no assurance that any such source of funding will be available to us for such purposes in the future.
Competition for real property may increase costs and reduce returns.
We will experience competition for real property and other hospitality assets from individuals, corporations, banks, and insurance company investment accounts, as well as other real estate limited partnerships, real estate investment funds, commercial developers, pension plans, institutional and foreign investors and entities engaged in real estate investment activities. We will compete against other potential purchasers of resort-style properties and, as a result of the weakened world economy, there is greater competition for the properties of the type we seek to acquire. Some of these competing entities may have greater financial and other resources allowing them to compete more effectively. This competition may result in us paying higher prices to acquire properties than we otherwise would, or we may be unable to acquire properties that we believe meet our business objectives from time to time.
In addition, our properties may be located close to properties that are owned by competitors. These competing properties may be better located and more suitable for desirable tenants or customers than our properties, resulting in a competitive advantage for these other properties. We may face similar competition from other properties that may be developed in the future. This competition may limit our ability to sell units and/or rent and manage such units, increase our costs of securing such purchasers or renters, and limit our ability to charge higher prices or rents and/or require us to make capital improvements we otherwise might not make to our properties. As a result, we may suffer reduced cash flow with a decrease in share price and/or the ability to provide dividends.
Environmental regulations and issues, certain of which we may have no control over, may adversely impact our business.
Federal, state, and local laws and regulations impose environmental controls, disclosure rules and zoning restrictions which directly impact the management, development, use, and/or sale of real estate. Such laws and regulations tend to discourage sales and leasing activities and mortgage lending with respect to some properties, and may therefore adversely affect us specifically, and the real estate industry in general. Failure to uncover and adequately protect against environmental issues may subject us to liability as the buyer of such property or asset. Environmental laws and regulations impose liability on current or previous real property owners or operators for the cost of investigating, cleaning up or removing contamination caused by hazardous or toxic substances at the property.
We may be held liable for such costs as a subsequent owner and developer of such property. Liability can be imposed even if the original actions were legal, and we had no knowledge of the presence of hazardous or toxic substances.
We may also be held responsible for the entire payment of the liability if we are subject to joint and several liabilities and the other responsible parties are unable to pay. Further, we may be liable under common law to third parties for damages and injuries resulting from environmental contamination emanating from the site, including the presence of asbestos containing materials. Insurance for such matters may not be available. Additionally, new or modified environmental regulations could develop in a manner which could adversely affect us.
Real estate may develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem.
When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing as exposure to mold may cause a variety of adverse health effects and symptoms, including allergies or other reactions.
As a result, the presence of significant mold at any of our properties could require us to undertake a costly remediation program to contain or remove the mold from the affected property. In addition, the presence of significant mold could expose us to liability from its tenants, employees of such tenants and others if property damage or health concerns arise.
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Terrorist attacks or other acts of violence or war may adversely affect our industry, operations, and profitability.
Terrorist attacks or other acts of violence or war may harm our results of operations. There can be no assurance that these attacks or armed conflicts, whether international or domestic, will not occur. These attacks or armed conflicts may directly or indirectly impact the value of the property we own or that secures our loans. Losses resulting from these types of events may be uninsurable or not insurable to the full extent of the loss suffered. Moreover, any of these events could cause consumer confidence and spending to decrease or result in increased volatility in the United States and worldwide financial markets and economy. These attacks or armed conflicts could also result in economic uncertainty in the United States or abroad. Adverse economic conditions resulting from terrorist attacks or other acts of violence or war could reduce demand for space in our properties due to the adverse effect on the economy and thereby reduce the value of our properties.
We will be subject to risks related to the geographic locations of the properties we develop and manage.
We intend to acquire, develop or re-develop, maintain, operate and manage residential and resort vacation home communities. If the hospitality markets or general economic conditions in the geographic areas in which we intend to operate declines, we may be delayed in completing development of our properties or revenues generated from these properties in these areas could decline. Any of these events could materially adversely affect our business, financial condition or results of operations.
There may be several conflicts of interest that arise as we implement our business plan.
Certain of our officers and directors and our affiliates may engage, for their own account, or for the account of others, in other business ventures similar to ours or otherwise, and neither we nor any shareholder shall be entitled to any interest therein. Our management will devote only so much time to our business as is reasonably required. If a specific business venture becomes available, such person(s) may face a conflict in selecting between our business and his or her other business interests. We have not yet formulated a policy for the resolution of such conflicts. We will not share in the risks or rewards of such other ventures; however, such other ventures will compete for their time and attention, which might create other conflicts of interest. We do not at this time require our officers or directors to devote any particular amount of time to the Company. As a result, our business and results of operations could be materially adversely affected. We are buying certain assets in our portfolio from certain of our officers and directors. Even though these will be purchased with arms-length appraisals, there is still an inherent conflict between the roles of certain officers and/or directors acting and representing the sellers and buyers in the same transaction.
The market price and trading volume of our common stock may be volatile, which may adversely affect its market price.
The market price of our common stock could be subject to significant fluctuations due to factors such as:
| ● | actual or anticipated fluctuations in our financial condition or results of operations; |
| ● | the success or failure of our operating strategies and our perceived prospects; realization of any of the risks described in this section; failure to be covered by securities analysts or failure to meet the expectations of securities analysts; |
| ● | a decline in the stock prices of peer companies; and |
| ● | a discount in the trading multiple of our common stock relative to that of common stock of certain of our peer companies due to perceived risks associated with our smaller size. |
As a result, shares of our common stock may trade at prices significantly below the price you paid to acquire them. Furthermore, declines in the price of our common stock may adversely affect our ability to conduct future offerings or to recruit and retain key employees, including our managing directors and other key professional employees.
Your interest in us may be diluted if we issue additional shares of common stock.
In general, shareholders do not have preemptive rights to any common stock issued by us in the future. Therefore, shareholders may experience dilution of their equity investment if we issue additional shares of common stock in the future, including shares issuable under equity incentive plans, or if we issue securities that are convertible into shares of our common stock, which we intend to do.
The sale of our Common Stock may cause its market price to drop significantly, regardless of the Company’s performance.
Any future sale of shares of our Common Stock could have the effect of increasing the volatility in the trading price of our Common Stock.
The sale of our Common Stock could also encourage short sales by market participants. Short selling is a method used to capitalize on an expected decline in the market price of a security and could depress the price of our Common Stock, which could further increase the potential for future short sales.
The Company cannot predict the size of future issuances or sales of our Common Stock or the effect, if any, that future issuances and sales of our Common Stock will have on its market price. Sales involving significant amounts of Common Stock, including issuances made in the ordinary course of the Company’s business, or the perception that such sales could occur, may materially and adversely affect prevailing market prices of our Common Stock.
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We cannot assure you that our common stock will become listed on a national securities exchange and the failure to do so may adversely affect your ability to dispose of our common stock in a timely fashion.
We intend to apply for our Common Stock to be listed on the NYSE American and have retained an investment banking firm to assist in this process and to assist in raising capital. We have also commenced discussions with representatives of the NYSE American in connection with our application. We do not have a specific timetable for such listing, although we anticipate it will commence during the calendar year ending December 31, 2024. We can give no assurance that such investment bank will be successful in raising the capital we will need to list on the NYSE American or that the NYSE American will accept our application for listing which has not yet been submitted. NYSE American has numerous requirements that an applicant must satisfy to list their common stock on the exchange, including total number of stockholders, minimum stock price, total value of public float, and in some cases total shareholders’ equity and market capitalization. Our failure to satisfy such applicable initial listing criteria could prevent us from listing our Common Stock on NYSE American. In the event we are unable to uplist our Common Stock, our Common Stock will continue to trade on the OTC Marketplace, which is generally considered less liquid and more volatile than the NYSE American or other national securities exchange. Our inability to uplist our Common Stock could make it more difficult for you to trade our Common Stock, could prevent our Common Stock trading on a frequent and liquid basis and could result in the value of our Common Stock being less than it would be if we were able to successfully uplist. We may never satisfy the initial listing standards of NYSE American or any other exchange and cannot assure you when or if we will satisfy such applicable listing standards, or that we will be able to maintain such a listing of our Common Stock.
Our common stock is subject to the “penny stock” rules of the SEC, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.
The SEC has adopted regulations which generally define a “penny stock” as an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. The SEC’s penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and the salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that before a transaction in a penny stock occurs, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s agreement to the transaction. If applicable in the future, these rules may restrict the ability of brokers-dealers to sell our common stock and may affect the ability of investors to sell their shares, until our common stock no longer is considered a penny stock.
Certain of our executive officers and directors, through their direct and indirect ownership of common stock, can substantially influence the outcome of matters requiring shareholder approval and may prevent you and other stockholders from influencing significant corporate decisions, which could result in conflicts of interest that could cause the Company’s stock price to decline.
Harthorne Capital, Inc., which is owned by certain of our executive officers and directors, along with Mr. Singh and Dr. Trumbach, collectively beneficially owns shares of our common stock equal to approximately 86% of our outstanding shares of common stock. As a result, such individuals will have the ability, acting together, to substantially influence the election of our directors and the outcome of corporate actions requiring shareholder approval, such as (i) a merger or a sale of our Company, (ii) a sale of all or substantially all of our assets, and (iii) amendments to our articles of incorporation and bylaws. Additionally, such ownership concentration and leadership positions give Mr. Singh and Dr. Trumbach the power to control, or substantial influence over, employment decisions, including compensation arrangements for themselves. Furthermore, this concentration of voting power and control could have a significant effect in delaying, deferring or preventing an action that might otherwise be beneficial to our other shareholders and be disadvantageous to our shareholders with interests different from those individuals. These individuals also have significant control over our business, policies and affairs as officers and/or directors of our Company. These stockholders may exert influence in delaying or preventing a change in control of the Company, even if such change in control would benefit the other stockholders of the Company. Lastly, the significant concentration of stock ownership may adversely affect the market value of the Company’s common stock due to investors’ perception that conflicts of interest may exist or arise. Therefore, you should not invest in reliance on your ability to have any control over the Company. In addition, stock ownership of insiders and management, at high levels of ownership, may induce executive decisions inconsistent with growth-oriented risk-taking.
Anti-takeover provisions in the Company’s charter and bylaws under Delaware law may prevent or frustrate attempts by stockholders to change the board of directors or current management and could make a third-party acquisition of the Company difficult.
Provisions in the Company’s certificate of incorporation and bylaws may delay or prevent an acquisition or a change in management. These provisions include a classified board of directors. Although the Company believes this provision could provide for an opportunity to receive higher bids by requiring potential acquirers to negotiate with the Company’s board of directors, they would apply even if the offer may be considered beneficial by some stockholders. In addition, these provisions may frustrate or prevent any attempts by the Company’s stockholders to replace or remove then current management by making it more difficult for stockholders to replace members of the board of directors, which is responsible for appointing members of management.
Investments in our common stock may provide you with limited rights, and we do not expect to pay cash dividends in the short term.
Common stock and similar equity securities generally represent the most junior position in an issuer’s capital structure and, as such, generally entitle holders to an interest in the assets of the issuer, if any, remaining after all more senior claims to such assets have been satisfied. Holders of common stock generally are entitled to dividends only if and to the extent declared by the governing body of the issuer out of income or other assets available after making interest, dividend, and any other required payments on more senior securities of the issuer. We anticipate that we will retain our earnings, if any, for future growth and therefore do not anticipate paying cash dividends on our common stock in the short term. Investors seeking cash dividends should not invest in our common stock for that purpose.
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Item 1B. Unresolved Staff Comments
Not Applicable.
Item 1C. Cybersecurity
Since 2022, we have been primarily focused on launching our real estate management and hospitality business. We have 4 employees and currently use third-party vendors and service providers for other activities.
We use a third-party sub-contractor to manage all Information Technology (IT) issues, including protection against, detection, and response to cyberattacks.
The measures that are taken to ensure proper protection include:
| ● | All computers are protected using a cloud-powered endpoint security solution that helps enterprises prevent, detect, investigate, and respond to advanced threats on their networks. It offers endpoint protection, endpoint detection and response, mobile threat defense, and integrated vulnerability management. It also provides, among other things, malware and spyware detection and remediation, rootkit detection and remediation and network vulnerability detection. | |
| ● | All Company e-mails are protected by a cloud-based email filtering service designed to protect the Company against advanced threats related to email and collaboration tools. | |
| ● | Periodically, all users on the Company’s computer network are required to perform multi-factor authentication. | |
| ● | The Company uses a cloud-based identity and access management service that enables access to external resources. | |
| ● | Backup is performed using a secure, automatic cloud-based backup and restore service. |
Additionally, we believe that our third-party vendors and service providers have their own respective cybersecurity protocols which our management believes to be adequate for protecting any of the Company’s data that might be in their possession from time to time; however, having such protocols is not necessarily a condition for us using or not using the services of any such vendors or providers.
Our Chief Financial Officer is responsible for assessing and managing cybersecurity risks, through his oversight of our IT service provider that manages our IT. Our CFO has a Doctorate Degree in Information Technology Management and has the specific cybersecurity expertise. The Company has an Information Technology Policy that, among other things, governs and provides for cybersecurity policies and processes, including to define safety measures to protect the Company’s confidentiality, integrity and availability of data and other intellectual property, as well as to define the manner in which information is stored, saved and routed in the Company’s network. Additionally, the Board and management believe cybersecurity represents an important component of the Company’s overall approach to risk management and oversight, especially as the Company moves towards commercialization of its first product.
Cybersecurity threats have not materially affected, and are not reasonably likely to affect, the Company, including its business strategy, results of operations or financial condition while we are strategically focused on pursuing development of our Casamora property. The Company is not aware of any material security breach to date. Accordingly, the Company has not incurred any expenses over the last two years relating to information security breaches. The occurrence of cyber-incidents, or a deficiency in our cybersecurity or in those of any of our third-party service providers could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information and systems, or damage to our business relationships or reputation, all of which could negatively impact our business and results of operations. There can be no assurance that the Company’s third-party vendors’ and service providers’ cybersecurity risk management processes, including their policies, controls or procedures, will be fully implemented, complied with or effective in protecting the Company’s systems and information.
Item 2. Properties.
Our principal executive office is located at 3400 Lakeview Drive, Suite 100, Miramar, Florida, pursuant to a 62-month lease that commenced at or around September 1, 2022. This facility, consisting of 2,349 square feet, is expected to provide the space and infrastructure necessary to accommodate our present operations, based on our current business plan. The annual rent for the first lease year was approximately $86,000, with subsequent lease years subject to escalation clauses.
As of September 30, 2023, we have been the owner of the Casamora Resort Assets, which are still under development.
Item 3. Legal Proceedings.
From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm business.
We are not currently a party in any legal proceeding or governmental regulatory proceeding nor are we currently aware of any pending or potential legal proceeding or governmental regulatory proceeding proposed to be initiated against us that would have a material adverse effect on us or our business.
Item 4. Mine Safety Disclosures.
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
There is no “established trading market” for our shares of Common Stock. Since May 25, 2022, our Common Stock has been quoted on the OTC Pink Market under the ticker symbol “AWCA”. There can be no assurance that a trading market will ever develop or, if such a market does develop, that it will continue. Prior to May 25, 2022, our Common Stock was quoted on the OTC Pink Market under the symbol “ASZP”.
The following table shows the high and low bid prices of our Common Stock for the periods indicated. These quotations reflect inter-dealer prices, without retail mark-up, markdown or commissions, and may not represent actual transactions.
| Quarter Ended | High | Low | ||||||
| June 30, 2024 | $ | 1.5500 | $ | 0.7500 | ||||
| March 31, 2024 | $ | 0.9090 | $ | 0.1799 | ||||
| December 31, 2023 | $ | 0.4500 | $ | 0.1570 | ||||
| September 30, 2023 | $ | 0.5100 | $ | 0.1075 | ||||
| June 30, 2023 | $ | 0.5100 | $ | 0.2538 | ||||
| March 31, 2023 | $ | 0.5100 | $ | 0.1001 | ||||
| December 31, 2022 | $ | 0.4100 | $ | 0.0921 | ||||
| September 30, 2022 | $ | 0.4499 | $ | 0.1503 | ||||
As of September 30, 2024, there were approximately 297 holders of record of our common stock, and the last reported closing sales price of our common stock on that date was $0.74.
Dividend Policy
We have never declared or paid any cash dividend. We do not anticipate that we will declare or pay any dividends in the foreseeable future. Our current policy is to retain earnings, if any, to fund operations, and the development and growth of our business. Any future determination to pay cash dividends will be at the discretion of our Board and will be dependent upon our financial condition, operation results, capital requirements, applicable contractual restrictions, restrictions in our organizational documents, and any other factors that our Board deems relevant.
Equity Compensation Plan Information Table
The following table provides information about shares of our common stock that may be issued upon the exercise of options under all of our existing compensation plans as of June 30, 2024.
| Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted- average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance | ||||||||||
| Plan Category | ||||||||||||
| Equity compensation plans approved by security holders: | ||||||||||||
| 2022 Omnibus Performance Award Plan | - | - | 19,775,931 | |||||||||
| Equity compensation plans not approved by security holders: | - | - | - | |||||||||
| Options to Purchase Common Stock (Michael Singh) | 11,250,000 | $ | 0.32 | - | ||||||||
| Options to Purchase Common Stock (Andrew Trumbach) | 11,250,000 | $ | 0.32 | - | ||||||||
| Total | 22,500,000 | 19,775,931 | ||||||||||
Unregistered Sale of Securities
During the past three years, the Company made the following issuances of its unregistered securities, none of which involved any underwriters, underwriting discounts or commissions. Unless otherwise specified below, the Company believes these transactions were exempt from registration under the Securities Act in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and/or Rule 506(b) under Regulation D of the Securities Act, as transactions by an issuer not involving any public offering. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof.
Between May 26, 2022, and June 30, 2022, the Company sold, in a private offering of up to $25 million of the Company’s Common Stock, at a price per share of $1.00 (the “Offering”), the Company entered into a Subscription Agreement with investors in the Offering for an aggregate of 1,818,000 shares of Common Stock with a total subscription price of $1,818,000. The Company has received a total of $875,000 and still has pending an aggregate of 943,000 shares of Common Stock (the “Pending Shares”) for a total subscription receivable of $943,000. The Company expects such proceeds to be funded, and the Pending Shares to be issued, during fiscal year 2025. All purchases made in connection with the Offering were pursuant to Subscription Agreements & Investor Suitability Questionnaires as between the Company and each of the investors.
As of June 30, 2022, as partial consideration for the Company’s acquisition of the Casamora Awaysis Assets, the Company issued to the owners of the seller of such assets an aggregate of 56.8 million shares of its common stock based on a per share price equal to the market price on the date of appraisal of $0.150.
In July 2022, the Company issued 25,000 shares of our common stock to an investor who participated in the Company’s private offering of common stock at a price per share of $1.00.
In July 2022, the Company issued an aggregate of 107,484 shares of the Company’s common stock as consideration for services rendered.
As of August 2022, the Company issued 75,000 shares of its common stock to an investor who participated in the Company private offering of common stock at a price per share of $1.00.
In September 2022, the Company issued 333,333 shares of its common stock as consideration for services rendered.
In December 2022, the Company issued an aggregate of 31,648 shares of its common stock as consideration for services rendered.
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On February 13, 2023, the Company issued (i) an aggregate of 100,000,000 restricted shares of its common stock, and (ii) options to purchase an aggregate of 22,500,000 shares of its commons stock, both as consideration for services rendered by affiliates of the Company.
In February 2023, the Company issued 150,000 shares of its common stock to an investor who previously subscribed in the Company’s private offering of common stock at a price per share of $1.00.
In March 2023, the Company issued 75,000 shares of its common stock to an investor who previously subscribed in the Company’s private offering of common stock at a price per share of $1.00.
In February and March 2023, the Company issued an aggregate of 73,958 shares of its common stock as consideration for services rendered.
In December 2023 and April 2024, the Company issued 50,000,000 shares of common stock to each of Mr. Singh and Dr. Trumbach, respectively, in lieu of cash bonus at a discounted price per share of $0.01.
In December 2023, the Company issued an aggregate of 9,982 shares of its common stock as consideration for services rendered.
In June 2024, the Company has approved the issuance of, and in September 2024 the Company issued, an aggregate of 31,706,358 shares of restricted common stock in lieu of cash compensation to Mr. Singh, Dr. Trumbach, Mr. Trumbach and a consultant, at an average price per share of $0.247.
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward Looking Statements
Certain information contained in this MD&A includes “forward-looking statements.” Statements which are not historical reflect our current expectations and projections about our future results, performance, liquidity, financial condition and results of operations, prospects and opportunities and are based upon information currently available to us and our management and their interpretation of what is believed to be significant factors affecting our existing and proposed business, including many assumptions regarding future events. Actual results, performance, liquidity, financial condition and results of operations, prospects and opportunities could differ materially and perhaps substantially from those expressed in, or implied by, these forward-looking statements as a result of various risks, uncertainties and other factors, including those risks described in detail in the section of this Annual Report on Form 10-K entitled “Risk Factors” as well as elsewhere in this Annual Report.
Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “should,” “would,” “will,” “could,” “scheduled,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “seek,” or “project” or the negative of these words or other variations on these words or comparable terminology.
In light of these risks and uncertainties, and especially given the nature of our existing and proposed business, there can be no assurance that the forward-looking statements contained in this section and elsewhere in this Annual Report on Form 10-K will in fact occur. Potential investors should not place undue reliance on any forward-looking statements. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
Overview
Awaysis Capital Inc is a real estate management and hospitality company focused on acquisition, redevelopment, sales, and managing rentals of residential vacation home communities in desirable travel destinations. We seek to create value through the targeting and acquisition, development, and up-cycling, rebranding, and repositioning of currently undervalued operating and shovel ready residential/resort communities in global travel destinations, with the intention to relaunch these assets under the “Awaysis” brand with the goals of creating a network of residential and resort enclave communities that will optimize both sales and rental revenues, providing attractive returns to owners and exceptional vacation experiences to travellers. Our strategy overlays the quality and consistency of the hotel management system over the Airbnb type rental model.
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The Company seeks to own and grow a stable, cash generating, diversified portfolio of single-family and luxury resort/residence properties in the Caribbean, Europe, South America, and the United States.
Our business strategy entails targeting and identifying undervalued assets in emerging markets located in proximity to high demand travel destinations. The Company intends to focus these efforts on shovel-ready properties and/or other assets that we believe can be used to optimize sales and rental revenues. We have currently identified five properties in the country of Belize, all of which are expected to constitute our initial real estate portfolio. To that effect, on June 30, 2022, we closed on the acquisition of certain real estate assets in San Pedro, Belize (the “Casamora Awaysis Assets”), pursuant to our previously announced series of Agreements of Purchase and Sale, all dated April 15, 2022. The total consideration paid by us for the properties subject to the agreements was at the appraisal value of $11.4 million (excluding transaction costs and fees) and was settled in a combination of a Purchase Money Mortgage of $2.6 million at 0% interest rate, payable on demand, a Purchase Money Mortgage of $280,000 at 0% interest rate that was paid on August 8, 2022 and 56.8 million shares of the Company’s common stock based on a per share price equal to the market price on the date of appraisal of $0.150. As the first acquisition by the Company in Belize and an important milestone, the Company expects to rebrand the Casamora Awaysis Asset, so it is easily identifiable as an Awaysis Property and fit perfectly with its strategy of creating a countrywide network of Awaysis residential enclave communities in the country for owners and guests to travel, work and play.
Revenues
As of June 30, 2024, our revenue consists primarily of monthly rental income of villas and commission from the rental of real property.
Sales and Marketing Expenses
Our sales and marketing expenses consist primarily of salaries, commissions and other personnel-related expenses, which may include share-based compensation, for employees engaged in sales, marketing and support of our products and services, promotional and public relations expenses and management and administration expenses in support of sales and marketing.
General and Administrative Expenses
Our general and administrative costs include payroll, employee benefits, and other personnel-related costs, which include share-based compensation, associated with administrative and support staff, as well as legal and accounting costs, insurance costs, depreciation and other administrative fees.
Results of Operations – Fiscal Years Ended June 30, 2024 and June 30, 2023
We commenced activities and started to incur material costs in the fiscal year ended June 30, 2022, as a result of our change in control transaction in November 2021 and commencement in February 2022 of our business strategy of acquiring, developing, and managing residential vacation home communities in desirable travel destinations. Our business strategy continued through the fiscal year ended June 30, 2024, showing substantial growth in operating expenses in preparation for expected future growth in revenue.
We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.
We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
Revenues
We recognized revenue of $50,674 and $107,760 - during the fiscal years ended June 30, 2024, and 2023, respectively. Revenue generated during fiscal year 2024 consisted of monthly rental income and commissions from short term property rentals. Revenue generated during fiscal year 2023 also consisted of monthly rental income and commissions from property rentals. The decrease in revenue from fiscal year 2023 to fiscal year 2024 was a result of construction in areas of the Casamora property which decreased the rental ability of existing units.
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Sales and Marketing Expenses
During the fiscal years ended June 30, 2024 and 2023, we incurred sales and marketing expenses of $36,675 and $91,319, respectively, consisting of marketing and support of our products and services, promotional and public relations expenses and management and administration expenses in support of rental offerings and marketing. The decrease in sales and marketing expenses from fiscal year 2023 to fiscal year 2024 was because in fiscal year 2023, we incurred more expenses on the initial push of marketing and sales than in fiscal year 2024 when such expenses stabilized.
General and Administrative Expenses
During the fiscal years ended June 30, 2024 and 2023, we incurred general and administrative expenses of $7,037,957 and $4,312,499, respectively, consisting of audit and accounting fees, travel and entertainment, payroll and employee benefits, legal fees, filing fees and transfer agent fees, all relating to both sustaining the corporate existence of the Company and public company-related expenses and its continued transitioning from being a shell company to an operating company. The increase in general and administrative expenses from fiscal year 2023 to 2024 was a result of continued growth of the Company’s operations and related increases in such expenses.
Operating Loss
During the fiscal years ended June 30, 2024, and 2023, we recognized operating losses of $(7,023,958) and $(4,296,058), respectively. These losses were primarily attributable to increased operating expenses related to salaries due to the Company scaling its hospitality operations under the Awaysis brand, having to re-audit its two prior years financial statements and preparing for a registered offering of securities. The increase in operating loss from fiscal year 2023 to fiscal year 2024 was a result of increased general and administrative expense and a decrease in recognized revenue which occurred when Casamora moved its Villas from its rental portfolio to renovate them.
Other Income (Expenses)
During the fiscal years ended June 30, 2024 and 2023, we incurred other income and expense of $69,518 and $(612), respectively, consisting of interest earned, offset by interest expense and loss on asset from the write off of software which was never put into service.
Net Loss
During the fiscal years ended June 30, 2024 and 2023, we recognized net losses of $(7,093,476) and $(4,295,446), respectively. These losses were primarily attributable to accounting, marketing, legal, filing fees and transfer agent fees to sustaining the corporate existence of the Company and public company related expenses, and the continued transitioning from being a shell company to an operating company. The increase in net loss from fiscal year 2023 to fiscal year 2024 was a result of increased expenses as described above.
Liquidity and Capital Resources
As of June 30, 2024, we had cash of $745,991 and had a positive working capital of $7,795,602, of which was mainly from the issuance of shares for real estate inventory, the sale of shares from our private placement of common stock and the June 2024 loan of $1,100,000 to the Company from an affiliate. We have sufficient cash or commitments for funding to satisfy our basic operations for at least 12 months and expect the anticipated cost of development of our first properties to come from pre-sales, investors subscriptions, advances or loans from our principal shareholders and not cash-on-hand. We will need to raise additional cash to satisfy our long-term requirements.
Historically, an affiliate shareholder has advanced funds on our behalf as we have required for the Company to become, and remain, a fully reporting public company while seeking to create value for shareholders. The shareholder has indicated its intention to continue to do so and most recently loaned $1,100,000 to the Company; provided, however, that such intentions do not represent a binding commitment by the affiliate shareholder and there is no guarantee that it will be able to provide all of the funding necessary to achieve this objective. To date, this affiliate shareholder has advanced and received a net of approximately $599,537 on behalf of the Company to cover certain of the Company’s expenses and loaned $1,100,000 for bridge financing.
If we are unable to obtain additional advances from our affiliate shareholder, we anticipate facing major challenges in raising the necessary funding to affect our business plan. Raising debt or equity funding for small publicly quoted, penny stock companies is extremely challenging. We can provide no assurance that financing will be available in the amounts it needs or on terms acceptable to it, if at all. If we are not able to secure adequate additional working capital when it becomes needed, it may be required to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible and/or suspend or curtail planned acquisitions and developments. Any of these actions could materially harm our planned business.
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Our plan for satisfying our cash requirements for the next 12 months and beyond or to further expand our asset base is through the generation of rental revenues, sale of shares of our capital stock to third parties and advances from our affiliate shareholder. While we are seeking to raise up to $10 million through the sale of our common stock or through other offerings of securities, we cannot assure you we will be successful in raising any or all of such capital and in meeting our working capital needs. Through June 30, 2024, we have raised an aggregate of $1,918,000 in our recent private placement and can give no assurance that we will be successful in raising the remaining funds being sought. The capital raises from issuances of equity securities could result in additional dilution to our shareholders. In addition, to the extent we determine to incur indebtedness, our incurrence of debt could result in debt service obligations and operating and financing covenants that would restrict our operations.
The following table provides a summary of the net cash flow activity for each of the periods set forth below:
| Year ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash used in operating activities | $ | 503,108 | $ | (257,255 | ) | |||
| Cash provided by investing activities | (857,196 | ) | (29,631 | ) | ||||
| Cash provided by financing activities | 1,100,000 | (195,000 | ) | |||||
| Change in cash | $ | 745,912 | $ | (481,886 | ) | |||
Cash Flows from Operating Activities
We generated positive cash flows from operating activities in the fiscal year ended June 30, 2024 compared to the fiscal year ended June 30, 2023. Net cash flows used in operating activities were $503,108 and $(257,255) for the fiscal years ended June 30, 2024, and 2023, respectively.
Cash Flows from Investing Activities
During the fiscal years ended June 30, 2024 and 2023, net cash flow used for investing activities was $(857,196) and $(29,631), respectively.
Cash Flows from Financing Activities
In 2022 through June 30, 2024, we have financed our operations by way of advances from our current majority shareholders, issuance of shares and debt for real estate inventory, in addition to cash raised from the private placement offering and an affiliate loan. In June 2024 the company received a convertible note in the amount of $1,100,000 from Harthorne Capital, an affiliate shareholder.
For the fiscal years ended June 30, 2024, and 2023, net cash from financing activities was $1,100,000 and $(195,000), respectively.
We are dependent upon the receipt of capital investment or other financing to fund our ongoing construction and to execute our business plan. In addition, we are dependent upon our controlling shareholders to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, we may not be able to implement our plan of operations.
Critical Accounting Policies
The company applies judgment and estimates that may have material effect in the eventual outcome of assets, liabilities, revenues and expenses, accounts receivable, inventory and goodwill. The following explains the basis and the procedure where judgment and estimates are applied.
Inventories
New real estate inventory is carried at the lower of cost or net realizable value. The cost of finished inventories determined on the specific identification method is removed from inventories and recorded as a component of cost of sales at the time revenue is recognized. In addition, an allocation of depreciation and amortization is included in cost of goods sold. Under the specific identification method, if finished real estate inventory can be sold for a profit there is no basis to write down the inventory below the lower of cost or net realizable value.
As per ASC 970-340-25-18, once the property is considered substantially complete, the capitalization of costs typically ceases. The entity stops adding new costs to the property’s carrying value except for additional improvements or costs that extend the asset’s life or improve its utility. This means that these types of costs are no longer added to the property’s carrying value once the property is substantially completed and held for rental. Instead, these costs are expensed as incurred, unless they directly enhance the property or extend its useful life.
Once the property is held for rental and substantially complete, the property is classified as a depreciable real estate asset and the total cost capitalized to date up to the point of substantial completion becomes the asset’s carrying amount. The cost of the property’s carrying amount (less its land value) is allocated over its estimated useful life.
Costs incurred after the property is completed and held for rental are generally expensed unless they extend the property’s useful life (ASC 970-340-35-3).
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not required.
Item 8. Financial Statements and Supplementary Data.
The consolidated financial statements and supplementary data required by this item are included in this Annual Report on Form 10-K immediately following Part IV and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
The Company needs to implement disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports are recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure.
As of June 30, 2024, the Chief Executive Officer and Chief Financial Officer carried out an assessment, of the effectiveness of the design and operation of our then existing disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b). As of the date of this assessment, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2024 to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures, primarily as a result of the late filing of certain reports with the Securities and Exchange Commission. The Company’s management is seeking to remedy this deficiency.
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Management’s Annual Report on Internal Control Over Financial Reporting.
Our management is responsible for establishing and maintaining effective internal control over financial reporting (as defined in Rule 13a – 15(f) of the Exchange Act). There are inherent limitations to the effectiveness of any internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even effective internal controls can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of internal control may vary over time. We have assessed the effectiveness of our internal controls over financial reporting (as defined in Rule 13a -15(f) of the Exchange Act) as of June 30, 2024, and have concluded that, as of June 30, 2024, our internal control over financial reporting was effective.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
Changes in Internal Control Over Financial Reporting.
There were no changes in our internal control over financial reporting, identified in connection with the evaluation of such internal control that occurred during our last fiscal quarter and year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.
PART III
Item 10. Directors, Executive Officers, and Corporate Governance.
Board of Directors
We currently have six directors serving on our Board. The following table lists the names, ages and positions of the individuals who serve as directors of the Company, as of September 30, 2024:
| Name | Age | Titles | ||
| Michael Singh | 58 | Chairman, Co-Chief Executive Officer and Director | ||
| Dr. Andrew E. Trumbach | 63 | Director, Co-Chief Executive Officer and CFO | ||
| Lisa-Marie Iannitelli | 46 | Director and Executive Vice President of Investor Relations | ||
| Dr. Claude Stuart | 63 | Director | ||
| Dr. Narendra Kini | 62 | Director | ||
| Tyler Trumbach | 34 | Director and Chief Legal Counsel |
Michael Singh, Chairman, Co-Chief Executive Officer and Director. Mr. Singh has been the Company’s Chairman of the Board and a member of the Company’s Board of Directors since November 23, 2021, and from November 23, 2021 to June 26, 2024 he was the Company’s Chief Executive Officer. On June 26, 2024, Mr. Singh was appointed Co-Chief Executive Officer with Andrew Trumbach. Mr. Singh is the founder and CEO of BTALCO Limited for over 20 years, and which is a leading logistics provider in Belize. Mr. Singh is also the managing partner for Island Club Resorts Ltd since June 2002 and has successfully developed, operated and sold the Belize Yacht Club, a major condominium development in San Pedro, Ambergris Caye, which consists of approximately 80 luxury units. Mr. Singh is also, since February 2016, the founder and Managing Partner of Century 21 Belize, a leading provider of real estate sales services in Belize. Mr. Singh holds a degree in Finance and International Business from Loyola University in New Orleans. At various times, he has served in the capacity of CEO for the Ministry of Tourism, Civil Aviation and Culture, and CEO of the Ministry of Trade and Investments, in Belize. Mr. Singh has extensive experience in a variety of successful Belize-based ventures.
Mr. Singh is an Executive Director of Harthorne Capital, Inc.
The Company believes that Mr. Singh is qualified to serve as a member of the Board of Directors due to his extensive business experience.
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Dr. Andrew E. Trumbach, Co-Chief Executive Officer, Chief Financial Officer and Director. Dr. Trumbach has been a member of the Company’s Board of Directors since November 23, 2021, and President from November 23, 2021 to June 26, 2024. Dr. Trumbach previously served as the Chief Financial Officer of the Company until his resignation on August 15, 2022, and has since been reappointed as CFO in September 2023. On June 26, 2024, Dr. Trumbach was appointed Co-Chief Executive Officer of the Company with Mr. Singh. Since 1992, Dr. Trumbach has been a consultant providing tax, accounting and financial analysis services and accounting information systems solutions to middle market companies and family-owned businesses. From 2008 to 2014, Dr. Trumbach was a part-time Professor at Nova Southeastern University, H. Wayne Huizenga School of Business and Entrepreneurship, where he taught classes on accounting, financial management , cost accounting, and accounting information systems. He was the part-time Chief Financial Officer of Omnia Wellness Inc. (OTC:OMWS) from March 2021 to October 2023. He was the EVP/CFO of a holding company from 2008 to 2019 that owned and operated one of the largest perfume distribution businesses operating worldwide. The company acquired and managed affiliated companies that included over 45 retail stores and a duty-free company operating airline, cruise, and retail duty free and duty paid concessions located in cruise, airport, and border locations worldwide. Prior to 2008, Dr. Trumbach spent 14 years as the CFO/CIO and Sr VP of a family-owned holding and investment company that included a portfolio that consisted of commercial, industrial, and residential real estate holdings, mining operations, outdoor advertising, publishing, polling, water and sewer utility, mobile home parks, data centers, and funeral homes. Prior to moving to industry, Dr. Trumbach spent three years working in an international accounting firm and five years in a regional firm working in public accounting in both the Caribbean and the United States. Dr. Trumbach is currently the owner of Writeup Express, Inc.In addition to a Bachelor of Science degree in Accounting and a Master of Business Administration degree, Dr. Trumbach has earned Doctorate degrees in both Information Technology Management and Accounting. He has undertaken numerous consulting projects for major companies in the United States and the Caribbean.
Dr. Trumbach is the President, CFO and an Executive Director of Harthorne Capital, Inc.
The Company believes that Dr. Trumbach is qualified to serve as a member of the Board of Directors due to his extensive business and financial experience, including acting as executive officers and directors of other public companies.
Lisa Marie Iannitelli, Executive Vice President, Investor Relations and Director. Ms. Iannitelli has been the Company’s Executive Vice President, Investor Relations and a member of the Company’s Board of Directors since November 23, 2021. Ms. Iannitelli has been the CEO and President of Wentworth Capital Markets Inc. since January 2017. Prior to that, from October 2010 to December 2018, Ms. Iannitelli was Director of Investor Relations
& Business Development at The Delavaco Group. From March 2005 to August 2010, she was a Compliance Officer and then was an Investment Associate, at BMO Nesbitt Burns Inc. Ms. Iannitelli is an executive director of Harthorne Capital, Inc.
The Company believes that Ms. Iannitelli is qualified to serve as a member of the Board of Directors due to her extensive investor relations experience and experience assisting real estate companies to go public.
Dr. Claude Stuart, Director. Dr. Stuart has been a member of the Company’s Board of Directors since February 17, 2022. Dr. Stuart is an Adjunct Assistant Professor of Mathematics at Farmingdale State College of the State University of New York, and an instructor for the New York City Department of Education for more than the past five years. He earned a Bachelor of Science in Economics from Rider University, a Juris Doctorate from Seton Hall University School of Law, a Master of Science in Mathematics from St. John’s University, and a Doctorate in Education Administration from Dowling College, New York. He is an attorney and is admitted to practice law in the New Jersey Supreme Court and Federal Court. He is also being called to the Bar in Belize. He is a trustee of the New York Annual Conference of the United Methodist Church, a not-for-profit organization, a member of the Council of Finance and Administration, and a member of the Audit Committee and the Board of Camping and Retreat Ministries. He is the Vice-President and Treasurer of Friends Supporting the Anglican Diocese of Belize Inc., a not-for-profit organization registered in the State of New York. He is also the Northeast-Regional Director of Benjamin Banneker Association, an affiliate of The National Council of Teachers in Mathematics and a member of several research and professional organizations.
The Company believes that Dr. Stuart is qualified to serve as a member of the Board of Directors due to his experience as an attorney and his education.
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Dr. Narendra M. Kini, Director. Dr. Kini has been a member of the Company’s Board of Directors since February 17, 2022. Dr. Kini has more than 25 years’ experience as a Chief Executive Officer, Chief Medical Officer, and an ER and Trauma doctor. Dr. Kini most recently served as the Chief Medical Officer of the State of Florida COVID-19 Infectious Disease Field Hospital System where he oversaw all clinical personnel for the 9-hospital system. In that role, Dr. Kini provided training and in-servicing, ran drills with clinical staff, ensured quality patient care, and provided guidance regarding necessary equipment and supplies to treat COVID-19 patients. Prior to that, from January 2008 until June 2019, Dr. Kini served as the Chief Executive Officer for Nicklaus Children’s Hospital (f/k/a Miami Children’s Hospital), providing management to the 26 facilities in the system and a 309-bed hospital with 3,000 employees and 700 plus physicians. He also provided ancillary and clinical operations leadership as the Chief Medical Officer for Trinity Health, a 45-hospital, $5 billion system. Dr. Kini also works as a consultant for innovation in digital health at KiniConsult, a company he founded in 2019. A graduate from University of Alabama and Medical College of Wisconsin, Dr. Kini has a Master of Science in Health Management to complement his Medical Doctorate degree.
The Company believes that Dr. Kini is qualified to serve as a member of the Board of Directors due to his education and experience.
Tyler Trumbach, Chief Legal Counsel and Director. Mr. Trumbach has been the Company’s Chief Legal Counsel and a member of the Company’s Board of Directors since February 17, 2022. Mr. Trumbach is a member of the Florida and New York bars. He graduated in 2013 from Columbia University with a B.A. in Economics and History. He was involved in various political organizations and served two terms as President of the Columbia University College Republicans. After Columbia, Mr. Trumbach attended Fordham University School of Law where he obtained his J.D. While at law school, Tyler was a member of the Urban Law Journal where he wrote a note analyzing the effects of Dodd-Frank on the current mortgage marker. He was also a participant in the Fordham Criminal Defense Clinic where he represented low-income clients in the Manhattan Criminal Court with the guide of the clinic professors. He was employed as in-house legal counsel for Carolina Financial Securities LLC and since 2017, he has been the principal of the Law Offices of Tyler A. Trumbach, P.A.
Mr. Trumbach is the son of Dr. Andrew Trumbach, the Company’s Co-CEO and CFO, and a director.
The Company believes that Mr. Trumbach is qualified to serve as a member of the Board of Directors due to his education and experience as an attorney.
Executive Officers
Following are the name, age and other information for our executive officers. All company officers have been appointed to serve until their successors are elected and qualified or until their earlier resignation or removal. Information regarding our executive officers is set forth above under “Board of Directors.”
| Name | Age | Titles | ||
| Michael Singh | 58 | Chairman, Co-Chief Executive Officer and Director | ||
| Dr. Andrew E. Trumbach | 63 | Director, Co-Chief Executive Officer and CFO | ||
| Lisa-Marie Iannitelli | 46 | Director and Executive Vice President of Investor Relations | ||
| Tyler Trumbach | 34 | Director and Chief Legal Counsel |
Committees of the Board of Directors
Structure and Operation of the Board
Presently, our Board of Directors maintains a standing Audit Committee that does not yet satisfy Nasdaq’s definition of independence. The Company does not have a standing compensation or nominating committee. However, the full Board performs all of the functions of a standing compensation committee and nominating committee. The Board currently consists of six directors: Mr. Singh (Chairman), Dr. Trumbach, Ms. Iannitelli, Dr. Stuart, Dr. Kini and Mr. Trumbach. The following is a brief description of these functions of the Board:
Nomination of Directors
The Board does not currently have a standing nominating committee, and thus we do not have a nominating committee charter. Due to our small size and limited operations to date, the Board determined that it was appropriate for the entire Board to act as the nominating committee. The full Board currently has the responsibility of selecting individuals to be nominated for election to the Board. Board candidates are typically identified by existing directors or members of management. The Board will consider director candidates recommended by shareholders. Any such candidates will be evaluated on the same basis as other candidates being evaluated by the Board. Information with respect to such candidates should be sent to Awaysis Capital, Inc., 3400 Lakeview Drive, Suite 100, Miramar, FL 33027; c/o Chairman. The Board considers the needs for the Board as a whole when identifying and evaluating nominees and, among other things, considers diversity in background, age, experience, qualifications, attributes and skills in identifying nominees, although it does not have a formal policy regarding the consideration of diversity.
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Audit Committee
Our Audit Committee consists of Messrs. Trumbach, Stuart and Kini. The Board has determined that Messrs. Stuart and Kini are independent, and Dr. Trumbach is an “audit committee financial expert” as defined in SEC rules, although he is not independent. The Audit Committee has not yet adopted a written charter but expects to do so.
The primary functions of the Audit Committee are to assist the Board in overseeing (i) the effectiveness of the Company’s accounting and financial reporting processes and internal controls and the audits of the Company’s financial statements, (ii) the qualifications, independence, appointment, retention, compensation and performance of the Company’s registered public accounting firm, and (iii) the performance of the Company’s internal audit department or department or person(s) having the equivalent responsibility and functions.
Because the Company’s common stock is traded on the OTC Pink market, the Company is not subject to the listing requirements of any securities exchange regarding audit committee related matters.
Risk Oversight
The Board’s risk oversight is administered primarily through the following:
| ● | review and approval of an annual business plan; |
| ● | review of a summary of risks and opportunities at meetings of the Board; |
| ● | review of business developments, business plan implementation and financial results; |
| ● | oversight of internal controls over financial reporting; and |
| ● | review of employee compensation and its relationship to our business plans. |
Due to the small size and early stage of the Company, we have not adopted a formal policy on whether there should be a separate Non-Executive Chairman.
Compensation Committee Related Function
The Board does not currently have a standing compensation committee, and thus we do not have a compensation committee charter. Due to our small size and limited operations to date, the Board determined that it was appropriate for the entire Board to act as the compensation committee. The full Board currently has the responsibility for reviewing and establishing compensation for executive officers and making policy decisions concerning salaries and incentive compensation for executive officers of the Company.
The Company’s executive compensation program is administered by the Board, which determines the compensation of the executive officers of the Company. In reviewing the compensation of the individual executive officers, the Board intends to consider the recommendations of the executive officers, published compensation surveys and current market conditions.
Communication with Shareholders
Shareholders wishing to communicate with the Board can send an email to [email protected] or write or telephone to the Company’s corporate offices:
Awaysis Capital, Inc.
Chairman
3400 Lakeview Drive, Suite 100
Miramar, FL 33027
Telephone: (855) 795-3311
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Code of Business Conduct and Ethics
We adopted a Code of Business Conduct and Ethics that applies to, among other persons, our principal executive officers, principal financial officer, principal accounting officer or controller, and persons performing similar functions. Our Code of Business Conduct and Ethics is incorporated by reference into this Annual Report on Form 10-K.
Corporate Governance
Section 16(a) Reports
Section 16(a) of the Exchange Act requires our executive officers, directors, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC reports of ownership of our securities and changes in reported ownership. Executive officers, directors and greater than 10% beneficial owners are required by SEC rules to furnish us with copies of all Section 16(a) reports they file. Based solely on a review of the copies of such forms furnished to us, or written representations from the reporting persons that no Form 5 was required, we believe that, during the fiscal year ended June 30, 2024, with the exception of one untimely Form 4 for each of Narendra Kini and Andrew Trumbach, and two untimely Form 4’s for Tyler Trumbach, all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners have been met.
Item 11. Executive Compensation.
The following table sets forth information regarding each element of compensation that was paid or awarded to the named executive officers of the Company for the periods indicated. On June 26, 2024, the Board passed a resolution to allow the officers of the Company to convert their unpaid salaries to equity compensation
| Non-Equity | ||||||||||||||||||||||||||||||
| Stock | Option | Incentive Plan | All Other | |||||||||||||||||||||||||||
| Name and Principal | Salary | Bonus | Awards | Awards | Compensation | Compensation | Total | |||||||||||||||||||||||
| Position | Year(1) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||
| Michael Singh(2) | 2024 | 750,000 | 750,000 | - | - | - | - | 1,500,000 | ||||||||||||||||||||||
| Co-CEO & Chairman | 2023 | 750,000 | 750,000 | - | (3 | ) | - | - | 1,500,000 | |||||||||||||||||||||
| Dr. Andrew Trumbach(4) | 2024 | 750,000 | 750,000 | - | - | - | - | 1,500,000 | ||||||||||||||||||||||
| Co-CEO and Chief Financial Officer | 2023 | 750,000 | 750,000 | - | (3 | ) | - | - | 1,500,000 | |||||||||||||||||||||
| Lisa-Marie Iannitelli | 2024 | - | - | - | - | - | - | - | ||||||||||||||||||||||
| Executive Vice President | 2023 | - | - | - | - | - | - | - | ||||||||||||||||||||||
| Tyler Trumbach(5) | 2024 | 200,000 | 200,000 | - | - | - | - | 400,000 | ||||||||||||||||||||||
| Chief Legal Counsel | 2023 | 200,000 | 200,000 | - | - | - | - | 400,000 | ||||||||||||||||||||||
| Amir Vasquez(6) | 2024 | - | - | - | - | - | - | - | ||||||||||||||||||||||
| Former CFO | 2023 | 118,750 | - | - | - | - | - | 118,750 | ||||||||||||||||||||||
(1) “2024” represents the fiscal year ended June 30, 2024, and “2023” represents the fiscal year ended June 30, 2023.
(2) Mr. Singh’s salary for the 2023 and 2024 fiscal years has been earned and paid subsequent to June 30, 2024 through the issuance of common stock of the Company.
(3) The executive was granted options to purchase 11,250,000 shares of Common Stock on February 13, 2023. No expense has been recorded under ASC 718 as there is no compensation expense to be recognized. The expense for stock options is based on the fair value of the options at the grant date and this fair value is determined to be zero.
(4) Dr. Trumbach’s salary for the 2023 and 2024 fiscal years has been earned and paid subsequent to June 30, 2024 through the issuance of common stock of the Company.
(5) Mr. Trumbach’s salary for the 2023 and 2024 fiscal years has been earned and paid subsequent to June 30, 2024 through the issuance of common stock of the Company.
(6) Mr. Vasquez resigned from CFO in or around September 2023.
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Outstanding Equity Awards at Fiscal Year-End
The following table presents the outstanding equity awards held by each of the named executive officers as of the end of the fiscal year ended June 30, 2024.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||||||
| Equity | Incentive | |||||||||||||||||||||||||||||
| Incentive | Plan | |||||||||||||||||||||||||||||
| Plan | Awards: | |||||||||||||||||||||||||||||
| Awards: | Market | |||||||||||||||||||||||||||||
| Number | or Payout | |||||||||||||||||||||||||||||
| of | Value of | |||||||||||||||||||||||||||||
| Market | Unearned | Unearned | ||||||||||||||||||||||||||||
| Number of | value of | Shares, | Shares, | |||||||||||||||||||||||||||
| Number of | Number of | Shares | Shares | Units or | Units or | |||||||||||||||||||||||||
| Securities | Securities | or Units | of Units | Other | Other | |||||||||||||||||||||||||
| Underlying | Underlying |
of Stock |
of Stock | Rights | Rights | |||||||||||||||||||||||||
| Unexercised | Unexercised | Option | Option | That | That | That | That | |||||||||||||||||||||||
| Options | Options | Exercise | Expiration | Have Not | Have Not | Have Not | Have Not | |||||||||||||||||||||||
| Name | Exercisable | Unexercisable | Price | Date | Vested | Vested | Vested | Vested | ||||||||||||||||||||||
| Michael Singh | 11,250,000 | - | $ | 0.32 | 02/13/2033 | - | - | - | - | |||||||||||||||||||||
| Andrew Trumbach | 11,250,000 | - | $ | 0.32 | 02/13/2033 | - | - | - | - | |||||||||||||||||||||
| Tyler Trumbach | - | - | - | - | ||||||||||||||||||||||||||
| Lisa-Marie Iannitelli | - | - | - | - | - | - | - | - | ||||||||||||||||||||||
Executive Employment Agreements
Michael Singh
Pursuant to Mr. Singh’s employment agreement (the “Singh Agreement”) with the Company, Mr. Singh will receive an annual base salary of $750,000 (the “Singh Base Salary”), retroactive to December 1, 2021 which was the approximate date he commenced his employment relationship with the Company. The Singh Base Salary will be reviewed on an annual basis to determine potential increases, if any, based on Mr. Singh’s performance and that of the Company. The Singh Base Salary may be paid in shares of the Company’s common stock or cash depending on cash availability and as agreed to by the Company and Employee.
Mr. Singh was granted (a) restricted shares of Company common stock pursuant to a Restricted Stock Agreement (the “Singh Restricted Stock Agreement”) equal in value to $500,000 and at an assumed per share value of par value, or 50,000,000 shares (the “Singh Restricted Stock”), which Singh Restricted Stock shall vest 50% on the date of grant and 50% on December 1, 2023, and (b) options to purchase an aggregate of 11,250,000 shares of the Company’s common stock pursuant to a Stock Option Agreement (the “Singh Option Agreement”), at an exercise price per share equal to the fair market value of the Company’s common stock on the date of grant, and which shall vest upon grant. He will also be entitled to participate in the Company’s incentive plans from time to time. Upon entering into the Singh Agreement, Additionally, Mr. Singh may earn an annual bonus of up to 100%-400% of Singh Base Salary, payable based on objectives and performance in the previous fiscal year.
Mr. Singh is also entitled to customary benefits and vacation, and is subject to customary confidentiality, ownership of intellectual property, non-disparagement, non-solicitation and non-compete provisions, as described in the Singh Agreement.
The Singh Agreement may be terminated by the Company at any time without prior notice for “Cause”, as defined in the Singh Agreement. Upon termination for Cause, Mr. Singh will be provided with any unpaid, earned Singh Base Salary up to the date of termination.
The Singh Agreement may be terminated at any time without Cause, and provided that Mr. Singh executes a general release, the Company shall pay to Mr. Singh an amount equal to 12-months’ Singh Base Salary (the “Singh Severance”) plus accrued unused vacation; provided that the Company shall not be required to pay the Singh Severance in the event the Company elects to enforce the Singh Agreement’s non-competition provisions and pay salary post-termination pursuant to the terms of the Singh Agreement.
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Mr. Singh can terminate the Singh Agreement and his employment at any time for any reason on 30 days prior written notice. In case of “Good Reason,” as defined in the Singh Agreement, the Company shall pay to Mr. Singh the Singh Severance plus accrued unused vacation; provided that the Company shall not be required to pay the Singh Severance in the event the Company elects to enforce the Singh Agreement’s non-competition provisions and pay salary post-termination pursuant to the terms of the Singh Agreement.
If Mr. Singh dies while employed under this Agreement, the Singh Agreement shall terminate immediately and the Company shall pay to his estate, any earned Singh Base Salary and accrued vacation, if any, that is unpaid up to the date of his death. The Company may terminate the Singh Agreement as a result of any mental or physical disability or illness which results in (a) Mr. Singh being unable to substantially perform his duties for a continuous period of 150 days or for periods aggregating 180 days within any period of 365 days or (b) Mr. Singh being subject to a permanent or indefinite inability to perform essential functions based on the opinion of a qualified medical provider chosen by the Company. Such termination will be effective on the date designated by the Company, and the Employee will be paid his annual Singh Base Salary, accrued vacation, if any, and certain benefits as set out in the Singh Agreement through the date of termination.
Andrew Trumbach
Pursuant to Mr. Trumbach’s employment agreement (the “Trumbach Agreement”) with the Company, Mr. Trumbach will receive an annual base salary of $750,000 (the “Trumbach Base Salary”), retroactive to December 1, 2021 which was the approximate date he commenced his employment relationship with the Company. The Trumbach Base Salary will be reviewed on an annual basis to determine potential increases, if any, based on Mr. Trumbach’s performance and that of the Company. The Trumbach Base Salary may be paid in shares of the Company’s common stock or cash depending on cash availability and as agreed to by the Company and Employee.
Mr. Trumbach was granted (a) restricted shares of Company common stock pursuant to a Restricted Stock Agreement (the “Trumbach Restricted Stock Agreement”) equal in value to $500,000 and at an assumed per share value of par value, or 50,000,000 shares (the “Trumbach Restricted Stock”), which Trumbach Restricted Stock shall vest 50% on the date of grant and 50% on December 1, 2023, and (b) options to purchase an aggregate of 11,250,000 shares of the Company’s common stock pursuant to a Stock Option Agreement (the “Trumbach Option Agreement”), at an exercise price per share equal to the fair market value of the Company’s common stock on the date of grant, and which shall vest upon grant. He will also be entitled to participate in the Company’s incentive plans from time to time. Upon entering into the Trumbach Agreement, Additionally, Mr. Trumbach may earn an annual bonus of up to 100%-400% of Trumbach Base Salary, payable based on objectives and performance in the previous fiscal year.
Mr. Trumbach is also entitled to customary benefits and vacation, and is subject to customary confidentiality, ownership of intellectual property, non-disparagement, non-solicitation and non-compete provisions, as described in the Trumbach Agreement.
The Trumbach Agreement may be terminated by the Company at any time without prior notice for “Cause”, as defined in the Trumbach Agreement. Upon termination for Cause, Mr. Trumbach will be provided with any unpaid, earned Trumbach Base Salary up to the date of termination.
The Trumbach Agreement may be terminated at any time without Cause, and provided that Mr. Trumbach executes a general release, the Company shall pay to Mr. Trumbach an amount equal to 12-months’ Trumbach Base Salary (the “Trumbach Severance”) plus accrued unused vacation; provided that the Company shall not be required to pay the Trumbach Severance in the event the Company elects to enforce the Trumbach Agreement’s non-competition provisions and pay salary post-termination pursuant to the terms of the Trumbach Agreement.
Mr. Trumbach can terminate the Trumbach Agreement and his employment at any time for any reason on 30 days prior written notice. In case of “Good Reason,” as defined in the Trumbach Agreement, the Company shall pay to Mr. Trumbach the Trumbach Severance plus accrued unused vacation; provided that the Company shall not be required to pay the Trumbach Severance in the event the Company elects to enforce the Trumbach Agreement’s non-competition provisions and pay salary post-termination pursuant to the terms of the Trumbach Agreement.
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If Mr. Trumbach dies while employed under this Agreement, the Trumbach Agreement shall terminate immediately and the Company shall pay to his estate, any earned Trumbach Base Salary and accrued vacation, if any, that is unpaid up to the date of his death. The Company may terminate the Trumbach Agreement as a result of any mental or physical disability or illness which results in (a) Mr. Trumbach being unable to substantially perform his duties for a continuous period of 150 days or for periods aggregating 180 days within any period of 365 days or (b) Mr. Trumbach being subject to a permanent or indefinite inability to perform essential functions based on the opinion of a qualified medical provider chosen by the Company. Such termination will be effective on the date designated by the Company, and the Employee will be paid his annual Trumbach Base Salary, accrued vacation, if any, and certain benefits as set out in the Trumbach Agreement through the date of termination.
Tyler Trumbach, Esq.
On July 25, 2022, we entered into an Employment Agreement with Tyler Trumbach, the Company’s Chief Legal Counsel and a director.
Pursuant to the Employment Agreement, Mr. Trumbach will receive an annual base salary of $200,000 (the “Tyler Trumbach Base Salary”), payable in shares of common stock of the Company or cash, depending on cash availability. The Tyler Trumbach Base Salary will be reviewed on an annual basis to determine potential increases, if any, based on Mr. Trumbach’ s performance and that of the Company. Additionally, Mr. Trumbach may earn an annual bonus of up to 200% of Tyler Trumbach Base Salary, payable based on performance in the previous fiscal year, and based on the achievement of objectives agreed to with the Company’s Chief Executive Office and/or President for each fiscal year.
Mr. Trumbach is also entitled to customary benefits and vacation, and is subject to customary confidentiality, ownership of intellectual property, non-disparagement, non-solicitation and non-compete provisions, as described in the Employment Agreement.
The Employment Agreement may be terminated by the Company at any time without prior notice for “Cause”, as defined in the Employment Agreement.
Upon termination for Cause, Mr. Trumbach will be provided with any unpaid, earned Base Salary up to the date of termination.
The Employment Agreement may be terminated at any time without Cause, and provided that Mr. Trumbach executes a general release, the Company shall pay to Mr. Trumbach an amount equal to 12-months’ Base Salary (the “Severance”) plus accrued unused vacation; provided that the Company shall not be required to pay the Severance in the event the Company elects to enforce the Employment Agreement’s non-competition provisions and pay salary post-termination pursuant to the terms of the Employment Agreement.
Mr. Trumbach can terminate the Employment Agreement and his employment at any time for any reason on 30 days prior written notice. In case of “Good Reason,” as defined in the Employment Agreement, the Company shall pay to Mr. Trumbach the Severance plus accrued unused vacation; provided that the Company shall not be required to pay the Severance in the event the Company elects to enforce the Employment Agreement’s non-competition provisions and pay salary post-termination pursuant to the terms of the Employment Agreement.
Mr. Trumbach is entitled to participate in the Company’s incentive plans and shall initially be granted options to purchase 1,500,000 shares of the Company’s common stock, which have not been issued as of the date of this Annual Report on Form 10-K.
Limits on Liability and Indemnification
We provide directors and officers insurance for our current directors and officers.
Our certificate of incorporation eliminates the personal liability of our directors to the fullest extent permitted by law. The certificate of incorporation further provides that the Company will indemnify its directors to the fullest extent permitted by law.
Director Compensation
Equity compensation was earned by the Company’s independent directors in the amounts of $24,000 and $24,000 each during the fiscal years ended June 30, 2024 and 2023. Dr. Kini received his equity compensation in the amount of $24,000 for the fiscal year ended June 30, 2023, and has not received his equity compensation for the fiscal year ended June 30, 2024. Dr. Stuart has not received his equity compensation for either of the fiscal years ended June 30, 2024 and 2023. In consideration for their board service, we may also choose to compensate our outside directors in the form of options for each year for their continued service. We also reimburse our directors reasonable out of pocket expenses incurred in attending board meetings and in carrying out their board duties.
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The following table summarizes cash and equity-based compensation information for our outside directors, for the year ended June 30, 2024:
| Fees | Nonqualified | |||||||||||||||||||||||||||
| earned | Non-Equity | Deferred | ||||||||||||||||||||||||||
| or paid | Stock | Option | Incentive Plan | Compensation | All Other | |||||||||||||||||||||||
| Name | in cash | Awards | Awards | Compensation | Earnings | Compensation | Total | |||||||||||||||||||||
| Dr. Claude Stuart(1) | - | $ | 24,000 | - | - | - | - | $ | 24,000 | |||||||||||||||||||
| Dr. Narendra Kini(1) | - | $ | 24,000 | - | - | - | - | $ | 24,000 | |||||||||||||||||||
(1) Such amount was earned during the fiscal year ended June 30, 2024 but the shares have not yet been issued.
All executive officers of the Company who are also directors received compensation, if any, for services to the Company as set forth under the summary compensation table above.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table shows the number of shares of our common stock beneficially owned, as September 30, 2024, by (i) each of our directors and director nominees, (ii) each of our named executive officers, (iii) all of our current directors and executive officers as a group, and (iv) all those known by us to be to a beneficial owner of more than 5% of the Company’s common stock. In general, “beneficial ownership” refers to shares that an individual or entity has the power to vote or dispose of, and any rights to acquire common stock that are currently exercisable or will become exercisable within 60 days of September 30, 2024. We calculated percentage ownership in accordance with the rules of the SEC. The percentage of common stock beneficially owned is based on 383,991,026 shares outstanding as of September 30, 2024. In addition, shares issuable pursuant to options or other convertible securities that may be acquired within 60 days of September 30, 2024 are deemed to be issued and outstanding and have been treated as outstanding in calculating and determining the beneficial ownership and percentage ownership of those persons possessing those securities, but not for any other persons.
This table is based on information supplied by each director, officer and principal stockholder of the Company. Except as indicated in footnotes to this table, the Company believes that the stockholders named in this table have sole voting and investment power with respect to all shares of Common Stock shown to be beneficially owned by them, based on information provided by such stockholders. Unless otherwise indicated, the address for each director, executive officer and 5% or greater stockholders of the Company listed is: c/o Awaysis Capital, Inc., 3400 Lakeside Drive, Suite 100, Miramar, FL 33027.
| Number of Shares | Percentage of Common Stock | |||||||
| Beneficial Owner | Beneficially Owned | Beneficially Owned | ||||||
| Harthorne Capital, Inc.(1) | 101,674,666 | 26.23 | % | |||||
| Michael Singh | 125,321,153 | (2)(3) | 31.71 | % | ||||
| Amir Vasquez | - | - | % | |||||
| Andrew Trumbach | 125,321,153 | (2)(3) | 31.71 | % | ||||
| Lisa-Marie Iannitelli | - | (2) | - | % | ||||
| Claude Stuart(4) | - | - | % | |||||
| Narendra Kini(5) | 70,588 | * | % | |||||
| Tyler Trumbach(6) | 3,862,460 | 1.01 | % | |||||
| All current directors and executive officers as a group (6 persons) | 356,250,020 | 86.86 | % | |||||
* Less than 1%.
(1) Pursuant to a Schedule 13D filed with the Securities and Exchange Commission on March 14, 2022, as amended, Harthorne Capital, Inc. (“Harthorne”) operates as a holding entity for Mr. Singh and Dr. Trumbach’s initial investments in the Company. Additionally, each of Mr. Singh, Dr. Trumbach and Ms. Iannitelli are Executive Directors of Harthorne. Each of Mr. Singh, Dr. Trumbach and Ms. Iannitelli disclaims beneficial ownership of all such securities except to the extent of his or her pecuniary interest therein. Also includes 3,666,666 shares of our common stock underlying a Convertible Promissory Note which may be converted from time to time in the discretion of Harthorne, executed by the Company and Harthorne on August 2, 2024. Such conversion shares do not include any additional shares upon conversion of accrued and unpaid interest under the note.
(2) Does not include shares held by Harthorne. See Footnote (1) above.
(3) Includes options to purchase 11,250,000 shares of common stock. through December 1, 2023.
(4) Does not include $48,000 of equity compensation earned by Mr. Stuart but not yet issued.
(5) Such shares are owned indirectly through Lucky International Limited Corp., of which Mr. Kini has voting and dispositive control. Does not include $24,000 of equity compensation earned by Mr. Kini but not yet issued.
(6) Such shares are owned indirectly through River Rock Holdings, Inc., of which Mr. Trumbach has voting and dispositive control. Does not include options to purchase 1,500,000 shares of the Company’s common stock which the Company is obligated to grant to Mr. Trumbach, but which have not been issued as of the date of this Annual Report on Form 10-K.
| 32 |
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Related Person Transaction
The Board intends to implement a policy to review, approve and oversee any transaction between us and any related person and any other potential conflict of interest situations on an ongoing basis, and develops policies and procedures for the approval of related party transactions. Prior to consideration of a transaction with a related person, the material facts as to the related person’s relationship or interest in the transaction would be disclosed to the disinterested directors. The transaction would not be approved unless a majority of the members of the Board who are not interested in the transaction approve the transaction. The Board intends to take into account, among other factors that it deems appropriate, whether the related person transaction is on terms no less favorable to us than terms generally available in a transaction with an unrelated third-party under the same or similar circumstances and the extent of the related person’s interest in the related person transaction.
Each of Mr. Singh, Dr. Trumbach and Ms. Iannitelli are Executive Directors of Harthorne, the owner of approximately 24.11% of the issued and outstanding shares of common stock of the Company.
As of the fiscal years ended June 30, 2024 and 2023, Harthorne advanced and received a net amount of $599,537 and $255,489, respectively, relating to costs paid on behalf of the Company. The Company expects Harthorne to continue to make and be repaid advances from time to time to cover construction and other expenses, although Harthorne has no legal obligation to do so. There is no agreement as between Harthorne and the Company with respect to these advances or the repayment of any such advances.
Tyler Trumbach, a director of the Company and its Chief Legal Officer, performed certain general counsel and legal services for the Company through The Law Offices of Tyler A. Trumbach, P.A., and in September 2022, received through his holding company River Rock Holdings, Inc., 333,333 shares of the Company’s common stock as payment in full for $50,000 of legal services provided by such firm. As of June 30 2024, Tyler Trumbach was issued through his holding company 3,529,127 shares of the Company’s common stock in lieu of accrued and unpaid cash compensation in the amount of $895,512.36 through June 30, 2024. Such shares were issued to Mr. Trumbach in September 2024.
As of June 30, 2024, Michael Singh and Andrew Trumbach were each issued 14,071,153 shares of the Company’s common stock in lieu of accrued and unpaid cash compensation in the amount of $3,469,664 through June 30, 2024. Such shares were issued to Mr. Singh and Dr. Trumbach in September 2024.
In June 2024, Harthorne loaned $1,100,000 in bridge financing to the Company, which was evidenced by a Convertible Promissory Note, executed by the Company and Harthorne on August 2, 2024, with an issue date as of July 30, 2024. Interest on the loan is 12% per annum, payable, with the principal and any and all fees, costs and expenses then due under the note, on July 30, 2025. The outstanding principal balance of and interest on the note shall be convertible, in whole or in part, at the option of Harthorne at any time prior to the maturity date, into shares of common stock of the Company, at a conversion price of $.30 per share.
Family Relationships
Tyler Trumbach, the Company’s Chief Legal Counsel and a director, is the son of Dr. Andrew Trumbach, the C-CEO and CFO and a director of the Company.
There are no other familial relationships between any of our officers and directors.
Apart from the disclosures set forth under this Item 13, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.
| 33 |
Director Independence
We use the definition of “independence” of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the company or any other individual having a relationship, which, in the opinion of the Company’s Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent if:
● The director is, or at any time during the past three years was, an employee of the company;
● The director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);
● A family member of the director is, or at any time during the past three years was, an executive officer of the company;
● The director or a family member of the director is a partner in, controlling shareholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);
● The director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or
● The director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit.
Under such definitions, two of our directors can be considered independent.
Item 14. Principal Accountant Fees and Services.
The Board of Directors has reviewed and discussed the audited consolidated financial statements of Awaysis Capital, Inc. for the fiscal year ended June 30, 2024, with management and have reviewed related written disclosures of Moore Belize LLP, our independent accountants of the matters required to be discussed by SAS 114 (Codification of Statements on Auditing Standards, AU Section 380), as amended, with respect to those statements. We have reviewed the written disclosures and the letter from Moore Belize LLP required by regulatory and professional standards and have discussed with Moore Belize LP its independence in connection with its audit of our most recent financial statements. Based on this review and these discussions, the Board of Directors recommends that the financial statements be included in this Form 10-K for the fiscal year ended June 30, 2024.
We have also reviewed the various fees that we paid or accrued to our auditors,Moore Assurance SAS, Columbia, and Moore Belize LP during the year ended June 30, 2024, and 2023 for services they rendered in connection with our annual audits and quarterly reviews, as well as for any other non-audit services they rendered.
The following table shows the fees for professional and other services rendered by Moore Belize LP for the audit of our financial statements for the years ended June 30, 2024, and 2023:
| 2024 | 2023 | |||||||
| Audit Fees | $ | 43,200 | $ | 18,000 | ||||
| Audit Related Fees | $ | 2,000 | $ | 6,000 | ||||
| Tax Fees | $ | 0 | $ | 0 | ||||
| All Other Fees | $ | 0 | $ | 0 | ||||
| Total | $ | 45,200 | $ | 24,000 | ||||
Audit fees consist of fees billed for professional services rendered for the audit of our financial statements that are normally provided by the above auditor in connection with statutory and regulatory filings or engagements. Audit-related fees consist of fees billed for professional services rendered for the review of SEC filings or review in quarterly reports and services that are normally provided by the above auditor in connection with statutory and regulatory filings. Tax fees consist of fees to prepare the Company’s federal and state income tax returns. Other fees relate to advisory services related research on accounting or other regulatory matters.
Pre-Approval Policies and Procedures
We have not adopted a policy on pre-approval of audit and permissible non-audit services.
| 34 |
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) The following documents are filed as part of this Annual Report on Form 10-K:
(1) Financial Statements:
The financial statements are filed as part of this Annual Report on Form 10-K commencing on page F-1 and are hereby incorporated by reference.
(2) Financial Statement Schedules:
The financial statement schedules are omitted as they are either not applicable or the information required is presented in the financial statements and notes thereto.
(3) Exhibits:
The documents set forth below are filed herewith or incorporated by reference to the location indicated.
*Indicates Management contract or compensatory plan or arrangement
| (1) | Incorporated by reference from the exhibit included in the Company’s Registration Statement on Form 10 filed with the SEC dated August 2, 2021. |
| (2) | Incorporated by reference from the exhibit included in the Company’s Current Report on Form 8-K filed with the SEC on May 23, 2022. |
| (3) | Incorporated by reference from Appendix B of the Information Statement on Schedule 14C filed with the SEC on March 4, 2022. |
| (4) | Incorporated by reference from the exhibit included in the Company’s Current Report on Form 8-K filed with the SEC on April 21, 2022. |
| (5) | Incorporated by reference from the exhibit included in the Company’s Current Report on Form 8-K filed with the SEC on July 29, 2022. |
| (6) | Incorporated by reference from the exhibit included in the Company’s Annual Report on Form 10-K filed for the fiscal year ended June 30, 2023. |
| (7) | Incorporated by reference from the exhibit included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022. |
| (8) | Incorporated by reference from the exhibit included in the Company’s Current Report on Form 8-K filed with the SEC on August 7, 2024 |
| (9) | Incorporated by reference from the exhibit included in the Company’s Current Report on Form 8-K/A filed with the SEC on August 7, 2024 |
Item 16. Form 10-K Summary
None
| 35 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| AWAYSIS CAPITAL, INC. | |
| /s/ Michael Singh | |
| Michael Singh | |
| Chairman and Chief Executive Officer |
Dated: October 11, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Michael Singh | Chairman and Co-CEO | October 11, 2024 | ||
| Michael Singh | (Co-Principal Executive Officer) | |||
| /s/ Andrew Trumbach | Co-CEO and Chief Financial Officer and Director | October 11, 2024 | ||
| Andrew Trumbach | (Co-Principal Executive Officer and Financial and Accounting Officer) | |||
| /s/ Lisa-Marie Iannitelli | Executive Vice President and Director | October 11, 2024 | ||
| Lisa-Marie Iannitelli | ||||
| /s/ Claude Stuart | Director | October 11, 2024 | ||
| Claude Stuart | ||||
| /s/ Narendra Kini | Director | October 11, 2024 | ||
| Narendra Kini | ||||
| /s/ Tyler Trumbach | Chief Legal Counsel and Director | October 11, 2024 | ||
| Tyler Trumbach |
| 36 |
Awaysis Capital, Inc.
Index to Consolidated Financial Statements
| Audited Consolidated Financial Statements | ||
| Report of Independent Registered Public Accounting Firm (Moore Belize LLP - PCAOB #: 6999) | F-2 | |
| Consolidated Balance Sheets as of June 30, 2024 and 2023 | F-3 | |
| Consolidated Statements of Operations for the Years Ended June 30, 2024 and 2023 | F-4 | |
| Consolidated Statements of Changes in Stockholders’ Equity For the Years Ended June 30, 2024, and 2023 | F-5 | |
| Consolidated Statements of Cash Flows for the Years Ended June 30, 2024 and 2023 | F-6 | |
| Notes to Consolidated Financial Statements | F-7 |
| F-1 |
Moore Belize LLP New Horizon Building 3 ½ Miles Philip S. W. Goldson Hwy Belize City, Belize T +501 223 2144 T +501 223 2139 www.moore-belize.bz |
Report of Independent Registered Public Accounting Firm
To the shareholders and the board of directors of Awaysis Capital, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Awaysis Capital, Inc. and subsidiaries (the Company) as of 30 June 2024 and 30 June 2023, the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of 30 June 2024 and 30 June 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
We determined that there are no critical audit matters.
We have served as the Company’s auditor since 2023.
October 11, 2024
| F-2 |
Awaysis Capital, Inc.
(formerly known as JV Group, Inc.)
Consolidated Balance Sheet
(Audited)
| June 30, 2024 | June 30, 2023 | |||||||
| (Audited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Prepaid expenses | ||||||||
| Inventory | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Fixed assets, net | ||||||||
| Escrow Deposit - Real Estate | ||||||||
| Security deposit | ||||||||
| Operating lease right-of-use | ||||||||
| Total non-current assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | ||||||||
| Other current liabilities | ||||||||
| Current portion of lease liability | ||||||||
| Due to related party | ||||||||
| Convertible note payable - related party, net of discount | ||||||||
| Notes payable | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock - shares authorized $ par value issued and outstanding at June 30, 2024 and June 30, 2023, respectively | ||||||||
| Common stock – shares authorized $ par value issued and outstanding common shares at June 30, 2024 and June 30, 2023 were and , respectively | ||||||||
| Common stock subscribed – $ par value subscribed common shares at June 30, 2024 and June 30, 2023 were and , respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Subscription receivable | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | ||||||||
See notes to audited consolidated financial statements
| F-3 |
Awaysis Capital, Inc.
(formerly known as JV Group, Inc.)
Consolidated Statements of Operations
(Audited)
| Year Ended | Year Ended | |||||||
| June 30, 2024 | June 30, 2023 | |||||||
| Revenue | $ | $ | ||||||
| Operating expenses | ||||||||
| Sales and marketing | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other (income) expense | ||||||||
| Other Income | ( | ) | ( | ) | ||||
| Interest Expense | ||||||||
| Loss on Asset | ||||||||
| Total other (income) expense | ( | ) | ||||||
| Net loss before income taxes | ( | ) | ( | ) | ||||
| Income taxes | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted per common share amounts: | ||||||||
| Basic and diluted net loss | $ | ) | $ | ) | ||||
| Weighted average number of common shares outstanding (basic and diluted) | ||||||||
See notes to audited consolidated financial statements
| F-4 |
Awaysis Capital, Inc.
(formerly known as JV Group, Inc.)
Consolidated Statements of Changes in Stockholders’ Equity
For the Years Ended June 30, 2024, and 2023
(Audited)
| Common Stock Shares | Common Stock Par Value | Common Stock Subscribed | Subscription Receivable | Additional Paid-in Capital | Accumulated Deficit | Total | ||||||||||||||||||||||
| Balance, June 30, 2022 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Shares issued for services | ||||||||||||||||||||||||||||
| Shares issued at $ | ||||||||||||||||||||||||||||
| Restricted Stock awards | ||||||||||||||||||||||||||||
| Shares subscribed adjustment on acquisition | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Decrease in subscriptions | - | ( | ) | |||||||||||||||||||||||||
| Net Income (Loss) | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, June 30, 2023 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| Balance, June 30, 2023 | $ | ( | ) | ( | ) |
| ||||||||||||||||||||||
| Shares issued for services | ||||||||||||||||||||||||||||
| Directors’ Equity Compensation | ||||||||||||||||||||||||||||
| Shares issued at $ for directors’ Bonuses | ||||||||||||||||||||||||||||
| Additional paid in capital BCF | - | |||||||||||||||||||||||||||
| Net Income (Loss) | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
See notes to audited consolidated financial statements
| F-5 |
Awaysis Capital, Inc.
(Formerly JV Group, Inc.)
Consolidated Statements of Cash Flows
(Audited)
| Year End | Year End | |||||||
| June 30, 2024 | June 30, 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | $ | |||||||
| Loss on write-off of asset | $ | |||||||
| Interest Expense | ||||||||
| Stock based compensation | $ | |||||||
| Restricted stock awards | $ | |||||||
| Amortization of operating lease right-of-use | $ | |||||||
| Changes in operating assets and liabilities: | ||||||||
| (Increase) decrease in accounts receivable | $ | ( | ) | |||||
| (Increase) decrease in prepaid expenses | $ | ( | ) | |||||
| (Increase) decrease in Inventory expenses | $ | |||||||
| (Increase) decrease in escrow deposit – real estate | $ | ( | ) | |||||
| (Increase) decrease in security deposit | $ | ( | ) | |||||
| Increase (decrease) in due to related party | $ | ( | ) | |||||
| Increase (decrease) in accounts payable | $ | |||||||
| Increase (decrease) in other current liabilities | $ | ( | ) | |||||
| Increase (decrease) in operating lease liabilities | $ | ( | ) | |||||
| Net cash provided by/(used in) operating activities | $ | ( | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of fixed assets | $ | ( | ) | ( | ) | |||
| Asset put into service | $ | ( | ) | |||||
| Sale of fixed assets | ||||||||
| Net cash used in investing activities | $ | ( | ) | ( | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from related party notes payable | $ | |||||||
| Payment of note payable | $ | ( | ) | |||||
| Net proceeds from sale of equity | $ | |||||||
| Net cash provided by/(used in) financing activities | $ | ( | ) | |||||
| Net change in cash | $ | ( | ) | |||||
| Cash - beginning of year | $ | |||||||
| Cash - end of year | $ | |||||||
See notes to audited consolidated financial statements
| F-6 |
Awaysis Capital, Inc.
Notes to the Consolidated Financial Statements
1. NATURE OF OPERATIONS
Nature of Business
Awaysis Capital, Inc. (formerly known as JV Group, Inc.), a Delaware corporation, (“Awaysis”, “JV Group”, “the Company”, “we”, “us” or “our’) is a publicly quoted operating company listed on the OTC Marketplace. We are a vacation rental company focused on acquisition, construction, selling and managing rentals of residential vacation home communities in desirable travel destinations. We seek to create value through the targeting and acquisition, development, and up-cycling, rebranding, and repositioning of currently undervalued residential/resort communities in global travel destinations, with the intention to relaunch these assets under the “Awaysis” brand with the goals of creating a network of residential and resort enclave communities that will optimize revenues, providing attractive returns to investors and exceptional vacation experiences to travellers.
Company History
JV Group was formed in Delaware on September 29, 2008 under the name ASPI, Inc.
On May 18, 2022, we changed our name from JV Group, Inc. to Awaysis Capital, Inc. In connection with this name change, we changed our ticker symbol from “ASZP” to “AWCA” and effective May 25, 2022, we began trading on the OTC Market under our new symbol.
In December 2021, we formed a wholly owned subsidiary, Awaysis Capital, LLC, a Florida single member limited liability corporation to hold the office lease and to become the master payroll company for Awaysis Capital Inc.
We also formed a wholly owned subsidiary, Awaysis Casamora Limited, a Belize single member limited liability corporation to hold the title to the acquisition of the Casamora assets.
From October 2015 to February 2022, we were a publicly quoted shell company seeking to merge with an entity with experienced management and opportunities for growth in return for shares of our common stock to create values for our shareholders. In February 2022, the Board of Directors of the Company determined to pursue a business strategy of acquiring, developing and managing residential vacation home communities in desirable travel destinations.
The Company’s principal executive office is located at 3400 Lakeside Drive, Suite 100, Miramar, FL 33027 and its main number is 855-795-3377. The Company’s website address is www.awaysisgroup.com.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The summary of significant accounting policies is presented to assist in the understanding of the consolidated financial statements. These policies conform to GAAP and have been consistently applied. The Company has selected June 30 as its financial year end.
Principals of Consolidation
The consolidated financial statements include accounts of the Company’s wholly-owned subsidiaries Awaysis Capital, LLC, Awaysis Cove Limited, Awaysis Chial Limited and Awaysis Casamora Limited. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
| F-7 |
Cash and Cash Equivalents
We maintain cash balances in a non-interest-bearing account and unrestricted cash in escrow that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with a maturity of three months or less are considered to be cash equivalents. The Company will hold payments made by guest in advance of reservations in a restricted escrow account until the rescission period expires in accordance with U.S. state regulations.
Fair Value Measurements
ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:
Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange.
Level 2 – Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.
Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.
Our financial accounts consist of prepaid expenses, accounts payable, accounts payable due to related parties and note payable. The carrying amount of our prepaid expenses, accounts payable, accounts payable - related party and note payable – related party approximate their fair values because of the short-term maturities.
Related Party Transactions
A related party is generally defined as (i) any person that holds 10% or more of our membership interests including such person’s immediate families, (ii) our management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with us, or (iv) anyone who can significantly influence our financial and operating decisions. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.
Fixed Assets
Fixed assets are carried at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives. The fixed assets include property, equipment and software which ownership is maintained by the Company.
When a property is substantially completed and held for rental, it transitions from being considered a development project (in progress) to an operating asset. At this point, the key measurement focuses on capitalizing costs and transitioning into depreciation as required under ASC 970-340-25-18.
Capitalization of Construction Costs Ceases after Substantial Completion
Prior to substantial completion, the costs incurred for the construction and development of the property (such as land acquisition, construction costs, interest, and certain other costs) are capitalized.
As per ASC 970-340-25-18, once the property is considered substantially complete, the capitalization of costs typically ceases. The entity stops adding new costs to the property’s carrying value except for additional improvements or costs that extend the asset’s life or improve its utility. This means that these types of costs are no longer added to the property’s carrying value once the property is substantially completed and held for rental. Instead, these costs are expensed as incurred, unless they directly enhance the property or extend its useful life.
Once the property is held for rental and substantially complete, the property is classified as a depreciable real estate asset and the total cost capitalized to date up to the point of substantial completion becomes the asset’s carrying amount. The cost of the property’s carrying amount (less its land value) is allocated over its estimated useful life.
Costs incurred after the property is completed and held for rental are generally expensed unless they extend the property’s useful life (ASC 970-340-35-3).
Impairment Testing (ASC 970-340-35-1 to 35-2)
Even though the property is measured at cost, impairment testing may be required under ASC 360 if there are indicators that the property’s carrying amount might not be recoverable. After substantial completion, the property’s carrying value is subject to impairment testing under ASC 360, where a reduction in the property’s recoverable value may require a write-down to fair value (ASC 970-340-35). If held at fair value (under ASC 360 or other applicable standards), market-based inputs would be used, including comparable sales, discounted cash flows, or appraisals to determine the fair value of the property.
Leases
The Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), and all related amendments on January 1, 2022, on a modified retrospective basis. Under Topic 842, the Company determines if an arrangement is or contains a lease at inception. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The lease term includes options to extend the lease when it is reasonably certain that the Company will exercise that option and when doing so is at the Company’s sole discretion. The Company has elected the short-term lease exception for all classes of assets, and therefore has not applied the recognition requirements of Topic 842 to leases of 12 months or less. The Company has also elected the practical expedient to not separate lease and non-lease components for all classes of assets. The Company’s classes of assets that are leased include real estate leases and equipment leases. Real estate leases typically pertain to the Company’s corporate office locations, field operation locations, or vacation properties whereby the Company takes control of a third party’s property during the lease period for the purpose of renting the property on a short-term basis.
| F-8 |
The Company recognizes lease expense on a straight-line basis over the lease term. The Company’s lease agreements may contain variable costs such as common area maintenance, operating expenses or other costs. Variable lease costs are expensed as incurred on the consolidated statements of operations.
We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) as assets, operating lease non-current liabilities, and operating lease current liabilities in our balance sheet. Finance leases are property and equipment, other current liabilities, and other non-current liabilities in the balance sheet.
ROU assets represent the right to use an asset for the lease term and lease liability represent the obligation to make lease payment arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over lease term. As most of the leases doesn’t provide an implicit rate, we generally use the incremental borrowing rate on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating ROU asset also includes any lease payments made and exclude lease incentives. Lease expense for lease payment is recognized on a straight-line basis over lease term.
As of the fiscal year ended June 30, 2024, we were party to an operating lease agreement which commenced during the fiscal year ended June 30, 2023. See Note 6 below for details of lessee leases.
Beneficial Conversion Features - The Company accounts for convertible notes payable in accordance with ASC 470-20. A beneficial conversion feature is a non-detachable conversion feature that is “in the money” at the commitment date, which requires recognition of interest expense for underlying debt instruments and a deemed dividend for underlying equity instruments. A conversion option is in the money if the effective conversion price is lower than the commitment date fair value of a share into which it is convertible.
Income Taxes
The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification. Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.
The
Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25
addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial
statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely
than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has
a greater than fifty percent (
| F-9 |
The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.
Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability. In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. In management’s opinion, adequate provisions for income taxes have been made for all years. If actual taxable income by tax jurisdiction varies from estimates, additional allowances or reversals of reserves may be necessary.
Revenue Recognition
Revenue Recognition Standard, ASC 606 is used by the Company to recognize revenue. ASC 606 standards were jointly issued by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The total booking value is generally due prior to the commencement of the reservation. The total booking value collected in advance of the reservation is recorded on the balance sheets as funds payable to owners, hospitality and sales taxes payable and deferred revenue in the amount obligated to the homeowner, the taxing authority, and the Company, respectively.
The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
Step 1: Identify the contract(s) with customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to performance obligations
Step 5: Recognize revenue when the entity satisfies a performance obligation
The Company is a development stage corporation, and we have identified certain revenue streams during this development stage.
The Company currently derives its revenue primarily from the short-term unit rentals of sold and unsold inventory at the resort we own and manage.
Revenue from rentals is recognized over the period in which a guest completes a stay.
Other services consist of revenue derived from our real estate brokerage and other related services.
Other Services
In addition to providing vacation rental platform services, the Company provides other services including real estate brokerage and management services. The purpose of these services is to attract and retain homeowners as customers of the Company’s vacation rental platform. As such, the Company enters into an exclusive rental management contract with each homeowners’ associations it controls. Under the real estate brokerage services, the Company assists home buyers and sellers in listing, marketing, selling and finding homes. Real estate commissions earned by the Company’s real estate brokerage business are recorded as revenue at a point in time which is upon the closing of a real estate transaction (i.e., purchase or sale of a home). The commissions the Company pays to real estate agents are recognized concurrently with associated revenues and presented as cost of revenue in the consolidated statements of operations. Under the homeowner’s association management services, the Company provides common area property management, community governance, and association accounting services to community and homeowner associations in exchange for a management fee and other incrementally billed services. The services represent an individual performance obligation in which the Company has determined it is primarily responsible. Revenue is recognized over time as services are rendered for the management fee and incrementally billed services are recognized at a point in time.
| F-10 |
Inventory
New real estate inventory is carried at the lower of cost or net realizable value. The cost of finished inventories determined on the specific identification method is removed from inventories and recorded as a component of cost of sales at the time revenue is recognized. In addition, an allocation of depreciation and amortization is included in cost of goods sold. Under the specific identification method, if finished real estate inventory can be sold for a profit there is no basis to write down the inventory below the lower of cost or net realizable value.
For real estate inventory that is considered substantially completed and may include the Company’s rental pool, the Company has implemented the Real Estate Accounting Guidance under ASC 970 for real estate development, rental, and sales activities. Details of ASC 970 are included in Fixed Assets above.
Financial Instruments
Fair Value of Financial Instruments - From inception, the Company adopted ASC 820, Fair Value Measurements and Disclosures, which provides a framework for measuring fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The standard also expands disclosures about instruments measured at fair value and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
| ● | Level 1: Quoted prices for identical assets and liabilities in active markets. | |
| ● | Level 2: Quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and | |
| ● | Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
The carrying amounts of financial instruments including cash, accounts payable and notes payable approximated fair value as of June 30, 2024, and 2023 due to the relatively short maturity of the respective instruments.
Advertising and Marketing Costs
We expense advertising costs when advertisements occur. Advertising for the Company consists primarily of the creation and marketing of the Awaysis brand guideline, logo, wordmark, tagline, and website.
The cost of equity instruments issued to employees and non-employees in return for goods and services is measured by the grant date fair value of the equity instruments issued in accordance with ASC 718, Compensation – Stock Compensation. The related expense is recognized as services are rendered or vesting periods elapse.
Basic earnings (loss) per common share (“EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average shares outstanding, assuming all dilutive potential common shares were issued. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.
| F-11 |
Recently Issued Accounting Pronouncements
As of June 30, 2024, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.
3. CASH
As
of June 30, 2024, our cash balance was $
4. INVENTORY
Inventory
of real estate under construction was $
5. FIXED ASSETS
The carrying basis and accumulated depreciation of fixed assets at June 30, 2024 and 2023 is as follows:
| Useful Lives | June 30, 2024 | June 30, 2023 | ||||||||
| Furniture and fixtures | $ | $ | ||||||||
| Computer and equipment | ||||||||||
| Machinery | ||||||||||
| Software | ||||||||||
| Assets/property placed into service | ||||||||||
| Less depreciation and amortization | ( | ) | ( | ) | ||||||
| Total fixed assets, net | $ | |||||||||
| F-12 |
6. OPERATING LEASES - LESSEE
The
Company has an operating lease for office space, with a term of
The maturity schedule of future minimum lease payments under operating leases and the reconciliation to the operating lease liabilities reported on the Consolidated Balance Sheets was as follows:
| June 30, 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| Thereafter | ||||
| Total operating lease payments | ||||
| Present value adjustment | ( | ) | ||
| Total operating lease liabilities | $ | |||
The
total operating lease liability amount consists of current and long-term portion of operating lease liabilities of $
7. ACCOUNTS PAYABLE
As
of June 30, 2024, and 2023, the balance of accounts payable was $
8. OTHER CURRENT LIABILITIES
Other current liabilities consist of a hospitality tax payable, a security deposit liability and accrued expenses. the balance of other current liabilities was as of June 30, 2024, and 2023 was $ and $, respectively,
As
of June 30, 2024, and 2023, the balance of accrued expenses was $
9. DUE TO RELATED PARTIES
As
of June 30, 2024, and 2023, the balance of due to related parties was $
On
February 13, 2023, the Company entered into compensation agreements with certain executive officers and directors of the Company and
as a result, approximately $
On
June 26, 2024, the Board approved a $
10. NOTES PAYABLE AND CONVERTIBLE NOTE PAYABLE – RELATED PARTY
The
Company has notes payable as of June 30, 2024, and 2023 in the amount of approximately $
On
June 30, 2022, the Company purchased from a non-related party, real estate asset appraised at $
Convertible Note Payable – Related Party
On
June 26, 2024, the Board approved a $
As
of June 30, 2024, and 2023, the net balance of Notes – related party was $
| F-13 |
11. STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred Stock
As of June 30, 2024, we were authorized to issue shares of preferred stock with a par value of $.
shares of preferred stock were issued and outstanding during the fiscal years ended June 30, 2024 or 2023.
Common Stock
As of June 30, 2024, we were authorized to issue shares of common stock with a par value of $, of which shares of common stock were issued and outstanding and shares of common stock were subscribed, contractually obligated and committed to be issued but not yet issued.
During
the fiscal year ended June 30, 2024, the Company issued common shares in the amount of $
During
the fiscal year ended June 30, 2023, the Company sold common shares in a private offering, at a price per share of $ for
$
During the year ended June 30, 2023, the Company entered into subscription agreements with investors in a private offering, for shares, at a price per share of $ for $ and has a subscription receivable of $ in the Consolidated Balance Sheet.
During
the year ended June 30, 2023, the Company has collected an aggregate of $
During the fiscal year ended June 30, 2023, the Company issued shares of restricted common stock to certain of its executive officers and directors.
On
June 26, 2024, the Board passed a resolution to allow the officers of the Company and certain other parties to convert their unpaid
salaries or other compensation to equity compensation, The company converted salaries and other compensation totaling $
Stock-based
compensation of $
potentially dilutive debt or equity instruments were issued or outstanding during the fiscal year ended June 30, 2024, and 2023.
The Company has not declared or paid any dividends or returned any capital to common stock shareholders as of June 30, 2024, and 2023.
| F-14 |
Warrants
warrants were issued or outstanding during the twelve months ended June 30, 2024, or 2023.
Stock Options
The Company has adopted the 2022 Omnibus Performance Award Plan in February 2022 (the “Plan”). The Plan authorizes the granting of of the Company’s Common Stock. stock options under the Plan were issued or outstanding during the twelve months ended June 30, 2024 or 2023.
On
February 13, 2023, the Company awarded to certain of its executive officers, options to purchase an aggregate of shares of the Company’s stock at an exercise
price per share equal to the fair market value of the Company’s common stock on the date of the grant, $per share; all of which are currently exercisable
and outstanding as of June 30, 2024. No expense has been recorded under ASC 718 as there is compensation expense to be recognized.
The expense for stock options is based on the fair value of the options at the grant date and this fair value is determined to be
12. REVENUE
During
the fiscal year ended June 30, 2024 and June 30, 2023, the Company earned revenue of $
13. SALES AND MARKETING EXPENSES
Advertising
expenses amounted to approximately $
14. GENERAL AND ADMINISTRATIVE EXPENSES
During
the fiscal years ended June 30, 2024 and 2023, we incurred general and administrative expenses of $
15. OTHER INCOME (EXPENSE)
During the fiscal year ended June 30, 2024, we incurred interest expense
on a convertible note and interest expense on the beneficial conversion feature of $
During the fiscal year ended June 30, 2023 we incurred other income of
$
16. COMMITMENTS & CONTINGENCIES
Legal Proceedings
We were not subject to any legal proceedings during the twelve months ended June 30, 2024 and 2023 and, to the best of our knowledge, no legal proceedings are pending or threatened.
17. SUBSEQUENT EVENTS
The Company evaluated subsequent events after June 30, 2024, in accordance with FASB ASC 855 Subsequent Events, through the date of the issuance of these financial statements and has determined the following subsequent events are required to be disclosed.
As of the date of the issuance of these financial statements, the Company has engaged in two lease contracts for
commercial space rental enabling an increase in rental income of
$
| ● | On September 1,
2024, The Company obtained a signed 6-month lease contract for the use of Parcel 12132 and 12135 Block 7 of commercial space located at
Casamora Resort in San Pedro, Belize for $ |
|
| ● | On September 1,
2024, |
|
| ● | As
of September 30,2024, the Company was approved for a $ |
In September 2024, the Company’s Board of Directors and holders of a majority of its outstanding voting securities,
approved of a reverse split of up to
Other than as provided above or in the other notes to these financial statements, the Company has determined that there were no other subsequent events that are required to be disclosed.
| F-15 |