Triller Group Inc 10-Q, filed Jan 26, 2026
Triller Group Inc. (ILLR)
About this 10-Q
Triller Group Inc filed this 10-Q on January 26, 2026, covering the quarter ended March 31, 2025.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2025
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 001-38909
| Triller Group Inc. |
| (Exact name of registrant as specified in its charter) |
| Delaware | 33-1473901 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
7119 West Sunset Boulevard, Suite 782 Los Angeles, CA |
90046 | |
| (Address of Principal Executive Offices) | (Zip Code) |
| (310) 893-5090 |
| (Registrant’s telephone number, including area code) |
| (Former name, former address and former fiscal year, if changed since last report) |
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. Yes ☒ No ☐
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). Yes ☒ No ☐
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 | ☐ |
| Non-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 is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stocks, $0.001 par value | ILLR | NASDAQ Capital Market | ||
| Warrants, each warrant exercisable for one-quarter of one share of Common Stock for $23.00 per full share | ILLRW | NASDAQ Capital Market |
As of [*], 2025, there were [*] shares of common stock issued and outstanding.
Triller Group Inc.
Quarterly Report on Form 10-Q
TABLE OF CONTENTS
i
PART I – FINANCIAL INFORMATION
TRILLER GROUP INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Currency expressed in thousands of United States Dollars, except for number of shares)
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 2,130 | $ | 3,065 | ||||
| Restricted cash | 12,793 | 14,196 | ||||||
| Accounts receivable, net | 1,131 | 2,873 | ||||||
| Loans and notes receivables, net | 111 | 92 | ||||||
| Deposit, prepayments, and other receivables, net | 1,652 | 1,860 | ||||||
| Assets held for sale | 469 | 2,003 | ||||||
| Total current assets | 18,175 | 24,089 | ||||||
| Non-current assets: | ||||||||
| Loans receivables, net | 1,013 | 1,034 | ||||||
| Long-term investments, net | 25,624 | 24,930 | ||||||
| Long-term investments, net, related party | 524 | 525 | ||||||
| Total non-current assets | 27,162 | 26,489 | ||||||
| TOTAL ASSETS | $ | 45,448 | $ | 50,578 | ||||
| LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and other current liabilities | $ | 147,553 | $ | 149,901 | ||||
| Other current liabilities, related parties | 1,078 | 1,251 | ||||||
| Escrow liabilities | 12,793 | 14,196 | ||||||
| Borrowings | 48,801 | 12,707 | ||||||
| Borrowings, related party | — | 29,181 | ||||||
| Convertible debts, net | — | 32,552 | ||||||
| Convertible debts, related party | 53,106 | 53,106 | ||||||
| Promissory notes payable | 33,966 | |||||||
| Warrant liabilities | 977 | 977 | ||||||
| Operating lease liabilities, current | 1,888 | 1,867 | ||||||
| Total current liabilities | 300,188 | 295,738 | ||||||
| Non-current liabilities: | ||||||||
| Operating lease liabilities, non-current | 324 | 807 | ||||||
| Total non-current liabilities | 807 | |||||||
| TOTAL LIABILITIES | 300,512 | 296,545 | ||||||
| Commitments and contingencies (Note XX) | ||||||||
| Stockholders’ deficit: | ||||||||
| Preferred stock, $0.001 par value, 100,000,000 shares authorized | ||||||||
| Series A-1 preferred stock, $0.001 par value, 50,000,000 shares authorized, 11,801,804 and 11,801,804 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | 12 | 12 | ||||||
| Series B preferred stock, $0.001 par value, 50,000,000 shares authorized,30,851 and 30,851 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | — | * | — | |||||
| Common stock, $0.001 par value; 150,000,000,000 shares authorized, 153,267,991 and 138,143,817 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | 153 | 138 | ||||||
| Series A-1 preferred stock to be issued | 12 | 12 | ||||||
| Common stock to be issued | 15 | 15 | ||||||
| Common stock held in escrow | 24 | 24 | ||||||
| Additional paid-in capital | 994,332 | 958,017 | ||||||
| Accumulated other comprehensive loss | (487 | ) | (548 | ) | ||||
| Accumulated deficit | (1,244,312 | ) | (1,203,637 | ) | ||||
| Total stockholders’ deficit | (45,448 | ) | (245,967 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | (281,902 | ) | $ | 50,578 | |||
| * | Less than $1,000 |
See accompanying notes to unaudited condensed consolidated financial statements.
1
TRILLER GROUP INC. AND ITS SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Currency expressed in thousands of United States Dollars, except for number of shares)
| Three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | ||||||||
| Loan interest income | $ | 18 | $ | 41 | ||||
| Commissions | 4,416 | 6,723 | ||||||
| Recurring asset management service fees | 346 | 650 | ||||||
| Recurring asset management service fees, related parties | 242 | |||||||
| Advertising revenue | — | — | ||||||
| SaaS fees | — | — | ||||||
| Subscription fee and paid-per-view fees | — | — | ||||||
| Total revenues | 4,781 | 7,656 | ||||||
| Operating expenses | ||||||||
| Operating expense for social media and streaming platform | — | ) | — | |||||
| Commission expense | (2,521 | )) | (4,446 | ) | ||||
| Sales and marketing expense | 48 | ) | (483 | ) | ||||
| Research and development expense | (1,702 | ) | (458 | ) | ||||
| Personal and benefit expense | (34,963 | ) | (6,059 | ) | ||||
| Legal and professional fee | (5,838 | ) | (625 | ) | ||||
| Legal and professional fee, related party | — | ) | (250 | ) | ||||
| Office and operating fee, related party | (1,178 | ) | (1,118 | ) | ||||
| Provision for allowance for expected credit losses | (47 | ) | (991 | ) | ||||
| Other general and administrative expenses | (2,783 | ) | (880 | ) | ||||
| Total operating expenses | (56,798 | ) | (15,310 | ) | ||||
| Loss from operations | ) | (7,654 | ) | |||||
| Other income (expense) | ||||||||
| Interest income | 167 | 12 | ||||||
| Interest expense | (4,803 | ) | (207 | ) | ||||
| Foreign exchange (loss) gain, net | 1,145 | ) | (227 | ) | ||||
| Investment loss, net | 68 | ) | (37 | ) | ||||
| Change in fair value of warrant liabilities | — | |||||||
| Sundry income | 38 | 91 | ||||||
| Total other income, net | 11,366 | ) | (368 | ) | ||||
| Loss before income tax expense | (41,795 | ) | (8,022 | ) | ||||
| Income tax expense | (25 | ) | (38 | ) | ||||
| Net loss | (41,760 | ) | (8,060 | ) | ||||
| Comprehensive loss | ||||||||
| Net loss | $ | (41,821 | ) | $ | (8,060 | ) | ||
| Other comprehensive loss | ||||||||
| Foreign currency translation adjustment | (61 | ) | 191 | |||||
| Comprehensive loss | $ | ) | $ | (7,869 | ) | |||
| Weighted average number of common stock outstanding# | ||||||||
| - Basic and diluted | (41,760 | ) | 33,942,768 | |||||
| Net loss per share# | ||||||||
| - Basic and diluted | $ | (0.27 | )) | $ | (0.24 | ) | ||
| # | Giving retroactive effect to the forward stock split and reverse stock split (see Note 19) |
See accompanying notes to unaudited condensed consolidated financial statements.
2
TRILLER GROUP INC. AND ITS SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ (DEFICIT) EQUITY*
(Currency expressed in thousands of United States Dollars, except for number of shares)
For the three months ended March 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Series A-1 preferred stock | Series B preferred stock | Common stock | Series A-1 preferred stock to be issued | Common stock to be issued | Common stock held in escrow | Additional | Accumulated other | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Note | No. of share | Amount | No. of share | Amount | No. of share# | Amount | No. of share | Amount | No. of share# | Amount | No. of share | Amount | paid-in capital | comprehensive loss | Accumulated deficit | stockholders’ deficit | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of January 1, 2025 | 11,801,804 | $ | 12 | 30,851 | $ | — | * | 138,143,817 | $ | 138 | 11,801,804 | $ | 12 | 15,022,711 | $ | 15 | 24,022,431 | $ | 24 | $ | 958,017 | $ | (548 | ) | $ | (1,203,637 | ) | $ | (245,967 | ) | ||||||||||||||||||||||||||||||||||||
| Issuance of common stock to settle finder fee | (19)(a)(iv) | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock and warrant liabilities for private placement | (19)(a)(v) | — | — | — | — | — | — | ) | — | — | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock to independent directors under 2024 Equity Incentive Plan | (19)(a)(viii) | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation to consultants | (19)(a)(iii),(d)(i) | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation to directors, officers, and employees | (19)(a)(i), (ii), (vii),(d)(ii) | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares issued for Investment H | (19)(a)(vi) | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock for commitment fee | (19)(a)(ix) | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of Series A-1, Series B preferred stocks and common stocks, replacement warrants and Series A-1 preferred stocks to be issued in related to the Merger Transaction | (19)(a)(x),(b),(c),(e) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Settlement of payables with common stock held in escrow | (19)(a)(xi),(c) | — | — | — | — | — | — | — | — | — | ) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Fractional shares from forward and reverse splits | (19)(a)(xii) | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss for the year | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as March 31, 2025 | 11,801,804 | $ | 12 | 30,851 | $ | — | * | 138,143,817 | $ | 138 | 11,801,804 | $ | 12 | 15,022,711 | $ | 15 | 24,022,431 | $ | 24 | $ | 958,017 | $ | (548 | ) | $ | (1,203,637 | ) | $ | (245,967 | ) | ||||||||||||||||||||||||||||||||||||
| * | Less than $1,000 |
3
| For the three months ended March 31, 2024 | ||||||||||||||||||||||||||||||||
| Common stock | Common stock to be issued | Additional | Accumulated other | Total | ||||||||||||||||||||||||||||
| No. of shares# | Amount | No. of Shares# | Amount | paid-in capital | comprehensive loss | Accumulated deficit | stockholders’ equity | |||||||||||||||||||||||||
| Balance as of January 1, 2024 | 33,240,990 | $ | 33 | 2,350,080 | $ | 2 | $ | 74,142 | $ | (473 | ) | $ | (65,601 | ) | $ | 8,103 | ||||||||||||||||
| Issuance of common stocks to management team | 210,829 | — | (210,829 | ) | — | — | — | — | — | |||||||||||||||||||||||
| Issuance of common stock to settle finder fee | 484,125 | 1 | — | — | 402 | — | — | 403 | ||||||||||||||||||||||||
| Stock-based compensation | 2,078,772 | 2 | 436,148 | — | 2,105 | — | — | 2,107 | ||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | 191 | — | 191 | ||||||||||||||||||||||||
| Net loss for the period | — | — | — | — | — | — | (8,060 | ) | (8,060 | ) | ||||||||||||||||||||||
| Balance as of March 31, 2024 | 36,014,716 | $ | 36 | 2,575,399 | $ | 2 | $ | 76,649 | $ | (282 | ) | $ | (73,661 | ) | $ | 2,744 | ||||||||||||||||
| # | Giving retroactive effect to the forward stock split and reverse stock split (see Note 19). |
See accompanying notes to unaudited condensed consolidated financial statements.
4
TRILLER GROUP INC. AND ITS SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Currency expressed in thousands of United States Dollars, except for number of shares)
| For the three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ) | $ | (8,060 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Stock-based compensation | 1,748 | |||||||
| Lease expense | 642 | |||||||
| Depreciation and amortization | 23 | |||||||
| Interest income | ) | (11 | ) | |||||
| Interest expense on borrowings | 207 | |||||||
| Foreign exchange loss (gain), net | 227 | |||||||
| Investment loss, net | 37 | |||||||
| Allowance for expected credit losses | 991 | |||||||
| Change in fair value of warrant liabilities | ) | — | ||||||
| Change in fair value of convertible debts | ) | — | ||||||
| Loss (gain) on disposal of property and equipment | (15 | ) | ||||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | 1,180 | |||||||
| Loans receivable | ) | (17 | ) | |||||
| Deposits, prepayments, and other receivables | ) | (245 | ) | |||||
| Accounts payable and other current liabilities | (1,661 | ) | ||||||
| Escrow liabilities | ) | (1,228 | ) | |||||
| Operating lease liabilities | ) | (485 | ) | |||||
| Income tax payable | ) | (190 | ) | |||||
| Net cash used in operating activities | ) | (6,857 | ) | |||||
| Cash flows from investing activities: | ||||||||
| Proceeds from sale of long-term investments | 2,152 | |||||||
| Proceeds from sale of property and equipment | 15 | |||||||
| Net cash provided by investing activities | 2,167 | |||||||
| Cash flows from financing activities: | ||||||||
| Advances from the holding company | 3,501 | |||||||
| Proceeds from convertible debts | — | |||||||
| Repayments of convertible debts | ) | — | ||||||
| Proceeds from borrowings | — | |||||||
| Repayments of borrowings | ) | — | ||||||
| Net cash provided by financing activities | 3,501 | |||||||
| Effect on exchange rate change on cash, cash equivalents and restricted cash | ) | 239 | ||||||
| Net change in cash, cash equivalent and restricted cash | ) | (950 | ) | |||||
| Beginning of period | 17,261 | 18,678 | ||||||
| End of period | $ | $ | 17,728 | |||||
| Supplemental cash flow information: | ||||||||
| Cash paid for income taxes | $ | $ | 227 | |||||
| Cash received from interest | $ | $ | 1 | |||||
| Cash paid for interest | $ | $ | 65 | |||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Issuance of common stocks to settle payables | $ | $ | 403 | |||||
| Remeasurement of operating lease right-of-use assets and lease liabilities | $ | $ | — | |||||
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Reconciliation to amounts on condensed consolidated balance sheets: | ||||||||
| Cash and cash equivalents | $ | $ | 2,139 | |||||
| Restricted cash | 15,589 | |||||||
| Total cash, cash equivalents and restricted cash | $ | $ | 17,728 | |||||
See accompanying notes to unaudited condensed consolidated financial statements.
5
TRILLER GROUP INC. AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(Currency expressed in thousands of United States Dollars, except for number of shares)
NOTE 1 — DESCRIPTION OF BUSINESS
Organization
Triller Group Inc. (“ILLR”, “Triller”, or the “Company”) was formed in the State of Delaware on October 15, 2024, to domicile the Company’s legal jurisdiction from British Virgin Islands to the State of Delaware. ILLR and its subsidiaries are hereinafter referred to as the “Company”.
The Company currently operates a global, artificial intelligence (“AI”) powered technology platform (“Technology Platform”) that serves a broad constituency of creators and brands around the world. “Creators” include influencers, artists, athletes and public figures that utilize Triller’s Technology Platform to create and publish content. “Brands” are companies, products or product lines which are active on Triller’s Technology Platform and utilize or have utilized one or more of Triller’s products or services offered through Triller’s Technology Platform, or companies, products or product lines whose associated data Triller tracks, report on and make available to Triller’s clients as part of one or more of Triller’s product offerings.
Also, the Company remains the operation of a wealth and health platform which offers a wide range of financial service and products, covering life insurance, pensions, property-casualty insurance, stock brokerage, mutual funds and lending businesses in Hong Kong.
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying unaudited condensed consolidated financial statements and notes.
| ● | Basis of Presentation |
The accompanying unaudited condensed consolidated financial statements of the Company are presented in United State dollars (“US$” or “$”) and have been prepared in accordance with accounting principles generally accepted in the United States of America(“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X of the Securities Exchange Commission. Certain information and footnote disclosures normally included in consolidated financial statements have been omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2024 derived from the audited consolidated financial statements at that date, but does not include all the information and footnotes required by U.S. GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed on January [x], 2026.
6
The unaudited condensed consolidated financial statements as of March 31, 2025 and December 31, 2024 and for the three months ended March 31, 2025 and 2024, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial condition, results of operations and cash flows. The results of operations for the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results to be expected for any other interim period or for the entire year.
| ● | Principles of Consolidation |
The accompanying unaudited condensed consolidated financial statements include the unaudited financial statements of the Company and its subsidiaries. A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. The condensed consolidated financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. All intercompany transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.
| ● | Use of Estimates and Assumptions |
The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the useful lives of property and equipment, impairment of long-lived assets, allowance for expected credit losses, stock-based compensation, fair value measurement of convertible debts, warrant liabilities, provision for contingent liabilities, revenue recognition, income tax provision, deferred taxes and uncertain tax position.
The inputs into the management’s judgments and estimates consider the geopolitical tension, inflationary and high interest rate environment and other macroeconomic factors on the Company’s critical and significant accounting estimates. Actual results could differ from these estimates.
| ● | Foreign Currency Translation and Transaction |
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the condensed consolidated statements of operations and comprehensive loss.
The reporting currency of the Company is US$ and the accompanying condensed consolidated financial statements have been expressed in US$. In addition, some of the Company’s subsidiaries are operating in Hong Kong, which maintain their books and record in their local currency, Hong Kong dollars (“HK$”), which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with Accounting Standards Codification (“ASC”) Topic 830-30, Translation of Financial Statement, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive loss within the condensed consolidated statements of changes in stockholders’ (deficit) equity.
Translation of amounts from HK$ into US$ has been made at the following exchange rates for the three months ended March 31, 2025 and 2024:
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Period-end HK$:US$ exchange rate | 0.1285 | 0.1278 | ||||||
| Period average HK$:US$ exchange rate | 0.1285 | 0.1279 | ||||||
7
| ● | Segment Reporting |
ASC Topic 280, Segment Reporting, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments.
The Company uses the management approach to determine reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance. The Company’s CODM has been identified as the Chief Executive Officer (“CEO”), who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. Based on management’s assessment, the Company determined that it has three reportable segments, which are Social Media, Sports streaming and Financial Services during the three months ended March 31, 2025.
| ● | Cash and Cash Equivalents |
Cash and cash equivalents consist primarily of cash in readily available checking and saving accounts. They consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments. The Company maintains most of its bank accounts in the United States of America and Hong Kong. Hong Kong is not protected by Federal Deposit Insurance Corporation (“FDIC”) insurance. However, management does not believe there is a significant risk of loss.
| ● | Restricted Cash |
Restricted cash consists of funds held in escrow accounts reflecting the restricted cash and cash equivalents maintained in certain bank accounts that are held for the exclusive interest of the Company’s customers. The Company currently acts as a custodian to manage the assets and investment portfolio on behalf of its customers under the terms of certain contractual agreements, which the Company does not have the right to use for any purposes, other than managing the portfolio.
The Company restricts the use of the assets underlying the funds held in escrow to meet with regulatory or contractual requirements and classifies the assets as current based on their purpose and availability to fulfill its direct obligation under current liabilities.
| ● | Accounts Receivable, net |
Accounts receivable, net are recorded at the invoiced amount less any allowance for expected credit losses to reserve for potentially uncollectible receivables.
Accounts receivable, net are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms.
The Company’s payment terms of accounts receivable vary by the types of services offered. The normal settlement terms of accounts receivable from insurance companies in the provision of brokerage agency services and customers for advertising services, are within 30 days up on the execution of the insurance policies and advertising campaigns. Credit terms with the products providers of investment, unit and mutual funds and asset portfolio are mainly 90 days or a credit period mutually agreed between the contracting parties.
For certain services and customers, the Company requires payment before services are delivered to the customers. Changes in the allowance for expected credit losses are recorded in general and administrative expense in the condensed consolidated statement of operations and comprehensive loss. To determine the amount of the allowance, the Company estimates all expected credits losses based on historical experience, current conditions and reasonable and supportable forecasts.
8
The Company seeks to maintain strict control over its outstanding receivables to minimize credit risk. Overdue balances are reviewed regularly by senior management. Management reviews its receivables on a regular basis to determine if the allowance for expected credit losses is adequate and provides allowance when necessary.
The Company does not hold any collateral or other credit enhancements over its accounts receivable balances.
For the three months ended March 31, 2025 and 2024, the Company evaluated the probable losses on account receivables and recorded a provision for allowance for expected credit losses of $[x] million and $0.2 million, respectively.
| ● | Loans and Notes Receivable, net |
Loans receivable, net are related to residential mortgage loans that are carried at unpaid principal balances, less the allowance for expected credit losses on loans receivable and charge-offs.
Loans are placed on nonaccrual status when they are past due 180 days or more as to contractual obligations or when other circumstances indicate that collection is not probable. When a loan is placed on nonaccrual status, any interest accrued but not received is reversed against interest income. Payments received on a nonaccrual loan are either applied to protective advances, the outstanding principal balance or recorded as interest income, depending on an assessment of the ability to collect the loan. A nonaccrual loan may be restored to accrual status when principal and interest payments have been brought current and the loan has performed in accordance with its contractual terms for a reasonable period (generally six months).
If the Company determines that a loan is impaired, the Company next determines the amount of the impairment. The amount of impairment on collateral dependent loans is charged off within the given fiscal quarter. Generally the amount of the loan and negative escrow in excess of the appraised value less estimated selling costs, for the fair value of collateral valuation method, is charged off. For all other loans, impairment is measured as described below in “Allowance for Expected Credit Losses on Financial Instruments”.
For the three months ended March 31, 2025 and 2024, the Company evaluated the probable losses on loans and notes receivable and recorded a provision for allowance for expected credit losses of approximately $[x] million and $0.2 million, respectively.
| ● | Allowance for Expected Credit Losses |
In accordance with ASC Topic 326, “Credit Losses – Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”), the Company utilizes the current expected credit losses (“CECL”) model to determine an allowance that reflects its best estimate of the lifetime expected credit losses on accounts receivable, loans receivable, notes receivable, and deposits, prepayments and others receivable which is recorded as a liability to offset the receivables. The CECL model is prepared after considering historical experience, current conditions, and reasonable and supportable economic forecasts to estimate lifetime expected credit losses. Accounts receivable, loans and notes receivable, and deposits, prepayments, and others receivable are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded as a reduction of bad debt expense.
For the three months ended March 31, 2025 and 2024, the aggregated provision for allowance for expected credit losses on accounts receivable, loans receivable, notes receivable, deposits and other receivables was approximately $[x] million and $1.0 million, respectively.
| ● | Deposits, Prepayments and other Receivable, net |
Deposits, prepayments and other receivables, net primarily consist of prepayments of professional service fees such as consulting services and business insurance. These advances are unsecured and reviewed periodically to determine whether their carrying value has become impaired.
9
For the three months ended March 31, 2025 and 2024, the Company evaluated the probable losses on deposits, prepayments and other receivables and recognized a provision for allowance for expected credit losses of approximately $[x] million and $0.6 million, respectively.
| ● | Long-Term Investments, net |
The Company invests in equity securities with readily determinable fair values and equity securities that do not have readily determinable fair values.
Equity securities with readily determinable fair values are carried at fair value with any unrealized gains or losses reported in earnings.
Equity securities that do not have readily determinable fair values mainly consist of investments in privately-held companies. They are stated at cost less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer.
At each reporting period, the Company makes a qualitative assessment considering impairment indicators to evaluate whether the investment is impaired.
| ● | Property and Equipment, net |
Property and equipment, net are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values, if any:
| Expected useful life | ||
| Building | Shorter of 50 years or lease term | |
| Leasehold improvement | 3 years | |
| Furniture, fixtures and equipment | 3 to 5 years | |
| Computer equipment | 3 years | |
| Motor vehicles | 3 years |
Expenditures for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.
Property and equipment are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long- lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets.
For the three months ended March 31, 2025 and 2024, the Company evaluated the approximately $[x] million and $0.6 million, respectively.
| ● | Impairment of Long-Lived Assets |
In accordance with the provisions of ASC Topic360, Impairment or Disposal of Long-Lived Assets, all long-lived assets such as property and equipment owned and held by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cashflows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. No impairment losses were recognized for the three months ended March 31, 2025 and 2024.
10
| ● | Accounts Payable |
Accounts payable primarily consists of (i) commission payable to the Company’s financial advisors for the sale of investment funds, investment products, or insurance products, accruals for payments of professional services fees and other operating payables and (ii) payable to the suppliers related to talent and influencers for brand activations and live-event. The carrying amount approximates fair value because of the short-term maturity.
| ● | Borrowings |
Borrowings are initially recognized at fair value, net of upfront fees incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.
| ● | Convertible Debts, net |
The Company accounts for certain convertible debts, net in accordance with ASC Topic 470-20, “Debt with Conversion and Other Options” (“ASC 470-20”), whereby the convertible instrument is initially accounted for as a single unit of account, unless it contains a derivative that must be bifurcated from the host contract in accordance with ASC Topic 815-15, “Derivatives and Hedging – Embedded Derivatives” or the substantial premium model in ASC 470-20 applies. Where the substantial premium model applies, the premium is recorded in additional paid -in capital. The resulting debt discount is amortized over the period during which the convertible debts is expected to be outstanding as additional non-cash interest expenses.
Certain of the Company’s convertible debts are accounted for under the fair value option election in ASC 825 due to difference in its features. Under the fair value option election, the financial instrument is initially measured at its issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The estimated fair value adjustment is presented within other income (expense) in the condensed consolidated statements of operations and comprehensive loss. The Company classifies its convertible debts that are being valued under the fair value option election as Level 3 due to the lack of relevant observable market data over fair value inputs, such as the probability weighting of the various scenarios that can impact settlement of the arrangement.
| ● | Warrants |
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
Equity-classified
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. Warrants classified as equity instruments are initially recognized at fair value and are not subsequently remeasured. The Company accounts for its (i) Public Warrants and (ii) Replacement Warrants of Triller Group Warrants as equity.
11
Liability-classified
For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed consolidated statements of operations and comprehensive loss. The Company accounts for its (i) SPAC Private Warrants, (ii) Common Warrants, and (iii) Warrants – Class A of Triller Group warrants as liabilities.
Warrants classified as liabilities are recorded at fair value and are remeasured at each reporting date until settlement. Changes in fair value is recognized as a component of change in fair value of warrant liability in the condensed consolidated statements of operations and comprehensive loss. Transaction costs allocated to warrants that are presented as a liability are immediately expensed in the condensed consolidated statements of operations and comprehensive loss.
| ● | Revenue Recognition |
The Company receives most of its non-interest income from contracts with customers, which are accounted for in accordance with Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC Topic 606”).
ASC Topic 606 provided the following overview of how revenue is recognized from the Company’s contracts with customers: The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
Step 1: Identify the contract(s) with a customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price – The transaction price is the amount of consideration in a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer.
Step 4: Allocate the transaction price to the performance obligations in the contract – Any entity typically allocates the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or service promised in the contract.
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation – An entity recognizes revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service). The amount of revenue recognized is the amount allocated to the satisfied performance obligation. A performance obligation may be satisfied at a point in time (typically for promises to transfer goods to a customer) or over time (typically for promises to transfer service to a customer).
Certain portion of the Company’s income is derived from contracts with customers, and as such, the revenue recognized depicts the transfer of promised goods or services to its customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company considers the terms of the contract and all relevant facts and circumstances when applying this guidance. The Company’s revenue recognition policies are in compliance with ASC Topic 606, as follows:
| (a) | Social Media and Sports Streaming |
| (i) | Advertising Revenue: The Company’s technology platform provides brands a variety of advertising services including AI-powered conversations and the augmentation and execution of advertising campaigns. Advertising revenue is generated from advertisements, either displayed on a device-specific application, browser or as part of an event. Brand sponsorship revenue is generally recognized as advertisements are viewed, if on a device-specific application or browser or when events occur with participation of the sponsor. Revenue from brand sponsorship agreements for which consideration is a fixed fee is allocated evenly to each event in a series of events over the applicable contractual service period as the advertisements are displayed, which is typically over a period of less than one year. |
12
| (ii) | Subscription Fees: The Company’s technology platform provides streaming services that acquires content licensing from various sport and entertainment franchises to provide a content rich environment for both subscription based and pay-per-view consumption both across a variety of platforms including mobile phones, tablets, PCs, streaming devices, set-top-boxes and connected TVs. Subscriptions for streaming services are through third party streaming service providers, examples include All Elite Wrestling (“AEW”) in the case of Triller TV. Revenue from streaming subscriptions is recognized ratably over the life of a subscription. |
| (iii) | Pay-per-view Fees: Unlike subscription fees, the Company’s technology platform, via its streaming service provides pay-per-view services for premium content and events. Revenue from streaming pay-per-view events is recognized at the time the event airs. |
| (iv) | SaaS Fees: The Company’s technology platform provides data, analytics and other marketing services to brands and advertising agencies with access to a data base of profiled Brands and Creators and their associated audiences, giving them the ability to enlist Creators to develop and share captivating stories to market their products and services. SaaS platform provides customers a detailed dashboard to measure all creator driven marketing campaigns as well as a marketplace allowing e-commerce brands to automate the process of on-boarding creators with per-transaction incentives for enabling e-commerce transactions. Revenue from SaaS platform subscriptions is recognized ratably over the life of a subscription. |
In arrangements where another party is involved in providing specified services to a customer, such as a distributor of the Company’s content for subscription and pay-per-view programming, the Company evaluates whether the Company is the principal or agent in the arrangement. In this evaluation, the Company considers if the Company obtains control of the specified goods or services before they are transferred to the customer, as well as other indicators such as the party primarily responsible for fulfillment and discretion in establishing price. For revenue arrangements where the Company is not the principal, the Company recognizes revenue on a net basis. The Company has revenue-share arrangements where the Company is the principal, such as serving as the provider of content for subscription and pay-per-view programming. Costs associated with revenue-share arrangements are recognized as part of expenses. The Company determined that it was the principal for all subscription and pay-per-view arrangements and no revenue was recognized on an agent net basis for the period presented.
The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within operating expense for social media and streaming platform in the condensed consolidated statements of operations and comprehensive loss.
| (b) | Financial Services |
| (i) | Commissions: The Company earns commissions from the sale of investment products to customers, who are insurance companies and fund houses. The Company enters into commission agreements with customers which specify the key terms and conditions of the arrangement. Commissions are separately negotiated for each transaction and generally do not include rights of return, credits or discounts, rebates, price protection or other similar privileges, and typically paid on or shortly after the transaction is completed. Upon the purchase of an investment product by customer, the Company earns a commission from customers, calculated as a fixed percentage of the investment products acquired by its customers. The Company defines the “purchase of an investment product” for its revenue recognition purpose as the time when the customers referred by the Company has entered into a subscription contract with the relevant product provider and, if required, the customer has transferred a deposit to an escrow account designated by the Company to complete the purchase of the investment products. After the contract is established, there are no significant judgments made when determining the commission price. Therefore, commissions are recorded at point in time when the investment product is purchased. |
13
| The Company also facilitates the arrangement between insurance providers and individuals or businesses by providing insurance placement services to the insured and is compensated in the form of commission from the respective insurance providers. The Company primarily facilitates the placement of life, general and MPF insurance products. The Company determines that insurance providers are the customers. | |
| The Company primarily earns commission income arising from the facilitation of the placement of an effective insurance policy, which is recognized at a point in time when the performance obligation has been satisfied upon execution of the insurance policy as the Company has no future or ongoing obligation with respect to such policies. The commission fee rate, which is paid by the insurance providers, based on the terms specified in the service contract which are agreed between the Company and insurance providers for each insurance product being facilitated through the Company. The commission earned is equal to a percentage of the premium paid to the insurance provider. Commission from renewed policies is variable consideration and is recognized in subsequent periods when the uncertainty around variable consideration is subsequently resolved (e.g., when customer renews the policy). | |
| In accordance with ASC Topic 606, Revenue Recognition: Principal Agent Considerations, the Company evaluates the terms in the agreements with its channels and independent contractors to determine whether or not the Company acts as the principal or as an agent in the arrangement with each party respectively. The determination of whether to record the revenue in a gross or net basis depends upon whether the Company has control over the services prior to transferring it. Control is demonstrated by the Company which is primarily responsible for fulfilling the provision of placement services through the Company’s licensed insurance brokers to provide agency services. The commissions from insurance providers are recorded on a gross basis and commission paid to independent contractors or channel costs are recorded as commission expense in the condensed consolidated statements of operations and comprehensive loss. |
| The Company also offers the sale solicitation of real estate property to the final customers and is compensated in the form of commissions from the corresponding property developers pursuant to the service contracts. Commission income is recognized at a point of time upon the sale contracts of real estate property is signed and executed. |
| (ii) | Recurring Asset Management Service Fees: The Company provides asset management services to investment funds or investment product providers in exchange for recurring asset management service fees. Recurring asset management service fees are determined based on the types of investment products the Company distributes and are calculated as a fixed percentage of the fair value of the total investment of the investment products, calculated daily. These customer contracts require the Company to provide investment management services, which represents a performance obligation that the Company satisfies over time. After the contract is established, there are no significant judgments made when determining the transaction price. As the Company provides these services throughout the contract term, for the method of calculating recurring asset management service fees, revenue is calculated on a daily basis over the contract term, quarterly billed and recognized. Recurring service agreements do not include rights of return, credits or discounts, rebates, price protection, performance component or other similar privileges and the circumstances under which the fixed percentage fees, before determined, could be not subject to clawback. Payment of recurring asset management service fees are normally on a regular basis (typically monthly or quarterly). |
| (iii) | Loan Interest Income: The Company offers money lending services from loan origination in form of mortgage and personal loans. Interest income is recognized monthly in accordance with their contractual terms and recorded as interest income in the condensed consolidated statement of operations. The Company does not charge prepayment penalties from its customers. Interest income on mortgage and personal loans is recognized as it accrued using the effective interest method. Accrual of interest income on mortgage loans is suspended at the earlier of the time at which collection of an account becomes doubtful or the account becomes 180 days delinquent. |
14
Disaggregation of Revenue
The Company has disaggregated its revenue from contracts with customers into categories based on the nature of the revenue. The following table presents the revenue streams disaggregated by nature and geographic location:
| For the three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| At a point in time | ||||||||
| Paid-per-view fees | $ | $ | — | |||||
| Commissions | 6,723 | |||||||
| Total revenue from the transfer of goods and services at a point in time | 6,723 | |||||||
| Over time | ||||||||
| Advertising revenue | — | |||||||
| Saas fees | — | |||||||
| Subscription fees | — | |||||||
| Recurring asset management service fees | 892 | |||||||
| Loans interest income | 41 | |||||||
| Total revenue from the transfer of goods and services over time | 933 | |||||||
| Total revenue | $ | $ | 7,656 | |||||
| For the three months ended March 31, | ||||||||
| By geography: | 2025 | 2024 | ||||||
| Hong Kong | $ | $ | 7,656 | |||||
| United States | — | |||||||
| Others | — | |||||||
| Total | $ | $ | 7,656 | |||||
Contract Balances
The following table provides information about contract liabilities from the Company’s contracts with customers:
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Contract liabilities, included in other current liabilities | $ | — | $ | 1,683 | ||||
Receivables relate to customer contracts for which the performance obligation has been satisfied and payment is expected to be received in the next twelve months.
The Company reviews the status of the then-outstanding accounts receivable on a customer-by-customer basis, taking into consideration the aging schedule of receivables, its historical collection experience, current information regarding the client, subsequent collection history, and other relevant data, in establishing the allowance for doubtful accounts. Accounts receivable are written off against the allowance for doubtful accounts when the Company determines amounts are no longer collectible.
For the three months ended March 31, 2025 and 2024, there were no revenues recognized relating to performance obligations satisfied or partially satisfied in prior periods.
15
| ● | Comprehensive Loss |
ASC Topic 220, Comprehensive Income, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive (loss) income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive (loss) income, as presented in the accompanying condensed consolidated statements of changes in stockholders’ (deficit) equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive (loss) income is not included in the computation of income tax expense or benefit.
| ● | Income Taxes |
Income taxes are determined in accordance with the provisions of ASC Topic 740, Income Taxes (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC Topic 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC Topic 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
For the three months ended March 31, 2025 and 2024, the Company did not have any interest and penalties associated with tax positions. As of March 31, 2025 and December 31, 2024, the Company did not have any significant unrecognized uncertain tax positions.
The Company is subject to tax in local and foreign jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the relevant tax authorities.
| ● | Stock-Based Compensation |
The Company accounts for stock-based compensation in accordance with the fair value recognition provision of ASC Topic 718, Stock Compensation. The Company grants share awards, including common stock and restricted share units, to eligible participants. Stock-based compensation expense for share awards is measured at fair value on the grant date. The fair value of restricted stock with either solely a service requirement or with the combination of service and performance requirements is based on the closing fair market value of the common stock on the date of grant. Stock-based compensation expense is recognized over the requisite service period for time-vesting awards and, for awards with a performance condition, over the requisite service period if the performance condition is probable of achievement. For awards with graded vesting that are subject only to a service condition, the expense is recognized on a straight-line basis over the service period for the entire award.
| ● | Net Loss Per Share |
In accordance with ASC 260, Earnings Per Share, basic net earnings (loss) per share is computed by dividing net income (loss) attributable to ordinary stockholders by the weighted average number of unrestricted common stock outstanding during the period using the two-class method. Under the two-class method, net income (loss) is allocated between common stock and other participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed. The Company’s holdback shares are participating securities because they are entitled to non-forfeitable dividends.
Basic loss per common stock is computed by dividing net loss by the weighted-average number of common stock outstanding during the period. Diluted loss per share is computed by dividing net loss by the sum of the weighted average number of common stock outstanding and of potential dilutive securities (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common stock that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted loss per share.
16
| ● | Leases |
Under ASU 2016-02, Leases (Topic 842) (“Topic 842”), leases are categorized as operating or financing lease at inception. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Lease terms include options to renew or terminate the lease when it is reasonably certain that the Company will exercise such options. The Company has recognized right of use (“ROU”) assets and corresponding lease liabilities on the Company’s condensed consolidated balance sheets for its operating lease agreements with contractual terms greater than 12 months. Lease liabilities are based on the present value of remaining lease payments over the lease term. As the discount rate implied in the Company’s leases is not readily determinable, the present value is calculated using the Company’s incremental borrowing rate, which is estimated to approximate the interest rate on a collateralized basis with similar terms.
Some of the Company’s lease agreements contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. The Company has elected the practical expedient to combine fixed payments for non-lease components with lease payments and account for them together as a single lease component which increases the amount of ROU assets and lease liabilities.
Leases with a term of twelve months or less upon the commencement date are considered short-term leases, are not included on the condensed consolidated balance sheets and are expensed on a straight-line basis over the lease term.
| ● | Related Parties |
The Company follows the ASC Topic 850-10, Related Party for the identification of related parties and disclosure of related party transactions.
Pursuant to section 850-10-20, the related parties include: a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which statements of operations are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which statements of operations are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
17
| ● | Commitments and Contingencies |
The Company follows the ASC Topic 450-20, Contingencies, to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
| ● | Fair Value Measurement |
The Company follows the guidance of the ASC Topic 820-10, Fair Value Measurements and Disclosures (“ASC Topic 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC Topic 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
| ● | Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets; |
| ● | Level 2 : Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and |
| ● | Level 3 : Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. |
The carrying value of the Company’s financial instruments: cash and cash equivalents, restricted cash, accounts receivable, loans receivable, deposits, prepayments and other receivables, accounts payable and accrued liabilities, escrow liabilities, borrowings, and amounts due to the holding company approximate at their fair values because of the short-term nature of these financial instruments.
Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of loans receivable approximates the carrying amount. The Company accounts for loans receivable at cost, subject to expected credit losses assessment.
The Company measures warrant liabilities, certain convertible debts for which the fair value option has been elected at fair value on a recurring basis.
18
The following table presents information about the Company’s financial assets and liabilities that were measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
| As of March 31, | Quoted prices in active markets | Significant other observable inputs | Significant other unobservable inputs | |||||||||||||
| Description | 2025 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
| Assets: | ||||||||||||||||
| Marketable equity securities | $ | $ | $ | — | $ | — | ||||||||||
| Liabilities: | ||||||||||||||||
| Warrant liabilities | $ | $ | — | $ | — | $ | ||||||||||
| Convertible debts for which the fair value option has been elected (a) | — | — | ||||||||||||||
| Total | $ | $ | — | $ | — | $ | ||||||||||
| As of December 31, | Quoted prices in active markets | Significant other observable inputs | Significant other unobservable inputs | |||||||||||||
| Description | 2024 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
| Assets: | ||||||||||||||||
| Marketable equity securities | $ | 1 | $ | 1 | $ | — | $ | — | ||||||||
| Liabilities: | ||||||||||||||||
| Warrant liabilities | $ | 977 | $ | — | $ | — | $ | 977 | ||||||||
| Convertible debts for which the fair value option has been elected (a) | 53,106 | — | — | 53,106 | ||||||||||||
| Total | $ | 54,083 | $ | — | $ | — | $ | 54,083 | ||||||||
The following table presents changes in Level 3 liabilities measured at fair value for the three months ended March 31, 2025:
| Warrant liabilities | Convertible debts | |||||||
| Balance as of December 31, 2024 | $ | 977 | $ | 53,106 | ||||
| Additions from new issuance | ||||||||
| Addition from acquisition of subsidiaries | ||||||||
| Settlement | ) | |||||||
| Fair value measurement adjustments | ) | ) | ||||||
| Balance as of March 31, 2025 | $ | 977 | $ | 53,106 | ||||
Note:
| (a) | Certain of the Company’s convertible debts are accounted for under the fair value option election in ASC 825. Under the fair value option election, the financial instrument is initially measured at its issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The estimated fair value adjustment is presented within other income (expense) in the condensed consolidated statements of operations and comprehensive loss. The Company classifies its convertible debts that are being valued under the fair value option election as Level 3 due to the lack of relevant observable market data over fair value inputs, such as the probability weighting of the various scenarios that can impact settlement of the arrangement. |
19
| The estimated fair value of the convertible debts as of Mrach 31, 2025 was computed using the models and assumptions shown below. A net gain from fair value movements of approximately $4.4 million for the year ended December 31, 2024 is included in condensed consolidated statements of operations and comprehensive loss. |
| The significant inputs in the valuation models as of March 31, 2025, are as follows: |
| Inputs | Convertible debts A | Convertible debts B | ||||||
| Valuation method | Binomial Tree Model | Binomial Tree Model | ||||||
| Conversion price | $ | 8.36 | $ | 12.00 | ||||
| Fair value of conversion units | 11.06 | 15.15 | ||||||
| Expected term (years) | 1.16 | 0.08 | ||||||
| Volatility | 198.02 | % | 112.77 | % | ||||
| Discount rate | 15.00 | % | 15.00 | % | ||||
| Risk free rate | 4.29 | % | 4.24 | % | ||||
| ● | Recently Issued Accounting Pronouncements |
From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.
In November 2023, the FASB amended guidance in ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). The revised guidance requires that a public entity disclose significant segment expenses regularly reviewed by the chief operating decisionmaker (CODM), including public entities with a single reportable segment. The amended guidance is effective for fiscal years beginning in January 2024 and interim periods beginning January 2025 on a retrospective basis. Effective January 1, 2024, the Company retroactively adopted ASU 2023-07 which resulted in additional disclosures for significant segment expenses reviewed by the Company’s CODM (refer to Note 5).
Recently issued accounting standards not yet adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for the Company’s annual reporting periods beginning in January 2025. Adoption is either with a prospective method or a fully retrospective method of transition. Early adoption is permitted. The Company is currently evaluating the impact on its condensed consolidated financial statements.
In March 2024, the FASB issued ASU 2024-01, Compensation – Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards, which adds an illustrative example aimed at clarifying the scope application of a profit interest award in accordance with Topic 718. The update will be effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. The new standard is not expected to have an impact on the Company’s financial position or results of operations.
In March 2024, the FASB issued ASU 2024-02, “Codification Improvements — Amendments to Remove References to the Concepts Statements”. This update contains amendments to the Codification that remove references to various FASB Concepts Statements. These changes remove references to various Concepts Statements and the amendments apply to all reporting entities within the scope of the affected accounting guidance. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2024. Early application of the amendments in this Update is permitted for any fiscal year or interim period for which financial statements have not yet been issued (or made available for issuance). The Company believes the future adoption of this ASU is not expected to have a material impact on its condensed consolidated financial statements.
20
In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires incremental disclosures about specific expense categories, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted and the amendments may be applied either prospectively or retrospectively. Management is currently evaluating this ASU to determine its impact on the Company’s disclosures.
In January 2025, the FASB issued ASU 2025-01 Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40). The FASB issued ASU 2024-03 on November 4, 2024. ASU 2024-03 states that the amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Following the issuance of ASU 2024-03, the FASB was asked to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred to as non-calendar year-end entities). Because of how the effective date guidance was written, a non-calendar year-end entity may have concluded that it would be required to initially adopt the disclosure requirements in ASU 2024-03 in an interim reporting period, rather than in an annual reporting period. The FASB’s intent in the basis for conclusions of ASU 2024-03 is clear that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Management is currently evaluating this ASU to determine its impact on the Company’s disclosures.
In July 2025, the FASB issued 2025-05 to improve the measurement of credit losses for accounts receivable and contract assets. The guidance provides a practical expedient for all entities to assume that current conditions as of the balance sheet date remain unchanged for the remaining life of the assets. The update aims to reduce the cost and complexity of estimating credit losses while maintaining decision-useful information for financial statement users. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025. Management is currently evaluating the impact that the adoption of this update may have on its financial statements
Except for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have a material impact on the condensed consolidated balance sheets, statements of operations and comprehensive loss and cash flows.
NOTE 3 — LIQUIDITY AND GOING CONCERN
The accompanying condensed consolidated financial statements were prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. They do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
For the three months ended March 31, 2025, the Company reported net loss of approximately $XX million and net cash outflows from operating activities of approximately $XX million. As of March 31, 2025, the Company had a working capital deficit of approximately $271.7 million and a stockholders’ deficit of approximately $246.0 million.
The Company has determined that the prevailing conditions and ongoing liquidity risks encountered by the Company raise substantial doubt about the ability to continue as a going concern for at least one year following the date these condensed consolidated financial statements are issued. The ability to continue as a going concern is dependent on the Company’s ability to successfully implement its current operating plan and fund-raising plan. The Company believes that it will be able to grow its revenue base and control expenditures. In parallel, the Company will monitor its capital structure and operating plans and search for potential funding alternatives in order to finance the development activities and operating expenses. The Company is continuing its plan to further grow and expand operations and seek sources of capital to pay the contractual obligations as they come due.
However, the Company cannot predict the exact amount or timing of the alternatives or guarantee those alternatives will be favorable to its stockholders. Any failure to obtain financing when required will have a material adverse impact on the Company’s business, operation and financial result.
their respective fair values as of the Acquisition Date. The excess of the value of consideration transferred over the aggregate fair value of those net assets was recorded as goodwill. Any identified definite lived intangible assets will be amortized over their estimated useful lives and any identified intangible assets with indefinite useful lives and goodwill will not be amortized but will be tested for impairment at least annually or more frequently when certain indicators are present. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenues and cash flows, discount rates, and selection of comparable companies.
21
NOTE 4 — SEGMENT INFORMATION
By assessing the qualitative and quantitative criteria established by ASC Topic 280, “Segment Reporting”, management has determined that the Company has four reportable segments, which include the Company’s social media, sports streaming, sports content, and financial services segments. The Company’s reportable segments reflect how the Company’s operations are managed, how the Company’s Chief Executive Officer, who is the Chief Operating Decision Maker (“CODM”), allocates resources and evaluates performance, and how the Company’s internal financial reporting is structured.
For the three months ended March 31, 2025 and 2024, the Company’s reportable segments comprised of the following:
| 1. Social media | The Social media segment consists of the Company’s operations related to its social media platform and related services for content creation and distribution | |
| 2. Sports streaming | The online streaming segment consists of the Company’s operations related to its online streaming service. | |
| 3. Financial services | The Financial services segment consists of revenues and costs incurred from the sale of investment products, offer asset management services and money lending services. |
The Company’s reportable segments are strategic business units that offer different products and services. They are managed separately because each business unit requires different technology and marketing strategies.
The following tables present the summary information by segment for the three months ended March 31, 2025 and 2024:
| Three months ended March 31, 2025 | ||||||||||||||||||||||||
| Social media | Sports streaming | Financial services | Corporate | Elimination | Consolidated | |||||||||||||||||||
| Revenue | ||||||||||||||||||||||||
| Loans interest income | — | — | — | — | ||||||||||||||||||||
| Commission | — | — | — | — | ||||||||||||||||||||
| Recurring asset management service fees | — | — | — | — | ||||||||||||||||||||
| Advertising revenue | — | — | — | |||||||||||||||||||||
| SaaS fees | — | — | — | |||||||||||||||||||||
| Subscription fees and paid-per-view fees | — | — | — | |||||||||||||||||||||
| Total revenue | — | — | ||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||
| Operating expenses for social media and streaming platform | ) | ) | — | — | — | ) | ||||||||||||||||||
| Commission expense | — | — | ) | — | — | ) | ||||||||||||||||||
| Sales and marketing expenses | ) | ) | ) | — | — | ) | ||||||||||||||||||
| Research and development expenses | ) | ) | ) | — | — | ) | ||||||||||||||||||
| Personal and benefit expenses | ) | ) | ) | ) | — | ) | ||||||||||||||||||
| Legal and professional fee | ) | ) | ) | ) | — | ) | ||||||||||||||||||
| Legal and professional fee, related party | — | — | — | ) | — | ) | ||||||||||||||||||
| Office and operating fee, related party | — | — | ) | — | — | ) | ||||||||||||||||||
| Provision for allowance for expected credit losses | ) | ) | — | — | ) | |||||||||||||||||||
| Other general and administrative expenses | ) | ) | ) | ) | — | ) | ||||||||||||||||||
| Total operating expenses | ) | ) | ) | ) | — | ) | ||||||||||||||||||
| Other income (expense), net | ||||||||||||||||||||||||
| Interest income | — | ) | ||||||||||||||||||||||
| Interest expense | ) | ) | ) | ) | ) | |||||||||||||||||||
| Foreign exchange (loss) gain, net | — | ) | — | — | ) | |||||||||||||||||||
| Impairment on property and equipment | — | — | ) | — | — | ) | ||||||||||||||||||
| Impairment on intangible assets | ) | ) | ) | — | — | ) | ||||||||||||||||||
| Impairment on goodwill | ) | ) | ) | |||||||||||||||||||||
| Impairment on right-of-use assets | — | — | ) | — | — | ) | ||||||||||||||||||
| Investment loss, net | — | — | ) | — | — | ) | ||||||||||||||||||
| Change in fair value of convertible debts | — | — | — | — | ||||||||||||||||||||
| Change in fair value of warrant liabilities | — | — | — | — | ||||||||||||||||||||
| Sundry income | — | — | ||||||||||||||||||||||
| Total other expense, net | ) | ) | ) | ) | — | ) | ||||||||||||||||||
| Income tax expense | — | — | — | — | — | — | ||||||||||||||||||
| Net loss | ) | ) | ) | ) | — | ( | ) | |||||||||||||||||
22
| Three months ended March 31, 2024 | ||||||||||||||||
| Financial services | Corporate | Elimination | Consolidated | |||||||||||||
| Revenue | ||||||||||||||||
| Commission | 6,723 | — | — | 6,723 | ||||||||||||
| Asset management service fees | 892 | — | — | 892 | ||||||||||||
| Loans interest income | 41 | — | — | 41 | ||||||||||||
| Total revenue | 7,656 | — | — | 7,656 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Commission expense | (4,446 | ) | — | — | (4,446 | ) | ||||||||||
| Sales and marketing expenses | ) | ) | — | (483 | ) | |||||||||||
| Research and development expenses | ) | ) | — | (458 | ) | |||||||||||
| Personal and benefit expenses | ) | ) | — | (6,059 | ) | |||||||||||
| Legal and professional fee | (625 | ) | ||||||||||||||
| Legal and professional fee, related party | (250 | ) | ||||||||||||||
| Office and operating fee, related party | (1,118 | ) | ||||||||||||||
| Provision for allowance for expected credit losses | (991 | ) | ||||||||||||||
| Other general and administrative expenses | ) | ) | — | (880 | ) | |||||||||||
| Total operating expenses | ) | ) | — | (15,310 | ) | |||||||||||
| Other income (expense) | ||||||||||||||||
| Interest income | — | 12 | ||||||||||||||
| Interest expense | ) | ) | — | (207 | ) | |||||||||||
| Investment loss, net | (37 | ) | ||||||||||||||
| Others | ) | — | (136 | ) | ||||||||||||
| Total other income (expense), net | ) | — | (368 | ) | ||||||||||||
| Income tax expense | ) | ) | — | (38 | ) | |||||||||||
| Net income (loss) | ) | — | (8,060 | ) | ||||||||||||
The following tables present a summary of the Company’s assets by reportable segment as of March 31, 2025 and December 31, 2024:
| As of March 31, 2025 | ||||||||||||||||||||||||
| Social media | Sports streaming | Financial services | Corporate | Elimination | Consolidated | |||||||||||||||||||
| Long-term investments, net | — | — | — | — | ||||||||||||||||||||
| Other assets | ||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||
| As of December 31, 2024 | ||||||||||||||||||||||||
| Social media | Sports streaming | Financial services | Corporate | Elimination | Consolidated | |||||||||||||||||||
| Long-term investments, net | — | — | 25,455 | — | — | 25,455 | ||||||||||||||||||
| Other assets | 7,506 | 5,614 | 18,121 | 37,514 | (43,632 | ) | 25,123 | |||||||||||||||||
| Total assets | 7,506 | 5,614 | 43,576 | 37,514 | (43,632 | ) | 50,578 | |||||||||||||||||
The Company had no capital expenditures by reportable segment for the three months ended March 31, 2025 and 2024.
The Company’s major customers and operations are based in Hong Kong and the United States.
23
NOTE 5 — RESTRICTED CASH
As of March 31, 2025 and December 31, 2024, the Company has approximately $X million and $14.2 million fund held in escrow, respectively. Fund held in escrow primarily comprised of escrow funds held in bank accounts on behalf of the Company’s customers. The Company is currently acted as a custodian to manage the assets and investment portfolio on behalf of its customers under the terms of certain contractual agreements, which the Company does not have the right to use for any purposes, other than managing the portfolio. Upon receiving escrow funds, the Company records a corresponding escrow liability.
NOTE 6 — ACCOUNTS RECEIVABLE, NET
Accounts receivable, net consisted of the following:
| As of | ||||||||
| Mrach 31, 2025 | December 31, 2024 | |||||||
| Accounts receivable | $ | $ | 3,388 | |||||
| Accounts receivable – related parties | 1,100 | |||||||
| Less: allowance for expected credit losses | ) | (1,615 | ) | |||||
| Accounts receivable, net | $ | $ | 2,873 | |||||
The accounts receivable due from related parties represented the management service rendered to the portfolio assets of related companies, which are controlled by the holding company, for a compensation of asset management service fee income at the predetermined rate based on the respective portfolio of asset values invested by the final customers. The amount is unsecured, interest-free and with a credit term mutually agreed.
The following table presents the activity in the allowance for expected credit losses:
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Balance at beginning of period | $ | 1,615 | $ | 312 | ||||
| Additions from acquisition of subsidiaries | 386 | |||||||
| Additions | 914 | |||||||
| Foreign translation adjustment | 3 | |||||||
| Balance at end of period | $ | $ | 1,615 | |||||
The Company generally conducts its business with creditworthy third parties. The Company determines, on a quarterly basis, the probable losses and an allowance for expected credit losses determined in accordance with the CECL model, based on historical losses, current economic conditions, forecasted future economic and market considerations, and in some cases, evaluating specific customer accounts for risk of loss. Accounts receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. In addition, receivable balances are monitored on an ongoing basis and its exposure to bad debts is not significant.
For the three months ended March 31, 2025 and 2024, the Company has assessed the probable loss and made a provision for allowance for expected credit losses of approximately $ XX and $0.2 million on accounts receivable, respectively.
24
NOTE 7 — LOANS AND NOTES RECEIVABLE, NET
| (a) | Loans Receivables, net |
The Company’s loans receivable, net was as follows:
| As of | ||||||||
| Mrach 31, 2025 | December 31, 2024 | |||||||
| Residential mortgage loans | $ | $ | 1,164 | |||||
| Less: allowance for expected credit losses | ) | (38 | ) | |||||
| Loans receivable, net | $ | $ | 1,126 | |||||
| Classifying as: | ||||||||
| Current portion | $ | $ | 92 | |||||
| Non-current portion | 1,034 | |||||||
| Loans receivable, net | $ | $ | 1,126 | |||||
The interest rates on loans issued ranged between 10.00% and 10.50% (2024: 9.00% to 10.50%) per annum for the three months ended March 31, 2025 and 2024. Mortgage loans are secured by collateral in the pledge of the underlying residential properties owned by the borrowers. As of March 31, 2025, the net carrying amount of the loans receivable was approximately $1.1 million which included an interest receivable of approximately $0.06 million.
Mortgage loans are made to either business or individual customers in Hong Kong for a period of 1 to 25 years, which are fully collateralized and closely monitored for counterparty creditworthiness, with such collateral having a fair value in excess of the carrying amount of the loans as of Mrach 31, 2025 and December 31, 2024.
The following table presents the activity in the allowance for expected credit losses:
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Balance at beginning of period | $ | 38 | $ | 1 | ||||
| Additions | 36 | |||||||
| Foreign translation adjustment | 1 | |||||||
| Balance at end of period | $ | 38 | $ | 38 | ||||
Estimated allowance for expected credit losses is determined on quarterly basis, in accordance with the CECL model, for general credit risk of the overall portfolio, which is relied on an assessment of specific evidence indicating doubtful collection, historical loss experience, loan balance aging and prevailing economic conditions. If there is an unexpected deterioration of a customer’s financial condition or an unexpected change in economic conditions, including macroeconomic events, the Company will assess the need to adjust the allowance for expected credit losses. Any such resulting adjustments would affect earnings in the period that adjustments are made.
For the three months ended March 31, 2025 and 2024, the Company has assessed the probable loss and made an allowance for expected credit losses of approximately $36,000 and $1,000 on loans receivable, respectively.
| (b) | Notes Receivables, net |
On February 24, 2023, the Company entered into a subscription agreement and a convertible loan note instrument (collectively the “Agreements”) with Investment A. Pursuant to the Agreements, the Company agrees to subscribe an aggregate amount of approximately $1.7 million notes, in batches, which are payable on or before January 31, 2024 and bears a fixed interest rate of 8% per annum. The Company sold all its convertible loan notes on Investment A to an independent third party on April 30, 2024 for a consideration of approximately $0.4 million.
25
As of December 31, 2023, the net carrying amount of the notes receivable was approximately $0.6 million, which including an interest receivable of approximately $0.03 million.
In accordance with ASC Topic 326, the Company accounts for its allowance for expected credit losses on notes receivable using the CECL model. Periodic changes to the allowance for expected credit losses are recognized in the consolidated statements of operations and comprehensive loss. For the three months ended March 31, 2025 and 2024, the Company has evaluated the probable losses on the notes receivable and made an allowance for expected credit losses of approximately $0.16 million and $0.07 million, respectively.
NOTE 8 — LONG-TERM INVESTMENTS, NET
Long-term investments, net consisted of the following:
| As of | ||||||||||||||||
| Ownership interest | March 31, 2025 | Ownership interest | December 31, 2024 | |||||||||||||
| Marketable equity securities: | ||||||||||||||||
| Investment C | 0.00 | %* | 1 | 0.00 | %* | 1 | ||||||||||
| Non-marketable equity securities: | ||||||||||||||||
| Investment A | 8.37 | % | 8.37 | % | 5,479 | |||||||||||
| Investment B | 3.63 | % | 3.63 | % | 255 | |||||||||||
| Investment D | 4.49 | % | 4.49 | % | 16,621 | |||||||||||
| Investment E, related party | 4.00 | % | 4.00 | % | 525 | |||||||||||
| Investment F (a) | — | — | % | — | ||||||||||||
| Investment G (b) | 56.93 | % | 56.93 | % | — | |||||||||||
| Investment H (c) | 3.76 | % | 3.76 | % | 2,574 | |||||||||||
| Net carrying value | $ | $ | 25,455 | |||||||||||||
| * | Less than 0.001% |
Investments in Marketable Equity Securities
Investments in equity securities, such as, marketable securities, are accounted for at its current market value with the changes in fair value recognized in net gain (loss). Investment C was listed and publicly traded on Nasdaq Stock Exchange.
Investments in Non-Marketable Equity Securities
Investments in non-marketable equity securities consist of investments in limited liability companies in which the Company’s interests are deemed minor and long-term, strategic investments in companies that are in various stages of development. These investments do not have readily determinable fair values and, therefore, are reported at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer.
Management assesses each of these investments on an individual basis, subject to a periodic impairment review and considers qualitative and quantitative factors including the investee’s financial condition, the business outlook for its products and technology, its projected results and cash flow, financing transactions subsequent to the acquisition of the investment, the likelihood of obtaining subsequent rounds of financing and cash usage. The Company is not required to determine the fair value of these investments unless impairment indicators existed. When an impairment exists, the investment will be written down to its fair value by recording the corresponding charge as a component of other income (expense), net. Fair value is estimated using the best information available, which may include cash flow projections or other available market data.
Notes:
| (a) | On February 5, 2024, the Company entered into a purchase and sale agreement with an independent third party to sell all of its equity interest in Investment F for a purchase price of approximately $2.15 million and the transaction was completed on February 19, 2024. |
26
| (b) | In connection with the Merger Transaction, the Company held a 56.93% equity interest in Bare Knuckle Fighting Championships, Inc. (“BKFC”) as of December 31, 2024. BKFC is a licensed combat sports platform that stages live and streaming bareknuckle fighting events featuring established professionals in boxing, mixed martial arts, kickboxing and Muay Thai. Notwithstanding the Company’s majority equity ownership, the Company determined that it did not have a controlling financial interest and significant influence in BKFC, as it lacked the power to direct the activities that most significantly impact BKFC’s economic performance. Based on an evaluation of BKFC’s governance structure, contractual arrangements, and actual operating practices, strategic, operational, and financing decisions are all directed by BKFC’s founder, and BKFC operates independently of the Company. Accordingly, the Company accounted for its investment in BKFC as a non-marketable equity security measured at cost less impairment in accordance with ASC 321, Investments — Equity Securities. |
| (c) | In September 2024, the Company subscribed 285,353 Class C Units of Investment H, a Nevada limited liability private company, representing a 3.79% equity interest of Investment H as of transfer date, for a non-cash consideration of approximately $18.5 million. The consideration was payable by the issuance of 7.35 million shares of ordinary shares of AGBA at the current market value of $2.51 per share. Accordingly, the Company accounted for its investment in Investment H as a non-marketable equity security measured at cost less impairment in accordance with ASC 321, Investments — Equity Securities. (see Note 19(a)(vi))
Subsequently in January 2025, the Company agreed to transfer all its equity interest in Investment H to a consulting firm for partial settlement of consultancy services (see Note 26(ii)). |
The following table presents the movement of non-marketable equity securities as of Mrach 31, 2025 and December 31, 2024:
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Balance at beginning of period/year | $ | 25,455 | $ | 25,725 | ||||
| Additions | 18,457 | |||||||
| Disposal | ) | (2,152 | ||||||
| Adjustments: | ||||||||
| Downward adjustments | ) | (15,971 | ) | |||||
| Foreign exchange adjustment | ) | (604 | ||||||
| Balance at end of period/year | $ | 25,455 | $ | 25,455 | ||||
Cumulative unrealized gains and losses, included in the carrying value of the Company’s non-marketable equity securities:
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Downward adjustments (including impairment) | $ | ) | $ | (53,318 | ) | |||
| Upward adjustments | 6,209 | |||||||
| Total | $ | ) | $ | (47,109 | ) | |||
27
Investment loss, net is recorded as other expense in the Company’s condensed consolidated statements of operations and comprehensive loss and consisted of the following:
| For the three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Marketable equity securities: | ||||||||
| Realized gain from sale of Investment C | $ | $ | — | |||||
| Non-marketable equity securities: | ||||||||
| Unrealized losses (including impairment) – Investment B | ) | (37 | ) | |||||
| Unrealized losses (including impairment) – Investment H | ) | — | ||||||
| Investment loss, net | $ | ) | $ | (37 | ) | |||
NOTE 9 — ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES
Accounts payable and other current liabilities consisted of the followings:
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Accounts payable | $ | $ | 53,752 | |||||
| Provision for potential litigation expense | 22,962 | |||||||
| Music contingencies | 23,793 | |||||||
| Accrued professional expenses | 28,627 | |||||||
| Redemption liability | 7,298 | |||||||
| Loan interest payable | 3,489 | |||||||
| Loan interest payable – related party | 1,251 | |||||||
| Accrued payroll | 2,636 | |||||||
| Other accrued liabilities | 7,344 | |||||||
| Total | $ | $ | 151,152 | |||||
NOTE 10 — BORROWINGS
The borrowings consisted of the followings:
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Mortgage borrowings (a) | $ | $ | 868 | |||||
| Short-term loans (b) | 11,642 | |||||||
| Short-term loans, related parties (c) | 29,181 | |||||||
| Factoring loan (d) | 197 | |||||||
| Total | $ | $ | 41,888 | |||||
Notes:
| (a) | Mortgage Borrowings |
In February 2023, the Company obtained a mortgage loan of approximately $1.8 million (equivalent to HK$14.0 million) from a finance company in Hong Kong, which bears an average interest rate at 13.75% per annum and becomes repayable in February 2024. The loan was pledged by a fixed charge on an office premise owned by the Company. As of December 31, 2024, the carrying value of the loan is approximately $0.9 million. On October 31, 2024, the Company entered into a preliminary sales and purchase agreement with an independent third party to sell the office premises with a cash consideration of approximately $1.6 million. The transaction is completed in February and June 2025.
28
In July 2024, the Company partially settled approximately $0.8 million, including approximately $0.02 million interest expense (equivalent to principal and interest of approximately HK$6.0 million and HK$0.15 million, respectively). The remaining principal and accrued interest are settled in January and June 2025.
| (b) | Short-term Loans |
In connection with the Merger Transaction, the Company assumed the liabilities of Triller Corp, which includes the short-term notes assumed at an aggregate principal amount of $9.5 million issued to various lenders (collectively, the “Short-term Loans”). The Short-term loans mature at various dates within the next twelve months and are included as current liabilities in the accompanying condensed consolidated balance sheets. The Company incurred approximately $2.1 million in interest expense and made aggregate payments of approximately $4.1 million toward the various short-term loans during the three months ended December 31, 2024. As of December 31, 2024, the aggregate outstanding principal and accrued interest was approximately $11.0 million.
On November 27, 2024, the Company also obtained a short-term loan of approximately $0.6 million from an independent third party in Hong Kong with a fixed interest rate of 6% per annum, repayable on December 31, 2024. The loan is unsecured and the fixed interest rate will increase to 15% per annum if there is any default on repayment.
As of the date of issuance of these condensed consolidated financial statements, the Company has not repaid the amount due and considered default of settlement.
| (c) | Short-term Loans, Related Parties |
In September 2023, the Company obtained short-term loans of approximately $5.0 million from Giant Wisdom Ventures Limited, a company controlled by major stockholder of the Company, which bears interest at a fixed rate of 12% per annum, repayable in October 2023. The borrowing is secured by a lien on the partial equity interest in Investment D owned by the Company.
In connection with the Merger Transaction, the Company assumed the liabilities of Triller Corp, which includes the borrowing entered with De Silva 2000 Living Trust for a principal of approximately $0.2 million with a fixed interest rate of 1.85% per annum.
In October 2024, the Company entered a loan facility agreement with one of its stockholders, TAG Holding Limited for borrowings up to $30.0 million. The loan is unsecured, repayable on demand and bears interest at a fixed rate of 6% per annum. As of December 31, 2024, the outstanding loan balance was approximately $18.4 million.
On October 16, 2024, Triller Corp. entered a short-term loan agreement with Giant Wisdom Ventures Limited for a principal of approximately $5.0 million with a fixed interest rate of 18% per annum. The loan is guaranteed by Triller Group and is collateralized by 5,000,000 shares of BKFC common stock. Both principal and accrued interest are due on January 16, 2025. In the event of a default, the interest rate increases to 21% per annum. As of December 31, 2024, the aggregate outstanding principal and accrued interest was approximately $5.2 million.
In November and December 2024, the Company obtained aggregate short-term loans of approximately $0.5 million from the Company’s Chief Operating Officer with a fixed interest rate of 6% per annum, repayable on December 31, 2024. The loans are unsecured and the fixed interest rate will increase to 15% per annum if there is any default on repayment.
| (d) | Factoring loan |
In connection with the Merger Transaction, the Company assumed the liabilities of Triller Corp.’s subsidiary, Flipps Media Inc. (“Flipps”), which included certain sale of future receipts agreements (the “Agreements”) entered with certain third-party financing companies in October 2024. Pursuant to the Agreements, Flipps sold its future receipts of approximately $0.6 million for a principal amount of approximately $0.4 million. Flipps recorded a debt discount of approximately $0.03 million for the loan origination fees. The debt discount was amortized over the term of the loans with a range of four to twelve-month periods. The agreed weekly payment was approximately $0.03 million. As of December 31, 2024, the outstanding principal balance, net of debt discount, was approximately $0.2 million.
29
NOTE 11 — CONVERTIBLE DEBTS, NET
| (i) | TFI Note |
In connection with the Merger Transaction, the Company assumed the liabilities of Triller Corp, which includes convertible notes issued to Total Formation Inc. (“TFI”), stockholder of the Company, with a total principal balance of approximately $35.3 million and fair value of approximately $46.3 million (the “TFI Note”) as of the Acquisition Date. The TFI Note bears 15% annual interest and payable on demand by TFI at any time on or after August 1, 2024. The Company may prepay any amount owed under the note in whole or in part at any time without penalty or premium, plus unpaid accrued interest as of the date of such repayment. In the event that the Company fails to pay any amount due under this note when due or if the Company commences any case, proceeding, or other action relating to bankruptcy, insolvency, or reorganization, these events will constitute an event of default. An event of default will result in TFI having the option, by written notice to the Company, to declare the entire principal amount, together with all accrued but unpaid interest, payable immediately. If any amount payable under this TFI Note is not paid when due, such overdue amount shall bear interest at the default rate of 16% from the date of such non-payment until such amount is paid in full.
As of December 31, 2024, the TFI Note was reported at a fair value of approximately $46.3 million and is included in convertible debts under current liabilities in the condensed consolidated balance sheets. For the period from the Acquisition date through December 31, 2024, the Company recognized a gain of approximately $5.8 million on the change in fair value of convertible debts in the accompanying condensed consolidated statements of operations and comprehensive loss. As of the date of issuance of these condensed consolidated financial statements, the Company has not repaid the amount due and considered default of settlement.
| (ii) | Exchangeable Note |
On October 16, 2024, the Company issued an exchangeable note of approximately $5.4 million to Giant Wisdom Ventures Limited which bears interest at a fixed rate of 15% per annum and mature on January 16, 2025. The note is secured by a pledge of 5,000,000 shares of common stock of BKFC owned by the Company. As of December 31, 2024, the fair value of the note is approximately $6.8 million. As of the date of issuance of these condensed consolidated financial statements, the Company has not repaid the amount due and considered default of settlement.
| (iii) | Convertible Promissory Note - Yorkville |
On April 25, 2024, the Company entered into an amended and restated standby equity purchase agreement (the “First A&R SEPA”) with YA II PN, LTD, a Cayman Islands exempt limited partnership (“Yorkville”), and Triller Corp.
In connection with the A&R SEPA, Yorkville agreed to an advance to the Triller Corp in the form of convertible promissory notes in a principal amount up to approximately $8.51 million (the “First Pre-Paid Advance”). The First Pre-Paid Advance amounted to 94.0% of the principal amount to be drawn down. Interest shall accrue on the outstanding balance at an annual rate of 5%, subject to an increase to 18% upon an event of default as described in the agreement. The maturity date is 12 months after its issuance date.
On June 28, 2024, the Company, Triller Corp and Yorkville entered into the Second A&R SEPA to modify the First A&R SEPA dated April 25, 2024. Pursuant to the Second A&R SEPA, Yorkville provides to the Company financing in the principal amount of $25 million (the “Second Pre-Paid Advance”) in the form of an additional convertible promissory note, subject to the same terms in interest charge and maturity under the First Pre-Paid Advance. The Second Pre-Paid Advance amounted to 94.0% of the principal amount to be drawn down.
30
Yorkville may convert the First Pre-Paid Advance and Second Pre-Paid Advance into the common shares at any time after the Merger at a fixed conversion price equal to (i) the principal amount and interests, divided by (ii) the determination of the lower of (a) 100% of the volume weighted average price (“VWAP”) during the ten trading days preceding the closing date of the Merger (the “Fixed Price”), or (b) 92.5% of the lowest daily VWAP during the 10 consecutive trading days immediately preceding the conversion date or other date of determination (the “Variable Price”), provided that the Variable Price shall not be lower than the Floor Price. The “Floor Price”, solely with respect to the Variable Price, shall be equal to (i) a price equal to 40% of the average of the VWAPs during the ten (10) trading days immediately preceding the closing date of the Merger, and (ii) from and after the date of effectiveness of the initial registration statement, 40% of the VWAP of the trading day immediately prior to the date of effectiveness of the initial registration statement, if such price is lower than the price in part (i) of this sentence.
On July 2, 2024, the Company received approximately $23.35 million, net of approximately $0.15 million legal and professional fee as direct issuance costs incurred in arranging the Second A&R SEPA, from Yorkville. As of December 31, 2024, the Company issued convertible promissory notes in an aggregate of approximately $33.51 million to Yorkville.
Common Warrants to Yorkville
Also, pursuant to the First A&R SEPA and Second A&R SEPA, the Company issued a warrant (the “Common Warrant”) to Yorkville to purchase up to a number of shares of common stock of the Company equal to 25% of the principal amount of the aggregated pre-paid advances divided by a price equal to the Fixed Price, each such Common Warrant with an exercise price equal to the Fixed Price. On June 28, 2024, the Company issued 1,431,561 common warrants to Yorkville at a fixed exercise price of $5.85 per share (see Note 17).
The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815 and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to a variable conversion rate. The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own shares and is therefore not afforded equity treatment.
The Company recorded amortization of debt discount and direct issuance costs and accrued interest of convertible promissory notes payable in interest expense in the condensed consolidated statements of operations and comprehensive loss of approximately $2.2 million and $0.9 million for the three months ended March 31, 2025 and 2024, respectively.
On November 26, 2024, Yorkville initiated litigation against Triller, Triller Corp., Triller Hold Co LLC, and Convoy Global Holdings Limited (“Defendants”) by filing a motion for summary judgment in lieu of a complaint pursuant to NY CPLR 3213 (the “Motion”), seeking a judgment finding Defendants liable for all amounts allegedly owed under the convertible promissory note, including interest, plus costs, legal fees, and expenses incurred by Yorkville (see Note 25). As of the date of issuance of these condensed consolidated financial statements, the Company has not repaid the amount due and considered default of settlement.
NOTE 12 — WARRANTS
In connection with the Merger Transaction aforementioned in Note 4, the exercise prices for, and the shares underlying, all previously outstanding public warrants (“AGBA Public Warrants”), Class A warrants (“AGBA Class A Warrants”), and common warrants (“AGBA Common Warrants”) (collectively, “AGBA Warrants”) issued by AGBA were adjusted in accordance with the terms of such warrant instruments to reflect the previously announced and implemented 1.9365-to-1 Forward Split and 1-for-4 Reverse Split. An equitable adjustment with a combined ratio of 0.5:1 applied to the number of AGBA Ordinary Shares issuable on the exercise of each AGBA Warrants and the warrant price. Upon the closing, all warrants issued by AGBA and Triller Corp. were assigned to and assumed by Triller Group (“Triller Group Warrants”). Accordingly, as of the close of business acquisition on October 15, 2024, each AGBA Public Warrant and each AGBA SPAC Private Warrant became one Triller Group Warrant which entitles the holder thereof to purchase 0.25 shares of Triller Group Common Stock at an adjusted exercise price of $23.00 per whole share (provided, however, warrants are not exercisable for fractional shares, only whole shares; thereby a warrant holder would need to hold four warrants to yield one share). Each AGBA Class A Warrant and each AGBA Common Warrant became one Triller Group Warrant which entitles the holder thereof to purchase 0.5 shares of Triller Group Common Stock at an adjusted exercise price of two times of the original exercise price per whole share (provided, however, warrants are not exercisable for fractional shares, only whole shares; thereby a warrant holder would need to hold two warrants to yield one share). AGBA Public Warrants started trading on a post-adjustment basis as Triller Group Warrants on October 16, 2024 under the new ticker symbol “ILLRW”. All the warrants and their exercise prices are retroactively restated in effect to the forward stock split and reverse stock split (see Note 19).
31
The Company has issued different classes of warrants, as follows:
Equity Classified Warrants
| (a) | Public Warrants |
Each public warrant entitles the holder thereof to purchase one-quarter (1/4) of one share of common stock at a price of $23.00 per full share, subject to adjustment as discussed herein. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares. This means that only an even number of warrants may be exercised at any given time by a warrant holder.
Once the warrants become exercisable, the Company may call the outstanding warrants (including any outstanding warrants issued upon exercise of the unit purchase option issued to Maxim Group LLC) for redemption:
| ● | in whole and not in part; |
| ● | at a price of $0.01 per warrant; |
| ● | upon a minimum of 30 days’ prior written notice of redemption, |
| ● | if, and only if, the last sales price of the common stock equals or exceeds $16.50 per share for any 20 trading days within a 30 trading day period ending three business days before the Company send the notice of redemption, and |
| ● | if, and only if, there is a current registration statement in effect with respect to the common stock underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption. |
If the Company calls the warrants for redemption as described above, the management of the Company will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the whole warrants for that number of common stock equal to the quotient obtained by dividing (x) the product of the number of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. Whether the Company will exercise its option to require all holders to exercise their warrants on a “cashless basis” will depend on a variety of factors including the price of its common stock at the time the warrants are called for redemption, the Company’s cash needs at such time and concerns regarding dilutive share issuances.
The public warrants qualify for the derivative scope exception under ASC 815 and are therefore presented as a component of stockholders’ (deficit) equity on the condensed consolidated balance sheets without subsequent fair value re-measurement.
As of March 31, 2025 and December 31, 2024, there were XX and 4,600,000 public warrants of Triller Group Warrants outstanding.
| (b) | Replacement Warrants |
On October 15, 2024, pursuant to the Merger Agreement, the Company issued 49,697,115 Triller Group Replacement Warrants to replace Triller Corp. warrants. Each replacement warrant entitles the holder thereof to purchase one share of common stock at a price of $3.1946 per full share, subject to adjustment as discussed herein.
32
The replacement warrants may be exercised in full or in part during the exercise period from the issue date to 2028. The holders will have the option to exercise warrants on a “cashless exercise.” In such event, each holder would pay the exercise price by surrendering the whole warrants for that number of shares equal to the quotient obtained by dividing (x) the product of the number of shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the volume average reported last sale price of the shares for the 10 trading days prior to the exercise date.
As of March 31, 2025 and December 31, 2024, there were XX and 49,697,115 replacement warrants of Replacement Warrants outstanding, respectively.
Liability Classified Warrants
| (a) | Warrant - Class A |
On May 2, 2024, the Company issued 3,557,932 shares of common stock and the associated warrants to purchase up to 734,920 shares of common stock at a purchase price of $1.40 per share under the private placement, to an institutional investor, a director, officers and employees of the Company. The subscribers in private placement will receive one Warrant – Class A for every five shares of common stock subscribed. Each Warrant – Class A entitles the holder to purchase 0.5 share of common stock at an exercise price of $2.00 per share and shall be exercised with more than $500,000 per tranche. The warrants will be exercisable six months after the issuance date for a period of five years after the exercise date.
As of March 31, 2025 and December 31, 2024, there were XXX and 1,469,840 Warrants - Class A of Triller Group Warrants outstanding, respectively, with aggregate value of approximately $1.0 million and nil, respectively.
| (b) | Common Warrants |
On June 28, 2024, the Company issued 1,431,561 common warrants to Yorkville, in connection with the Second A&R SEPA (see Note 16). Each common warrant entitles the holder to purchase 1 share of common stock with an exercise price of $5.85 per share.
As of March 31, 2025 and December 31, 2024, there were XX and 1,431,561 common warrants of Triller Group Warrants outstanding, respectively.
The Company has accounted for and presented Warrant – Class A and Common Warrants as liabilities on the condensed consolidated balance sheets, in accordance with ASC 480. The fair value of the warrant liabilities is valued by an independent valuer using a Binominal pricing model. The warrant liabilities were classified as Level 3 due to the use of unobservable inputs.
The key inputs into the Binominal pricing model were as follows at their measurement dates:
| As of March 31, 2025 | ||||||||
| Common Warrants | Warrants – Class A | |||||||
| Input | ||||||||
| Share price | $ | 2.38 | $ | 2.38 | ||||
| Risk-free interest rate | 4.38 | % | 4.37 | % | ||||
| Volatility | 52.67 | % | 52.71 | % | ||||
| Exercise price | $ | 5.85 | $ | 2.00 | ||||
| Warrant remaining life (years) | 4.49 | 4.84 | ||||||
33
NOTE 13 — OPERATING LEASES
The Company has entered into a commercial operating lease with an independent third party for the use of an office in Hong Kong. The lease has an original term exceeding 1 year, but not more than 3 years with an option to renew a further term of 3 years. The operating leases are included in “Right-of-use asset, net” on the condensed consolidated balance sheets and represents the Company’s right to use the underlying assets during the lease term. The Company’s obligation to make lease payments are included in “Operating lease liabilities” on the condensed consolidated balance sheets.
Supplemental balance sheet information related to the operating lease was as follows:
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Operating lease: | ||||||||
| Right-of-use asset | $ | 12,626 | $ | 12,512 | ||||
| Less: accumulated amortization and impairment | (12,626 | ) | (1,004 | ) | ||||
| Right-of-use asset, net | $ | — | $ | 11,508 | ||||
| Lease liabilities: | ||||||||
| Current lease liabilities | $ | 1,867 | $ | 1,229 | ||||
| Non-current lease liabilities | 807 | 10,646 | ||||||
| Total lease liabilities | $ | 2,674 | $ | 11,875 | ||||
Operating lease expense for the three months ended March 31, 2025 and 2024 was approximately $2.6 million and $1.5 million, respectively.
In December 2024, the Company assessed that due to change of operation strategy in its financing service business, the Company believes that the right-of-use asset may not generate economic benefits in the foreseeable future. The Company considered it is reasonably certain not to exercise the renewal option and remeasured the right-of-use assets and corresponding lease liabilities as of the effective date of modification. The Company recorded a reduction in operating right-of-use assets and lease liabilities of approximately $8 million for the three months ended March 31, 2025 and 2024. Consequently, the Company recorded impairment of right-of-use asset of approximately $1.7 million during the three months ended March 31, 2025 and 2024.
Other supplemental information about the Company’s operating lease as of March 31, 2025 and December 31, 2024 are as follow:
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Weighted average discount rate | 5.25 | % | 6.58 | % | ||||
| Weighted average remaining lease term (years) | 1.42 | 5.42 | ||||||
Maturities of operating lease liabilities as of March 31, 2025 were as follows:
| For the year ending March 31, | Operating lease | |||
| 2025 | $ | 1,952 | ||
| 2026 | 814 | |||
| Total minimum lease payments | 2,766 | |||
| Less: imputed interest | (92 | ) | ||
| Total operating lease liabilities | $ | 2,674 | ||
34
NOTE 14 — STOCKHOLDERS’ (DEFICIT) EQUITY
| (a) | Common Stock |
The Company has 150,000,000,000 authorized shares of common stock, with a par value of $0.001 per share.
During the three months ended March 31, 2025, the Company issued XX shares of common stock as follows:
| (i) | 167,586 shares of common stock to the directors and officers of the Company under the Share Award Scheme (the “Scheme”), whose shares were vested in 2023. |
| (ii) | 8,079,002 shares of common stock to a director, officers and employees of the Company to compensate for the contributions of their services and performance. |
| (iii) | 3,157,068 shares of common stock to certain consultants to compensate their services rendered which included 636,899 shares issued to a related company owned by the former Chairman of the Company for advisory services. As of December 31, 2024, the unrecognized deferred equity compensation amounting to approximately $6.4 million was recorded and will be amortized over the remaining service period. |
| (iv) | 484,125 shares of common stock to Apex Twinkle Limited to partially settle the finder fee payable. |
| (v) | 3,557,932 shares of common stock and the associated warrants to purchase 734,920 shares of common stock at a purchase price of $1.45 per share under the private placement, to an institutional investor, a director, officers and employees of the Company, on May 2, 2024. Among 3,557,932 shares of common stock, in December 2023, the Company received gross proceeds of approximately $1.9 million from an institutional investor in exchange of 1,279,688 shares of common stock and settled the accrued salaries of approximately $1.2 million with an aggregate of 859,564 shares of common stock to a director, officers and employees of the Company. The remaining 1,418,680 shares of common stock were issued to a director of the Company. |
| (vi) | 3,558,319 shares of common stock to stockholder of Investment H in September 2024 with the aggregate fair value of approximately $18.5 million, at the current market value of $2.51 per share in exchange of 285,353 units of Class C of Investment H, equal to 3.79% of its equity interest. (see Note 10(c)) |
| (vii) | 1,306,970 shares of common stock for the settlement of the accrued salaries and salaries incurred during the year to the directors and officers. |
| (viii) | 290,475 shares of common stock to the independent directors of the Company under the 2024 Equity Incentive Plan. |
| (ix) | 480,426 shares of common stock to Yorkville as a commitment fee pursuant to A&R SEPA. (see Note 16(iii)) |
| (x) | 83,468,631 shares of common stock to the Triller Corp stockholders in connection with the Merger Transaction. (see Note 4) |
| (xi) | 183,815 shares of common stock for settlement of claims that relate to the affairs of Triller Corp. prior to the Closing date with common stock held in escrow. (see Note 4) |
| (xii) | 168,477 fractional shares of common stock resulting from rounding up to whole shares upon the effectiveness of Reverse Split. |
There were XX and 138,143,817 shares of common stock issued and outstanding, as of March 31, 2025 and December 31, 2024, respectively.
To the date of the accompanying condensed consolidated financial statements issued, there were 197,266,991 shares of common stock issued and outstanding. The subsequent issuance of common stocks is listed from (i) to (vii) in Note 26.
35
For the three months ended March 31, 2025 and 2024, the Company recorded approximately $77.8 million and $11.2 million stock-based compensation expense, respectively which is included in the personal and benefit expense and legal and professional fee in the condensed consolidated statements of operations and comprehensive loss.
| (b) | Preferred Stock |
The Company has authorized a total of 100,000,000 shares of preferred stock with a par value of $0.001 per share. Of this amount the Company has authorized 50,000,000 shares and 50,000,000 shares to two classes of preferred stock, Series A-1 Preferred Stock and Series B Preferred Stock, respectively.
A description of each class of preferred stock is listed below:
Series A-1 Preferred Stock
The Company designated up to 11,803,398 shares as Series A-1 Preferred Stock, with a par value of $0.001 per share. Each share of Series A-1 Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable shares of common stock.
In connection with the Merger Transaction, the Company issued 11,801,804 shares of Series A-1 Preferred Stock to the holders of Triller Corp preferred stock and 11,801,804 shares of Series A-1 Preferred Stock to be issued to Giant Wisdom Ventures Limited.
There were XX and 11,801,804 shares of Series A-1 Preferred Stock issued and outstanding as of March 31, 2025 and December 31, 2024, respectively.
Series B Preferred Stock
The Company designated up to 35,000 shares of Series B Preferred Stock, with a par value of $0.001 per share. Each share of Series B Preferred Stock shall be entitled to 10,000 votes for each share of Series B Preferred Stock held by such holder.
In connection with the Merger Transaction, the Company issued 30,851 shares of Series B Preferred Stock to Green Nature Limited, an affiliate of the Company’s majority stockholder.
There were XX and 30,851 shares of Series B Preferred Stock issued and outstanding as of March 31, 2025 and December 31, 2024, respectively.
| (c) | Preferred Stock To Be Issued |
There were 11,801,804 shares of Series A-1 preferred stock to be issued in connection with the Merger Transaction which were subsequently settled with 11,807,332 common stocks in March 2025 (see Note 4).
| (d) | Common Stock To Be Issued |
The Company has committed to issue common stocks as compensation for services:
| (i) | 9,672,500 common stocks to a consultant under a consulting agreement. |
| (ii) | 5,340,211 common stocks to directors, officers and employees under equity incentive plans for their service and performance |
There were 15,022,711 and 2,350,081 shares of common stock to be issued, as of March 31, 2025 and 2024, respectively.
36
| (e) | Common Stock Held In Escrow |
There were 24,206,246 shares of common stock deposited into an escrow account in the name of the Company, acting as escrow agent, in connection with the Merger Transaction (see Note 4).
During the three months ended March 31, 2025 and 2024, 183,815 and nil shares common stock held in escrow are transferred out to settle claims that relate to the affairs of Triller Corp. prior to the Closing date with common stock held in escrow.
There were XX and 24,022,431 shares of common stock held in escrow issued and outstanding as of March 31, 2025 and 2024, respectively.
| (f) | Forgiveness of Amount Due to the Holding Company |
During the three months ended March 31, 2025 and 2024, the holding company of the Company agreed to forgive a debt of nil and approximately $12.6 million , in aggregate, respectively representing certain amounts due to it and treat as additional paid-in capital.
| (g) | 2023 Share Award Scheme (the “Scheme”) |
Pursuant to the Share Award Scheme, the Company filed S-8 registration statement to register up to 5,652,352 shares of common stock on February 24, 2023.
The fair value of the common stock granted during the period is measured based on the closing price of the Company’s common stocks as reported by Nasdaq Exchange on the date of grant. For those vested immediately on the date of grant, the fair value is recognized as stock-based compensation expense in the condensed consolidated statements of operations and comprehensive loss.
| (h) | Restricted Share Units (“RSUs”) |
In December 2022, the Company approved and granted 2,420,625 shares of common stock as RSUs to employees and consultants as additional compensation under the Scheme. These RSUs typically will be vested over one to four years period from 2023 to 2026.
For the RSUs, the fair value is recognized over the period based on the derived service period (usually the vesting period), on a straight-line basis. The valuations assume no dividends will be paid. The Company has assumed 10% forfeitures.
As of March 31, 2025 and December 31, XX and 2024, 388,683 shares of common stock are available to issue under this plan.
During the three months ended March 31, 2025 and 2024, the Company recorded approximately $0.8 million and $1.9 million stock-based compensation expense, respectively which is included in the personnel and benefit expenses in the condensed consolidated statements of operations and comprehensive loss.
As of March 31, 2025 and December 31, 2024, total unrecognized compensation remaining to be recognized in future periods for RSUs totaled approximately $0.7 million. They are expected to be recognized over the weighted average period of 1.37 years.
37
A summary of the activities for the Company’s RSUs as of March 31, 2025 and December 31, 2024 is as follow:
| As of December 31, | ||||||||||||||||
| March 31, 2025 | December 31, 2024 | |||||||||||||||
| Number
of RSUs |
Weighted Average Grant Price |
Number of RSUs | Weighted Average Grant Price |
|||||||||||||
| Outstanding, beginning of year | 388,683 | $ | 2.47 | 634,072 | $ | 2.47 | ||||||||||
| Granted | — | $ | — | — | ) | $ | — | |||||||||
| Vested | ) | $ | 2.47 | (95,525 | ) | $ | 2.47 | |||||||||
| Forfeited | ) | $ | 2.47 | (149,864 | $ | 2.47 | ||||||||||
| Outstanding, end of year | $ | 2.47 | 388,683 | $ | 2.47 | |||||||||||
| (i) | 2024 Equity Incentive Plan |
Pursuant to the 2024 Equity Incentive Plan (the “2024 Plan”), the Company filed S-8 registration statement to register 7,746,000 shares of common stock on August 29, 2024.
The fair value of the common stock granted during the period is measured based on the closing price of the Company’s common stock as reported by Nasdaq Exchange on the date of grant. For those vested immediately on the date of grant, the fair value is recognized as stock-based compensation expense in the condensed consolidated statements of operations and comprehensive loss.
As of March 31, 2025 and December 31, 2024, XX and 36,016 shares of common stock are available to issue under this plan.
NOTE 15 — INCOME TAX EXPENSE
The provision for income tax expense consisted of the following:
| For the three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| U.S. | $ | — | $ | — | ||||
| Other than U.S. | — | 287 | ||||||
| Income tax expense | $ | — | $ | 287 | ||||
| For the three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Current tax | $ | — | $ | 332 | ||||
| Deferred tax | — | (45 | ) | |||||
| Income tax expense | $ | — | $ | 287 | ||||
The Company’s subsidiaries mainly operate in Hong Kong and the U.S. that are subject to taxes in the jurisdictions in which they operate, as follows:
United States of America
The Company is formed in the State of Delaware, the Company is subject to the federal income tax rate of 21%.
British Virgin Islands
The Company’s subsidiaries are incorporated in the British Virgin Islands and is not subject to taxation. In addition, upon payments of dividends by these entities to their stockholders, no British Virgin Islands withholding tax will be imposed.
38
Hong Kong
The Company’s subsidiaries operating in Hong Kong are subject to the Hong Kong Profits Tax at the income tax rates ranging from 8.25% to 16.5% on the assessable income arising in Hong Kong during its tax year.
For the three months ended March 31, 2025 and 2024, Hong Kong profits tax is calculated in accordance with the two-tiered profits tax rates regime. The applicable tax rate for the first HK$ 2 million of assessable profits is 8.25% and assessable profits above HK$ 2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong, effective from the year of assessment 2018/2019.
The reconciliation of income tax rate to the effective income tax rate based on loss before income tax expense for the three months ended March 31, 2025 and 2024 are as follows:
| For the three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Loss before income taxes | $ | (1,138,036 | ) | $ | (48,919 | ) | ||
| Statutory income tax rate | 16.5 | % | 16.5 | % | ||||
| Income tax expense at statutory rate | (187,776 | ) | (8,072 | ) | ||||
| Income not subject to taxes | (7,641 | ) | (2,563 | ) | ||||
| Non-deductible items: | ||||||||
| - Share based compensation | 12,833 | 1,854 | ||||||
| - Investment loss | 2,635 | 1,135 | ||||||
| - Others (a) | 178,777 | — | ||||||
| Effect of difference tax jurisdiction | (309 | ) | — | |||||
| Under provision of prior years | — | 221 | ||||||
| Change in valuation allowance | 1,481 | 7,733 | ||||||
| Tax holiday | — | (21 | ) | |||||
| Income tax expense | $ | — | $ | 287 | ||||
Note:
| (a) | For the three months ended December 31, 2024, other non-deductible expenses mainly consisted of impairment loss on goodwill and other non-current assets. |
The following table sets forth the significant components of the deferred tax assets of the Company as of March 31, 2025 and December 31, 2024:
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| Deferred tax assets, net: | ||||||||
| Net operating loss carryforwards | $ | 10,446 | $ | 8,909 | ||||
| Less: valuation allowance | (10,446 | ) | (8,909 | ) | ||||
| Deferred tax assets, net: | $ | — | $ | — | ||||
The movement of valuation allowance is as follows:
| For the three months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Balance as of beginning of the period | $ | (8,909 | ) | $ | (5,461 | ) | ||
| Additions | (1,537 | ) | (3,448 | ) | ||||
| Balance as of end of the period | $ | (10,446 | ) | $ | (8,909 | ) | ||
39
As of Mrach 31, 2025 and December 31, 2024, the operations incurred approximately $61.5 million and $54.0 million, respectively of cumulative net operating losses, which can be carried forward to offset future taxable income. Net operating loss can be carried forward indefinitely but cannot be carried back to prior years. There are no group relief provisions for losses or transfers of assets under Hong Kong tax regime. Each company within a corporate group is taxed as a separate entity. The Company has provided for a full valuation allowance against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes that it is more likely that not all of these assets will be realized in the future. The valuation allowance is reviewed annually.
Uncertain tax positions
The Company evaluates the uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of March 31, 2025 and December 31, 2024, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur any interest and penalties related to potential underpaid income tax expenses for the three months ended March 31, 2025 and 2024 and also did not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from March 31, 2025.
NOTE 16 — RELATED PARTY BALANCES AND TRANSACTIONS
The table below sets forth major related parties of the Company and their relationships with the Company.
| Name | Relationship with the Company | |
| JFA Capital | Investment private funds controlled by the holding company of the Company | |
| NSD Capital | Investment private funds controlled by the holding company of the Company | |
| TAG Holdings Limited | Stockholder of the Company | |
| TAG Financial Holdings Limited | Company controlled by common stockholder of the Company | |
| Convoy Financial Services Limited | Company controlled by common stockholder of the Company | |
| Convoy Global Holdings Limited | Company controlled by common stockholder of the Company | |
| Giant Wisdom Ventures Limited | Company controlled by major stockholder of the Company | |
| Atlas Merchant Capital LLC | Company controlled by the former chairman of the Company | |
| Wong Suet Fai Almond | Chief Operating Officer of the Company | |
| De Silva Trust | Company controlled by director of subsidiaries of the Company | |
| HCMPS Healthcare Holdings Limited | Company with common director of the Company | |
| Total Formation Inc. | Stockholder of the Company |
In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attain adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by the stockholder. Amounts represent advances or amounts paid in satisfaction of liabilities.
| (i) | Related party balances |
Related party balances consisted of the following:
| As of | ||||||||||
| March 31, 2025 | December 31, 2024 | |||||||||
| Balance with related parties: | ||||||||||
| Accounts receivable | (a) | $ | — | $ | 1,094 | |||||
| Other current liabilities | (b) | $ | 1,251 | $ | — | |||||
| Borrowings | (c) | $ | 29,181 | $ | 5,000 | |||||
| Amount due to the holding company | (d) | $ | — | $ | 2,906 | |||||
| Long-term investment – Investment E | (e) | $ | 525 | $ | 523 | |||||
| Convertible debts | (f) | $ | 53,106 | $ | — | |||||
| (a) | Accounts receivable due from related parties represented the management service rendered to two individual close-ended investment private funds registered in the Cayman Islands, which is controlled by the holding company. |
40
| (b) | Other current liabilities due to related parties represented the interest payable accrued on the short-term borrowings from four related parties (see Note 15(c)). |
| (c) | Borrowings consisted of short-term loans obtained from the Company’s senior management, major stockholder of ultimate holding company, a company controlled by director of subsidiaries and a stockholder. The amounts were secured, interest-bearing and repayable on demand (see Note 15(c)). |
| (d) | Amount due to the holding company are those nontrade payables arising from transactions between the Company and the holding company, such as advances made by the holding company on behalf of the Company, advances made by the Company on behalf of the holding company, and allocated shared expenses paid by the holding company. During the three months ended March 31, 2025 and 2024, amounts due to the holding company of nil and $12.6 million, respectively, were forgiven (see Note 19). |
| (e) | The Company purchased 4% equity interest in Investment E from a related party in May 2021, based on historical cost. The Company has a common director with Investment E. |
| (f) | TFI Note obtained from the Company’s major stockholder of ultimate holding company. The amount was secured, interest-bearing, and repayable in June 2026 (see Note 16). |
| (ii) | Transactions with related parties |
In the ordinary course of business, during the three months ended March 31, 2025 and 2024, the Company involved with transactions, either at cost or current market prices and on the normal commercial terms among related parties. The following table provides the transactions with these parties for the periods as presented (for the portion of such period that they were considered related):
| For the three months ended March 31, | ||||||||||
| 2025 | 2024 | |||||||||
| Asset management service income | (g) | $ | - | $ | 970 | |||||
| Office rental and operating fees | (h) | $ | 4,303 | $ | 6,040 | |||||
| Legal and professional fees | (i) | $ | 1,000 | $ | 333 | |||||
| Interest expense | (j) | $ | 1,024 | $ | - | |||||
| (g) | Under the management agreements, the Company shall provide management service to the portfolio assets held by two individual close-ended investment private funds in the Cayman Islands, which is controlled by the shareholder, for a compensation of asset management service fee income at the predetermined rate based on the respective portfolio of asset values invested by the final customers. |
| (h) | Pursuant to the service agreement, the Company agreed to pay the office and administrative expenses to the holding company for the use of office premises, including, among other things, building management fees, government rates and rent, office rent, and lease-related interest and depreciation that were actually incurred by the holding company. |
41
| (i) | On September 19, 2023, the Company entered into an advisory services agreement with a related company, which owned by the Chairman of the Company, for a monthly fee of approximately $0.8 million. The service will be terminated by either party upon 90 days prior written notice. |
| (j) | The interest expense incurred for borrowings from four related parties. |
Apart from the transactions and balances detailed above and elsewhere in these accompanying condensed consolidated financial statements, the Company has no other significant or material related party transactions during the periods presented.
NOTE 17 — RISK AND UNCERTAINTIES
The Company is exposed to the following concentrations of risks:
| (a) | Major customers |
For the three months ended March 31, 2025 and 2024, the customers who accounted for 10% or more of the Company’s revenues and its outstanding receivable balances at period-end dates, are presented as follows:
| For the three months ended March 31, 2025 | As of March 31, 2025 | |||||||||||
| Customer | Revenues | Percentage of revenues | Accounts receivable | |||||||||
| Customer A | $ | 4,726 | 17 | % | $ | 141 | ||||||
| Customer B | $ | 3,841 | 14 | % | $ | — | ||||||
| Customer C | $ | 2,583 | 9 | % | $ | 420 | ||||||
| For the three months ended March 31, 2024 | As of March 31, 2024 | |||||||||||
| Customer | Revenues | Percentage of revenues | Accounts receivable | |||||||||
| Customer A | $ | 14,452 | 27 | % | $ | 1,092 | ||||||
| Customer B | $ | 5,961 | 11 | % | $ | 61 | ||||||
| Customer D | $ | 5,923 | 11 | % | $ | 2 | ||||||
| (b) | Credit risk |
Financial instruments that potentially subject the Company to credit risk consist of cash equivalents, restricted cash, accounts receivable, loans receivable, and notes receivables. Cash equivalents are maintained with high credit quality institutions, the composition and maturities of which are regularly monitored by management. As of Mrach 31, 2025, the Company maintained a total of approximately $17.26 million at financial institutions, consisting of approximately $15.86 million held in Hong Kong, including a cash balance of approximately $1.66 million and escrow funds of approximately $14.20 million, of which approximately $15.86 million was subject to credit risk, and approximately $1.40 million in cash held in the United States. These balances are protected by the Hong Kong Deposit Protection Board, which provides coverage up to a limit of HK$0.8 million (approximately $0.1 million) if the bank with which an individual/a company hold its eligible deposit fails, effective from October 1, 2024, and the Federal Deposit Insurance Corporation (“FDIC”) in the United States. While management considers these financial institutions to be of high credit quality, it continuously monitors their creditworthiness.
42
For accounts receivable and loans and notes receivables, the Company determines, on a continuing basis, the probable losses and sets up an allowance for expected credit losses based on the estimated realizable value. Credit of money lending business is controlled by the application of credit approvals, limits and monitoring procedures.
The Company uses internally-assigned risk grades to estimate the capability of borrowers to repay the contractual obligations of their loan agreements as scheduled or at all. The Company’s internal risk grade system is based on experiences with similarly graded loans and the assessment of borrower credit quality, such as, credit risk scores, collateral and collection history. Individual credit scores are assessed by credit bureau, such as TransUnion. Internal risk grade ratings reflect the credit quality of the borrower, as well as the value of collateral held as security. To minimize credit risk, the Company requires collateral arrangements to all mortgage loans and has policies and procedures for validating the reasonableness of the collateral valuations on a regular basis. Management believes that these policies effectively manage the credit risk from advances.
| (c) | Economic and political risk |
The Company’s major operations are conducted in Hong Kong and the United States of America. Accordingly, the political, economic, and legal environments in Hong Kong and the United States of America, as well as the general state of their economies may influence the Company’s business, financial condition, and results of operations.
In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these condensed consolidated financial statements. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these condensed consolidated financial statements.
| (d) | Exchange rate risk |
The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HKD converted to US$ and Sterling on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.
For the three months ended March 31, 2025 and 2024, the Company recorded the foreign exchange loss of approximately $0.70 million and foreign exchange gain of approximately $0.91 million, respectively, mainly attributable from the long-term investments which are mostly denominated in Sterling.
| (e) | Liquidity risk |
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s policy is to ensure that it has sufficient cash to meet its liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. A key risk in managing liquidity is the degree of uncertainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases.
NOTE 18 — COMMITMENTS AND CONTINGENCIES
Contractual Commitments
Sale and Purchase Agreement with Sony Life Singapore
Pursuant to the agreement dated April 5, 2023, entered with Sony Life Singapore Pte. Ltd. (“SLS”), an independent third party, the Company is committed to purchase 100% equity interest in Sony Life Financial Advisers Pte. Ltd. for a cash consideration of SGD2.5 million (equivalent to approximately $1.88 million). On December 28, 2023, the Company and SLS entered into a second supplementary agreement to extend the closing date of the transaction from December 31, 2023 to March 31, 2024. On March 29, 2024, the Company and SLS entered into a third supplementary agreement to extend the closing date of the transaction from March 31, 2024 to May 9, 2024. Pursuant to the third supplementary agreement, the Company paid SGD0.25 million (equivalent to approximately $0.19 million) to SLS as the partial payment to cash consideration on April 12, 2024. On May 9, 2024, the Company and SLS entered into a fourth supplementary agreement to extend the closing date of the transaction from May 9, 2024 to May 20, 2024. On June 18, 2024, the Company and SLS entered into a fifth supplementary agreement to extend the closing date of the transaction from May 20, 2024 to July 31, 2024. Pursuant to the fifth supplementary agreement, the Company paid an aggregate of SGD0.15 million (equivalent to approximately $0.11 million) as the extension fee and indemnification fee in July 2024. On October 3, 2024 and January 30, 2025, the Company and SLS entered into the sixth and seventh supplementary agreements, respectively to extend the closing date of the transaction to February 28, 2025.
43
Subsequently on March 14, 2025, SLS issued a termination notice to terminate the agreement due to the Company’s failure to complete the transaction. On April 21, 2025, the Company and SLS entered into a settlement agreement under which the Company is obligated to pay SLS a settlement amount of SGD 1.85 million (equivalent to approximately $1.4 million) on or before August 31, 2025. In addition, SLS has claimed further damages of SGD 0.1 million (equivalent to approximately $0.07 million) arising from the Company’s breach of its obligations under the agreement. Both the settlement amount and the additional damages claim bear interest at a rate of 5.33% per annum, accruing from March 5, 2025, until the date of full payment.
Legal Matters and Other Contingencies
From time to time, the Company is party to various claims and legal proceedings incident to the operation of its business. For example, the Company is currently involved in proceedings brought by music companies relating to the payment of royalties for music used on its platform, employment and related matters, consumer class actions and suits alleging, among other things, violations of state consumer protection or privacy laws, and contractual disputes over representations and warranties and post-closing obligations associated with business acquisitions.
In addition, third parties have from time to time claimed, and others may claim in the future, that the Company has infringed their intellectual property rights. The Company is subject to intellectual property disputes, including patent infringement claims, and management expects that it will continue to be subject to intellectual property infringement claims as its services expand in scope and complexity. The Company is not presently involved in any patent infringement and other intellectual property-related lawsuits. The Company may also become more vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act are interpreted by the courts, and the Company becomes subject to laws in jurisdictions where the underlying laws with respect to the potential liability of online intermediaries are either unclear or less favorable. Management believes that additional lawsuits alleging that the Company has violated patent, copyright or trademark laws may be filed against it. Intellectual property claims, whether meritorious or not, are time consuming and often costly to resolve, could require expensive changes in the Company’s methods of doing business or the goods it sells, or could require the Company to enter into costly royalty or licensing agreements.
The Company is also subject to consumer claims or lawsuits relating to alleged violations of consumer protection or privacy rights and statutes, some of which could involve potentially substantial claims for damages, including statutory or punitive damages. Consumer and privacy-related claims or lawsuits, whether meritorious or not, could be time consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, or require the Company to change its business practices, sometimes in expensive ways.
The Company is also subject to, or in the future may become subject to, a variety of regulatory inquiries, audits, and investigations across the jurisdictions where it conducts business, including, for example, inquiries related to consumer protection, employment matters and/or hiring practices, marketing practices, tax, unclaimed property and privacy rules and regulations. Any regulatory actions against the Company, whether meritorious or not, could be time consuming, result in costly litigation, damage awards, fines and penalties, injunctive relief or increased costs of doing business through adverse judgment or settlement, require the Company to change its business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources, materially damage its brand or reputation, or otherwise harm its business.
Legal expenses related to defense, negotiations, settlements, rulings and advice of outside legal counsel are expensed as incurred.
The Company establishes an accrued liability for loss contingencies related to legal and regulatory matters when the loss is both probable and reasonably estimable. Those accruals represent management’s best estimate of probable losses and, in such cases, there may be an exposure to loss in excess of the amounts accrued. For certain of the matters described above, there are inherent and significant uncertainties based on, among other factors, the stage of the proceedings, developments in the applicable facts of law, or the lack of a specific damage claim.
44
The Company’s accrued liabilities for loss contingencies related to legal and regulatory matters may change in the future as a result of new developments, including, but not limited to, the occurrence of new legal matters, changes in the law or regulatory environment, adverse or favorable rulings, newly discovered facts relevant to the matter, or changes in the strategy for the matter. Regardless of the outcome, litigation and other regulatory matters can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.
The following describes material legal proceedings in which the Company is involved as of March 31, 2025:
| (i) | Action Case: CACV 1116/2025 (on appeal from HCA702/2018) |
On March 27, 2018, the writ of summons was issued against the Company and seven related companies of the former shareholder (the “Defendants”) by the Plaintiff. This action alleged the infringement of certain registered trademarks currently registered under the Plaintiff. On February 23, 2023, the Court granted leave for this action be set down for trial of 13 days, and the trial will commence on November 25, 2024. On October 31, 2025, the Court granted judgement in favor of the Plaintiff. On November 28, 2025, the Defendants lodged and served the Notice of Appeal (CACV 1116/2025) to the Court of Appeal. Legal counsel of the Company will continue to handle in this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the appeal or the range of reasonably possible loss as the Court is in the process of quantifying the amount of damages.
| (ii) | Action Case: HCA765/2019 |
On April 30, 2019, the writ of summons was issued against the Company’s subsidiary, three related companies and the former directors, stockholders and financial consultant by the Plaintiff. This action alleged the deceit and misrepresentation from an inducement of the fund subscription and claimed for compensatory damage of approximately $2.6 million. On April 18, 2024, the court made an order that the plaintiff shall set the case down for trial on or before July 6, 2024 for a 7 days trial before a judge and there shall be a pre-trial review before the trial judge on a date 12 weeks before the trial. The plaintiff and the defendants agreed on a time extension until August 8, 2024 to set the case down for trial. On August 9, 2024, the Court made an order that the case be adjourned to January 14, 2025 for another case management conference. On February 17, 2025, the Company filed an amended defence to the court and the next case management conference is fixed to be heard on January 6, 2026. The case is on-going and parties have yet to attempt mediation. Legal counsel of the Company will continue to handle this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonably possible loss, if any.
| (iii) | Action Case: HCA2097 and 2098/2020 |
On December 15, 2020, the writs of summons were issued against the Company and the former consultant by the Plaintiff. This action alleged the misrepresentation and conspiracy causing the loss from the investment in corporate bond and claimed for compensatory damage of approximately $1.7 million. The Company previously made approximately $0.8 million as contingency loss for the year ended December 31, 2021. Parties participated in a mediation held on March 25, 2022 and negotiated for settlement through without prejudice correspondence, no settlement was reached. The pre-trial review is fixed to be heard on January 29, 2026 and the 6-days trial is fixed to be heard from May 14 to 21, 2026. The case is on-going and legal counsel of the Company will continue to handle this matter. As of March 31, 2025, the Company accrued a legal provision of approximately $0.8 million as a liability in the condensed consolidated balance sheets.
45
| (iv) | Sony Music Entertainment |
In connection with the Merger Transaction, the Company assumed the liabilities of Triller Corp, including the legal contingency accrual stemming from the litigation with Sony Music Entertainment (“Sony”) alleging claims for breach of contract, copyright infringement, contributory copyright infringement, and vicarious copyright infringement. The court entered judgement pursuant to stipulation in the amount of approximately $3.6 million requiring Triller Corp to make monthly payments through May 21, 2025. Triller Corp defaulted on the payments and judgement was entered against Triller Corp on August 27, 2024 for the full amount due. As of March 31, 2025, approximately $3.6 million is included as a liability in the condensed consolidated balance sheets.
| (v) | Sony Music Publishing Europe Limited (“SOLAR”) |
In connection with the Merger Transaction, the Company assumed the liabilities of Triller Corp, including the legal contingency accrual stemming from the complaint filed by SOLAR in the London, United Kingdom Circuit Common Court alleging claims of songwriter/producer music publishing rights infringement. A default judgement for £3.8 million was ruled in SOLAR’s favor and SOLAR filed an action in the Superior Court of California for the County of Los Angeles for recognition of this foreign country money judgment in the amount of approximately $4.4 million. As of March 31, 2025, this amount is included as a liability in the condensed consolidated balance sheets.
| (vi) | Music Licensing |
Triller Corp has outstanding contractual obligations to various record labels, music publishers and performing rights organizations (collectively, “Rightsholders”) who have licensed to Triller Corp the right to use sound recordings and musical compositions in connection with the operation of the Triller app and other aspects of the Company’s business. As of March 31, 2025, the Company has recorded liabilities in the amount of approximately $30.0 million for unpaid amounts owed under its music licenses. Triller Corp is also involved in various legal proceedings and has received threats of litigation from Rightsholders. Triller Corp believes it may be or become liable to Rightsholders for additional amounts such as interest, penalty fees, attorneys’ fees, copyright infringement damages and other amounts, but is currently unable to estimate the probability of loss associated with these actions or the range or reasonably possible losses, if any, or the impact such losses may have on the Company’s results of operations, financial condition or cash flows.
| (vii) | Fox Plaza Lease |
In connection with the Merger Transaction, the Company assumed the liabilities of Triller Corp, including the legal contingency accrual stemming from the ongoing litigation with Fox Plaza, LLC due to an alleged breach of a commercial office lease agreement as a result of an alleged failure to pay rents under the agreement. The plaintiff seeks damages in excess of approximately $3.5 million, plus attorney’s fees, costs of suit, and additional damages to be proven at trial. Triller Corp intends to vigorously defend itself in this matter. The Company has accrued approximately $1.8 million as a liability pertaining to this claim on the condensed consolidated balance sheets. It is reasonably possible that the potential loss may exceed the accrued liability amount.
| (viii) | Concentrix Daksh |
In connection with the Merger Transaction, the Company assumed the liabilities of Triller Corp, including the legal contingency accrual stemming from the arbitration with Concentrix Daksh Services India Private Ltd. (“Concentrix”). Concentrix alleges wrongful early termination of a services agreement and seeks damages of approximately $2.0 million in lost profits, plus interest and fees. The Company has accrued approximately $2.0 million as a liability pertaining to this matter. While the Company intends to defend the claim vigorously, management believes the recorded amount represents the probable loss as of March 31, 2025.
| (ix) | Epic Sports & Entertainment |
In connection with the Merger Transaction, the Company assumed the liabilities of Triller Hold Co LLC and Triller Fight Club LLC related to litigation with Epic Sports & Entertainment, Inc. (“Epic”) for alleged breach of a settlement agreement. Epic initially claimed damages of approximately $1.8 million, and recent settlement discussions indicate a potential settlement range of approximately $0.6 to $2.0 million. As of March 31, 2025, the Company accrued a legal provision of approximately $1.9 million as a liability in the condensed consolidated balance sheets.
46
| (x) | Samsung Arbitration Award |
In connection with the Merger Transaction, the Company assumed the liabilities of Triller Corp, including the legal contingency accrual stemming from the arbitration with Samsung Electronics Co., Ltd due to a breach of a commercial agreement and failure to pay the amounts owed under the contract. The U.S. District Court for the Central District of California confirmed the award and entered a judgment of approximately $2.6 million in May 2024, accruing interest at $368.43 per day, at a rate of 5.17% per annum until repaid. A writ of execution was issued on August 2, 2024, and a Judgment Debtor Examination is scheduled for February 24, 2025. The Company provided financial records in December 2024 in response to a subpoena. As of March 31, 2025, the Company accrued approximately $3.0 million as a liability in the condensed consolidated balance sheets.
| (xi) | Prem Parameswaren |
In connection with the Merger Transaction, the Company assumed potential liabilities related to claims asserted by Prem Parameswaran, the former Chief Executive Officer of Triller Corp for alleged unpaid compensation. To avoid litigation, the parties reached an agreement in principle for a settlement consisting of $500,000 in cash and 625,000 stock units, subject to approval by AGBA Group Holding Limited. As of March 31, 2025, the Company has accrued approximately $2.4 million as a liability pertaining to this matter, representing the probable settlement amount.
| (xii) | Triller Legacy, LLC Settlement Agreement |
On July 26, 2024, Triller Hold Co, LLC and Triller Acquisition, LLC entered into a settlement agreement with Triller Legacy, LLC (“Legacy”), original sellers of Triller Corp, regarding the 2019 acquisition of Triller Corp from Legacy. The Company agreed to issue 3.89 million shares of Series A common stock to Legacy. Legacy intends to sell 1.75 million shares for a minimum return of approximately $7.0 million by the end of March 31, 2025. The Company must compensate Legacy for any shortfall of share sales below $7.0 million. The Company has the option to purchase up to 1.75 million shares from Legacy at $4.00 per share through December 31, 2024 and $4.75 per share through March 31, 2025. The Company can also opt to pay Legacy $7.0 million. The Company has included the estimated guaranteed payment liability in its accounts payable and legal contingencies.
| (xiii) | Bobby Sarnevesht |
The Company is subject to claims asserted by Bobby Sarnevesht for alleged breach of a merger agreement and related contracts. The Company disputes the claims and the matter remains unresolved. As of March 31, 2025, the Company has accrued approximately $3.0 million as a liability pertaining to this dispute, which represents management’s best estimate of the probable loss.
| (xiv) | YA II PN, LTD. v. Triller Group Inc.; Triller Corp.; Triller Hold Co LLC; Convoy Global Holdings Limited, Index No. 659314/2024 in the New York Supreme Court, Commercial Division |
On November 26, 2024, Yorkville (“Plaintiff”) initiated litigation against the Company, Triller Corp., Triller Hold Co LLC, and Convoy Global Holdings Limited (“Defendants”) by filing a motion for summary judgment in lieu of a complaint pursuant to NY CPLR 3213 (the “Motion”), seeking a judgment finding Defendants liable for all amounts allegedly owed under the convertible promissory note (the “Note”), dated June 28, 2024, including interest, plus costs, legal fees, and expenses incurred by Yorkville in enforcing the Note’s terms. On February 24, 2025, Defendants filed their opposition to the Motion, arguing that the Motion should be denied because Plaintiff’s reliance on CPLR 3213 was improper and because, even if Plaintiff’s reliance on CPLR 3213 were proper, triable disputes of fact preclude summary judgment in Plaintiff’s favor. On March 7, 2025, Plaintiff filed a reply in support of the Motion. On May 19, 2025, Yorkville’s initial motion for summary judgment in lieu of complaint, seeking immediate payment, was denied by the Supreme Court of the State of New York, New York County. The court determined that Yorkville’s right to payment depended on a detailed analysis of obligations under multiple intertwined documents, including the Yorkville Convertible Promissory Note, Second A&R SEPA, Registration Rights Agreement, and Pledge Agreements, thus converting the case to a plenary action. Yorkville filed a notice of appeal on May 28, 2025 and a new motion for summary judgment on July 1, 2025, asserting the Yorkville Convertible Promissory Note’s maturity date of June 28, 2025 (the “Maturity Date”).
47
On June 20, 2025, the Company transferred 3,000,000 shares of common stock of BKFC, previously pledged by Triller Hold Co LLC as collateral pursuant to the Amended and Restated Pledge Agreement, dated June 28, 2024, between Triller Hold Co LLC and Yorkville, as partial repayment. The case does not have a trial date set. Defendants intend to litigate the case until a resolution is reached.
On December 3, 2025, the Plaintiff filed responses and objections (the “Responses and Objections”) to the Defendants’ first set of interrogatories dated November 3, 2025 to the Supreme Court of the State of New York County of New York (Index no.: 659314/2024). Pursuant to the Responses and Objections, the Plaintiff stated its claims and contentions with respect to its damage resulting from the event of default that occurred under the Note when the Defendants failed to pay all amounts due by the Maturity Date. The total amount owed under the Note, including interest, plus costs, legal fees, and expenses incurred by Yorkville less the value of BKFC’s shares is approximately $38.1 million. Yorkville further stated that it continues to accrue additional damages with each passing day that the obligations under the Note and guaranties remain unpaid. The case is on-going and legal counsel of the Company will continue to handle this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonable possible loss, if any.
| (xv) | 13080 Advisors LLC v. Triller Group, Inc., Jams Reference No. 5220008039 (Los Angeles County, California) |
On December 18, 2024, 13080 Advisors LLC (“Claimant”) submitted a Notice of Arbitration and Demand for Arbitration (“13080 Arbitration Demand”) to JAMS to assert that Triller and TAG Holdings Limited (collectively as “Respondents”) have breached their alleged duties to Claimant under the following alleged agreements: (1) a partially executed document entitled “Grant Agreement for S-8 Registered Shares” dated March 14, 2024, and (2) a partially executed document entitled “Consulting Services Agreement” also dated March 14, 2024. The 13080 Arbitration Demand asserts four purported claims for relief: breach of contract, negligent misrepresentation, specific performance and declaratory relief. On February 18, 2025, Respondents submitted to JAMS a motion to dismiss all the claims for relief asserted in the 13080 Arbitration Demand along with a motion to strike Claimant’s requests for punitive damages. This motion remains pending and no arbitrator has been appointed. The case is on-going and legal counsel of the Company will continue to handle this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonable possible loss, if any.
Subsequent to March 31, 2025, the Company is involved in the following material legal proceedings:
Robert E. Diamond Jr.et al. v. Triller Group, Inc., Case No. 25-cv-00129 (PAE) (S.D.N.Y.)
On January 7, 2025, Robert E. Diamond Jr (“Diamond”), the former chairman of Triller’s board of directors and Atlas Merchant Capital LLC (collectively as “Plaintiffs”), an advisory services company under Diamond’s control filed a lawsuit in federal district court in Manhattan, New York to allege that Triller has failed to pay over or grant to Plaintiffs certain cash amounts and equity awards to which Plaintiffs were entitled pursuant to various agreements between Plaintiffs and Triller. Plaintiffs claim that they are entitled to over $5.0 million in cash compensation and over 6.0 million shares of Triller’s common stock. On February 28, 2025, Triller filed a partial motion to dismiss the scope of Plaintiffs’ claims. This motion is now pending before the court. The case is on-going and legal counsel of the Company will continue to handle this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonable possible loss, if any.
NOTE 19 — SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the condensed consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred after March 31, 2025, up to the date that the unaudited condensed consolidated financial statements were available to be issued.
| (i) | In April 2025, the Company issued an aggregate of 603,839 shares of common stock to the directors and officers of the Company under the Share Award Scheme, whose shares were vested in 2023. |
48
| (ii) | In April 2025, the Company issued an aggregate of 823,642 shares of common stock to the employees of the Company to compensate for the contributions of their services and performance, at a price range from $1.072 to $2.532 per share. |
| (vi) | In April 2025, the Company issued an aggregate 304,478 shares of common stock to the employees of Triller Corp. under the share award scheme of Triller Corp. |
| In April 2025, the Company issued 3,227,500 shares of common stock to 13080 Advisors LLC for the first installment. |
| (viii) | On April 11, 2025, the Company entered into a Convertible Note Purchase Agreement (“NPA”) with an independent third party pursuant to which the Company (i) issues a convertible note in the principal amount of approximately $10.0 million (the “Note”), (ii) issues a warrant to purchase 10,000,000 shares of the Company’s common stock at an exercise price of $1.00 per share (the “Warrant”), (iii) executes and delivers a registration rights agreement, and (iv) executes and delivers a termination agreement to terminate a securities purchase agreement dated January 24, 2025.
The Note matures in two years after its date of issuance with an interest rate of U.S. Prime Rate plus 2% per annum payable at maturity. The Note will be convertible into the Company’s common stock at a 20% discount to the 5-day daily dollar volume weighted average price of the common stock of the Company.
The Warrant will be exercisable in a year after the Company’s next qualified equity financing with a term of five years. |
| (ix) | On April 17, 2025, the Company received a written notice (the “Notice”) from Nasdaq, notifying that the Company failed to comply with Nasdaq Listing Rule 5250(c)(1) as the Company failed to timely file its Annual Report on Form 10-K for the year ended December 31, 2024. The Notice had no immediate effect but, before June 16, 2025, the Company was required to submit a plan to Nasdaq to regain compliance with the Nasdaq Listing Rule. If Nasdaq accepts the Company’s plan, Nasdaq will grant the Company up to 180 calendar days from the filing due date to regain compliance. Otherwise, after the date, subject to other requirements and conditions, the Company may proceed to delisting procedures. On August 19, 2025, Nasdaq accepted the Company’s plan to regain the compliance by October 13, 2025. |
| (x) | On May 20, 2025, the Company received a written notice (the “Notice”) from Nasdaq, notifying that the Company failed to comply with Nasdaq Listing Rule 5250(c)(1) as the Company failed to timely file its quarterly report on Form 10-Q for the period ended March 31, 2025. The Notice had no immediate effect but, before June 16, 2025, the Company was required to submit a plan to Nasdaq to regain compliance with the Nasdaq Listing Rule. If Nasdaq accepts the Company’s plan, Nasdaq will grant the Company up to 180 calendar days from the filing due date to regain compliance. Otherwise, after the date, subject to other requirements and conditions, the Company may proceed to delisting procedures. On August 19, 2025, Nasdaq accepted the Company’s plan to regain the compliance by October 13, 2025. |
| (xi) | On June 20, 2025, Yorkville effected a foreclosure under the Amended and Restated Pledge Agreement, dated June 28, 2024, between Triller Hold Co LLC and Yorkville (the “Triller Pledge Agreement”). This action was undertaken by Yorkville following its allegations of various events of default by the Company under the terms of the Yorkville Convertible Promissory Note, dated June 28, 2024, and other related transaction documents, including the Second A&R SEPA. Yorkville had previously sought to accelerate payment of all amounts due under the Yorkville Convertible Promissory Note. Although the Company has not received a formal notice of foreclosure from Yorkville, the Company became aware through a transfer agent statement that 3,000,000 shares of common stock of BKFC, previously pledged by Triller Hold Co LLC as collateral, were transferred to Yorkville on June 20, 2025. These 3,000,000 shares represented a 17.2% ownership interest in BKFC as specifically pledged to Yorkville. As a direct result of this transfer, the Company’s beneficial ownership in BKFC declined from 56.93% to 38.91% of BKFC’s outstanding common shares. Following this change in ownership, the majority stockholders of BKFC approved amendments to BKFC’s certificate of incorporation and its Stockholders Agreement, which included the removal of the Company’s board designation rights. These amendments became effective on July 1, 2025. Consequently, the Company no longer holds a majority stake in BKFC and has lost its contractual rights to appoint directors to the BKFC board. As a result of losing control over BKFC, BKFC will be deconsolidated from the Company’s condensed consolidated financial statements as of July 1, 2025, the effective date of the amended and restated Stockholders Agreement. The Company is currently evaluating the accounting and reporting implications of this deconsolidation, which may include potential impairment charges, recognition of a gain or loss on deconsolidation, and any required restatement of prior period comparative information. |
49
| (xii) | On June 30, 2025, the Company received a written notice (the “Notice”) from Nasdaq, notifying that the Company had publicly traded under $1.00 per share for a period of 30 consecutive trading days or more, which failed to comply with Nasdaq Listing Rule 5550(a)(2) and Nasdaq Listing Rule 5810(c)(3)(A). The Notice had no immediate effect but, before December 29, 2025, the Company was required to regain compliance by trading at least $1.00 per share for a minimum of 10 consecutive trading days. Otherwise, after the date, subject to other requirements and conditions, the Company may proceed to delisting procedures. As of the date of the condensed consolidated financial statements, the Company is still consecutively trading under $1.00, directors of the Company are investigating actions, where appropriate, to regain the compliance, by December 29, 2025. |
| (xiii) | On June 30, 2025, the Company and Green Ventures entered into Amendment No. 5 to the Green Ventures Note, in which Green Ventures agreed (i) amend certain terms and conditions of the Green Ventures Note, including reducing the interest rates for the Green Ventures Note to 8%, reducing the rate of the default interest rate to 11%, extending the maturity date to June 6, 2026 and (ii) waive all existing events of default under the Green Ventures Note (collectively, the “Requested Amendments and Waivers”). As consideration for granting the Requested Amendments and Waivers, Triller has agreed to provide additional collateral to secure the outstanding obligations under the Green Ventures Note, and to procure its affiliate, TAG Technologies, to guarantee the due and punctual performance and payment obligations under the Green Ventures Note. |
| (xiv) | On October 14, 2025, the Company received a delisting determination letter (the “Determination Letter”) from Nasdaq indicating that, unless the Company timely requests a hearing before the Nasdaq Hearings Panel (the “Panel”), the Company’s common stock would be subject to suspension and delisting from the Nasdaq Capital Market at the opening of business on October 23, 2025 due to the Company’s non-compliance with Nasdaq’s filing requirements set forth in Listing Rule 5250(c)(1) (the “Listing Rule”) for its failure to timely file its Form 10-K for the year ended December 31, 2024, and its Forms 10-Q for the periods ended March 31, 2025 and June 30, 2025, respectively. The Company has requested to appeal the delisting determination and will attend the hearing to demonstrate its ability to regain and sustain long-term compliance.
On November 17, 2025, the Company received an additional delisting determination letter (the “Additional Determination Letter”) from Nasdaq indicating that since it failed to timely file its Form 10-Q for the period ended September 30, 2025, this serves as an additional basis for delisting.
Following a hearing held on November 25, 2025, the Panel has granted the Company an exception period subject to the Company satisfying the following conditions: |
| ● | File 2024 Form 10-K and delinquent Forms 10-Q for the quarters ended March 31, June 30, and September 30, 2025 on or before December 24, 2025; |
| ● | Regain compliance with the $1.00 minimum bid-price requirement on or before February 27, 2026; and |
| ● | File its 2025 Form 10-K on or before March 31, 2026. |
| (xv) | On December 26, 2025, the Company received a determination letter from the Panel confirming the suspension trading on the Nasdaq Stock Market effective at the opening of the market on December 30, 2025 and delisting of the Company’s securities. This decision stems from the Company not having been able to file two periodic reports by a deadline of December 24, 2025 set by the Panel. |
50
NOTE 20 — PARENT ONLY FINANCIAL INFORMATION
The Company performed a test on the restricted net assets of consolidated subsidiaries in accordance with Securities and Exchange Commission Regulation S-X Rule 5-04 and concluded that it was applicable for the Company to disclose the financial statements for Triller Group Inc., the parent company.
The Company did not have significant capital and other commitments, long-term obligations, or guarantees as of March 31, 2025 and December 31, 2024. Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted.
The following presents condensed parent company only financial information of Triller Group Inc.
Condensed balance sheets
| As of | ||||||||
| March 31, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | 3 | |||||
| Amounts due from the holding company | — | |||||||
| Amounts due from subsidiaries | 66,088 | |||||||
| Promissory notes receivable, related party | 33,949 | |||||||
| Prepayments | 155 | |||||||
| Total current assets | 100,195 | |||||||
| Non-current assets: | ||||||||
| Investments in subsidiaries | 785,733 | |||||||
| Total non-current assets | 785,733 | |||||||
| TOTAL ASSETS | $ | $ | 885,928 | |||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Other payable and accrued liabilities | $ | $ | 8,929 | |||||
| Borrowings | 32,552 | |||||||
| Borrowings, related party | 18,443 | |||||||
| Warrant liabilities | 977 | |||||||
| Total current liabilities | 60,901 | |||||||
| TOTAL LIABILITIES | 60,901 | |||||||
| Commitments and contingencies (Note 25) | ||||||||
| Stockholders’ equity (deficit): | ||||||||
| Preferred stock, $0.001 par value, 100,000,000 shares authorized | ||||||||
| Series A-1 preferred stock, $0.001 par value, 50,000,000 and nil shares authorized, XX and 11,801,804 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | 12 | 12 | ||||||
| Series B preferred stock, $0.001 par value, 50,000,000 and nil shares authorized, XX and 30,851 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | — | * | — | |||||
| Common stock, $0.001 par value; 150,000,000,000 and 484,125,000 shares authorized, XX and 138,143,817 shares issued and outstanding as of Mrach 31, 2025 and December 31, 2024, respectively | 138 | 138 | ||||||
| Common stock to be issued | 15 | 15 | ||||||
| Series A-1 preferred stock to be issued | 12 | 12 | ||||||
| Common stock held in escrow | 24 | 24 | ||||||
| Additional paid-in capital | 909,806 | 909,806 | ||||||
| Accumulated deficit | ) | (84,980 | ) | |||||
| Total stockholders’ equity (deficit) | 825,027 | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | $ | 885,928 | |||||
| * | Less than $1,000 |
51
Condensed Statements of Operations
| Three Months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating cost and expenses: | ||||||||
| Stock-based compensation expense | $ | (51,671 | ) | $ | (9,933 | ) | ||
| Other general and administrative expenses | (11,066 | ) | (3,764 | ) | ||||
| Total operating cost and expenses | (62,737 | ) | (13,697 | ) | ||||
| Loss from operations | (62,737 | ) | (13,697 | ) | ||||
| Other income (expense): | ||||||||
| Interest income | 765 | — | ||||||
| Interest expense | (4,546 | ) | — | |||||
| Interest expense, related party | (231 | ) | — | |||||
| Change in fair value of warrant liabilities | 3,463 | 4 | ||||||
| Change in fair value of forward share purchase liability | — | (82 | ) | |||||
| Loss on settlement of forward share purchase agreement | — | (379 | ) | |||||
| Sundry income | — | 344 | ||||||
| Total other income (expense), net | (549 | ) | (113 | ) | ||||
| Loss before income taxes | (63,286 | ) | (13,810 | ) | ||||
| Income tax expense | — | — | ||||||
| NET LOSS | $ | (63,286 | ) | $ | (13,810 | ) | ||
Condensed Statement of Cash Flows
| Three Months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (63,286 | ) | $ | (13,810 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Stock-based compensation expense | 51,671 | 9,933 | ||||||
| Change in fair value of warrant liabilities | (3,463 | ) | (4 | ) | ||||
| Change in fair value of forward share purchase liability | — | 82 | ||||||
| Loss on settlement of forward share purchase agreement | — | 379 | ||||||
| Interest income from promissory note receivable, related party | (765 | ) | — | |||||
| Interest expenses on borrowings | 4,777 | — | ||||||
| Change in operating assets and liabilities: | ||||||||
| Prepayments | 658 | (17 | ) | |||||
| Other payables and accrued liabilities | 6,399 | 1,161 | ||||||
| Net cash used in operating activities | (4,009 | ) | (2,276 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Issuance of promissory notes receivable, related party | (15,465 | ) | — | |||||
| Net cash used in investing activities | (15,465 | ) | — | |||||
| Cash flows from financing activities: | ||||||||
| Advances to related companies | (4,003 | ) | (934 | ) | ||||
| Proceeds from convertible promissory note payables | 23,350 | — | ||||||
| Settlement of forward share purchase agreement | — | (13,953 | ) | |||||
| Proceeds from private placement | — | 1,850 | ||||||
| Net cash provided by (used in) financing activities | 19,347 | (13,037 | ) | |||||
| Net change in cash, cash equivalent and restricted cash | (127 | ) | (15,313 | ) | ||||
| BEGINNING OF PERIOD | 130 | 15,443 | ||||||
| END OF PERIOD | $ | 3 | $ | 130 | ||||
52
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this report (the “Quarterly Report”) to “we,” “us”, “the Group” or the “Company” refer to Triller Group Inc. (formerly AGBA Group Holding Limited (“AGBA”)). References to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section included in our 2023 Annual Report filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
Triller Group Inc. is formed in the State of Delaware, on October 15, 2024, which was established to domicile its legal jurisdiction from British Virgin Islands to the State of Delaware.
Nasdaq Listing Extension
We received a delisting determination letter on October 14, 2025 and an additional delisting determination letter on November 17, 2025 from the Listing Qualifications Staff (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”), due to the our non-compliance with Nasdaq’s filing requirements set forth in Listing Rule 5250(c)(1) (the “Listing Rule”) for its failure to timely file the Form 10-K for the year ended December 31, 2024, and the Forms 10-Q for the periods ended March 31, 2025, June 30, 2025 and September 30, 2025, respectively.
We requested a hearing before the Nasdaq Hearings Panel (the “Panel”) on October 21, 2025, and the hearing was held on November 25, 2025. On December 3, 2025, we received a decision letter from the Staff of Nasdaq, indicating that based on the information presented at the hearing, the Panel has determined to grant us an exception period to continue its listing on Nasdaq subject to the conditions that: (1) on or before December 24, 2025, we shall demonstrate compliance with the Listing Rule; (2) on or before February 27, 2026, we shall demonstrate compliance with the $1.00 per share minimum bid price requirement; and (3) on or before March 31, 2026, we shall file the Form 10-K for the year ended December 31, 2025. It is a requirement during the exception period that the we provide prompt notification of any significant events that occur during this time that may affect the our compliance with Nasdaq requirements.
Business overview
We are a leading one-stop financial supermarket based in Hong Kong servicing over 400,000 individual and corporate customers. We offer the broadest set of financial services and healthcare products in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) through a tech-led ecosystem, enabling clients to unlock the choices that best suit their needs.
We currently operate four major areas of businesses, comprising of:
| 1. | Distribution Business: The Group’s powerful financial advisor business is the largest in the market, it engages in the personal financial advisory business (including advising and sales of a full range of financial services products including long-term life insurance, savings and mortgages), with additional internal and external channels being developed and added. |
53
| 2. | Platform Business: The Group operates as a “financial supermarket” offering over 1,800 financial products to a large universe of retail and corporate customers. |
| 3. | Healthcare Business: Through the Group’s 4% stake in and a strategic partnership with HCMPS, operating as one of the largest healthcare management organizations in the Hong Kong and Macau region, with over 800 doctors in its network. Established in 1979, it is one of the most reputed healthcare brands in Hong Kong. |
| 4. | Fintech Business: The Group has an ensemble of leading FinTech assets and businesses in Europe and Hong Kong. In addition to financial gains, the Group also derives substantial knowledge transfers from its investee companies, supporting the development and growth of the Group’s new business models. |
Distribution Business
The Distribution Business comprises a variety of captive financial services distribution channels. We have built a market leading financial advisors distribution channel in Hong Kong. We have also built other distribution channels alongside our market leading financial advisors business.
Our combined captive distribution channels enable us to directly access one of the largest pools of customers accessible to independent financial services providers in Hong Kong.
| Channel | Description | |
| Financial Advisors Business
(“FA Business”) |
“Focus” is engaged in the distribution of life insurance, asset management, property-casualty and Mandatory Provident Fund products through its teams of independent financial advisors (brokers). | |
| Alternative Distribution Business | A collection of distribution channels, including salaried financial planners targeting HNWI, development teams pursuing corporate partnerships and incubating financial advisors teams. | |
| Digital Business | ILLR Money is a direct-to-consumer digital app that provides various financial products and services to retail customers. |
Our largest distribution channel is the FA Business, operating under the brand name Focus. With its large salesforce of financial advisors, “Focus” provides a wide range of financial products and independent advisory services to individual and corporate customers, primarily in connection with life insurance products. Our FA Business has been the clear market leader in the insurance brokerage industry in Hong Kong for decades, building up a large and highly productive salesforce. As of September 30, 2024, there were around 562 financial advisors at “Focus”, organized into 10 sales teams. Each team is led by a “tree head”, responsible for managing the financial advisors within their teams.
In addition to the FA Business, we continued to expand our distribution footprint with the establishment and expansion of a number of additional distribution channels, collectively known as our Alternative Distribution Business. These distribution channels are targeted at specific customer segments and/or capturing specific distribution opportunities.
Combined with our Digital Business, we now have a well-diversified range of distribution channels and capabilities.
During 2025, we continued to make significant investments into developing and expanding our financial advisors salesforce, broadening and deepening the product range, as well as upgrading the supporting infrastructure. Our infrastructure not only supports the financial consultants in engaging with their customers, it also provides extensive operational support in relation to the processing of transactions, associated payment flows, as well as after-sales services. Building our infrastructure required substantial investments into technological, operational and financial systems, as well as the development of comprehensive operational and support teams (operations support, customer services, payments, etc.). Since many of the financial products offered to our customers are regulated, on top of the various operational requirements, we have built significant internal capabilities in the areas of risk and internal control, as well as legal and compliance to ensure an appropriate level of regulatory compliance and supervision.
As a result of our efforts to expand our distribution capabilities and improve our supporting infrastructure, we have successfully developed these inter-related strategic assets:
| ● | Vast customer base in Hong Kong and growing customer base in Mainland China. |
| ● | State-of-the-art supporting infrastructure. |
| ● | Relationships with and access to a broad range of leading global financial product providers. |
| ● | Deep market knowledge and understanding. |
| ● | Highly productive and well-trained salesforce. |
54
We will continue to capitalize on these core strategic assets and match them with the emerging opportunities in our three core industries (life insurance, wealth management and healthcare).
For the nine months ended September 30, 2024, the Company made $15.21 million from commission in the Distribution Business. The revenue attributed to the Company during the first half year of 2024 only captured an insignificant portion of the revenues actually generated by the financial advisors currently associated with Focus.
We will continue to widen our distribution footprint and actively explore further opportunities to develop partnerships and generate customer leads on the ground in Mainland China, as well as refining our abilities to service our customer base. We expect sales volumes to return to the levels previously recorded, prior to the pandemic period, especially with the re-opening of the Mainland border and the ongoing integration of Hong Kong into the Greater Bay area.
Platform Business
The Platform business, through OPH and its subsidiaries, is a one-stop financial supermarket with a breadth of products and services that is unrivaled in Hong Kong sourced from leading global product providers.
The Platform Business was set up to take advantage of the decades-long experience we built up in supporting the largest financial advisors salesforce in Hong Kong. We were already servicing a large pool of customers and in the process, built up a wide library of world class financial products and constructed a state-of-the-art technological and operational infrastructure.
The Platform Business now operates this full-service platform under its “OnePlatform” brand and has opened it up to banks, other financial institutions, family offices, brokers, and individual independent financial advisors that are looking for support in advising and serving their retail clients.
Our technology-enabled Platform Business offers a wide range of financial products, covering life insurance, pensions, property-casualty insurance, stock brokerage, mutual funds, money lending and real estate agency.
In addition to its unrivaled product-shelf, the Platform Business offers digital-enabled sales management and support solutions, business operations support, comprehensive customer services, and training support.
Currently, our platform financial services and investment products mainly comprise mutual fund distributions, portfolio management, money lending, insurance and Mandatory Provident Fund (MPF) products, and international real estate referral and brokerage services, as discussed below:-
The OnePlatform brand currently covers 80 insurance providers selling 1,183 products, and 53 asset management fund houses with over 1,141 products.
Fintech Business
The Fintech Business has collected an ensemble of valuable fintech assets in its investment portfolio. Fintech Business’ management team has strived to establish the business as a leading name in the fintech investment sector.
Core Fintech investments held under the Fintech Business as of September 30, 2024 include:
| 1. | An investment in Tandem Money Limited, a UK digital bank. |
| 2. | An investment in CurrencyFair Limited, a B2B and B2C payments company. |
| 3. | An investment in Oscar Health Inc., a US direct-to-consumer digital health insurer. |
| 4. | An investment in Goxip Inc., a fashion media platform based in Hong Kong. |
55
| Carrying amount in | ||||||||
| US$ thousands (1) | ||||||||
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Tandem Money Limited | 17,751 | 16,880 | ||||||
| CurrencyFair Limited | 5,887 | 5,827 | ||||||
| Oscar Health Inc.(2) | — | — | ||||||
| Goxip Inc. | 306 | 342 | ||||||
| LC Healthcare Fund I, L.P. (3) | — | 2,152 | ||||||
Notes:
| (1) | Carrying amount represents Fintech’s attributable interest in the investment portfolio asset. |
| (2) | The Company partially sold 993,108 shares of Oscar Health Inc. on Nasdaq Stock Exchange with an average current market price of $4.01 per share in 2023. |
| (3) | On February 5, 2024, the Company sold all its equity interest in LC Healthcare Fund I, L.P. to an independent third party for a consideration of $2.15 million. |
Healthcare Business
We currently hold a 4% equity stake in HCMPS, one of the leading healthcare management organizations in Hong Kong.
Founded in 1979 and currently operating under the Dr. Jones Fok & Associates Medical Scheme Management Limited (“JFA”) brand, JFA is one of the most reputed healthcare brands in Hong Kong. It has four self-operated medical centres and a network of over 700 healthcare service providers – providing healthcare schemes for more than 500 corporate clients with over 300,000 scheme members. JFA’s clients include blue chip companies from various industry and leading insurers. Apart from Hong Kong, JFA is the largest operator in Macau with around 70 clinics.
JFA operates a city-wide medical network that includes 340 general practitioners (“GP”), 11 laboratories and imaging centers, 273 specialist doctors, 25 physiotherapy centers, 12 Chinese medicine practitioner clinics, all based in Hong Kong, and 69 GP clinics in Macau. Over 380,000 out-patient and in-patient visits are recorded annually through HCMPS’s medical network. JFA offers its patients a full range of medical services, including general services, specialist services, physiotherapy, Chinese medicine, dental, vaccination, X-ray, laboratories and imaging services.
We believe that the future of healthcare is in “Smart Health” – technology that offers improved patient-care management and leverages data as the new tool for solving complex healthcare challenges with reduced operating costs. We will focus on technology/digitalization and consumerization of healthcare to create an ecosystem empowering customers to proactively manage their health and well-being and to improve their access to healthcare at a lower cost – with connectivity across the care continuum. We believe that JFA has the captive customer base, infrastructure and product/service offerings to optimize customer experience to further grab market share.
We are currently working to transform JFA into the best medical care institution in Asia by 2025, redefining industry standards in the Greater Bay Area and offering market-leading customer care and best-in-class infrastructure empowered by data analytics.
56
Results of Operations
Comparison of the Three Months Ended September 30, 2024 and 2023:
The following tables set forth our results of operations for the periods presented in U.S. dollars (in thousands):
| Three months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Revenues: | ||||||||||||||||
| Interest income: | ||||||||||||||||
| Loans | $ | 60 | $ | 41 | 19 | 46.34 | ||||||||||
| Total interest income | 60 | 41 | 19 | 46.34 | ||||||||||||
| Non-interest income: | ||||||||||||||||
| Commissions | 4,785 | 12,169 | (7,384 | ) | (60.68 | ) | ||||||||||
| Recurring asset management service fees | 349 | 752 | (403 | ) | (53.59 | ) | ||||||||||
| Recurring asset management service fees, related party | 246 | 245 | 1 | 0.41 | ||||||||||||
| Total non-interest income | 5,380 | 13,166 | (7,786 | ) | (59.14 | ) | ||||||||||
| Total revenues | 5,440 | 13,207 | (7,767 | ) | (58.81 | ) | ||||||||||
| Operating expenses: | ||||||||||||||||
| Interest expense | (1,148 | ) | (393 | ) | 755 | 192.11 | ||||||||||
| Commission expense | (1,934 | ) | (8,916 | ) | (6,982 | ) | (78.31 | ) | ||||||||
| Sales and marketing expense | (93 | ) | (754 | ) | (661 | ) | (87.67 | ) | ||||||||
| Research and development expense | (401 | ) | (741 | ) | (340 | ) | (45.88 | ) | ||||||||
| Personnel and benefit expense | (6,827 | ) | (7,764 | ) | (937 | ) | (12.07 | ) | ||||||||
| Legal and professional fee | (2,594 | ) | (3,453 | ) | (859 | ) | (24.88 | ) | ||||||||
| Legal and professional fee, related party | (250 | ) | (78 | ) | 172 | 220.51 | ||||||||||
| Office and operating fee, related party | (1,088 | ) | (1,317 | ) | (229 | ) | (17.39 | ) | ||||||||
| Provision for allowance for expected credit losses | (135 | ) | (328 | ) | (193 | ) | (58.84 | ) | ||||||||
| Other general and administrative expenses | (1,153 | ) | (806 | ) | 347 | 43.05 | ||||||||||
| Total operating expenses | (15,623 | ) | (24,550 | ) | (8,927 | ) | (36.36 | ) | ||||||||
| Loss from operations | (10,183 | ) | (11,343 | ) | (1,160 | ) | (10.23 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 302 | 17 | 285 | 1,676.47 | ||||||||||||
| Foreign exchange gain (loss), net | 1,105 | (864 | ) | 1,969 | 227.89 | |||||||||||
| Investment loss, net | — | (793 | ) | (793 | ) | (100.00 | ) | |||||||||
| Change in fair value of warrant liabilities | (632 | ) | 1 | (633 | ) | (63,300.00 | ) | |||||||||
| Rental income | — | 79 | (79 | ) | (100.00 | ) | ||||||||||
| Sundry income | 26 | 38 | (12 | ) | (31.58 | ) | ||||||||||
| Total other income (expense), net | 801 | (1,522 | ) | 2,323 | 152.63 | |||||||||||
| Loss before income taxes | (9,382 | ) | (12,865 | ) | (3,483 | ) | (27.07 | ) | ||||||||
| Income tax expense | (37 | ) | (56 | ) | (19 | ) | (33.93 | ) | ||||||||
| NET LOSS | $ | (9,419 | ) | $ | (12,921 | ) | (3,502 | ) | (27.10 | ) | ||||||
Revenue
The following table summarizes the major operating revenues for the three months ended September 30, 2024 and 2023:
| Three months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Business segment | ||||||||||||||||
| Distribution Business | $ | 4,701 | $ | 11,876 | (7,175 | ) | (60.42 | ) | ||||||||
| Platform Business | 739 | 1,331 | (592 | ) | (44.48 | ) | ||||||||||
| Fintech Business | — | — | — | — | ||||||||||||
| Healthcare Business | — | — | — | — | ||||||||||||
| TOTAL | $ | 5,440 | $ | 13,207 | (7,767 | ) | (58.81 | ) | ||||||||
57
Distribution Business
The Distribution Business contributed 86.42% and 89.92% of the total revenue for the three months ended September 30, 2024 and 2023, respectively. Income from the Distribution Business mainly related to commissions earned, which decreased by US$7.2 million, or 60.42%, from US$11.9 million in 2023 to US$4.7 million in 2024. The decrease in revenue primarily attributed from the economic recession and outward migration in Hong Kong. The largest segment of the Distribution Business is our FA Business, operated under the “Focus” brand name.
Summarized revenue breakdown by product and type of contracts:
| Three months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| By product: | ||||||||||||||||
| Life insurance | $ | 3,921 | $ | 11,147 | (7,226 | ) | (64.82 | ) | ||||||||
| Property-casualty insurance | 639 | 467 | 172 | 36.83 | ||||||||||||
| Mandatory provident fund and related revenues | 141 | 262 | (121 | ) | (46.18 | ) | ||||||||||
| 4,701 | 11,876 | (7,175 | ) | (60.42 | ) | |||||||||||
| By the type of contracts: | ||||||||||||||||
| - New and or current year | 4,701 | 11,496 | (6,795 | ) | (59.11 | ) | ||||||||||
| - Recurring | — | 380 | (380 | ) | (100.00 | ) | ||||||||||
| TOTAL | $ | 4,701 | $ | 11,876 | (7,175 | ) | (60.42 | ) | ||||||||
Platform Business
The Platform Business contributed 13.58% and 10.08% of the total revenue for the three months ended September 30, 2024 and 2023, respectively.
| Three months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Commission | $ | 84 | $ | 293 | (209 | ) | (71.33 | ) | ||||||||
| Recurring service fees | 595 | 996 | (401 | ) | (40.26 | ) | ||||||||||
| Loans | 60 | 42 | 18 | 42.86 | ||||||||||||
| TOTAL | $ | 739 | $ | 1,331 | (592 | ) | (44.48 | ) | ||||||||
Operating Expenses
Interest Expense
Interest expense increased by US$0.8 million for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase was mainly attributed to the interest expense and amortization of the debt discount on convertible notes payable.
Commission Expense
| Three months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Business segment | ||||||||||||||||
| Distribution Business | $ | 1,843 | $ | 8,593 | (6,750 | ) | (78.55 | ) | ||||||||
| Platform Business | 91 | 323 | (232 | ) | (71.83 | ) | ||||||||||
| Fintech Business | — | — | — | — | ||||||||||||
| Healthcare Business | — | — | — | — | ||||||||||||
| TOTAL | $ | 1,934 | $ | 8,916 | (6,982 | ) | (78.31 | ) | ||||||||
58
The Distribution Business contributed 95.29% and 96.38% of the total commission expense for the three months ended September 30, 2024 and 2023, respectively. Commission expense for the Distribution Business decreased by US$6.8 million, or 78.55%, from US$8.6 million in 2023 to US$1.8 million in 2024. As a result of the decrease in revenue associated with the Distribution Business, commission expense decreased correspondingly.
Sales and Marketing Expense
Sales and marketing expense decreased by US$0.7 million or 87.67% for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The decrease in sales and marketing expense is mainly attributed to lower spending associated with “AGBA” corporate branding and associated product campaigns for celebrating the successful listing.
Research and Development Expense
Research and development expense decreased by US$0.3 million or 45.88% for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The slight decrease was primarily due to decreased in headcounts.
Personnel and Benefit Expense
| Three months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Personnel and benefit | $ | 3,517 | $ | 6,446 | (2,929 | ) | (45.44 | ) | ||||||||
| Share-based compensation to employees | 3,310 | 1,318 | 1,992 | 151.14 | ||||||||||||
| TOTAL | $ | 6,827 | $ | 7,764 | (937 | ) | (12.07 | ) | ||||||||
Personnel and benefit cost decreased by US$1.0 million for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The decrease was primarily attributable to the reduction of headcounts during the period.
Share-based compensation for employees increased by US$2.0 million for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The increase was primarily due to the issuance of common stocks to our independent directors under the 2024 Equity Incentive Plan and issuance of common stocks to our officers and employees to compensate for their contributions of services and performance, offset by the decrease in the amortization of the fair value of the restricted share units due to the vested and forfeited shares in 2024. The fair value of the restricted share units is recognized over the period based on the derived service period (usually the vesting period), on a straight-line basis.
Legal and Professional Fees
| Three months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Legal and professional fee | $ | 1,915 | $ | 1,301 | 614 | 47.19 | ||||||||||
| Legal and professional fee, related party | 250 | 78 | 172 | 220.51 | ||||||||||||
| Consulting fees (share-based related) | 679 | 2,152 | (1,473 | ) | (68.45 | ) | ||||||||||
| TOTAL | $ | 2,844 | $ | 3,531 | (687 | ) | (19.46 | ) | ||||||||
Legal and professional fees in aggregate decreased by US$0.7 million, or 19.46%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The decrease was primarily attributed to the decrease in the consulting fees incurred during the period, which settled by the issuance of our common stocks.
Legal and professional fees, related party of $0.3 million for the three months ended September 30, 2024 represented the advisory service fee paid to a related company which owned by the Chairman of the Company.
59
Consulting fees under share-based compensation for the three months ended September 30, 2024 was mainly related to the corporate strategic consultancy, intelligence technology consultancy, and business marketing service rendered by certain third party consultants, equal to 5,349,582 shares of common stock at the market price ranging from US$0.339 to US$2.5111 per share.
Other General and Administrative Expense
| Three months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Depreciation on property and equipment | $ | 23 | $ | 23 | — | — | ||||||||||
| Depreciation on right-of-use assets | 467 | 446 | 21 | 4.71 | ||||||||||||
| Financial data subscription expense | 67 | 155 | (88 | ) | (56.77 | ) | ||||||||||
| Interest expense on lease liabilities | 173 | 199 | (26 | ) | (13.07 | ) | ||||||||||
| Building management fee and utilities | 247 | 166 | 81 | 48.80 | ||||||||||||
| Overseas travelling expense | 52 | 129 | (77 | ) | (59.69 | ) | ||||||||||
| Other operating expenses | 124 | (312 | ) | 436 | 139.74 | |||||||||||
| TOTAL | $ | 1,153 | $ | 806 | 347 | 43.05 | ||||||||||
Total other general and administrative expenses increased US$0.3 million, or 43.05%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The net increase was mainly due to the increase in building management fee and utilities of US$0.08 million and other operating expenses of US$0.4 million, offset by the decrease in depreciation on right-of-use assets of US$0.09 million, and overseas travelling expense of US$0.08 million. The depreciation on right-of-use assets and the interest expense on lease liabilities were mainly attributed to the commercial operating lease entered with an independent third party for the use of an office premises in Hong Kong. The lease has original terms exceeding one year, but not more than three years with an option to renew for a further term of three years.
Loss from Operations
Loss from operations decreased by US$1.2 million, or 10.23%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. The decrease was mainly attributable to the decrease in operating expenses of US$8.9 million, offset by the decrease in revenues of $7.8 million.
Other Income (Expense), net
Interest Income
Interest income increased by US$0.3 million for the three months ended September 30, 2024.
Foreign Exchange Gain (Loss), net
Foreign exchange gain (loss), net mainly represented the unrealized net foreign exchange gain (loss) from the translation of long-term investments which are mostly denominated in Sterling. The net foreign exchange gain increased by US$2.0 million or 227.89% for the three months ended September 30, 2024, as compared to the net foreign exchange loss for the three months ended September 30, 2023, due to the continuous strong Sterling exchange rate.
60
Investment Loss, Net
Investment loss decreased by US$0.8 million, or 100.00%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, mainly because of the decrease in unrealized loss in non-marketable equity securities of US$1.0 million, and decrease in dividend income of US$0.2 million.
Change in fair value of warrant liabilities
We classified the SPAC Private Warrants, Warrant – Class A, and Common Warrants as liabilities at their fair value and adjust them to fair value at each reporting period. These warrant liabilities are subject to re-measurement of each balance sheet date until exercised. For the three months ended September 30, 2024 and 2023, we recognized the change in fair value in aggregate of $0.6 million and nil in our condensed consolidated statements of operations and comprehensive loss.
Net Loss
Net loss decreased by US$3.5 million, or 27.10% for the three months ended September 30, 2024, as compared to three months ended September 30, 2023, primarily due to the decrease in operating expense of US$8.9 million, offset by the decrease in total revenues of US$7.8 million and increase in other income of US$2.3 million.
Nine months ended September 30, 2024 vs nine months ended September 30, 2023
| Nine months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Revenues: | ||||||||||||||||
| Interest income: | ||||||||||||||||
| Loans | $ | 123 | $ | 118 | 5 | 4.24 | ||||||||||
| Total interest income | 123 | 118 | 5 | 4.24 | ||||||||||||
| Non-interest income: | ||||||||||||||||
| Commissions | 15,661 | 38,507 | (22,846 | ) | (59.33 | ) | ||||||||||
| Recurring asset management service fees | 1,503 | 2,301 | (798 | ) | (34.68 | ) | ||||||||||
| Recurring asset management service fees, related party | 730 | 725 | 5 | 0.69 | ||||||||||||
| Total non-interest income | 17,894 | 41,533 | (23,639 | ) | (56.92 | ) | ||||||||||
| Total revenues | 18,017 | 41,651 | (23,634 | ) | (56.74 | ) | ||||||||||
| Operating expenses: | ||||||||||||||||
| Interest expense | (1,723 | ) | (806 | ) | 917 | 113.77 | ||||||||||
| Commission expense | (7,697 | ) | (28,196 | ) | (20,499 | ) | (72.70 | ) | ||||||||
| Sales and marketing expense | (606 | ) | (3,125 | ) | (2,519 | ) | (80.61 | ) | ||||||||
| Research and development expense | (1,354 | ) | (2,678 | ) | (1,324 | ) | (49.44 | ) | ||||||||
| Personnel and benefit expense | (18,364 | ) | (22,672 | ) | (4,308 | ) | (19.00 | ) | ||||||||
| Legal and professional fee | (4,707 | ) | (12,423 | ) | (7,716 | ) | (62.11 | ) | ||||||||
| Legal and professional fee, related party | (750 | ) | (78 | ) | 672 | 861.54 | ||||||||||
| Office and operating fee, related party | (3,281 | ) | (5,089 | ) | (1,808 | ) | (35.53 | ) | ||||||||
| Provision for allowance for expected credit losses | (1,878 | ) | (661 | ) | 1,217 | 184.12 | ||||||||||
| Other general and administrative expenses | (3,441 | ) | (2,242 | ) | 1,199 | 53.48 | ||||||||||
| Total operating expenses | (43,801 | ) | (77,970 | ) | (34,169 | ) | (43.82 | ) | ||||||||
| Loss from operations | (25,784 | ) | (36,319 | ) | (10,535 | ) | (29.01 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 390 | 385 | 5 | 1.30 | ||||||||||||
| Foreign exchange gain, net | 826 | 41 | 785 | 1,914.63 | ||||||||||||
| Investment (loss) income, net | (37 | ) | 489 | (526 | ) | (107.57 | ) | |||||||||
| Change in fair value of warrant liabilities | (4,281 | ) | 3 | (4,284 | ) | (142,800.00 | ) | |||||||||
| Change in fair value of forward share purchase liability | — | (82 | ) | (82 | ) | (100.00 | ) | |||||||||
| Loss on settlement of forward share purchase agreement | — | (379 | ) | (379 | ) | (100.00 | ) | |||||||||
| Rental income | 14 | 217 | (203 | ) | (93.55 | ) | ||||||||||
| Sundry income | 121 | 122 | (1 | ) | (0.82 | ) | ||||||||||
| Total other (expense) income, net | (2,967 | ) | 796 | (3,763 | ) | (472.74 | ) | |||||||||
| Loss before income taxes | (28,751 | ) | (35,523 | ) | (6,772 | ) | (19.06 | ) | ||||||||
| Income tax expense | (98 | ) | (56 | ) | 42 | 75.00 | ||||||||||
| NET LOSS | $ | (28,849 | ) | $ | (35,579 | ) | (6,730 | ) | (18.92 | ) | ||||||
61
Revenue
The following table summarizes the major operating revenues for the nine months ended September 30, 2024 and 2023:
| Nine months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Business segment | ||||||||||||||||
| Distribution Business | $ | 15,211 | $ | 37,569 | (22,358 | ) | (59.51 | ) | ||||||||
| Platform Business | 2,806 | 4,082 | (1,276 | ) | (31.26 | ) | ||||||||||
| Fintech Business | — | — | — | — | ||||||||||||
| Healthcare Business | — | — | — | — | ||||||||||||
| TOTAL | $ | 18,017 | $ | 41,651 | (23,634 | ) | (56.74 | ) | ||||||||
Distribution Business
The Distribution Business contributed 84.43% and 90.20% of the total revenue for the nine months ended September 30, 2024 and 2023, respectively. Income from the Distribution Business mainly related to commissions earned, which significantly decreased by US$22.4 million, or 59.51%, from US$37.6 million in 2023 to US$15.2 million in 2024. The largest segment of the Distribution Business is our FA Business, operated under the “Focus” brand name. The decrease in revenue primarily attributed from the economic recession and outward migration in Hong Kong.
Summarized revenue breakdown by product and type of contracts:
| Nine months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| By product: | ||||||||||||||||
| Life insurance | $ | 13,811 | $ | 35,286 | (21,475 | ) | (60.86 | ) | ||||||||
| Property-casualty insurance | 1,034 | 1,523 | (489 | ) | (32.11 | ) | ||||||||||
| Mandatory provident fund and related revenues | 366 | 760 | (394 | ) | (51.84 | ) | ||||||||||
| 15,211 | 37,569 | (22,358 | ) | (59.51 | ) | |||||||||||
| By the type of contracts: | ||||||||||||||||
| - New and or current year | 15,130 | 36,944 | (21,814 | ) | (59.05 | ) | ||||||||||
| - Recurring | 81 | 625 | (544 | ) | (87.04 | ) | ||||||||||
| TOTAL | $ | 15,211 | $ | 37,569 | (22,358 | ) | (59.51 | ) | ||||||||
62
Platform Business
The Platform Business contributed 15.57% and 9.80% of the total revenue for the nine months ended September 30, 2024 and 2023, respectively.
| Nine months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Commission | $ | 450 | $ | 938 | (488 | ) | (52.03 | ) | ||||||||
| Recurring service fees | 2,233 | 3,026 | (793 | ) | (26.21 | ) | ||||||||||
| Loans | 123 | 118 | (5 | ) | (4.24 | ) | ||||||||||
| TOTAL | $ | 2,806 | $ | 4,082 | (1,276 | ) | (31.26 | ) | ||||||||
Operating Expenses
Commission Expense
| Nine months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Business segment | ||||||||||||||||
| Distribution Business | $ | 7,124 | $ | 27,133 | (20,009 | ) | (73.74 | ) | ||||||||
| Platform Business | 573 | 1,063 | (490 | ) | (46.10 | ) | ||||||||||
| Fintech Business | — | — | — | — | ||||||||||||
| Healthcare Business | — | — | — | — | ||||||||||||
| TOTAL | $ | 7,697 | $ | 28,196 | (20,499 | ) | (72.70 | ) | ||||||||
The Distribution Business contributed 92.56% and 96.23% of the total commission expense for the nine months ended September 30, 2024 and 2023, respectively. Commission expense for the Distribution Business decreased by US$20.0 million, or 73.74%, from US$27.1 million in 2023 to US$7.1 million in 2024. As a result of the decrease in revenue associated with the Distribution Business, commission expense decreased correspondingly.
Sales and Marketing Expense
Sales and Marketing expense decreased by US$2.5 million or 80.61%, from US$3.1 million in 2023 to US$0.6 million in 2024. The decrease in sales and marketing expense is mainly attributed to lower spending associated with “AGBA” corporate branding and associated product campaigns for celebrating the successful listing.
Research and Development Expense
Research and development expense decreased by US$1.3 million or 49.44%, from US$2.7 million in 2023 to US$1.4 million in 2024. The decrease was primarily due to decreased in headcounts.
Personnel and Benefit Expense
| Nine months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Personnel and benefit | $ | 12,987 | $ | 18,719 | (5,732 | ) | (30.62 | ) | ||||||||
| Share-based compensation to employees | 5,377 | 3,953 | 1,424 | 36.02 | ||||||||||||
| TOTAL | $ | 18,364 | $ | 22,672 | (4,308 | ) | (19.00 | ) | ||||||||
63
Personnel and benefit cost decreased by US$4.3 million for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The decrease was primarily due to the decrease in headcounts in both Platform Business and Distribution Business.
Share-based compensation for employees increased by US$1.4 million for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The increase was primarily due to the issuance of common stocks to our independent directors under the 2024 Equity Incentive Plan and issuance of common stocks to our officers and employees to compensate for their contributions of services and performance, offset by the decrease in the amortization of the fair value of the restricted share units due to the vested and forfeited shares in 2024. The fair value of the restricted share units is recognized over the period based on the derived service period (usually the vesting period), on a straight-line basis.
Legal and Professional Fees
| Nine months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Legal and professional fees | $ | 3,612 | $ | 4,396 | (784 | ) | (17.83 | ) | ||||||||
| Legal and professional fees, related party | 750 | 78 | 672 | 861.54 | ||||||||||||
| Consulting fees (share-based related) | 1,095 | 8,027 | (6,932 | ) | (86.36 | ) | ||||||||||
| TOTAL | $ | 5,457 | $ | 12,501 | (7,044 | ) | (56.35 | ) | ||||||||
Legal and professional fees in aggregate decreased by US$7.0 million, or 56.35%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The decrease was primarily attributed to the decrease in the consulting fees incurred during the period, which settled by the issuance of our common stocks.
Legal and professional fees, related party of $0.8 million for the nine months ended September 30, 2024 represented the advisory service fee paid to a related company which owned by the Chairman of the Company.
Consulting fees under share-based compensation for the nine months ended September 30, 2024 was mainly related to the corporate strategic consultancy, intelligence technology consultancy, and business marketing service rendered by certain third party consultants, equal to 6,078,488 shares of common stock at the market price ranging from US$0.339 to US$2.5111 per share.
Other General and Administrative Expenses
| Nine months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Depreciation on property and equipment | $ | 69 | $ | 238 | (169 | ) | (71.01 | ) | ||||||||
| Depreciation on right-of-use assets | 1,386 | 594 | 792 | 133.33 | ||||||||||||
| Financial data subscription expense | 254 | 294 | (40 | ) | (13.61 | ) | ||||||||||
| Interest expense on lease liabilities | 542 | 266 | 276 | 103.76 | ||||||||||||
| Building management fee and utilities | 749 | 633 | 116 | 18.33 | ||||||||||||
| Overseas travelling expense | 256 | 350 | (94 | ) | (26.86 | ) | ||||||||||
| Other operating expenses | 185 | (133 | ) | 318 | 239.10 | |||||||||||
| TOTAL | $ | 3,441 | $ | 2,242 | 1,199 | 53.48 | ||||||||||
Total other general and administrative expenses increased by US$1.2 million, or 53.48%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The net increase was mainly due to the increase in depreciation on right-of-use assets of US$0.8 million, interest expense on lease liabilities of US$0.3 million, building management fee and utilities of US$0.1 million, and other operating expenses of $0.3 million, offset by the decrease in depreciation on property and equipment of US$0.2 million. The depreciation on right-of-use assets and the interest expense on lease liabilities were mainly attributed to the commercial operating lease entered with an independent third party for the use of an office premises in Hong Kong. The lease has original terms exceeding one year, but not more than three years with an option to renew for a further term of three years.
64
Loss from Operations
Loss from operations decreased by US$10.5 million, or 29.01%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. The decrease was mainly attributable to the significant decrease in operating expenses of $34.2 million, offset by decrease in revenues of $23.6 million.
Other Income (Expense), net
Foreign Exchange Gain, net
Foreign exchange gain, net mainly represented the unrealized net foreign exchange gain from the translation of long-term investments which are mostly denominated in Sterling. The net foreign exchange gain increased by US$0.8 million or 1,914.63% for the nine months ended September 30, 2024, as compared to the net foreign exchange gain for the nine months ended September 30, 2023, due to continuous strong Sterling exchange rate.
Investment (Loss) Income, Net
| Nine months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Realized gain in marketable equity securities | $ | 1 | $ | 1,543 | (1,542 | ) | (99.94 | ) | ||||||||
| Unrealized loss in non-marketable equity securities | (38 | ) | (2,458 | ) | (2,420 | ) | (98.45 | ) | ||||||||
| Dividend income | — | 1,404 | (1,404 | ) | (100.00 | ) | ||||||||||
| TOTAL | $ | (37 | ) | $ | 489 | (526 | ) | (107.57 | ) | |||||||
Investment loss decreased by US$0.5 million, or 107.57%, for the nine months ended September 30, 2024, as compared to the investment income for the nine months ended September 30, 2023, mainly because of the decrease in realized gain in marketable equity securities of US$1.5 million, decrease in dividend income of US$1.4 million, and offset by the decrease in unrealized loss in non-marketable equity securities of US$2.4 million. The decrease in realized gain in marketable equity securities and dividend income was mainly due to the disposal of long-term investments.
Change in Fair Value of Warrant Liabilities
We classified the SPAC Private Warrants, Warrants – Class A, and Common Warrants as liabilities at their fair value and adjust them to fair value at each reporting period. These warrant liabilities are subject to re-measurement of each balance sheet date until exercised. For the nine months ended September 30, 2024 and 2023, we recognized the change in fair value in aggregate of $(4.3) million and $0.003 million, respectively in our condensed consolidated statements of operations and comprehensive loss.
Rental Income
Rental income was earned from the leasing of our owned office premises. For the nine months ended September 30, 2024, the rental income decreased by US$0.2 million, or 93.55%, as compared to the nine months ended September 30, 2023 was resulted from the sale of one of the office premises in 2023.
65
Income Tax Expense
Income tax expense increased by US$0.04 million for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily attributable to the provision of income tax during the period.
Net Loss
Net loss decreased by US$6.7 million, or 18.92% for the nine months ended September 30, 2024, as compared to nine months ended September 30, 2024, primarily due to the decrease in operating expenses of US$34.2 million, offset by the decrease in revenue of $23.6 million and other expense, net of US$3.8 million.
Liquidity and Capital Resources
Sources of Liquidity
We have a history of operating losses and negative cash flow. For the nine months ended September 30, 2024, we reported a net loss of US$28.8 million and reported a negative operating cash flow of US$20.7 million. As of September 30, 2024, our cash balance was US$5.1 million for working capital use. Our management estimates that currently available cash will not be able to provide sufficient funds to meet the planned obligations for the next 12 months.
Our ability to continue as a going concern is dependent on our ability to successfully implement our plans. Our management believes that it will be able to continue to grow our revenue base and control expenditures. In parallel, ILLR continually monitors its capital structure and search for potential funding alternatives in order to finance our business development activities and operating expenses. ILLR is continuing its plan to further grow and expand operations and seek sources of capital to pay the contractual obligations as they come due. To access capital to fund operations or provide growth capital, we will need to raise capital in one or more debt and/or equity offerings. Although there is no assurance that, if needed, we will be able to pursue these fundraising initiatives and have access to the capital markets going forward. The unaudited condensed consolidated financial statements attached to this Form 10-Q do not include any adjustments that might result from the outcome of these uncertainties.
Future Liquidity
On a recurring basis, the primary future cash needs of the Company will be focused on operating activities, working capital, capital expenditures, investment, regulatory and compliance costs. The ability of the Company to fund these needs will depend, in part, on its ability to generate or raise cash in the future, which is subject to general economic, financial, competitive, regulatory, and other factors that are beyond its control.
The ability to fund our operating needs will depend on its future ability to continue to generate positive cash flow from operations and raise capital in the capital markets. Our management believe that we will meet known or reasonably likely future cash requirements through the combination of cash flows from operating activities, available cash balances, and external borrowings and fund raising. Our management expects that the primary cash requirements in 2024 will be to fund capital expenditures for (i) expansion of the Distribution Business and (ii) Platform Business.
If our sources of liquidity need to be augmented, additional cash requirements would likely need to be financed through the issuance of debt or equity securities; however, there can be no assurances that we will be able to obtain additional debt or equity financing on acceptable terms, or at all, in the future.
We expect that operating losses could continue into the foreseeable future as we continue to invest in growing our businesses. Based upon our current operating plans, our management believes that cash and equivalents will not be able to provide sufficient funds to its operations for at least the next 12 months from the date of its unaudited condensed consolidated financial statements provided with this Form 10-Q. However, these forecasts involve risks and uncertainties, and actual results could vary materially.
Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenues growth, the timing and extent of spending on sales and marketing, the expansion of sales and marketing activities, the timing of new product introductions, market acceptance of our brand, and overall economic conditions. We may also seek additional capital to fund our operations, including through the sale of equity or debt financings. To the extent that we raise additional capital through the future sale of equity, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations.
66
Cash Flows
As of September 30, 2024, we had cash and cash equivalents totaling $5.1 million, and $13.7 million in restricted cash.
As of December 31, 2023, we had cash and cash equivalents totaling $1.9 million, and $16.8 million in restricted cash.
Comparison of the nine months ended September 30, 2024 and 2023
The following table summarizes our cash flows for the periods presented:
| Nine months ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| (US$ in thousands) | ||||||||
| Net cash used in operating activities | $ | (20,742 | ) | $ | (33,365 | ) | ||
| Net cash provided by investing activities | 2,580 | 4,687 | ||||||
| Net cash provided by (used in) financing activities | 18,254 | (415 | ) | |||||
| Effect on exchange rate change on cash and cash equivalents | (19 | ) | (26 | ) | ||||
| Net change in cash, cash equivalents and restricted cash | 73 | (29,119 | ) | |||||
| Cash, cash equivalents and restricted cash, at the beginning | 18,678 | 51,294 | ||||||
| Cash, cash equivalents and restricted cash, at the end | $ | 18,751 | $ | 22,175 | ||||
| Representing as: | ||||||||
| Cash and cash equivalents | 5,093 | 1,622 | ||||||
| Restricted cash – fund held in escrow | 13,658 | 20,553 | ||||||
| $ | 18,751 | $ | 22,175 | |||||
The following table sets forth a summary of our working capital:
| September 30, 2024 | December 31, 2023 | Variance | ||||||||||||||
| (US$ in thousands) | $ | % | ||||||||||||||
| Total Current Assets | $ | 52,073 | $ | 25,619 | 26,454 | 103.26 | ||||||||||
| Total Current Liabilities | 92,562 | 47,840 | 44,722 | 93.48 | ||||||||||||
| Working Capital Deficit | $ | (40,489 | ) | $ | (22,221 | ) | 18,268 | 82.21 | ||||||||
Working Capital Deficit
The working capital deficit as of September 30, 2024 and December 31, 2023 was amounted to approximately US$40.5 million and US$22.2 million, respectively, an increase of US$18.3 million or 82.21%. The increase was mainly attributed to the issuance of convertible promissory note payable of $32.5 million and warrant liabilities of $4.3 million, offset by the receivable from Triller LLC of $28.3 million and deposit, prepayments, and other receivables, net of $1.8 million.
67
Cash Flows from Operating Activities
Net cash used in operating activities was US$20.7 million and US$33.4 million for the nine months ended September 30, 2024 and 2023, respectively.
Net cash used in operating activities for the nine months ended September 30, 2024 was primarily the result of the net loss of US$28.8 million, deposits, prepayments, and others receivable of US$0.6 million, decrease in accounts payable and accrued liabilities of US$2.3 million, decrease in escrow liabilities of US$3.2 million, decrease in lease liabilities of US$1.5 million and decrease in income tax payable of US$0.1 million. These amounts were partially offset by the decrease in accounts receivable of US$0.7 million, loans receivable of US$0.05 million, and non-cash adjustments consisting of share-based compensation expense of US$6.4 million, non-cash lease expense of US$1.9 million, depreciation of property and equipment of US$0.07 million, interest income on loans receivable of US$0.1 million, interest income on promissory note receivables of US$0.4 million, interest expense on convertible promissory notes payable of $1.1 million, interest expense on borrowings of $0.6 million, net foreign exchange gain of US$0.8 million, provision for allowance for expected credit losses of US$1.9 million, and change in fair value of warrant liabilities of US$4.3 million.
Net cash used in operating activities for the nine months ended September 30, 2023 was primarily the result of the net loss of US$35.6 million, an increase in accounts receivable of US$0.6 million, increase in deposits, prepayments, and others receivable of US$2.9 million, decrease in escrow liabilities ofUS$8.9 million, decrease in lease liabilities of US$0.6 million and decrease in income tax payable of US$0.1 million. These amounts were partially offset by the decrease in loans receivable of US$0.1 million, increase in accounts payable and accrued liabilities of US$5.5 million, and non-cash adjustments consisting of share-based compensation expense ofUS$12.0million, non-cash lease expense of US$0.9 million, depreciation of property and equipment of US$0.2 million, interest income on loans receivable of US$0.1 million, interest income on notes receivable of US$0.02 million, net foreign exchange gain of US$0.04 million, net investment income of US$0.5 million, allowance for credit losses on financial instruments of US$0.7 million, loss on settlement of forward share purchase agreement of US$0.4 million and reversal of annual bonus accrued in prior year of US$3.8 million.
Cash Flows from Investing Activities
Net cash provided by investing activities for the nine months ended September 30, 2024 of US$2.6 million was primarily due to proceeds from sale of long-term investments of US$2.2 million and proceeds from sale of convertible notes receivable of US$0.4 million.
Net cash provided by investing activities for the nine months ended September 30, 2023 of US$4.7 million was primarily due to proceeds from sale of investments of US$4.0 million, dividend received from long-term investments of US$1.4 million, offset by the purchase of notes receivable of US$0.6million and purchase of property and equipment of US$0.1 million.
Cash Flows from Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2024 of US$18.3 million was primarily due to advances from the holding company of US$15.6 million, proceeds from convertible promissory note payable of US$23.4 million, offset by repayments of borrowings of US$0.8 million and issuance of promissory notes to Triller LLC of US$20.0 million.
Net cash used in financing activities for the nine months ended September 30, 2023 of US$0.4 million was primarily due to advances from holding company of US$6.3 million, proceeds from borrowings of US$7.2 million, offset by the settlement of forward share purchase agreement of US$14.0 million.
Liquidity and Going Concern
Our unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. The management of the Company estimates that currently available cash will not be able to provide sufficient funds to meet the Company’s planned obligations for the next 12 months from the date that these unaudited condensed consolidated financial statements were made available to be issued.
68
For the nine months ended September 30, 2024, we reported a net loss of approximately US$28.8 million. With a significant decrease in our revenues, described in the paragraph below, we had an accumulated deficit of approximately US$94.4 million as of September 30, 2024.
Coupled with the economic recession in Hong Kong, we reported a sales decline with total revenue of approximately US$18.1 million for the nine months ended September 30, 2024 (nine months ended September 30, 2023: US$41.7 million) and resulting with an operating loss of approximately US$25.8 million (nine months ended September 30, 2023: US$36.3 million). We expect to continue our business growth, while closely monitoring our future spending.
Our ability to continue as a going concern is dependent on the management’s ability to successfully implement its plans. Our management team believes that we will be able to continue to grow our revenue base and control our expenditures. In parallel, our management team will continually monitor our capital structure and operating plans and evaluate various potential funding alternatives that may be needed in order to finance our business development activities, general and administrative expenses and growth strategy.
We intend to raise additional capital through various debt and equity offerings, but there can be no assurance that these funds will be available on terms acceptable, or will be sufficient to enable us to fully complete its development activities or sustain operations. If we are unable to raise sufficient additional funds, we will have to develop and implement a plan to further extend payables, reduce overhead, or scale back our current business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.
Capital Commitments
Sale and Purchase Agreement — Pursuant to the agreement dated April 5, 2023, entered with Sony Life Singapore Pte. Ltd. (“SLS”), an independent third party, the Company is committed to purchase 100% equity interest in Sony Life Financial Advisers Pte. Ltd. for a cash consideration of SGD2,500,000 (equivalent to $1,882,000). On December 28, 2023, the Company and SLS entered into a second supplementary agreement to extend the closing date of the transaction from December 31, 2023 to March 31, 2024. On March 29, 2024, the Company and SLS entered into a third supplementary agreement to extend the closing date of the transaction from March 31, 2024 to May 9, 2024. Pursuant to the third supplementary agreement, the Company paid SGD250,000 (equivalent to $188,200) to SLS as the partial payment to cash consideration on April 12, 2024. On May 9, 2024, the Company and SLS entered into a fourth supplementary agreement to extend the closing date of the transaction from May 9, 2024 to May 20, 2024. On June 18, 2024, the Company and SLS entered into a fifth supplementary agreement to extend the closing date of the transaction from May 20, 2024 to July 31, 2024. Pursuant to the fifth supplementary agreement, the Company paid an aggregate of SGD150,000 (equivalent to $112,920) as the extension fee and indemnification fee in July 2024. On September 25, 2024, the Company and SLS entered into a sixth supplementary agreement to extend the closing date of the transaction from July 31, 2024 to October 31, 2024. Up to the date of the unaudited condensed consolidated financial statements available to be issued, further extension on the closing date of the transaction is under negotiation between SLS and the Company.
Nasdaq Compliance — On March 20, 2024, Nasdaq granted an additional 180 calendar days period or until September 16, 2024, to the Company to regain the compliance. On May 3, 2024, the closing bid price of the common stocks of the Company has been over $1.00 per share for a minimum of 10 consecutive trading days. Accordingly, Nasdaq confirmed that the Company regained compliance with Rule 5550(a)(2) and that this matter is now closed.
Off-Balance Sheet Arrangements
We are not party to any off-balance sheet transactions. We have no guarantees or obligations other than those which arise out of normal business operations.
We have not engaged in any off-balance sheet financial arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, net revenue or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Critical Accounting Policies, Judgements and Estimates
The preparation of financial statements in conformity with GAAP requires us to make judgments, estimates, and assumptions in the preparation of our unaudited condensed consolidated financial statements. Actual results could differ from those estimates. There have been no material changes to our critical accounting policies and estimates as reported in our 2024 Annual Report on Form 10-K.
69
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation and supervision of our Chief Executive Officer and our Chief Financial Officer, have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but there can be no assurance that such improvements will be sufficient to provide us with effective internal control over financial reporting.
70
As of September 30, 2024, the Company involved with various legal proceedings:
Action Case: HCA702/2018 On March 27, 2018, the writ of summons was issued against the Company and seven related companies of the former shareholder by the Plaintiff. This action alleged the infringement of certain registered trademarks currently registered under the Plaintiff. On February 23, 2023, the Court granted leave for this action be set down for trial of 13 days, and the trial will commence on November 25, 2024. Legal counsel of the Company will continue to handle in this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonably possible loss, if any.
Action Case: HCA765/2019 On April 30, 2019, the writ of summons was issued against the Company’s subsidiary, three related companies and the former directors, shareholders and financial consultant by the Plaintiff. This action alleged the deceit and misrepresentation from an inducement of the fund subscription and claimed for compensatory damage of approximately $2 million (equal to HK$17.1 million). On April 18, 2024, the court made an order that the plaintiff shall set the case down for trial on or before July 6, 2024 for a 7 days trial before a judge and there shall be a pre-trial review before the trial judge on a date 12 weeks before the trial. The plaintiff and the defendants agreed on a time extension until August 8, 2024 to set the case down for trial. On August 9, 2024, the Court made an order that the case be adjourned to January 14, 2025 for another case management conference. The case is on-going and parties have yet to attempt mediation. Legal counsel of the Company will continue to handle this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonably possible loss, if any.
Action Case: HCA2097 and 2098/2020 On December 15, 2020, the writs of summons were issued against the Company and the former consultant by the Plaintiff. This action alleged the misrepresentation and conspiracy causing the loss from the investment in corporate bond and claimed for compensatory damage of approximately $1.67 million (equal to HK$13 million). The Company previously made $0.84 million as contingency loss for the year ended December 31, 2021. Parties participated in a mediation held on March 25, 2022 and negotiated for settlement through without prejudice correspondence, no settlement was reached. The case is on-going and legal counsel of the Company will continue to handle this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonably potential loss, if any.
As smaller reporting company we are not required to make disclosures under this Item.
71
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
None.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| No. | Description of Exhibit | |
| 31.1*** | Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2*** | Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32*** | Certification of Principal Executive Officer and Principal Financial and Accounting Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS*** | Inline XBRL Instance Document | |
| 101.CAL*** | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.SCH*** | Inline XBRL Taxonomy Extension Schema Document | |
| 101.DEF*** | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB*** | Inline XBRL Taxonomy Extension Labels Linkbase Document | |
| 101.PRE*** | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104*** | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * | Filed herewith. |
| ** | Furnished. |
| *** | To be filed by an amendment. |
72
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Triller Group Inc. | ||
| Date: January 26, 2026 | By: | /s/ Ng Wing Fai |
| Name: | Ng Wing Fai | |
| Title: | Chief Executive Officer and Director | |
| (Principal Executive Officer) | ||
| Date: January 26, 2026 | By: | /s/ Shu Pei Huang, Desmond |
| Name: | Shu Pei Huang, Desmond | |
| Title: | Acting Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
73