10-Q - SMC Entertainment, Inc. (0001497230) (Filer)
Thu, Aug 22, 2:20 PM (151 days ago)
SMC Entertainment, Inc. reported significant financial challenges for the quarter ending June 30, 2024, with a net loss of $14.6 million, a stark increase from a $359,131 loss in the same quarter of 2023. The company’s operating expenses rose considerably, driven by a $7.97 million transaction expense related to the acquisition of ChainTrade, LTD, and a $6.1 million loss from changes in derivative fair value. Revenue remained non-existent for both periods. Total liabilities surged to approximately $17.23 million, reflecting escalating convertible notes and accrued interest, while stockholders’ deficit expanded to $17.13 million. Cash reserves dwindled to $1.42 million from $7.27 million at the start of the quarter, raising concerns about liquidity. Management highlighted a need for ongoing financing to sustain operations and fund future growth, indicating substantial doubt about the company's ability to continue as a going concern. The firm aims to issue additional equity and debt securities to address these challenges. Overall, SMC's financial health remains precarious, with reliance on external funding amidst ongoing operational losses.