GD Culture Group Ltd
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
GDC$1.20+9.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-20.
0001213900-24-045188
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001213900-24-069008
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 60 previous paragraphs and 85 current paragraphs.
39 unchanged; 17 reworded; 26 added; 4 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current report
Nasdaq Compliance
Current report
On May 13, 2024, the Company received a written notice from the Listing Qualifications Department of the Nasdaq Stock Market, LLC (“Nasdaq”) notifying the Company that, based on the closing bid price of the Company’s common stock was below $1.00 for the last 30 consecutive trading days, the Company no longer complies with the minimum bid price requirement (the “Minimum Bid Price Requirement”) for continued listing on the Nasdaq Capital Market as set forth in Nasdaq Listing Rule 5450(a)(1). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has an initial compliance period of 180 calendar days, or until November 11, 2024, to regain compliance with the Minimum Bid Price Requirement.
Current report
On June 18, 2024, the Company received a letter from Nasdaq stating that because the Company’s common stock had a closing bid price at or above $1.00 per share for 10 consecutive business days, the Company had regained compliance with the Minimum Bid Price Requirement, and that the matter is now closed.
Current report
Software Purchase Agreement
Current report
On May 31, 2024, the Company entered into a software purchase agreement with Shanxi Gangdong Cultural Media Co., Ltd., a seller unaffiliated with the Company (the “Seller”). Pursuant to the agreement, the Company agreed to purchase and the Seller agreed to sell all of Seller’s right, title, and interest in and to the certain software. The purchase price of the software shall be $1,248,000, payable in the form of issuance of 1,560,000 shares of common stock of the Company, valued at $0.80 per share. The Company plans to use the software to develop its AI business. On June 4, 2024, the Company issued 1,560,000 shares of common stock of the Company to the Seller’s designees and the transaction was completed.
Current report
Revenues
Current report
The Company’s revenue consists of software copyright. Total revenues decreased by approximately $150,000 to $nil for the three months ended June 30, 2024, compared to approximately $150,000 for the three months ended June 30, 2023. The decrease was mainly due to no sales of software copyright in 2024.
Current report
Gross Profit
Current report
The Company’s gross profit decreased by $150,000 to nil, during the three months ended June 30, 2024, from $150,000 for the three months ended June 30, 2023. The decrease was due to no sales of software copyright in 2024.
Current report
Other Income (Expenses)
Current report
The Company’s other expense increased by approximately $1.5 million during the three months ended June 30, 2024, compared to $179 other income for the three months ended June 30, 2023. The other expense increment was mainly due to the impairment loss recognized on the convertible note receivable.
Current report
The Company’s net loss increased by approximately $3.4 million, or 2,210.6%, to approximately $3.6 million net loss for the three months ended June 30, 2024, from $155,498 net loss for the three months ended June 30, 2023. The increase was mainly due to the combined impact of (i) the expansion of our administrative associated personnel cost, (ii) increase in operating and lease expenses for offices, (iii) the professional service fee and (iv) increase in researching and development about our artificial intelligence based digital human application.
Current report
Revenues
Current report
The Company’s revenue consists of software copyright. Total revenues decreased by approximately $150,000 to $nil for the six months ended June 30, 2024, compared to approximately $150,000 for the three months ended June 30, 2023. The decrease was mainly due to no sales of software copyright in 2024.
Current report
Gross Profit
Current report
The Company’s gross profit decreased by $150,0000 to nil, during the six months ended June 30, 2024, from $150,000 for the three months ended June 30, 2023. The decrease was due to no sales of software copyright in 2024.
Current report
Operating Expenses
Current report
Other Income (Expenses)
Current report
The Company’s other income decreased by approximately $1.5 million during the six months ended June 30, 2024, compared to $179 for the six months ended June 30, 2023. The decrease was mainly due to the impairment loss recognized on the convertible note receivable.
Current report
Loss from Continuing Operations
Current report
Net Loss
Current report
The Company evaluates quarterly whether AFS securities are other-than-temporarily impaired (OTTI) based on criteria that include the extent to which cost exceeds market value, the duration of the market decline, the credit rating of the issuer or security, the failure of the issuer to make scheduled principal or interest payments, and the financial health and prospects of the issuer or security.
Current report
Declines in the value of AFS securities determined to be OTTI are recognized in earnings and included in other-than-temporary impairment losses. Debt securities with unrealized losses are considered OTTI if the Company intends to sell the security or if the Company will be required to sell the security prior to any anticipated recovery. If the Company determines that a security is OTTI under these circumstances, the impairment recognized in earnings is measured as the difference between the amortized cost and the current fair value. A debt security is also determined to be OTTI if the Company does not expect to recover the amortized cost of the security. However, in this circumstance, if the Company does not intend to sell the security and will not be required to sell the security, the impairment recognized in earnings equals the estimated credit loss as measured by the difference between the present value of expected cash flows and the amortized cost of the security. Expected cash flows are discounted using the security’s effective interest rate. An equity security is determined to be OTTI if the Company does not expect to recover the cost of the security. Declines in the value of AFS securities determined to be temporary are reported, net of tax, as other comprehensive earnings (losses) and included as a separate component of stockholders’ equity.
Current report
As of June 30, 2024, the Company had $301,837 in its operating bank accounts and working capital of approximately $2.1 million. In August 2024, Mr. Xiaojian Wang, the Chief Executive Officer of the Company, executed a Letter of Support in which he agreed to provide continuing financial support to the Company for a period of at least 12 months from the issuance date of the Company’s unaudited consolidated financial statements for the period ended June 30, 2024.
Current report
The Company also intends to raise additional debt or equity capital to fund future operations. There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, the Company has planned and implemented cost-cutting measures to reduce operating expenditures and loss. Management believes that the Company can adjust the pace of its business development and control operating expenses when necessary. Therefore, the Company assesses that current working capital, together with the letter of financial support from Mr. Xiaojian Wang, will be sufficient to meet its obligations for the next 12 months from the issuance date of this report. These unaudited consolidated financial statements are prepared on going concern basis.
Removed paragraphs (4)
Previous report
Other Income, Net
Previous report
The Company’s other income increased by approximately $22 thousand during the three months ended March 31, 2024, compared to nil for the three months ended March 31, 2023. The increase was mainly due to the interest income earned from the loan to a third party.
Previous report
The Company has funded working capital and other capital requirements primarily by equity contributions. Cash is required to repay debts and pay salaries, office expenses and other operating expenses. As of March 31, 2024, our net working capital was approximately $5.6 million.
Previous report
We believe that current levels of cash and cash flows from operations will be sufficient to meet its anticipated cash needs for at least the next twelve months from the date the unaudited condensed consolidated financial statements to be issued. However, it may need additional cash resources in the future if it experiences changed business conditions or other developments, and may also need additional cash resources in the future if it wishes to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements exceed the Company’s amounts of cash and cash equivalents on hand, the Company may seek to issue debt or equity securities or obtain additional credit facility.
Reworded paragraphs (17)
Previous wording
The following discussion and analysis of the results of our operations and financial condition should be read in conjunction with our unaudited condensed financial statements, and the notes to those unaudited condensed financial statements that are included elsewhere in this Report. All monetary figures are presented in U.S. dollars, unless otherwise indicated.
Current wording
The following discussion and analysis of the results of our operations and financial condition should be read in conjunction with our unaudited financial statements, and the notes to those unaudited financial statements that are included elsewhere in this Report. All monetary figures are presented in U.S. dollars, unless otherwise indicated.
Previous wording
On March 26, 2024, the Company issued 810,277 shares of common stock in a registered direct offering. See Note 16 of the notes to the unaudited condensed consolidated financial statements.
Current wording
On March 26, 2024, the Company issued 810,277 shares of common stock in a registered direct offering. See Note 16 of the notes to the unaudited consolidated financial statements.
Previous wording
The COVID-19 pandemic did not have a material impact on our business or results of operation for the three months ended March 31, 2024 and 2023. However, the extent to which the COVID-19 pandemic may negatively impact the general economy and our business is highly uncertain and cannot be accurately predicted. These uncertainties may impede our ability to conduct our operations and could materially and adversely affect our business, financial condition and results of operations, and as a result could adversely affect our stock price and create more volatility.
Current wording
The COVID-19 pandemic did not have a material impact on our business or results of operation for the six months ended June 30, 2024 and 2023. However, the extent to which the COVID-19 pandemic may negatively impact the general economy and our business is highly uncertain and cannot be accurately predicted. These uncertainties may impede our ability to conduct our operations and could materially and adversely affect our business, financial condition and results of operations, and as a result could adversely affect our stock price and create more volatility.
Previous wording
The Company’s operating expenses include selling and marketing (“S&M”) expenses, general and administrative (“G&A”) expenses, research and development (“R&D”) expenses. S&M expenses increased to approximately $2.2 million for the three months ended March 31, 2024, compared to nil for the three months ended March 31, 2023. The increase was mainly due to the Company increased inputs on digital human and e-commerce live streaming marketing and advertising to improve its brand reputation, attract a large following on social media. G&A expenses increased by approximately $1.8 million from $4,617 for the three months ended March 31, 2023 to approximately $1.8 million for the three months ended March 31, 2024. The increase was mainly due to the combined impact of (i) the expansion of our administrative associated personnel cost, (ii) increase in operating and lease expenses for offices, (iii) increase in the professional service fee and (iv) amortization of intangible assets. R&D expenses increased to $217,500 for the three months ended March 31, 2024, compared to nil for the three months ended March 31, 2023. The increase was mainly due to the Company increased inputs on research and development about our artificial intelligence based digital human application, to create unconventional digital characters and customize digital humans to support the clients’ marketing efforts.
Current wording
The Company’s operating expenses include selling and marketing (“S&M”) expenses, general and administrative (“G&A”) expenses, research and development (“R&D”) expenses. S&M expenses increased to approximately $0.2 million for the three months ended June 30, 2024, compared to approximately $nil for the three months ended June 30, 2023. The increase was mainly due to the Company increased inputs on digital human and e-commerce live streaming marketing and advertising to improve its brand reputation, attract a large following on social media. G&A expenses increased by approximately $1.4 million from approximately $0.3 million for the three months ended June 30, 2023 to approximately $1.7 million for the three months ended June 30, 2024. The increase was mainly due to the combined impact of (i) the expansion of our administrative associated personnel cost, (ii) increase in operating and lease expenses for offices, (iii) increase in the professional service fee and (iv) amortization of intangible assets. R&D expenses increased to approximately $0.2 million for the three months ended June 30, 2024, compared to nil for the three months ended June 30, 2023. The increase was mainly due to the Company increased inputs on research and development about our artificial intelligence based digital human application, to create unconventional digital characters and customize digital humans to support the clients’ marketing efforts.
Previous wording
As a result of the foregoing, loss from continuing operations for the three months ended March 31, 2024 was approximately $4.1 million, an increase of approximately 89,948.5%, from loss from continuing operations of $4,617 for the three months ended March 31, 2023.
Current wording
As a result of the foregoing, loss from continuing operations for the three months ended June 30, 2024 was approximately $3.6 million, an increase of approximately 2,867.9%, from loss from continuing operations of $121,058 for the three months ended June 30, 2023.
Previous wording
The Company’s net loss increased by approximately $4.1 million, or 19,410.7%, to approximately $4.2 million net loss for the three months ended March 31, 2024, from $21,309 net loss for the three months ended March 31, 2023. The increase was mainly due to the combined impact of (i) the expansion of our administrative associated personnel cost, (ii) increase in operating and lease expenses for offices and (iii) increase in researching and development about our artificial intelligence based digital human application.
Current wording
The Company’s net loss increased by approximately $7.6 million, or 4,283.6%, to approximately $7.8 million net loss for the six months ended June 30, 2024, from $176,807 net loss for the six months ended June 30, 2023. The increase was mainly due to the combined impact of (i) the expansion of our administrative associated personnel cost, (ii) increase in operating and lease expenses for offices and (iii) increase in researching and development about our artificial intelligence based digital human application.
Previous wording
The Company prepares its unaudited condensed consolidated financial statements in accordance with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires the Company to make estimates, assumptions and judgments that can significantly impact the amounts the Company reports as assets, liabilities, revenue, costs and expenses and the related disclosures. The Company bases its estimates on historical experience and other assumptions that it believes are reasonable under the circumstances. The Company’s actual results could differ significantly from these estimates under different assumptions and conditions. The Company has identified the following key accounting estimates:
Current wording
The Company prepares its unaudited consolidated financial statements in accordance with U.S. GAAP. The preparation of these unaudited consolidated financial statements requires the Company to make estimates, assumptions and judgments that can significantly impact the amounts the Company reports as assets, liabilities, revenue, costs and expenses and the related disclosures. The Company bases its estimates on historical experience and other assumptions that it believes are reasonable under the circumstances. The Company’s actual results could differ significantly from these estimates under different assumptions and conditions. The Company has identified the following key accounting estimates:
Previous wording
The Company evaluated the terms of the DigiTrax Convertible Notes and the Liquid Convertible Notes (as defined in Note 12 of the unaudited condensed consolidated financial statements) according to ASC 320 “Investments — Debt Securities” and concluded that the convertible notes should be classified as an available-for-sale security and measured at fair value. To evaluate the fair value of the available-for-sale security, the Company used the valuation methodology of income approach, which is determined by the future cash flow forecast. The fair value changes of these notes were recorded as accumulated other comprehensive income on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended as of the reporting period.
Current wording
The Company evaluated the terms of the DigiTrax Convertible Notes and the Liquid Convertible Notes (as defined in Note 12 of the unaudited consolidated financial statements) according to ASC 320 “Investments — Debt Securities” and concluded that the convertible notes should be classified as an available-for-sale security and measured at fair value. To evaluate the fair value of the available-for-sale security, the Company used the valuation methodology of income approach, which is determined by the future cash flow forecast. The fair value changes of these notes were recorded as accumulated other comprehensive income on the accompanying unaudited consolidated statements of operations and comprehensive loss for the three months ended as of the reporting period.
Previous wording
The Company’s determination of whether or not an indication of impairment exists at the cash generating unit level requires significant management judgment pertaining to intangible assets, including a copyright of a broadcast game (the “Tribal Light”) and 55 digital humans, which are used for online living-stream, as well as the operating Right-of-use (“ROU”) assets, including the offices of the Company. Management considers both external and internal sources of information in assessing whether there are any indications that the Company’s intangible assets and ROU assets are impaired.
Current wording
The Company’s determination of whether or not an indication of impairment exists at the cash generating unit level requires significant management judgment pertaining to intangible assets, including a copyright of a broadcast game (the “Tribal Light”), 55 digital humans and a copyright of AI Box, which are used for online living-stream, as well as the operating Right-of-use (“ROU”) assets, including the offices of the Company. Management considers both external and internal sources of information in assessing whether there are any indications that the Company’s intangible assets and ROU assets are impaired.
Previous wording
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08), which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The new amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments, with early adoption permitted. The Company has evaluated and concluded that there’s no impact of the new guidance on the unaudited condensed consolidated financial statements. The Company adopted ASU 2021-08 since January 1, 2024.
Current wording
In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08), which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The new amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments, with early adoption permitted. The Company has evaluated and concluded that there’s no impact of the new guidance on the unaudited consolidated financial statements. The Company adopted ASU 2021-08 since January 1, 2024.
Previous wording
In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. This guidance also requires certain disclosures for equity securities subject to contractual sale restrictions. The new guidance is required to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. This guidance is effective for fiscal years beginning after 15 December 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company has evaluated and concluded that there’s no impact of the new guidance on the unaudited condensed consolidated financial statements. The Company adopted ASU 2022-03 since January 1, 2024.
Current wording
In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. This guidance also requires certain disclosures for equity securities subject to contractual sale restrictions. The new guidance is required to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. This guidance is effective for fiscal years beginning after 15 December 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company has evaluated and concluded that there’s no impact of the new guidance on the unaudited consolidated financial statements. The Company adopted ASU 2022-03 since January 1, 2024.
Previous wording
In December 2023, the FASB issued ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which establishes accounting guidance for crypto assets meeting certain criteria. Bitcoin meets this criteria. The amendments require crypto assets meeting the criteria to be recognized at fair value with changes recognized in net income each reporting period. Upon adoption, a cumulative-effect adjustment is made to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption. ASU 2023-08 is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. The Company has evaluated and concluded that there’s no impact of the new guidance on the unaudited condensed consolidated financial statements. The Company adopted ASU 2022-08 since January 1, 2024.
Current wording
In December 2023, the FASB issued ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, which establishes accounting guidance for crypto assets meeting certain criteria. Bitcoin meets this criteria. The amendments require crypto assets meeting the criteria to be recognized at fair value with changes recognized in net income each reporting period. Upon adoption, a cumulative-effect adjustment is made to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption. ASU 2023-08 is effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. The Company has evaluated and concluded that there’s no impact of the new guidance on the unaudited consolidated financial statements. The Company adopted ASU 2022-08 since January 1, 2024.
Previous wording
The following summarizes the key components of the Company’s cash flows for the three months ended March 31, 2024 and 2023.
Current wording
The following summarizes the key components of the Company’s cash flows for the six months ended June 30, 2024 and 2023.
Previous wording
As of March 31, 2024 and December 31, 2023, the Company had cash in the amount of $486,201 and $5,175,518, respectively. As of March 31, 2024 and December 31, 2023, $44,377 and $211,222 were deposited with one financial institution located in the PRC, respectively. As of March 31, 2024 and December 31, 2023, $441,824 and $4,964,296 were deposited with one financial institution located in the United States, respectively.
Current wording
As of June 30, 2024 and December 31, 2023, the Company had cash in the amount of $301,837 and $5,175,518, respectively. As of June 30, 2024 and December 31, 2023, $31,933 and $211,222 were deposited with one financial institution located in the PRC, respectively. As of June 30, 2024 and December 31, 2023, $269,904 and $4,964,296 were deposited with one financial institution located in the United States, respectively.
Previous wording
Net cash used in operating activities was approximately $3.6 million for the three months ended March 31, 2024, as compared to approximately $0.4 million net cash used in operating activities for the three months ended March 31, 2023. Net loss for the three months ended March 31, 2024 was approximately $4.2 million, as compared to approximately $21 thousands for the three months ended March 31, 2023. Adjustments to reconcile net loss to net cash used in operating activities increased by approximately $0.3 million, mainly due to the increased amortization of intangible assets and right - of - use assets, and changes in operating assets and liabilities increased approximately $0.6 million.
Current wording
Net cash used in operating activities was approximately $5.1 million for the six months ended June 30, 2024, as compared to approximately $1.7 million net cash used in operating activities for the six months ended June 30, 2023. Net loss for the six months ended June 30, 2024 was approximately $7.8 million, as compared to approximately $177 thousands for the six months ended June 30, 2023. Adjustments to reconcile net loss to net cash used in operating activities increased by approximately $2.1 million, mainly due to the increased amortization of intangible assets of approximately $0.4 million, the increased lease expenses of right - of - use assets of approximately $0.2 million and impairment of convertible notes receivable of $1.5 million.
Previous wording
Net cash used in investing activities was approximately $1.9 million for the three months ended March 31, 2024, as compared to nil for the three months ended March 31, 2023. Net cash used in investing activities was increased by approximately $1.9 million, due to the increase of the loan to a third party.
Current wording
Net cash used in investing activities was approximately $0.7 million for the six months ended June 30, 2024, as compared to $4,642 for the six months ended June 30, 2023. Net cash used in investing activities was increased by approximately $0.7 million, due to the increase of the loan to a third party.
Previous wording
Net cash provided by financing activities was approximately $0.8 million for the three months ended March 31, 2024, as compared to nil net cash provided by financing activities for the three months ended March 31, 2023. Net cash provided by financing activities was mainly due to approximately $0.8 million proceeds from the issuance of common stock.
Current wording
Net cash provided by financing activities was approximately $0.8 million for the six months ended June 30, 2024, as compared to approximately $8.7 million net cash provided by financing activities for the six months ended June 30, 2023. Net cash provided by financing activities was decreased by approximately $7.9 million, due to no significant proceeds from issuance of comment stock in 2024.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
For Six Months Ended June 30, 2024 vs. June 30, 2023
Current report — wording carried from elsewhere
The Company’s operating expenses include selling and marketing (“S&M”) expenses, general and administrative (“G&A”) expenses, research and development (“R&D”) expenses. S&M expenses increased to $2.4 million for the six months ended June 30, 2024, compared to $nil for the six months ended June 30, 2023. The increase was mainly due to the Company increased inputs on digital human and e-commerce live streaming marketing and advertising to improve its brand reputation, attract a large following on social media. G&A expenses increased by approximately $3.2 million from approximately $0.3 million for the six months ended June 30, 2023 to approximately $3.5 million for the six months ended June 30, 2024. The increase was mainly due to the combined impact of (i) the expansion of our administrative associated personnel cost, (ii) increase in operating and lease expenses for offices, (iii) increase in the professional service fee and (iv) amortization of intangible assets. R&D expenses increased to approximately $0.4 million for the six months ended June 30, 2024, compared to nil for the six months ended June 30, 2023. The increase was mainly due to the Company increased inputs on research and development about our artificial intelligence based digital human application, to create unconventional digital characters and customize digital humans to support the clients’ marketing efforts.
Current report — wording carried from elsewhere
As a result of the foregoing, loss from continuing operations for the six months ended June 30, 2024 was approximately $7.8 million, an increase of approximately 6,067.1%, from loss from continuing operations of $125,675 for the six months ended June 30, 2023.