Triller Group Inc.

Previous wording

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.

Current wording

Through our subsidiaries in Hong Kong, we are also a leading wealth management and healthcare institution 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.

Previous wording

For the year ended December 31, 2023, the Company made $48.9 million from commission in the Distribution Business. The revenue attributed to the Company during 2023 only captured an insignificant portion of the revenues actually generated by the financial advisors currently associated with Focus.

Current wording

For the year ended December 31, 2024, the Company made $22.4 million from commission in the financial services business. The revenue attributed to the Company during 2024 only captured an insignificant portion of the revenues actually generated by the financial advisors currently associated with Focus.

Previous wording

The following tables set forth our results of operations for the years presented in U.S. dollars (in thousands):

Current wording

The following tables set forth our results of operations by segment for the years ended December 31, 2024 and 2023 presented in U.S. dollars (in thousands):

Previous wording

The following table summarizes the major operating revenues from the year ended December 31, 2023, as compared to the corresponding year ended December 31, 2022:

Current wording

The following table summarizes the major operating revenues for the years ended December 31, 2024 and 2023:

Previous wording

Sales and Marketing Expense primarily consists of personnel-related costs attributable to our sales and marketing personnel, marketing expense for brand promotion and spending on marketing programs to launch the insurance and investments products distributed by consultants.

Current wording

Sales and marketing expenses of financial services and corporate segment primarily consist of brand promotion and spending on marketing programs to launch the insurance and investments products distributed by our consultants. The aggregate sales and marketing expenses for these segments decreased $3.5 million, or 94.11% from $3.7 million for the year ended December 31, 2023 to $0.2 million for the year ended December 31, 2024. The decrease was mainly attributed to lower spending associated with “AGBA” corporate branding and associated product campaigns for celebrating the successful listing.

Previous wording

Technology expense primarily includes personnel-related costs attributable to our IT team, technology contractors, server facilities expenses, telecommunications expenses, software and hardware expenses to support and maintain the Platform Business infrastructure.

Current wording

Research and development expenses of financial services and corporate segment primarily include personnel-related costs attributable to our IT team, technology contractors, server facilities expenses, telecommunications expenses, software and hardware expenses to support and maintain the technology platform infrastructure for financial services. The aggregate research and development expenses for these segments decreased $2.7 million, or 59.34% from $4.5 million for the year ended December 31, 2023 to $1.8 million for the year ended December 31, 2024. The decrease was mainly attributed to decreased in headcounts

Previous wording

Personnel and benefit expense primarily consists of personnel-related costs and benefits, stock-based compensation costs for employees in our executive, accounting and finance, project management, corporate development, office administration, legal and human resources functions.

Current wording

Personnel and benefit expenses primarily consist of personnel-related costs and benefits and stock-based compensation costs for our administrative, legal, human resources, information technology, corporate development, finance and accounting employees and executives.

Previous wording

Share-based compensation for employees increased by US$1.2 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022. The increase was primarily due to the settlement of accrued salaries to certain directors and employees of the Company and the amortization of the fair value of the restricted share units. 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.

Current wording

Stock-based compensation for executive directors and employees increased by $64.4 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023. The increase was primarily due to the settlement of accrued salaries to certain executive directors and employees of the Company and the amortization of the fair value of restricted share units. 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.

Previous wording

Legal and Professional fees primarily consist of certain professional consulting services in legal, audit, accounting and taxation, and others.

Current wording

Legal and professional fees mainly consisted of certain professional consulting services in legal, audit, accounting and taxation, and others.

Previous wording

Legal and professional fees increased by US$12.3 million, or 974.33%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022. The increase was primarily attributed to the increase in the US legal counsel fees and the consulting fees incurred during the year.

Current wording

Legal and professional fees increased by $4.1 million, or 80.20%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023. The increase was primarily attributed to the increase in the US legal counsel fees and the consulting fees incurred during the year.

Previous wording

Consulting fees under share-based compensation for the year ended December 31, 2023 was mainly related to the corporate strategic consultancy and business marketing service rendered by certain third party consultants, equal to 4,900,000 ordinary shares at the market price ranging from US$0.417 to US$2.158 per share.

Current wording

Consulting fees under stock-based compensation increased by $1.6 million or 18.43% for the year ended December 31, 2024, as compared to the year ended December 31, 2023. The increase was mainly attributed to the increase in corporate strategic consultancy and business marketing service rendered by certain third party consultants.

Previous wording

Legal and professional fees, related party increased by US$0.3 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022. The increase was primarily from the advisory services rendered by a related company which owned by the Chairman of the Company.

Current wording

Legal and professional fee, related party increased by US$0.6 million from $0.9 million for the year ended December 31, 2024 to $0.3 million for the year ended December 31, 2023. The increase was primarily from the advisory services rendered by a related company which owned by the former Chairman of the Company whom resigned in December 2024.

Previous wording

Allowance For Expected Credit Losses on Financial Instruments

Current wording

Provision for allowance for expected credit losses

Previous wording

In accordance with Accounting Standards Codification (“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 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. For the years ended December 31, 2023 and 2022, the aggregated allowance for expected credit losses on accounts receivable, loans receivable, notes receivable, and other receivables was US$1.1 million and US$0.02 million, respectively.

Current wording

In accordance with Accounting Standards Codification (“ASC”) Topic 326*“Credit Losses – Measurement of Credit Losses on Financial Instruments”*(ASC Topic326), the Company utilizes the current expected credit losses (“CECL”) model to determine an allowance that reflects its best estimate of the 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. For the years ended December 31, 2024 and 2023, the aggregated provision for allowance for expected credit losses on accounts receivable, loans receivable, notes receivable, and other receivables was $2.5 million and $1.1 million, respectively.

Previous wording

Other general and administrative expenses primarily consist of rent and facilities expenses allocated based upon total direct costs, as well as, general corporate costs and allocated overhead expenses.

Current wording

Other general and administrative expenses of financial services and corporate segments primarily consist of rent and facilities expenses allocated based upon total direct costs, depreciation and amortization expenses, allowance for expected credit losses, professional services fees, allocated overhead expenses, and other corporate expenses that are not allocated to the above expense categories. The aggregate other general and administrative expenses for these segments increased $1.1 million, or 32.48% from $3.4 million for the year ended December 31, 2023 to $4.5 million for the year ended December 31, 2024.

Previous wording

Net loss increased by US$4.7 million, or 10.52% for the year ended December 31, 2023, as compared to December 31, 2022, primarily due to the increase in operating expenses of US$38.6 million, offset by the increase in revenues of US$23.1 million and decrease in other expense, net of US$11.0 million.

Current wording

Net loss increased by $1,088.8 million, or 2,212.80% for the year ended December 31, 2024, as compared to December 31, 2023. The increase was primarily due to the increase in operating expenses of $43.4 million and increase in other expense, net of $1,019.0 million.

Previous wording

We have a history of operating losses and negative cash flow. For the year ended December 31, 2023, we reported a net loss of US$49.2 million and reported a negative operating cash flow of US$42.1 million. As of December 31, 2023, our cash balance was US$1.9 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.

Current wording

We have a history of operating losses and negative operating cash flows. For the year ended December 31, 2024, we reported a net loss of $1,138.0 million and reported a negative operating cash flow of $29.0 million. As of December 31, 2024, our cash balance was $3.1 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.

Previous wording

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, AGBA continually monitors its capital structure and operating plans and evaluates various potential funding alternatives that may be needed in order to finance our business development activities, general and administrative expenses, and growth strategy. These alternatives include external borrowings, raising funds through public equity, or tapping debt markets. 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 consolidated financial statements attached to this Form 10-K do not include any adjustments that might result from the outcome of these uncertainties.

Current wording

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, we continually monitor our capital structure and operating plans and evaluates various potential funding alternatives that may be needed in order to finance our business development activities, general and administrative expenses, and growth strategy. These alternatives include external borrowings, raising funds through public equity, or tapping debt markets. 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 consolidated financial statements attached to this Form 10-K do not include any adjustments that might result from the outcome of these uncertainties.

Previous wording

Following the completion of Business Combination, we will independently manage the capital structure of the Company and our sources of liquidity. 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.

Current wording

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 2025 will be to fund capital expenditures for the repayment of debts and obligation and the businesses operations.

Previous wording

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 shareholders. 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.

Current wording

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 financing. 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.

Previous wording

As of December 31, 2022, we had cash and cash equivalents totaling $6.4 million, and $44.8 million in restricted cash.

Current wording

As of December 31, 2024, we had cash and cash equivalents totaling $3.1 million, and $14.2 million in restricted cash.

Previous wording

Net cash used in operating activities was US$42.28 million for the year ended December 31, 2023, as compared to net cash used in operating activities of US$19.30 million for the year ended December 31, 2022.

Current wording

Net cash used in operating activities was $29.0 million for the year ended December 31, 2024, as compared to net cash used in operating activities of $42.3 million for the year ended December 31, 2023.

Previous wording

Net cash used in operating activities for the year ended December 31, 2022 was primarily the result of a net loss of US$44.52 million, a decrease in loans receivable of US$2.32 million, and an increase in accounts payable and accrued liabilities of US$10.88 million. These amounts were partially offset by the increase in accounts receivable of US$1.95 million, deposits, prepayments, and other receivable of US$0.20 million, decrease in escrow liabilities of US$5.00 million, income tax payable of US$0.28 million, unrealized investment loss of US$8.94 million, net foreign exchange loss of US$2.64 million, share based compensation of US$2.09 million, change in fair value of forward share purchase liability of US$5.39 million and depreciation of property and equipment of US$0.39 million.

Current wording

Net cash used in operating activities for the year ended December 31, 2024 was primarily the result of a net loss of $1,138.0 million, a decrease in escrow liabilities of $2.6 million, operating lease liabilities of $1.9 million, and income tax payable of $0.3 million. These amounts were partially offset by the decrease in accounts receivable of $2.5 million, increase in accounts payable and accrued liabilities of $4.1 million, and non-cash adjustments consisting of stock-based compensation of $77.8 million, lease expense of $2.6 million, depreciation and amortization of $0.3 million, interest expense on borrowings of $7.9 million, impairment on goodwill of $1,005.8 million, impairment on intangible assets of $1.2 million, impairment on right-of-use assets of $1.7 million, investment loss, net of $16.0 million, provision for allowance for expected credit losses of $2.5 million, change in fair value of warrant liabilities of $(3.5) million, change in fair value of convertible debts of $(4.4) million, and impairment on property and equipment of $0.1 million.

Previous wording

Net cash used in operating activities for the year ended December 31, 2023 was primarily the result of the net loss of US$49.21 million, an increase in accounts receivable of US$1.19 million, increase in deposits, prepayments, and others receivable of US$2.50 million, decrease in escrow liabilities of US$12.67 million, and decrease in lease liabilities of US$1.13 million. These amounts were partially offset by the increase in accounts payable and accrued liabilities of US$6.89 million, increase in income tax payable of US$0.54 million, and non-cash adjustments consisting of share-based compensation expense of US$11.24 million, non-cash lease expense of US$1.50 million, depreciation of property and equipment of US$0.26 million, interest income on notes receivable of US$0.03 million, interest expense on borrowings of US$0.78 million, net foreign exchange gain of US$0.91 million, net investment loss of US$6.88 million, allowance for expected credit losses on financial instruments of US$1.08 million, gain on disposal of property and equipment of US$0.66 million, loss on settlement of forward share purchase agreement of US$0.38 million, and reversal of over-accruals in prior year of US$3.60 million.

Current wording

Net cash used in operating activities for the year ended December 31, 2023 was primarily the result of the net loss of $49.2 million, an increase in accounts receivable of $1.2 million, increase in deposits, prepayments, and others receivable of $2.5 million, decrease in escrow liabilities of $12.7 million, and decrease in lease liabilities of $1.1 million. These amounts were partially offset by the increase in accounts payable and accrued liabilities of $6.9 million, increase in income tax payable of $0.5 million, and non-cash adjustments consisting of share-based compensation expense of $11.2 million, non-cash lease expense of $1.5 million, depreciation of property and equipment of $0.3 million, interest income on notes receivable of $0.03 million, interest expense on borrowings of $0.8 million, net foreign exchange gain of $0.9 million, net investment loss of $6.9 million, allowance for credit losses on financial instruments of $1.1 million, gain on disposal of property and equipment of $0.7 million, loss on settlement of forward share purchase agreement of $0.4 million, and reversal of over-accruals in prior year of $3.6 million.

Previous wording

Net cash used in investing activities for the year ended December 31, 2022 of US$14.19 million was primarily due to proceeds from sale of investments of US$1.85 million, and dividend received from long-term investments of $1.15 million, offset by the addition in long-term investments of US$16.23 million, and the purchase of property and equipment of US$0.97 million.

Current wording

Net cash provided by investing activities for the year ended December 31, 2024 of $3.7 million was primarily due to proceeds from sale of long-term investments of $2.5 million and cash from acquisition of Triller Corp. of $1.2 million.

Previous wording

Net cash provided by investing activities for the year ended December 31, 2023 of US$10.79 million was primarily due to proceeds from sale of investments of US$3.98 million, dividend received from long-term investments of US$1.67 million, proceeds from sale of property and equipment of US$6.13 million, offset by the purchase of notes receivable of US$0.59 million, purchase of long-term investments of US$0.29 million, and purchase of property and equipment of US$0.10 million.

Current wording

Net cash provided by investing activities for the year ended December 31, 2023 of $10.8 million was primarily due to proceeds from sale of investments of $4.0 million, dividend received from long-term investments of $1.7 million, proceeds from sale of property and equipment of $6.1 million, offset by the purchase of notes receivable of $0.6 million, purchase of long-term investments of $0.3 million, and purchase of property and equipment of $0.1 million.

Previous wording

Net cash provided by financing activities for the year ended December 31, 2022 of US$12.14 million was primarily due to advances from the shareholder of US$9.75 million, proceeds from borrowings of US$4.46 million, cash proceeds from reverse recapitalization of US$15.36 million, offset by the dividend distribution of US$17.44 million to the shareholder that occurred in early 2022.

Current wording

Net cash provided by financing activities for the year ended December 31, 2024 of $24.0 million was primarily due to advances from stock holder of $15.6 million, proceeds from convertible debts of $28.7 million, and proceeds from borrowings of $7.4 million, offset by the repayments of convertible debts of $23.9 million, and repayments of borrowings of $3.9 million.

Previous wording

Net cash used in financing activities for the year ended December 31, 2023 of US$1.04 million was primarily due to advances from the holding company of US$9.34 million, proceeds from borrowings of US$7.75 million, proceeds from private placement of US$1.85 million, offset by the settlement of forward share purchase agreement of US$13.95 million, and repayments of borrowings of US$6.03 million.

Current wording

Net cash used in financing activities for the year ended December 31, 2023 of US$1.04 million was primarily due to advances from stockholder of US$9.34 million, proceeds from borrowings of US$7.75 million, proceeds from private placement of US$1.85 million, offset by the settlement of forward share purchase agreement of US$13.95 million, and repayments of borrowings of US$6.03 million.

Previous wording

For the year ended December 31, 2023, we reported a net loss of approximately US$49.21 million. With a significant increase in our operating costs, described in the paragraph below, we had an accumulated deficit of approximately US$65.60 million as of December 31, 2023.

Current wording

For the year ended December 31, 2024, we reported a net loss of approximately $1,138.0 million. With a significant increase in our operating costs, described in the paragraph below, we had an accumulated deficit of approximately $1,203.6 million as of December 31, 2024.

Previous wording

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 search for potential funding alternatives in order to finance our business development activities and operating expenses. These alternatives may include borrowings, raising funds through public equity or debt markets. However, we cannot predict the exact amount or timing of the alternatives, or guarantee those alternatives will be favorable to our shareholders. Any failure to obtain financing when required will have a material adverse impact on our business, operation and financial result.

Current wording

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 search for potential funding alternatives in order to finance our business development activities and operating expenses. These alternatives may include borrowings, raising funds through public equity or debt markets. However, we cannot predict the exact amount or timing of the alternatives, or guarantee those alternatives will be favorable to our stockholders. Any failure to obtain financing when required will have a material adverse impact on our business, operation and financial result.

Previous wording

We reported a net loss during the year ended December 31, 2023. However, we expect to generate profitable operating results within the foreseeable future, after a full recovery from the anti-pandemic policy in Hong Kong and getting access to the collective sales capabilities force of the sale channels associated with our distribution business. Our management expects sales volumes to return to levels previously recorded at the predecessor company prior to the pandemic, especially with the re-opening of the Mainland border and the ongoing integration of Hong Kong into the Greater Bay area**.** As a result, management expects our net cash position to expand in 2024 and to be in excess of 2022. As of December 31, 2023, we had an accumulated deficit of US$65.60 million. Our material cash requirements are highly dependent upon additional financial support associated with our its business operations for the next 12 – 18 months.

Current wording

We reported a net loss during the year ended December 31, 2024. However, we expect to generate profitable operating results within the foreseeable future, after getting access to the collective sales capabilities force of the sale channels associated with our financial services business. As a result, management expects our net cash position to expand in 2025. As of December 31, 2024, we had an accumulated deficit of $1,203.6 million. Our material cash requirements are highly dependent upon additional financial support associated with our business operations for the next 12 to 18 months.

Previous wording

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 ordinary shares 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.

Current wording

We account 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 our own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of our 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.

Previous wording

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. 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 consolidated statements of operations. The Company accounts for its Public Warrants as equity and the Private Warrants as liabilities.

Current wording

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 consolidated statements of operations and comprehensive loss. We account 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 consolidated statements of operations and comprehensive loss. Transaction costs allocated to warrants that are presented as a liability are immediately expensed in the consolidated statements of operations and comprehensive loss.