10-Q: Awaysis Capital Inc. Reports Increased Revenue and Acquisition of Chial Mountain in Q2 2025

Awaysis Capital, Inc. reports increased revenue driven by rental income and the acquisition of Chial Mountain, while also noting ongoing losses and the need for additional capital.

Summary

• Awaysis Capital, Inc., a real estate management and hospitality company, filed its Form 10-Q for the quarter ended December 31, 2024.
• The company focuses on acquiring, redeveloping, and managing residential vacation home communities.
• Awaysis Capital reported revenue of $138,526 for the three months ended December 31, 2024, compared to $27,100 for the same period in 2023.
• For the six months ended December 31, 2024, revenue was $182,645, up from $33,900 in 2023.
• The increase in revenue is attributed to more rental units being available and the acquisition of Chial Reserve.
• The company incurred a net loss of $813,835 for the three months ended December 31, 2024, compared to a net loss of $628,280 for the same period in 2023.
• The net loss for the six months ended December 31, 2024, was $1,507,909, compared to $4,160,108 in 2023.
• The company acquired all of the stock and substantially all of the assets of Chial Mountain Ltd. on December 31, 2024, for $5,500,000.
• The purchase price for Chial Mountain included $2,400,000 in cash, a $1,500,000 secured promissory note, and a $1,600,000 senior convertible promissory note.
• As of December 31, 2024, the company's cash balance was $34,684.
• The company has a $5 million line of credit commitment, of which approximately $3,000,000 has been borrowed through the filing date of the report.
• The company needs to raise additional cash to satisfy its medium and long-term requirements.
• The company's disclosure controls and procedures were deemed not effective as of December 31, 2024, due to the failure to timely file certain reports.
• On January 30, 2025, Chial Mountain assigned an agreement to Awaysis Belize LTD, granting the right to purchase approximately 157 acres of property in the Cayo District of Belize for approximately $408,000.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While revenue increased due to acquisitions and more rental units, the company is still operating at a loss and has a low cash balance. The need for additional capital raises concerns about financial stability, but the company's strategic acquisitions and focus on emerging markets offer potential for future growth.

Positives

• Revenue increased significantly due to more rental units being available and the acquisition of Chial Reserve.
• The company secured a $5 million line of credit commitment to fund operations and acquisitions.
• The acquisition of Chial Mountain adds approximately 63 acres of real property with 35 villas to the company's portfolio.
• The company is focused on expanding its presence in desirable travel destinations.

Negatives

• The company incurred net losses of $813,835 and $1,507,909 for the three and six months ended December 31, 2024, respectively.
• The company's cash balance is low at $34,684 as of December 31, 2024.
• Disclosure controls and procedures were deemed not effective as of December 31, 2024, due to the failure to timely file certain reports.

Risks

• The company needs to raise additional capital to meet its medium and long-term operating requirements.
• The company's ability to secure additional acquisition and construction capital is uncertain.
• The company's reliance on affiliate shareholders for funding poses a risk if such funding is not available.
• The company's disclosure controls and procedures are not effective, which could negatively impact investor confidence.
• The company's recurring losses raise concerns about its ability to continue as a going concern.

Future Outlook

The company expects increasing sales to generate cash flow for working capital and anticipates the cost of development of its first properties to come from the $5 million line of credit commitment. The company will need to raise additional cash to satisfy its medium and long-term requirements through the sale of equity or debt securities.

Management Comments

• The company believes that more people are seeking comfortable and convenient places to travel, visit, and live for extended durations.
• The company seeks to capitalize on these trends by transforming residential/resort properties in desirable locations into convenient enclaves that facilitate this type of travel or residency.

Industry Context

The company is operating in the real estate management and hospitality industry, focusing on residential vacation home communities. The increased global trends towards work from home opportunities have impacted both residency and travel, creating opportunities for companies that can provide convenient and comfortable places to live and work for extended durations.

Comparison to Industry Standards

• It is difficult to compare Awaysis Capital directly to industry standards due to its unique business model of acquiring and redeveloping undervalued resort communities.
• However, companies like Wyndham Destinations and Marriott Vacations Worldwide operate in the broader vacation ownership and resort management space.
• These larger companies have established brands, extensive portfolios, and significant revenue streams, which Awaysis Capital is working to develop.
• Awaysis Capital's focus on emerging markets and shovel-ready properties differentiates it from some of the larger players in the industry.

Related Party Transactions

• The balance due to related parties was $7,271,591 and $1,753,417 as of December 31, 2024 and June 30, 2024, respectively, and related to both costs paid on behalf of the Company and funding to the Company by Harthorne Capital, Inc. (Harthorne), an affiliate of the Company and other related party members.
• Between November 15, 2024 and December 20, 2024, the Company borrowed an aggregate of $2,859,973, evidenced by a Secured Promissory Note, dated December 1, 2024 for $3,000,000, under a planned committed line of credit with BOS Investment Inc. BOS is an affiliate of Michael Singh, the Company's Chairman and Co-CEO.
• On June 26, 2024, the Board approved a $1.1 million convertible bridge loan to the Company by Harthorne.

Stakeholder Impact

• Shareholders face potential dilution from future equity offerings.
• Employees may be affected by the company's ability to secure funding and execute its business plan.
• Customers may benefit from the company's focus on developing high-quality vacation home communities.
• Suppliers and creditors face risks associated with the company's financial stability and ability to meet its obligations.

Next Steps

• The company intends to focus its efforts on shovel-ready properties and/or other assets that can be used to optimize sales and rental revenues.
• The company expects the note from BOS Investment Inc. will be rolled into the definitive documents relating to the full line of credit once finalized and executed.
• The company is seeking to raise up to $10 million through the sale of its common stock or through other offerings of securities.

Key Dates