10-Q/A: GivBux Inc. Reports Increased Revenue but Continues to Face Going Concern Issues in Q3 2024

GivBux Inc. saw a significant revenue increase in Q3 2024 due to beta testing of its app and increased sales associates, but the company still faces substantial doubt about its ability to continue as a going concern.

Summary

• GivBux Inc. filed an amended quarterly report on Form 10-Q/A for the quarter ended September 30, 2024, to include proper disclosures and certifications.
• The company experienced a 294% increase in revenue for the three months ended September 30, 2024, reaching $257,920 compared to $65,470 for the same period in 2023, attributed to beta testing of the GivBux App and increased sales associates.
• Net losses decreased by 29.5% for the quarter compared to the same period in 2023.
• The company's net loss for the nine months ended September 30, 2024, was $3,019,598.
• As of September 30, 2024, the company had an accumulated deficit of $7,006,264 and current liabilities exceeding current assets by $3,162,237.
• Management intends to raise additional operating funds through equity and/or debt offerings, but there is no assurance of success.
• There is substantial doubt about the company's ability to continue as a going concern.
• The company is taking steps to remediate material weaknesses in its internal control over financial reporting.
• The company is an emerging growth company and a smaller reporting company, which allows for reduced disclosure requirements.
• The company intends to increase its board members from 3 to 5 in the first quarter of 2025.

Sentiment

Score: 4

Explanation: While revenue increased, the company's significant losses, accumulated deficit, and going concern uncertainty weigh heavily on the overall sentiment. The material weaknesses in internal control further contribute to a negative outlook.

Positives

• The company experienced a significant increase in revenue, driven by the beta testing of the GivBux App and an increase in sales associates.
• Net losses decreased for the quarter compared to the same period in the previous year.
• The company is actively working to remediate material weaknesses in its internal control over financial reporting.
• The number of sales associates has increased significantly, indicating potential for future growth.

Negatives

• The company has incurred significant net losses and has a substantial accumulated deficit.
• Current liabilities exceed current assets by a significant margin.
• There is substantial doubt about the company's ability to continue as a going concern.
• The company has identified material weaknesses in its internal control over financial reporting.
• The company has a history of defaults on loans and convertible notes.

Risks

• The company's ability to continue as a going concern is uncertain.
• The company may not be successful in raising additional operating funds.
• Failure to maintain effective internal control over financial reporting could lead to inaccurate financial reporting and sanctions.
• The company's common stock is considered a penny stock, which may limit trading activity.
• There is limited liquidity in the company's common stock.
• The company's senior management team has limited experience managing a public company.
• The company is subject to the rules and regulations of the SEC and PCAOB, which can be costly and time-consuming.

Future Outlook

The company expects to see continual revenue growth as they ramp up operations over the next few quarters.

Management Comments

• Management intends to raise additional operating funds through equity and/or debt offerings.
• Management is committed to continuously improving our internal control system and to maintaining a culture of integrity and accountability throughout the organization.

Industry Context

Without more information about GivBux's specific industry, it's difficult to provide a detailed industry context. However, the company's focus on developing an app and recruiting sales associates suggests a move towards a technology-driven, direct sales model, which is a common trend in various industries.

Comparison to Industry Standards

• Without knowing the specific industry GivBux operates in, it's challenging to provide a precise comparison to industry standards.
• However, the company's financial performance can be compared to other small-cap or micro-cap companies in similar sectors.
• For example, if GivBux operates in the software or app development space, its revenue growth and losses can be benchmarked against similar companies in that sector.
• It's important to consider factors such as market capitalization, stage of development, and business model when making comparisons.

Legal Proceedings

• There are no legal proceedings against the company at this time.

Related Party Transactions

• During the nine months ended September 30, 2024, and 2023, the Company obtained $31,940 and $148,988 loan from our related parties, repaid $98,047 and $109,950 to our related parties and recognized interest of $20,326 and $21,560, respectively.
• As of September 30, 2024, and December 31,2023, the Company had notes payable related parties of $868,747 and $934,854 and accrued interest of $111,732 and $91,406, respectively.
• The notes are unsecured, 3% interest bearing and due on demand.
• As of September 30,2024, and December 31,2023, the Company had due to related party of $3,275.

Stakeholder Impact

• Shareholders face significant risk due to the company's financial instability and potential inability to continue as a going concern.
• Employees may be affected by potential cost-cutting measures or even the cessation of operations if the company cannot secure additional funding.
• Customers may experience disruptions in service or product availability if the company's financial situation worsens.
• Suppliers and creditors face increased risk of non-payment due to the company's financial difficulties.

Next Steps

• The company intends to raise additional operating funds through equity and/or debt offerings.
• The company intends to increase its board members from 3 to 5 in the first quarter of 2025.
• The company will continue to develop and refine its disclosure controls and internal control over financial reporting.

Key Dates

Keywords

financial reporting, convertible notes, going concern, revenue, internal control, GivBux, losses, debt