SMC Entertainment, Inc. reported significant financial developments in its 10-Q filing for the quarter ending September 30, 2024. The company, which has not utilized the extended transition period for new financial accounting standards, continues to operate as a non-shell entity. As of November 18, 2024, SMC had 1,352,951,483 shares of common stock outstanding.

The company’s current assets plummeted to $1,752 from $307,269 at the end of 2023, while total current liabilities surged to $11,536,450 from $3,700,524. This resulted in a total stockholders’ deficit of $(11,440,904), a significant increase from $(3,329,061) at the end of the previous fiscal year. The convertible notes also rose sharply to $9,007,616 from $846,269.

For the three months ended September 30, 2024, SMC reported total operating expenses of $247,246, a decrease from $286,204 in the same period of 2023. The loss from operations improved to $(247,246) from $(286,204) year-over-year. However, for the nine months ended September 30, 2024, total operating expenses increased to $940,212 from $709,454, with a corresponding loss from operations of $(940,212) compared to $(709,454) in the prior year.

A notable change in the fair value of derivatives contributed to a total other income of $5,939,012 for the third quarter of 2024, a stark contrast to the total other expense of $(9,345) in Q3 2023. This led to a net income of $5,691,766 for the quarter, compared to a net loss of $(295,549) in the same quarter of the previous year. However, for the nine-month period, the net loss widened to $(8,771,833) from $(1,085,587) in 2023.

The company’s cash position deteriorated, with cash at the end of the period reported at $1,752, down from $17,917 a year earlier. Cash used in operating activities also increased to $(165,094) from $(127,589) in the prior year. Despite these challenges, SMC secured $161,347 in loan proceeds, up from $138,581 in the same period of 2023.

Strategically, SMC completed the acquisition of Fyniti Global Equities EBT Inc. in April 2023 and closed an acquisition of ChainTrade’s AI-powered Trading Platform in June 2024. The company has also issued shares for accrued compensation and has seen substantial changes in its convertible debt structure, with total convertible debt and accrued interest reaching $9,509,251 as of September 30, 2024.

The auditors expressed substantial doubt regarding the company's ability to continue as a going concern, citing ongoing losses and cash flow challenges.