UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to ________

Commission file number: 001-41592

MGO GLOBAL INC.

(Exact name of registrant as specified in its charter)

Delaware		87-3929852
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1515 SE 17th Street, Suite 121/#460236, Ft Lauderdale, FL		33346
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:

(347) 913-3316

N/A

(Former name, former address and formal fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, par value $0.00001 per share		MGOL		The Nasdaq Stock Market LLC

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “emerging growth company” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of November 14, 2024, there were 2,904,001 shares of common stock issued and outstanding.

MGO GLOBAL INC.

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION	4

ITEM 1.	FINANCIAL STATEMENTS:	4

	Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023	4

	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited)	5

	Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023 (unaudited)	6

	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (unaudited)	7

	Condensed Notes to Consolidated Financial Statements (unaudited)	8

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	26

ITEM 4.	CONTROLS AND PROCEDURES	26

PART II		26

ITEM 1.	LEGAL PROCEEDINGS	26

ITEM 1A	RISK FACTORS	26

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	26

ITEM 3.	DEFAULT UPON SENIOR SECURITIES	27

ITEM 4.	MINE SAFETY DISCLOSURES	27

ITEM 5.	OTHER INFORMATION	27

ITEM 6.	EXHIBITS	27

SIGNATURES		29

NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. Statements made in this report that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Investors are cautioned that such forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management and involve risks and uncertainties. Forward-looking statements include statements regarding our plans, strategies, objectives, expectations and intentions, which are subject to change at any time at our discretion. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. Forward-looking statements include our assessment, from time to time of our competitive position, the industry environment, potential growth opportunities, the effects and events outside of our control, such as natural disasters, wars, epidemics or pandemics. Forward-looking statements often include words such as “anticipates,” “believes,” “could,” “forecast,” “estimates,” “expects,” “suggest,” “hopes,” “intends,” “may,” “might,” “plans,” “potential,” “predicts,” “targets,” “projects,” “projections,” “should,” “could,” “will,” “would” or the negative of these terms or other similar expressions.

Where in any forward-looking statement we express an expectation or belief as to future results or events, such expectation or belief is based on the current plans and expectations of our management, expressed in good faith and believed to have a reasonable basis. However, there can be no assurance that the expectation or belief will result or will be achieved or accomplished. The following include some, but not all, of the factors that could cause actual results or events to differ materially from those anticipated:

	●	current economic conditions, including consumer spending levels and the price elasticity of our products;

	●	the highly competitive and evolving nature of the industry in which we compete;

	●	our ability to successfully manage social, political, economic, legal and other conditions affecting our operations and our supply chain sources, such as political instability and acts of war or terrorism, natural disasters, disruption of markets, operational disruptions, changes in import or export laws, currency restrictions and currency exchange rate fluctuations;

	●	the impact of the loss of one or more of our suppliers of finished goods or raw materials;

	●	our ability to manage our inventory effectively and reduce inventory reserves;

	●	our ability to optimize our global supply chain;

	●	our ability to distribute our products effectively through our ecommerce store and through our growing wholesale distribution channel;

	●	our ability to keep pace with changing consumer preferences;

	●	the impact of any inadequacy, interruption or failure with respect to our information technology or any data security breach;

	●	our ability to protect our reputation and the reputation and images of our licensed and any future proprietary brand(s);

	●	unanticipated changes in our tax rates or exposure to additional income tax liabilities or a change in our ability to realize deferred tax benefits;

	●	our ability to comply with environmental and other laws and regulations;

	●	changes in our relationship with our employees and costs and adverse publicity from violations of labor or environmental laws by us or our suppliers;

	●	our ability to attract and retain key personnel; and

	●	our ability to integrate and grow potential acquisitions successfully.

The reader should understand that the uncertainties and other factors listed above or identified elsewhere in this Quarterly Report and in our Annual Report are not a comprehensive list of all the uncertainties and other factors that may affect forward-looking statements. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. We do not undertake any obligation to update or revise any forward-looking statements or the list of uncertainties and other factors that could affect those statements. You should, however, consult further disclosures and risk factors we include in Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports filed on Form 8-K.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

MGO GLOBAL INC.

CONSOLIDATED BALANCE SHEETS

	As of September 30, 2024 (Unaudited)			As of December 31, 2023 (Audited)
Assets
Current assets:
Cash and cash equivalents	$	1,435,288		$	836,446
Accounts receivable		15,998			25,352
Inventories		1,049,359			607,022
Prepaid expenses		56,979			178,425
Other current assets		7,500			7,500
Current assets from discontinued operations		10,135			267,703
Total current assets		2,575,259			1,922,448

Property and equipment, net		238,384			319,462
Total assets		2,813,643			2,241,910

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable		51,170			184,677
Accounts payable - related party		2,769			5,678
Accounts payable		2,769			5,678
Accrued liabilities		40,340			216,297
Accrued payroll		58,648			533,643
Loan payable		27,788			-
Current liabilities from discontinued operations		1,529			379,867
Total current liabilities		182,244			1,320,162
Total liabilities		182,244			1,320,162

Commitments and contingencies (Note 4)		-			-

Stockholders’ equity:
Preferred stock, par value, $.00001, authorized 20,000,000 shares, nil outstanding		-			-
Common stock, par value $0.00001, authorized 150,000,000 shares; 2,904,001 and 1,426,613 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		29			14
Additional paid-in capital		19,874,872			14,450,217
Accumulated deficit		(16,884,132	)		(12,940,040	)
Total MGO stockholders’ equity		2,990,769			1,510,191
Non-controlling interest		(359,370	)		(588,443	)
Total stockholder’s equity		2,631,399			921,748
Total liabilities and stockholders’ equity	$	2,813,643		$	2,241,910

See accompanying condensed notes to these unaudited consolidated financial statements.

MGO GLOBAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

(UNAUDITED)


	For the Three Months Ended						For the Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Revenues, net	$	565,400		$	1,054,161		$	2,661,253		$	2,823,601
Cost of sales		72,414			235,003			586,502			761,473
Gross profit		492,986			819,158			2,074,751			2,062,128

Operating expenses:
Selling, general and administrative expenses		1,386,146			1,827,926			5,711,978			3,325,737
Marketing and e-commerce expenses		464,571			1,022,732			2,026,263			2,362,606
Total operating expenses		1,850,717			2,850,658			7,738,241			5,688,343

Operating loss		(1,357,731	)		(2,031,500	)		(5,663,490	)		(3,626,215	)

Other (income) expenses:
Interest expense		4,454			-			8,403			-
Interest income		(15,381	)		-			(16,151	)		(29,876	)
Other (income) expenses, net		-			-			(2,715	)		-
Total other (income) expenses		(10,927	)		-			(10,463	)		(29,876	)

Net loss from continuing operations		(1,346,804	)		(2,031,500	)		(5,653,027	)		(3,596,339	)
Net income (loss) from discontinued operations		44,237			(520,613	)		1,938,008			(1,574,104	)
Net loss	$	(1,302,567	)	$	(2,552,113	)	$	(3,715,019	)	$	(5,170,443	)
Less: net income (loss) attributable to noncontrolling interest		5,229			(62,800	)		229,073			(185,556	)
Net loss attributable to MGO stockholders	$	(1,307,796	)	$	(2,489,313	)	$	(3,944,092	)	$	(4,984,887	)

Basic and diluted weighted average shares outstanding		2,507,442			1,424,154			1,953,276			1,408,517
Basic and diluted net loss per share to MGO stockholders on continuing operations	$	(0.54	)	$	(1.43	)	$	(2.89	)	$	(2.55	)
Basic and diluted net income (loss) per share to MGO stockholders on discontinued operations	$	0.02		$	(0.37	)	$	0.99		$	(1.12	)
Basic and diluted net income (loss) per share to MGO stockholders	$	(0.52	)	$	(1.79	)	$	(1.90	)	$	(3.67	)

See accompanying condensed notes to these unaudited consolidated financial statements.

MGO GLOBAL INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

(UNAUDITED)


	Common Stock				Additional Paid-In			Accumulated			Total MGO Stockholders’ Equity			Stock Subscription			Non- controlling			Total Stockholders’ Equity
	Shares		Amount		Capital			Deficit			(deficit)			Receivable			Interests			(deficit)

Balance at December 31, 2022		1,168,923	$	12	$	4,963,445		$	(5,796,636	)	$	(833,179	)		-		$	(361,382	)	$	(1,194,561	)

Share issuance for cash		172,500		1		7,622,353			-			7,622,354			-			-			7,622,354
Cashless exercise of warrants		12,731		-					-			-			-			-			-
Cash received from exercise of warrants		70,000		1		699,999			-			700,000			-			-			700,000
Net loss		-		-		-			(1,158,056	)		(1,158,056	)		-			(62,069	)		(1,220,125	)
Balance at March 31, 2023		1,424,154	$	14	$	13,285,797		$	(6,954,692	)	$	6,331,119			-		$	(423,451	)	$	5,907,668
Net loss		-		-		-			(1,337,518	)		(1,337,518	)		-			(60,687	)		(1,398,205	)
Balance at June 30, 2023		1,424,154	$	14		13,285,797		$	(8,292,210	)	$	4,993,601			-		$	(484,138	)	$	4,509,463
Stock Compensation Expense		-		-		673,624			-			673,624			-			-			673,624
Net loss		-		-		-			(2,489,313	)		(2,489,313	)		-			(62,800	)		(2,552,113	)
Balance at September 30, 2023		1,424,154	$	14		13,959,421		$	(10,781,523	)	$	(3,177,912	)		-			(546,938	)		2,630,974

Balance at December 31, 2023		1,426,613	$	14	$	14,450,217		$	(12,940,040	)	$	1,510,191			-		$	(588,443	)	$	921,748

Stock issued for settlement		23,202		-		99,999			-			99,999						-			99,999
Stock issued for vested restricted stock awards		46,243		1		192,515			-			192,516						-			192,516
Stock issued for cash		157,983		1		572,314			-			572,315			130,249			-			702,564
Stock compensation expense		-		-		193,146			-			193,146			-			-			193,146
Net income (loss)		-		-		-			(164,644	)		(164,644	)		-			227,807			63,163
Balance at March 31, 2024		1,654,040	$	16	$	15,508,191		$	(13,104,684	)	$	2,403,523			130,249		$	(360,636	)	$	2,173,136
Stock issued for vested restricted stock awards		345,786		4		1,295,991			-			1,295,995			-			-			1,295,995
Stock issued for cash		100,698		1		1,093,217			-			1,093,218			(130,249	)		-			962,969
Stock compensation expense		-		-		9,451			-			9,451			-			-			9,451
Net loss		-		-		-			(2,471,652	)		(2,471,652	)		-			(3,963	)		(2,475,615	)
Balance at June 30, 2024		2,100,524	$	21	$	17,906,850		$	(15,576,336	)	$	2,330,535			-		$	(364,599	)	$	1,965,936
Balance		2,100,524	$	21	$	17,906,850		$	(15,576,336	)	$	2,330,535			-		$	(364,599	)	$	1,965,936
Stock issued for settlement of accounts payable		53,638		1		131,949			-			131,950			-			-			131,950
Stock issued for vested restricted stock awards		110,500		1		285,860			-			285,861			-			-			285,861
Stock issued for cash		522,757		5		1,550,214			-			1,550,219			-			-			1,550,219
Round up of shares due to reverse stock split		116,582		1		(1	)		-			-			-			-			-
Net loss		-		-		-			(1,307,796	)		(1,307,796	)		-			5,229			(1,302,567	)
Net income (loss)		-		-		-			(1,307,796	)		(1,307,796	)		-			5,229			(1,302,567	)
Balance at September 30, 2024		2,904,001		29		19,874,872			(16,884,132	)		2,990,769			-			(359,370	)		2,631,399
Balance		2,904,001		29		19,874,872			(16,884,132	)		2,990,769			-			(359,370	)		2,631,399

See accompanying condensed notes to these unaudited consolidated financial statements.

MGO GLOBAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOW

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

(UNAUDITED)


	For the Nine Months Ended September 30,
	2024			2023
Cash flows from operating activities:
Net loss	$	(3,715,019	)	$	(5,170,443	)
Net income (loss) from discontinued operations		1,938,008			(1,574,104	)
Net loss from continuing operations		(5,653,027	)		(3,596,339	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expenses		81,590			38,321
Stock compensation expense		1,976,962			673,624
Net changes in operating assets and liabilities:
Accounts receivable		9,354			(44,274	)
Inventory		(442,337	)		(479,375	)
Prepaid expenses		146,446			(388,238	)
Other current assets		-			(7,500	)
Accounts payable - related party		(2,909	)		(22,533	)
Accrued payroll		(474,995	)		(643,030	)
Accounts payable and accrued liabilities		1,622,298			(2,071,651	)
Net cash used in continuing operating activities		(2,736,618	)		(6,540,995	)
Net cash provided by (used in) discontinued operating activities		(1,978,857	)		144,432
Net cash used in operating activities		(4,715,475	)		(6,396,563	)

Cash flows from investing activities:
Purchases of property and equipment		(512	)		(179,853	)
Net cash used in investing activities		(512	)		(179,853	)
Net cash provided by discontinued investing activities		2,000,000			-
Net cash provided by (used in) investing activities		1,999,488			(179,853	)

Cash flows from financing activities:
Shares issued for cash, net		3,215,752			7,622,354
Cash received from exercise of warrants		-			700,000
Payment for investment advisor services		(25,000	)		-
Principle payment on loan payable		(57,212	)		-
Borrowings from loan payable		85,000			-
Net cash provided by continuing financing activities		3,218,540			8,322,354
Net cash provided by discontinued financing activities		-			(138,840	)
Net cash provided by financing activities		3,218,540			8,183,514

Net increase in cash and cash equivalents		502,553			1,607,098
Cash and cash equivalents at beginning of period, including discontinued operations		934,911			113,952
Cash and cash equivalents at end of period, including discontinued operations		1,437,464			1,721,050
Less cash from discontinued operations		(2,176	)		(88,271	)
Cash and cash equivalents at the end of the period	$	1,435,288			1,632,779

Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest	$	14,364			-

Non-cash financing activities
Stock issued for legal settlement	$	99,999
Stock issued for settlement of accounts payable	$	131,950			-

See accompanying condensed notes to these unaudited consolidated financial statements.

MGO GLOBAL INC.

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

NOTE 1 – ORGANIZATION AND OPERATIONS

Founded in October 2018 and headquartered in Florida with remote employees and specialty contractors in London, New York and Latin America, MGO Global Inc. (“MGO,” “MGO Global,” the “Company,” “we,” “our” and “us”) has built a brand acceleration platform with a focus on the acquisition, optimization and monetization of consumer brands across multiple categories. Our mission is to provide customers with unmatched variety, quality and shopping experience, while adding considerable value for MGO’s shareholders.

Our accomplished leadership team encompasses decades of experience in building successful global lifestyle brands, including fashion design, marketing, technology, corporate finance and branding. We strive to continually push innovation and evolution of the consumer product cycle without compromising quality and design integrity. Through our end-to-end, scalable brand-building platform, backed by robust consumer behavioral data, we are engaged in nurturing digitally native brands that will thrive in the modern Direct to Consumer (“DTC”) economy.

We operate our business through three subsidiaries: Americana Liberty, LLC; MGO Digital LLC and MGOTeam1, LLC (“MGOTeam1”).

On July 18, 2024, the Company effected a reverse stock split on the Company’s common stock at a ratio of 1-for-10.

Stand Flagpoles/Americana Liberty, LLC

On March 13, 2023, we obtained a royalty-free, worldwide and exclusive license (the “License”) to the use of certain assets of Stand Co., LLC (“Stand”) for all purposes in exchange for payment of $1.00 by the Company. The license is in perpetuity. Licensed assets include all rights to all stock keeping units (“SKU”) of Stand sold under the names: “Roosevelt Premium 25 foot Telescoping Flag Pole Kit,” “20 Foot Telescoping Flag Pole Kit” and “LED Solar Flag Pole Light;” any intellectual property and other intangible property related to SKUs, including but not limited to all rights to the brand name Stand Flagpoles, domain and website www.standflagpoles.com, the Meta pages associated with Stand Flagpoles brand name (in Facebook and Instagram); all manufacturer, distributor and customer contracts and relationships for SKUs; marketing materials; any commercialization rights; domain and administrative access to Stand’s Shopify account, Facebook Assets & Accounts; all historical digital and non-digital assets; and customer database since inception.

In support of our flagpole business, we formed a wholly owned subsidiary, Americana Liberty, LLC (“Americana Liberty”), on March 13, 2023, which was created to advertise and sell the licensed line of Stand Flagpoles and other related products, along with an expanding line of patriotic-themed products to be developed and marketed to consumers under our new Americana Liberty brand.

In addition, on May 11, 2023, we executed a 12-month consulting agreement with Jason Harward, the owner of Stand Co. and nephew of our former Chief Marketing Officer of the Company. The consultant shall furnish the Company with business continuity and consulting services, substantially similar to the following: provide general advice and counsel regarding the establishment of systems and processes for direct-to-consumer (“DTC”) and e-commerce sales and operations; provide subject matter and product-level expertise in the area of flag-poles, flags, and related products; provide consultation regarding product sourcing and distribution; and assist with the establishment, operation, optimization, and maintenance of DTC and e-commerce platforms on behalf of the Company. Consultant was compensated for services through a combination of cash or immediately available funds and restricted stock units or shares of the Company’s stock as follows: (1) cash in the amount of $150,000, paid on September 30, 2023; (2) cash in the amount of $200,000, paid on January 10, 2024, upon satisfactory performance of the consultant’s obligations under the agreement; and (3) 15,000 restricted stock units of the Company issuable on May 11, 2023. The Company recorded $51,587 and $109,679 as stock-based compensation expense for the fair value of the restricted stock units awarded as of September 30, 2024 and December 31, 2023, respectively. The consulting agreement ended May 2024.

MGO Digital LLC

In November 2022, we formed MGO Digital LLC to leverage data analytics, advanced technology-enabled marketing and our leadership team’s industry relationships and expertise to identify, incubate and test market new proprietary brands and brand concepts.

The Messi Store/MGOTeam 1 LLC

MGOTeam1 designed, manufactured, licensed, distributed, advertised and sold a range of products under the soccer legend Lionel (“Leo”) Messi brand, Messi Brand. The Messi Brand is a premium lifestyle brand with a sporty edge and sold its products direct to consumers through the website www.themessistore.com.

In October 2018, the Company entered into a Trademark License Agreement with Leo Messi Management SL (“LMM”). LMM granted the Company a worldwide non-exclusive license in order to use Leo Messi’s trademarks with the purpose of developing, manufacturing, trading and promoting the Messi Brand products.

On November 20, 2021, the Company entered into a new Trademark License Agreement (“Messi License”) with LMM to have the worldwide license to use Leo Messi’s trademarks for the purpose of developing, manufacturing, marketing and promoting his products. The Company is to pay LMM a minimum guaranteed amount on account of royalties amounting to Four Million Euros (€4,000,000) over the four-year agreement, net of taxes with the last payment due on November 15, 2024.

On March 21, 2024, MGOTeam1 assigned the Messi License to Centric Brands, LLC (“Centric”), which paid MGOTeam1 $2,000,000 in cash and assumed the obligation to pay the minimum guaranteed amount due to LMM in 2024. The Company accounted for The Messi Store segment as discontinued operations. See Note 10.

Business Combination Agreement with Heidmar, Inc.

On June 18, 2024, MGO entered into a definitive Business Combination Agreement and Plan of Merger (the “Business Combination Agreement”) with Heidmar, Inc., (“HMI”), a company organized under the laws of the Republic of the Marshall Islands; Heidmar Maritime Holdings Corp., a company organized under the laws of the Republic of the Marshall Islands (“Holdings”); HMR Merger Sub Inc., a Delaware corporation and wholly-owned subsidiary of Holdings (“Merger Sub”); and Rhea Marine Ltd. and Maistros Shipinvest Corp (the “HMI Shareholders”). The Company, Merger Sub, Holdings, HMI and HMI Shareholders are sometimes referred to herein individually as a “Party” and, collectively, as the “Parties.”

Pursuant to the Business Combination Agreement, the Parties will effect a business combination involving the following transactions (collectively, the “Business Combination”):

	(a)	Merger Sub will merge (the “Merger”) with and into the MGO, with MGO continuing as the surviving entity and a wholly owned subsidiary of Holdings;
	(b)	all of the issued and outstanding shares of common stock of MGO (the “MGO Common Stock”) prior to the effective time of the Merger will be converted into the right to receive common shares of Holdings (the “Holdings Common Shares”) on a one-for-one basis;
	(c)	immediately after the effective time of the Merger, the HMI Shareholders will transfer all the outstanding shares of common stock of HMI (the “HMI Shares”) to Holdings (the “HMI Share Acquisition”), with HMI becoming a wholly owned subsidiary of Holdings; and
	(d)	Holdings shall issue to the HMI Shareholders (i) at the closing of the Business Combination (the “Closing”), a number of Holdings Common Shares equal to (x) the number of the Company’s outstanding shares of common stock on a fully diluted and as-converted basis immediately prior to the effective time of the Merger, times (y) 16.6667, divided by (z) the number of outstanding HMI Shares immediately prior to the HMI Share Acquisition and (ii) after the Closing and upon the satisfaction of certain earnout conditions set forth in the Business Combination Agreement, additional Holdings Common Shares equal to 10% of the shares issued to the Heidmar Shareholders on the Closing.

MGO expects that the holders of MGO Common Stock and the Heidmar Shareholders will hold 5.66% and 94.34% (inclusive of shares to be distributed to advisors), respectively, of the Holdings Common Shares after the Closing, which is expected to occur late in the fourth quarter of 2024.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

The accompanying unaudited consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K, Form 10-K/A and Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on April 1, 2024, June 3, 2024 and August 13, 2024, respectively. Interim results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024.

In the opinion of the Company’s management, the accompanying unaudited consolidated financial statements contain all of the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2024 and the results of operations and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the operating results for the full fiscal year or any future period. Management acknowledges its responsibility for the preparation of the accompanying unaudited consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its consolidated financial position and the consolidated results of its operations for the periods presented.

MGOTeam1 was formed on October 11, 2018, and the Company entered into a Rollover Agreement by and among MGOTeam1 and members of MGOTeam1 on December 6, 2021. All of the members of MGOTeam1, except for one member who owns a 11.82% membership interest in MGOTeam1, exchanged all of their membership interests in MGOTeam1 for 881,800 shares of the Company’s common stock. A sole MGOTeam1 member did not rollover its 11.82% membership interest in MGOTeam1 to the Company as of December 6, 2021, and remains a member in MGOTeam1.

We account for the 11.82% minority interest in MGOTeam1 as non-controlling interest. Both the Company and MGOTeam1 were under common control, the series of contractual arrangements between the Company and MGOTeam1 on December 6, 2021 constituted a reorganization under common control and are required to be retrospectively applied to the consolidated financial statements at their historical amounts.

Principles of Consolidation

The unaudited consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation.

Reclassifications

Certain amounts in prior periods have been reclassified to reflect the impact of the discontinued operations treatment in order to conform to the current period presentation. In addition, on July 18, 2024, the Company effected a reverse stock split at a ratio of 1-for-10. Accordingly, the financial statements presented in this Form 10-Q have been adjusted to reflect the reverse stock split historically.

Discontinued Operations

On March 20, 2024, MGOTeam1 entered into a term sheet with Centric, providing for the terms and conditions for MGOTeam1 to assign and Centric to assume the existing Trademark License Agreement (“License Agreement”), dated November 21, 2021, with an expiration date of December 31, 2024 (“Expiration Date”), between Leo Messi Management SL (“LMM”) and MGOTeam1. Pursuant to the term sheet, Centric assumed the Company’s minimum guarantee obligation to LMM under the License Agreement for payment due dates in 2024 amounting to €1,500,000. MGO received full payment of the $2,000,000 consideration on March 22, 2024.

On March 21, 2024, the Company, Centric and LMM signed a Deed of Novation, Assignment and Assumption (the “Deed”) providing for MGOTeam1 to assign all of its rights and obligations under the License Agreement to Centric, and Centric agreed to assume all of MGO’s rights and obligations in respect of the License Agreement with effect on and from March 21, 2024. No other assets or liabilities were assumed. See Note 10.

Use of Estimates

The preparation of the unaudited consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our most critical estimates include those related to stock-based compensation, inventory and inventory allowance valuation. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash equivalents consist of highly liquid investments with maturities of three months or less when purchased. The Company maintains its cash with high credit quality financial institutions; at times, such balances with any one financial institution may exceed Federal Deposit Insurance Corporation (“FDIC”) insured limits. As of September 30, 2024 and December 31, 2023, the Company had $1,177,368 and $586,446 in excess of the FDIC limit for cash from continuing operations, respectively.

Accounts Receivable

Accounts receivables are carried at their estimated collectible amounts, net of any estimated allowances for credit losses. We grant unsecured credit to our wholesale customers who are deemed creditworthy. Ongoing credit evaluations are performed, and potential credit losses estimated by management are charged to operations on a regular basis. At the time any particular account receivable is deemed uncollectible, the balance is charged to the allowance for doubtful accounts. As of September 30, 2024 and December 31, 2023, the Company had no allowance for credit losses from continuing operations.

Inventory

Inventory consists of raw materials and finished goods ready for sale and is stated at the lower of cost or net realizable value. We value inventories using the weighted average costing method. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. We regularly review inventory and consider forecasts of future demand, market conditions and product obsolescence. If the estimated realized value of our inventory is less than cost, we make provisions in order to reduce its carrying value to its estimated net realizable value. The write downs are recognized as a component of cost of sales. As of September 30, 2024 and December 31, 2023, the Company had no reserve for inventory obsolescence impairment from continuing operations.

Property and Equipment, Net

Property and equipment is recorded at cost. Expenditures for renewals and improvements that significantly add to the productivity capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are expensed. When equipment is retired or sold, the cost and related accumulated depreciation are eliminated from the accounts and the resultant gain or loss is reflected in income. Depreciation is provided using the straight-line method, based on useful lives of the assets which is three years for computers, equipment and software. Depreciation expense from continuing operations for the nine months ended September 30, 2024 and 2023 was $81,590 and $38,321, respectively.

Classification	Useful Life	September 30, 2024 (unaudited)			December 31, 2023
Computer equipment and software	3 years	$	309,286		$	308,774
Furniture	3 years		17,191			17,191
Property and equipment, gross
Less: Accumulated depreciation			(88,903	)		(6,503	)
Property and equipment, net		$	238,384		$	319,462

Revenue Recognition

The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.

Revenue transactions associated with the sale of Stand Flagpoles products comprise a single performance obligation, which consists of the sale of products to customers either through direct wholesale or online sales through our website www.standflagpoles.com. We satisfy the performance obligation and record revenues when transfer of control to the customer has occurred, based on the terms of sale. A customer is considered to have control once they are able to direct the use and receive substantially all of the benefits of the product. Control is transferred to wholesale customers upon shipment or upon receipt depending on the country of the sale and the agreement with the customer. Control transfers to online customers at the time upon receipt of the goods. The transactions price is determined based upon the invoiced sales price, less anticipated sales returns, discounts and miscellaneous claims from customers. Payment terms for wholesale transactions depend on the country of sale or agreement with the customer and payment is generally required within 30 days or less of shipment to or receipt by the wholesale customer. Payment is due at the time of sale for direct wholesale and online transactions.

For the three and nine months ended September 30, 2024 and 2023, the Company generated revenues of $565,400 and $2,661,253, and $1,054,161 and $2,823,601, respectively, directly from consumers via our website. The Company does not have any major customers as revenue is primarily direct to individual consumers. All revenues for September 30, 2024 and 2023 were generated by customers within the United States. There were no sales to customers outside of the United States during either reporting period.

Non-Controlling Interest

As of December 6, 2021, one shareholder did not rollover its 11.82% membership interest in MGOTeam1. According to ASC 810, Consolidation, the carrying amount of the non-controlling interest (“NCI”) will be adjusted to reflect the change in the NCI’s ownership interest in the subsidiary. Any difference between the amount by which the NCI is adjusted and the fair value of the consideration paid or received is recognized in additional paid in capital and attributed to the equity holders of the parent. The Company accounted for this portion of shares as non-controlling interest in net income of $5,229 and net loss of $(62,800) for the three months ended September 30, 2024 and 2023, respectively; and net income of $229,073 and a net loss of $(185,556) for the nine months ended September 30, 2024 and 2023, respectively

Foreign Currency

The Company’s functional and reporting currency is the U.S. dollar. Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. The resulting monetary assets and liabilities are translated into U.S. dollars at exchange rates prevailing on the subsequent balance sheet date. Revenue and expense components are translated to U.S. dollars at weighted-average exchange rates in effect during the period. Foreign currency transaction gains and losses resulting from remeasurement are recognized in other income, net within the consolidated statements of operations.

Segment Reporting

On March 21, 2024, the Company discontinued operations of The Messi Store due to the Deed executed with Centric, LMM and the Company. As such, the Company is no longer required to provide segment reporting, as the Company has only one reportable segment as of September 30, 2024.

Income Taxes

The Company accounts for income taxes using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments of changes in the tax law. For deferred tax assets, management evaluates the probability of realizing the future benefits of such assets. The Company establishes valuation allowances for its deferred tax assets when evidence suggests it is unlikely that the assets will be fully realized.

The Company recognizes the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date and then only in an amount more likely than not to be sustained upon review by the tax authorities. Income tax positions that previously failed to meet the more likely than not threshold is recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more likely than not threshold is derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company classifies potential accrued interest and penalties related to unrecognized tax benefits within the accompanying consolidated statements of operations as income tax expense.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update 2023-07 – Segment Reporting (Topic ASC 280) Improvements to Reportable Segment Disclosures. The ASU improves reportable segment disclosure requirements, primarily through enhanced disclosure about significant segment expenses. The enhancements under this update require disclosure of significant segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of segment profit or loss, require disclosure of other segment items by reportable segment and a description of the composition of other segment items, require annual disclosures under ASC 280 to be provided in interim periods, clarify use of more than one measure of segment profit or loss by the CODM, require that the title of the CODM be disclosed with an explanation of how the CODM uses the reported measures of segment profit or loss to make decisions, and require that entities with a single reportable segment provide all disclosures required by this update and required under ASC 280. ASU 2023-07 is effective for public business entities for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company adopted ASC 280 on January 1, 2024 and ASC 280 does not have a material impact on its consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued Accounting Standards Update 2023-09 – Income Taxes (Topic ASC 740) Income Taxes. The ASU improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in ASU 2023-09 will become effective at the beginning of our 2025 fiscal year. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. We do not expect that this guidance will have a material impact upon our financial position and results of operations.

NOTE 3 – GOING CONCERN

In the pursuit of MGO’s long-term growth strategy and the development of its growing portfolio of brands, the Company has incurred continued operating losses. As of September 30, 2024, we had working capital of $2,393,015. For the nine months ended September 30, 2024 and 2023, we incurred losses from continuing operations of ($5,663,027) and ($3,596,339), respectively, and cash used in operating activities of ($4,715,475) and $(6,396,563), respectively. We believe the cash on hand, in connection with cash generated from future revenue, may not be sufficient to sustain continued operating losses. These factors cause substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date these financial statements were made available.

On February 8, 2024, we filed a shelf registration statement on Form S-3 (“S-3”) to provide our Company with the flexibility to issue and sell securities if and when deemed appropriate to support our ongoing business operations and in the best interest of our shareholders. The S-3 contained two prospectuses: i) a base prospectus that covers the potential offering, issuance and sale from time to time of our common stock, preferred stock, warrants, debt securities and units in one or more offerings with a total value of up to $100,000,000; and ii) a sales agreement prospectus covering the potential offering, issuance and sale from time to time of shares of our common stock having an aggregate gross sales price of up to $1,650,000 pursuant to an equity distribution agreement entered into with the New York-based investment banking firm, Maxim Group LLC (“At-the-Market Offering” or “ATM”). On June 7, 2024, MGO entered into an Amendment No. 1 (“Amendment”) to the equity distribution agreement for the ATM whereby the offering size was amended to reflect an increase in the aggregate gross sales price from $1,650,000 to $3,389,384. As of September 30, 2024, we exhausted the ATM and received net proceeds from sales of our common stock pursuant to the ATM totaling an aggregate of $3,215,752.

NOTE 4 – BALANCE SHEET ITEMS

Inventory

As of September 30, 2024 and December 31, 2023, inventory amounted to $1,049,359 and $607,022, respectively.

Prepaid Expenses

As of September 30, 2024 and December 31, 2023, prepaid expenses amounted to $56,979 and $178,425, respectively.

SCHEDULE OF PREPAID EXPENSES

	September 30, 2024 (unaudited)		December 31, 2023
Prepaid expenses	$	49,479	$	5,577
Prepaid rent		7,500		7,500
Prepaid inventories		-		165,348
Total	$	56,979	$	178,425

Accounts Payable and Accrued Liabilities (Including Related Parties)

Accounts payable and accrued liabilities were $152,929 and $940,296 as of September 30, 2024 and December 31, 2023, respectively. Accounts payable are mainly payables to vendors and accrued liabilities consist of mainly credit card payable and sales tax payable.

	September 30, 2024 (unaudited)		December 31, 2023
Accounts payable	$	51,170	$	184,677
Accounts payable, related party		2,769		5,678
Accounts payable		2,769		5,678
Accrued liabilities		40,340		216,297
Accrued payroll		58,648		533,643
Total	$	152,927	$	940,295

Commitments and Contingencies

In January 2024, the Company entered into a financing agreement for the Company’s Directors and Officers insurance policy with First Insurance Funding at an interest rate of 7.58%, a principal balance of $225,185 and a monthly payment of $23,308 over the nine-month term of the promissory note. The loan matured on October 12, 2024 and the policy is paid in full as of the maturity date. The policy term is January 2024 through December 2024.

On August 7, 2024, Americana Liberty entered into a business loan agreement (the “Loan Agreement”) and a promissory note (the “Note”) for $250,000 revolving line of credit (the “Loan Agreement”) with Platinum Bank with an interest rate of 8.15% per annum. The line of credit matures August 7, 2026. There were no borrowings on the line of credit as of September 30, 2024.

In connection with the Loan Agreement, the Company signed a commercial guaranty (the “Guaranty”) dated August 7, 2024, pursuant to which it guarantees full and punctual payment of the indebtedness of Americana Liberty under the Loan Agreement and the Note. The Company and Americana Liberty also signed an assignment of deposit account (the “Assignment”), dated August 7, 2024, pursuant to which the Company assigned and granted to Platinum Bank a security interest in the savings account with Platinum Bank with an approximate balance of $250,000, all interest accrued, all additional deposits made to the account, any and all proceeds from such account, as well as all renewals, replacements, and substitutions for any of the foregoing.

Nasdaq Deficiency Notices, Hearings Panel Determinations and Reverse Stock Split

On April 17, 2024, the Company received a notice (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) notifying the Company that 180 calendar day period that it had been provided by Nasdaq to regain compliance with Nasdaq Listing Rule 5550(a)(2) on April 16, 2024 did not result in the Company regaining compliance. As a consequence, the Company is not eligible for a second 180 day period, because the Company does not meet the $5,000,000 minimum stockholders’ equity requirement for initial listing on The Nasdaq Capital Market. In addition, the Notice informed the Company that in light of the foregoing and in accordance with Nasdaq Listing Rule 5810(c)(2)(A), the Nasdaq staff could no longer accept a plan for the Company to regain compliance with Listing Rule 5550(b)(1) and this matter has become an additional and separate basis for delisting the Company’s securities from Nasdaq.

The Notice further stated unless the Company requests an appeal of the above determination by April 24, 2024, Nasdaq has determined that the Company’s securities will be scheduled for delisting from The Nasdaq Capital Market and will be suspended at the opening of business on April 26, 2024, and a Form 25-NSE will be filed with the SEC, which will remove the Company’s securities from listing and registration on The Nasdaq Stock Market.

On April 18, 2024, the Company formally requested a hearing before Nasdaq’s Hearings Panel (the “Panel”) and such request was granted by Nasdaq on April 19, 2024. The hearing date was scheduled for May 30, 2024.

On May 30, 2024, senior members of MGO’s executive team and the Company’s SEC counsel participated in the hearing before the Nasdaq’s Hearings Panel and endeavored to address all questions and concerns posed by the panelists relating to the Company’s plan to regain compliance with the continued listing standards (the “Plan”) – the Plan was formally submitted to the members of the Nasdaq Hearings Panel on May 8, 2024. In accordance with the Plan, MGO requested at least until August 15, 2024 to evidence compliance with the Equity Rule and Bid Price Rule for continued listing on The Nasdaq Capital Market through execution of the Plan.

On June 14, 2024, MGO received notice from Nasdaq confirming that the Nasdaq Hearings Panel (the “Panel”) has determined to grant the request of MGO to continue its listing on The Nasdaq Stock Market subject to the following:

1. On or before July 15, 2024, the Company will effect a reverse stock split at a ratio of 1-for-10. See Note 1 and 11.

2. On or before August 15, 2024, the Company will (a) complete the transactions described to the Panel to achieve compliance with Listing Rule 5550(b)(1) (or its alternatives) and (b) demonstrate compliance with Listing Rule 5550(a)(2) by evidencing a closing bid price of $1.00 or more per share for a minimum of ten (10) consecutive trading sessions;

3. On or before August 21, 2024, the Company must file a Form 8-K describing these transactions and indicating its post-transaction equity. The Company may do so with a balance sheet no older than 60 days containing pro forma adjustments for significant transactions or events occurring on or before the report date. Alternatively, the Company can provide an affirmative statement that, as of the date of the report, it believes it has regained compliance with the stockholders’ equity requirement based upon the specific transactions or events described; and

4. At the time of filing the Form 8-K, the Company must demonstrate compliance with all other applicable requirements for continued listing on the Nasdaq Capital Market.

The Company filed a Current Report on Form 8-K on August 12, 2024, stating that the Company believes that it is in compliance with the Nasdaq minimum stockholders’ equity requirement as of August 9, 2024. However, on August 16, 2024, Nasdaq notified the Company that it was not able to confirm the Company’s compliance with the net equity requirement based on the information provided by the Company. On August 21, 2024, MGO provided supplemental information for Nasdaq and the Hearings Panel’s review.

On September 30, 2024, Nasdaq notified the Company that after reviewing the supplemental materials provided by the Company, the Hearings Panel confirmed the Company has cured the previous deficiencies with the equity requirement and the bid price requirement and the Company is back in compliance with all applicable continued listing standards

NOTE 5 – LOAN PAYABLE

On January 24, 2024, MGO entered into a 52-week loan with PayPal for $85,000 and a $10,312 fixed loan fee, aggregating $95,312. Weekly payments are $1,833 over the life of the loan. The outstanding balance of this loan was $27,788 as of September 30, 2024.

NOTE 6 – RELATED PARTY TRANSACTIONS

The accounts payable owed to our related parties as of September 30, 2024 and December 31, 2023 was $2,769 and $5,678, respectively, and was comprised of employee reimbursements for September 30, 2024 and December 31, 2023.

The accrued payroll owed to our executives and staff as of September 30, 2024 and December 31, 2023 was $58,648 and $533,643, respectively, inclusive of bonuses.

On May 11, 2023, we executed a 12-month consulting agreement with Jason Harward (“Consultant”), the owner of Stand and nephew of Matt Harward, MGO’s former Chief Marketing Officer. The consulting agreement compensation terms were $350,000 payable in two installments, the first installment was paid in September 2023 and second installment was paid in January 2024. The compensation terms included 15,000 restricted stock units awarded on January 31, 2024 which vest over the remaining life of the consulting agreement. The Company recognized $51,587 of stock-based compensation for the nine months ended September 30, 2024 and $123,914 for the year ended December 31, 2023.

On April 2, 2024, the Board of Directors (the “Board”) of MGO, at the recommendation of the Compensation Committee (the “Committee”), approved an increase in the base salary of Ms. Dana Perez, the Company’s Chief Financial Officer, from $165,000 to $200,000 per annum. This salary increase is effective as of April 2, 2024. In addition, the Board approved an increase in the annual cash bonus which Ms. Perez will be entitled to receive based on her and the Company’s continued satisfaction of a combination of personal and Company’s goals. The annual cash bonus has been increased from ‘up to 20%’ to ‘up to 25%’ of Ms. Perez’s base salary. The Board also approved the immediate granting of 5,000 restricted stock units (“RSUs”) in accordance with the MGO 2022 Equity Incentive Plan (the “Plan”). Subject to any acceleration provisions contained in the Plan or any other written agreement authorized by the Committee governing the terms of this award, these RSUs will vest on the one-year anniversary of their grant date, or April 2, 2025.

Also see Note 7.

NOTE 7 – STOCKHOLDERS’ EQUITY

Common Stock

On January 12, 2023, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Boustead Securities, LLC, as representative of the underwriters, relating to the Company’s initial public offering (the “Offering”) of 172,500 shares (the “Shares”) of the Company’s common stock, par value $0.00001 per share (“common stock”), which included the exercise by the underwriters in full of the over-allotment option to purchase an additional 22,500 shares of the Company’s common stock at an Offering price of $50.00 per share. Pursuant to the Underwriting Agreement, in exchange for the Representative’s firm commitment to purchase the Shares, the Company agreed to sell the Shares to the Representative at a purchase price of $46.50 (93% of the public offering price per Share of $50.00) and issue the underwriters three-year warrants to purchase an aggregate of 8,625 shares of the Company’s common stock, which is equal to five percent (5%) of the Shares sold in the Offering. Such warrants have an exercise price of $6.25, which is equal to 125% of the Offering price (the “Warrant”).

The Shares were offered and sold pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-268484), as amended (the “Registration Statement”), and filed with the Securities and Exchange Commission (the “Commission”) and the final prospectus filed with the Commission pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended (the “Securities Act”). The Registration Statement was declared effective by the Commission on January 12, 2023. The closing of the Offering for the Shares took place on January 18, 2023 with net proceeds of $7,560,354, which included 22,500 shares sold by the Company upon the exercise by the underwriters of the over-allotment option in full. The Company used the net proceeds from the Offering for team expansion, marketing, general and administrative corporate purposes, including working capital and capital expenditures.

In January 2023, the Company issued 70,000 shares to the Pre-IPO funding investors pursuant to the exercise of their warrants at fair value of $10.00 per share.

In January 2023, the Company issued 12,731 shares to Boustead Securities, LLC pursuant to the cashless exercise of their 16,448 warrants.

On January 13, 2023, in connection with the Offering, the Company commenced trading on The Nasdaq Capital Market under ticker symbol “MGOL.”

In February 2024, the Company issued 23,202 shares to its former Chief Marketing Officer pursuant to a Settlement Agreement and Release, valued at the stock price on the day of the executed Settlement Agreement, which was $4.31 on January 19, 2024. The related stock-based compensation of $99,999 was accrued as of December 31, 2023 and included in other accrued expenses as of the year ended December 31, 2023.

On April 12, 2024, the Board unanimously authorized and approved an amendment (“Plan Amendment”) to MGO’s 2022 Equity Incentive Plan (the “2022 Plan”) to increase the number of shares of the Company’s common stock, par value $0.00001 per share, (“Common Stock”) reserved for issuance under the 2022 Plan by an additional 182,451 shares of Common Stock. Such an increase resulted in a total of 451,188 shares of Common Stock being reserved under the 2022 Plan, of which 205,071 were available for future awards. On April 17, 2024 (the “Record Date”), a majority of our stockholders consented to the Plan Amendment. In accordance with Rule 14c-2 of the Exchange Act of 1934, as amended (the “Exchange Act”), corporate actions described above went effective twenty (20) days after a Schedule 14C Information Statement was mailed to our stockholders on April 29, 2024.

On June 4, 2024, MGO issued a total of 182,869 unregistered restricted shares of the Company’s common stock to directors and officers of the Company, including 41,633 shares issued to Maximiliano Ojeda, the Chief Executive Officer of the Company, 41,633 shares issued to Virginia Hilfiger, the Chief Brand Officer of the Company, 41,633 shares issued to Julian Groves, the Chief Operating Officer of the Company, 22,297 shares issued to Dana Perez, the Chief Financial Officer of the Company, and 8,919 shares issued to each non-employee director of the Company. The restricted shares of the Company’s common stock were issued pursuant to the MGO’s 2022 Equity Incentive Plan and are exempt from registration in reliance on exemption provided for under Section 4(a)(2) of the Securities Act of 1933.

Between July 1, 2024, and August 19, 2024, 9,500 restricted stock units were converted into restricted shares of common stock of the Company in accordance with the terms of respective grant agreements.

On July 11, 2024, 2,000 options held by employees of the Company to purchase 2,000 shares of the Company’s common stock was canceled by the Board of Directors of the Company. Subsequent to the cancelation, the Company issued these employees 2,000 shares of the Company’s restricted stock.

On July 18, 2024, the Company effected a reverse stock split at a ratio of 1-for-10. Accordingly, the financial statements presented in this Form 10-Q have been adjusted to reflect the reverse stock split historically.

On August 5, 2024, MGO issued a total of 22,000 unregistered shares of the Company’s common stock to directors and officers of the Company, including 4,986 shares issued to Maximiliano Ojeda, the Chief Executive Officer of the Company, 4,987 shares issued to Virginia Hilfiger, the Chief Brand Officer of the Company, 4,987 shares issued to Julian Groves, the Chief Operating Officer of the Company, 2,640 shares issued to Dana Perez, the Chief Financial Officer of the Company, and 1,100 shares issued to each non-employee director of the Company. The shares of the Company’s common stock were issued pursuant to the MGO Global Inc. 2022 Equity Incentive Plan and are exempt from registration in reliance on exemption provided for under Section 4(a)(2) of the Securities Act of 1933.

Throughout the first nine months of 2024,

SEC Form 10-Q filed by MGO Global Inc.