WEBUY GLOBAL LTD — Form 20-F Summary
Business Context and Reporting Period
This annual report covers the fiscal year ended December 31, 2023, although the request identifies the period as 2023 Q4. The filing reports full-year results, not standalone quarterly results. Webuy is a Cayman Islands holding company whose operations are conducted primarily through subsidiaries in Singapore and Indonesia. Its community e-commerce business focuses on groceries, lifestyle products and packaged travel, with an online-to-offline franchise model introduced in October 2023. The company reports under U.S. GAAP and trades on Nasdaq Capital Market under “WBUY.”
Key Financial Metrics
| Metric | FY2023 | FY2022 | Change |
|---|---|---|---|
| Revenue | $61.69 million | $44.56 million | +38.4% |
| Gross profit | $5.14 million | $3.75 million | +37.1% |
| Gross margin | 8.34% | 8.42% | Down 8 basis points |
| Operating loss | $5.15 million | $7.37 million | Improved by $2.22 million |
| Net loss | $5.16 million | $6.70 million | Improved by $1.54 million |
| Net cash used in operating activities | $7.16 million | $4.12 million | Use increased by $3.04 million |
| Cash and cash equivalents | $5.39 million | $1.55 million | Increased by $3.84 million |
Revenue consisted primarily of groceries and packaged tours. Indonesia grocery revenue increased to $36.18 million from $19.54 million, Singapore grocery revenue declined to $10.85 million from $18.35 million, and packaged-tour revenue increased to $14.66 million from $6.43 million. Indonesia represented approximately 59% of revenue and Singapore approximately 41%.
Cost of revenues was $56.54 million, including $42.58 million of inventory costs and $13.29 million of packaged-tour costs. Selling and distribution expenses declined to $2.56 million from $4.12 million, while general and administrative expenses increased to $7.73 million from $5.73 million. No share-based compensation was recorded in 2023, compared with $1.27 million in 2022.
Investing cash outflows were $4.59 million, including $3.00 million for an unsecured promissory note, $0.89 million for intangible assets and $0.70 million for leasehold improvements and equipment. The promissory note was fully collected in January 2024. Financing cash inflows were $15.53 million, primarily from IPO proceeds and convertible notes.
At December 31, 2023, total assets were $30.23 million and total liabilities were $24.58 million. Current liabilities were $22.18 million against current assets of $25.39 million. Loans payable totaled $0.72 million, convertible notes payable totaled $1.90 million and operating lease liabilities totaled $2.90 million. Shareholders’ equity was $5.66 million, compared with a deficit of $2.78 million at December 31, 2022.
Material Changes Versus the Prior Period
- Revenue growth was driven by Indonesian bulk grocery orders and higher demand for Singapore packaged tours.
- Gross margin remained broadly stable despite higher grocery costs, discounts and increased freight costs.
- Operating and net losses narrowed due to revenue growth and reduced marketing, fulfillment and distribution expenses.
- General and administrative expenses rose because of increased Indonesian headcount, amortization of acquired software and higher depreciation related to a new Singapore office and warehouse lease.
- Operating cash burn worsened substantially, principally because accounts receivable increased by $8.11 million and prepaid expenses and other assets increased by $4.78 million.
- The company completed an IPO and over-allotment transactions during 2023, issuing a total of 4.37 million ordinary shares and receiving approximately $15.54 million in proceeds before certain offering costs.
- The company introduced an online-to-offline franchise model and established Indonesian entities for offline retail and travel operations.
Outlook, Risks, Contingencies and Unusual Items
Management did not provide quantified revenue, earnings or cash-flow guidance. Management expects to pursue additional fundraising and borrowings to support working capital and expansion, but the filing states that financing may not be available on acceptable terms or at all.
The independent auditor included a going-concern uncertainty. The company has incurred operating losses and negative operating cash flow since inception, and management’s plans depend materially on future financing and improved cash flows. The financial statements contain no adjustments for the possible effects of an inability to continue as a going concern.
Major operating risks include intense e-commerce competition, dependence on customer and Group Leader retention, expansion and execution risk, product quality and authenticity issues, supply-chain and freight-cost inflation, foreign-exchange volatility, cybersecurity and data-protection exposure, dependence on third-party payment providers, regulatory and licensing requirements in Singapore and Indonesia, and limited insurance coverage. The company has no registered intellectual property as of the report date.
The company does not expect to pay dividends in the foreseeable future. Its founder and chairman, Bin Xue, controls approximately 69.36% of voting power through Class B shares, making the company a controlled company. Class B shares carry ten votes per share.
Subsequent events include the March 2024 reclassification of shares into Class A and Class B shares, a $2.50 million unsecured promissory note issued to the company in January 2024 bearing interest at 3% per month, and the February 2024 incorporation of Webuy Advisory Pte. Ltd. Nasdaq notified the company in January 2024 that it was not in compliance with the $1.00 minimum bid-price requirement and gave it until July 24, 2024 to regain compliance.
Important Facts for Investors to Verify
- Verify the company’s current liquidity, cash runway and ability to raise additional capital given the auditor’s going-concern uncertainty and $7.16 million of 2023 operating cash burn.
- Assess collectability and concentration of the $10.11 million accounts receivable balance and the $6.03 million of prepaid expenses and other assets.
- Review the terms, maturity and settlement status of the $1.90 million convertible notes, including the reported waiver of conversion rights and cash-settlement provisions.
- Reconcile the filing’s IPO timing and proceeds disclosures, which reference both an April 5, 2023 offering and Nasdaq trading beginning October 19, 2023.
- Evaluate whether Indonesian revenue growth and the new franchise/O2O model can produce sustainable margins rather than growth dependent on discounts and bulk orders.
- Monitor Nasdaq minimum-bid-price compliance and any resulting reverse split, delisting or other capital-markets actions.
- Confirm the effect of the dual-class structure, founder control and potential dilution from authorized but unissued shares.
- Review cybersecurity, data privacy, payment-processing, licensing and foreign-exchange controls across the company’s operating jurisdictions.