Company: AGCC
Filing Date: 2025-03-31
Form Type: DRS
Source: 0001213900-25-026121
Chunk: 73

Company: Agencia Comercial Spirits Ltd.
Filing Date: 2025-03-31
Form: DRS
Chunk 73
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 capital needs and ongoing operations. The negative operating cash flows in both years were primarily attributable to the nature of our whisky trading business, which requires us to maintain significant inventory levels to meet customer demand and support the aging process of our whisky products. These cash outflows reflect our continued investment in the business as we pursue long -termgrowth and success. The significant net cash inflow of US$494,042 from investing activities in 2023 was primarily due to the repayment of a loan extended to a related party in a previous period. This loan was provided to support the working capital needs of the related party, and its repayment in 2023 resulted in a substantial cash inflow for our company. It is important to note that our cash flows from financing activities, particularly in the year 2024, were impacted by offering costs incurred in connection with IPOs. These offering costs reduced the net cash inflows from financing activities. In 2024, we incurred offering costs of US$150,151 related to IPOs, which contributed to the lower net cash inflows from financing activities during that period. 52

The contrasting cash flows from financing activities between 2023 and 2024 are attributable to our financing strategy and the specific transactions undertaken in each year. In 2023, we experienced a net cash outflow from financing activities of US$157,258, which was primarily due to repayments of bank borrowings and related party loans. However, in 2024, our financing needs were met through a significant related party loan, resulting in a net cash inflow of US$191,786 from financing activities. This shift from a cash outflow to a cash inflow reflects our strategic decision to obtain additional financing from a related party to support our working capital requirements and ongoing operations in 2024. We have established robust liquidity management processes, including cash flow forecasting, working capital optimization, and proactive inventory management strategies. These measures ensure that we maintain sufficient liquidity to meet our obligations as they come due. We have initiated cost -cuttinginitiatives and operational efficiency improvements to reduce our cash outflows and enhance profitability, thereby improving our operating cash flow generation. We are currently evaluating our business strategy, including potential adjustments to our product mix, pricing strategies, and market focus, to enhance profitability and cash flow generation from our core operations. Please refer to the statements of cash flows in our audited financial statements for further details on our cash flow movements during the reported periods.

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