First Half Year of 2025 Financial Highlights
Total revenues were approximately $0.1 million for the six months ended June 30, 2025, compared with the total revenues of approximately $0.4 million for the six months ended June 30, 2024.
Gross profit was approximately $0.1 million for the six months ended June 30, 2025, compared with approximately gross profit of $0.3 million for the six months ended June 30, 2024.
Gross margin was 84.7% for the six months ended June 30, 2025, compared with a gross margin of 65.8% for the six months ended June 30, 2024.
Loss from operations was approximately $4.5 million for the six months ended June 30, 2025, compared with income from operations of approximately $2.1 million for the six months ended June 30, 2024.
Net loss was approximately $3.8 million for the six months ended June 30, 2025, compared with approximately $1.9 million for the six months ended June 30, 2024.
Basic and diluted loss per share was $0.19 for the six months ended June 30, 2025, compared with $0.28 for the six months ended June 30, 2024.
Recent developments
On January 23, 2025, the Board of Directors of the Company (the "Board") approved the appointment of Mr. Aimin Kong as the Chief Operating Officer ("COO") of the Company for a term of 5 years and agreed to grant him 12 million preferred shares. On June 27, 2025, the shareholders of the Company approved that 12 million preferred shares (the "Preferred Shares") be designated and issued to Mr. Aimin Kong or the company under this control at the Extraordinary General Meeting of the shareholders of the Company. Each Preferred Share shall have 15 votes for every Preferred Share of which he is the holder, subject to the Certificate of Designation and certain vesting and earn-out terms in his Employment Agreement. The Preferred Shares were valued at approximately $1.75 million on the grant date. On June 27, 2025, the 12 million Preferred Shares were issued to Hao Shun Investments Limited, a company under the control of Mr. Kong.
On April 28, 2025 ("Grant Date"), Compensation Committee of the Board granted stock awards of 500,000 ordinary shares, par value $0.00025, pursuant to our 2021 Omnibus Equity Plan, to five officers and employees of us and subsidiaries of our operating variable interest entity (the "Grantees"), including 100,000 shares to Mr. Yi Shao, the Chief Executive Officer of the Company (collectively, the "Grants"). The Grants vested immediately on the Grant Date and each of the Grantees also entered into an Unrestricted Stock Award Agreement with the Company on April 28, 2025. Grant date fair value of the stock award was approximately $2,040,000.
Due to the investigation against our related parties (see details below), the revenue for the six months ended June 30, 2025 has been continuously, materially and negatively impacted as regaining customers' confidence in the Company was challenging. In order to develop the business and customers, the Company purchased software of block chain asset exchange system at a cost of $1.5 million in November 2024 and planed to offer block chain asset trading on our platform to generate transactions service fee. However, the project has not yet been launched and the Company is evaluating the project and will obtain all approvals required before the launch of this project.
On October 16, 2025, the Board approved and authorized that the authorized share capital of the Company be increased from (a) $50,000 divided into 280,000,000 shares of which (x) 180,000,000 shares are designated as ordinary shares with a nominal or par value of $0.00025 per share and (y)100,000,000 shares are designated as preferred shares with a nominal or par value of $0.0005 per share, to (b) $500,000 divided into shares of which (x) 1,980,000,000 shares are designated as ordinary shares with a nominal or par value of $0.00025 per share, and (y) 100,000,000 shares are designated as preferred shares with a nominal or par value of $0.00005 per share by creation of 1,800,000,000 ordinary shares with a nominal or par value of $0.00025 per share. (the "Share Capital Increase") The Share Capital Increase is still subject to shareholders' approval.
On October 16, 2025, the Board also approved to terminate the variable interest entity ("VIE") structure of the Company due to the change of its business strategy. Jiangsu Yanggu Culture Development Co., Ltd. ("Jiangsu Yanggu"), the variable interest entity of the Company, will transfer all the equity interests of its wholly owned subsidiaries, namely Nanjing Yanqing Information Technology Co., Ltd. ("Nanjing Yanqing") and Nanjing Yanyu Information Technology Co., Ltd. ("Nanjing Yanyu") to Nanjing Rongke Business Consulting Service Co., Ltd. (the "WFOE" or "Nanjing Rongke"), a wholly owned subsidiary of the Company and the Company will terminate the Equity Pledge Agreement by and among the WFOE, Jiangsu Yanggu and Jiangsu Yanggu's shareholders to release the pledged shares of Jiangsu Yanggu to its shareholders. Jiangsu Yanggu has completed the transfer of all the equity interests of Nanjing Yanqing and Nanjing Yanyu to Nanjing Rongke on November 11, 2025. Upon the completion of this transfer, the Company owns the equity interest of its operating entities in China instead of through VIE structure.
Impact of investigation and charge against our shareholders
On July 1, 2022, Mr. Huajun Gao and Mr. Aimin Kong, each was a major shareholder of the Company, were detained by Nan County Public Safety Bureau of Yiyang City, Hunan Province, China. On July 26, 2022, Nan County People's Procuratorate ("NCPP") approved the arrest of Mr. Gao and Mr. Kong, charging them with assisting in illegal online business operation of Nanjing Jinwang Art Purchase E-commerce Co., Ltd. ("Nanjing Jinwang") and prosecuted them to Nan County People's Court (the "Court") in August 2023.
On July 1, 2022, the bank accounts of Nanjing Jinwang were frozen by Nan County Public Safety Bureau, including a trust account into which the customers of the Company deposit their security deposits in order to trade on the Company's two online trading platforms which the Company had entrusted Nanjing Jinwang for escrow.
Also, on July 1, 2022, Nan County Public Safety Bureau froze certain bank accounts of Kashi Longrui Business Management Services Co., Ltd. ("Kashi Longrui"), Kashi Dongfang Cangpin Culture Development Co., Ltd. ("Kashi Dongfang") and Nanjing Yanyu Information Technology Co., Ltd. ("Nanjing Yanyu"), all subsidiaries of Jiangsu Yanggu Culture Development Co., Ltd., the variable interest entity of the Company in China because they, each had business relationship with Nanjing Jinwang.
The Court had the hearing in August 2023 and trial in January 2024 and both of Mr. Kong and Mr. Gao were released on bail waiting for the judgement of the Court since February 2024. On May 5, 2025, NCPP filed with the Court to withdraw the charges against Nanjing Jinwang, Mr. Aimin Kong and Mr. Huajun Gao due to lack of evidence to press the charges. On May 8, 2025, the Court ordered to grant the withdrawal of charges against Nanjing Jinwang, Mr. Kong and Mr. Gao by NCCP. On May 15, 2025, Nan County Public Safety Bureau unfroze the bank accounts of Nanjing Jinwang, a related party of the Company. On May 15, 2025, Nan County Public Safety Bureau unfroze the bank accounts of Kashi Longrui, Kashi Dongfang and Nanjing Yanyu. On May 28, 2025, NCCP determined it would not seek to file any charges against Nanjing Jinwang, Mr. Aimin Kong and Mr. Huajun Gao. The investigation and case have been officially closed according to the PRC counsel of the Company, Tahota (Nanjing) Law Firm. All customers can freely transfer their deposits and make their withdrawals based on their actual needs.
Neither the Company nor its VIE or subsidiaries of its VIE have received any notification for enforcement charges from Nan County Public Safety Bureau, other than cash and short-term investment in the frozen bank accounts relating to the Nanjing Jinwang investigation as described above. Mr. Gao and Mr. Kong are not officers, directors or employees of the Company, its VIE or subsidiaries of the VIE until January 23, 2025 when Mr. Kong was appointed as Chief Operating Officer of the Company.
Due to the Nanjing Jinwang case between July 2022 and May 2025, the business operations of the Company have been materially and negatively impacted as its customers may had concerns regarding the safety of their deposited funds following difficulties they experienced in withdrawing their security deposits through online banking when the bank accounts were frozen. The number of customers who actively traded on our online platform continuously deceased from 15,124 for the six months ended June 30, 2024, to 4,504 for the same period in 2025.
This investigation and case against our related parties had negative impact on our revenue for the six months ended June 30, 2025. Our revenue decreased approximately $0.3 million from approximately $0.4 million for the six months ended June 30, 2024 to approximately $0.1 million for the same period of 2025.
Liquidity and Capital Resources
The Company typically financed its operations through internally generated cash and equity financing. As of June 30, 2025, the Company had approximately $38.8 million in cash and the Company's working capital was approximately $39.1 million at June 30, 2025.
If the Company is unable to realize its assets within the normal operating cycle of a 12-month period, the Company may have to consider supplementing its available sources of funds through the following sources:
other available sources of equity or debt financing from financial institutions or investors; and
financial support from our related parties and shareholders.
Based on the above considerations, the Company's management believes that it has sufficient funds to meet its working capital requirements and debt obligations as they become due over the next 12 months.
Results of Operations
The tables in the following discussion summarize our unaudited interim condensed consolidated statements of operations and comprehensive loss for the periods indicated. The operating results in any period are not necessarily of the results that may be expected for any future period. Six Months Ended June 30, 2025 vs. June 30, 2024
For the Six MonthsEndedJune 30,
Variance
2025
2024
Amount
%
Net revenues
$
141,374
$
392,624
$
(251,250
)
(64.0
)%
Net revenues, related parties
-
54,633
(54,633
)
(100.0
)%
Total operating revenues
141,374
447,257
(305,883
)
(68.4
)%
Less: cost of revenues
(20,696
)
(152,802
)
132,106
(86.5
)%
Gross profit
120,678
294,455
(173,777
)
(59.0
)%
Operating expenses
(4,635,712
)
(2,373,523
)
(2,262,189
)
95.3
%
Loss from operations
(4,515,034
)
(2,079,068
)
(2,435,966
)
117.2
%
Other income, net
690,693
205,996
484,697
235.3
%
Loss before income taxes
(3,824,341
)
(1,873,072
)
(1,951,269
)
(104.2
)%
Provision for income taxes
-
-
-
-
%
Net loss
(3,824,341
)
(1,873,072
)
(1,951,269
)
(104.2
)%
Foreign currency translation adjustment
130,857
(192,302
)
323,159
(168.0
)%
Comprehensive income
$
(3,693,484
)
$
(2,065,374
)
(1,628,110
)
78.8
%
Weighted average number of ordinary shares outstanding, basic and diluted
20,070,022
6,800,280
13,269,742
195.1
%
Basic and diluted earnings per share
$
(0.19
)
$
(0.28
)
$
0.09
(30.8
)%
Revenues:
The following table sets forth the principal components of our net revenues by amounts and percentages of our net revenues for the periods indicated:
For the Six Months Ended June 30,
2025
2024
Variance
Revenue
%
Revenue
%
Amount
%
Listing services fees(1)
$
114
