香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示概不對因本公告全部或任何 部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 恩典生命科技控股有限公司 Grace Life-tech Holdings Limited （於開曼群島註冊成立的有限公司） （已委任聯席臨時清盤人） （僅適用於公司重組） （股份代號：02112） 補充公告 恩典生命科技控股有限公司（「本公司」）董事（各自為「董事」）會（「董事會」）擬 提供有關其截至二零二四年十二月三十一日止年度的年報（「年報」）之額外資料。 除另有所指外，本公告所用詞彙與年報所界定者具有相同涵義。 礦業業務 於二零二五年四月二十三日，本集團與一間馬來西亞礦業管理公司（「合夥人A」） 訂立合作協議，本集團於二零二五年二月與合夥人A相遇及自此開始探索開採錫 精礦的可能性。本集團將向合夥人A提供採礦許可證、現有採礦機器及設備以及生 產人員，以於Ibam礦山進行勘探及開採。 合夥人A已與一間主要於中國從事礦產材料進出口的公司訂立合作協議，以帶來 流程技術、設備安裝及選礦生產管理之專業知識及技 ...

Grace Life Technology Holdings Limited 2024 Annual Report Supplement Announcement [Measures and Current Status Addressing the 'Disclaimer of Opinion'](index=1&type=section&id=Disclaimer%20of%20Opinion) This section outlines the company's multi-faceted strategies, encompassing business development, debt restructuring, receivables recovery, cost control, and legal petition management, to address the auditor's disclaimer of opinion and enhance financial sustainability [Business Development](index=1&type=section&id=Business%20Development) The company has pivoted to the plant stem cell business, suspending iron ore operations, and is expanding its B2B market through outsourced production, distributor networks, new product launches, and strategic partnerships, generating new revenue and securing minor bank loans - Due to declining iron ore prices, the company has suspended its iron ore business while evaluating other revenue possibilities, such as tin concentrate as a byproduct[4](index=4&type=chunk) - The company is actively developing its plant stem cell business using a B2B model, outsourcing production to external factories, and has launched new products like ginseng stem cell liquor and high-fiber probiotic beverages to expand its market[5](index=5&type=chunk)[6](index=6&type=chunk) - A strategic cooperation framework agreement was signed with Tianjin Bingcaogangmu in June 2024, leveraging its sales network to promote products and generating approximately **$3.3 million** in new revenue from this partnership during the year[6](index=6&type=chunk)[15](index=15&type=chunk) - To support working capital, the company borrowed **RMB 2.1 million** in unsecured bank loans during the year, with annual interest rates ranging from **14.3% to 18.0%**[6](index=6&type=chunk) [Debt and Financing Status](index=3&type=section&id=Debt%20and%20Financing%20Status) The company faces severe debt pressure, engaging in restructuring negotiations with multiple creditors, including a **$60 million** loan from controlling shareholder Yutian, approximately **$27.7 million** from a third-party merchant, about **$36.8 million** in bank loans (primarily OCBC), and approximately **$78.2 million** in overdue notes, while also facing fundraising challenges due to unfavorable market conditions Debt Overview | Debt Type | Related Party | Amount (Approx.) | Status | | :--- | :--- | :--- | :--- | | Shareholder Loan | Controlling Shareholder Yutian | $60 million | Verbally agreed not to demand repayment, but no formal agreement | | Shareholder Loan 2 | Yutian/Industrial Bank | $40 million | Loan rights assigned to Industrial Bank due to Yutian's default to Industrial Bank | | Other Borrowings | Hong Kong Merchant (Third Party) | $27.7 million (Principal & Interest) | Verbally agreed not to demand repayment, formal agreement under negotiation | | Bank Loans | OCBC Bank, etc. | $36.75 million | Defaulted, debt restructuring being handled by asset management company | | Outstanding Notes | Noteholders 1 & 2 | $78.2 million (Total) | Defaulted, restructuring negotiation being handled by asset management company | - Due to uncertain future economic growth and a high-interest rate environment, investor sentiment is cautious, posing fundraising challenges for the company, with only preliminary discussions held with potential investors[11](index=11&type=chunk)[14](index=14&type=chunk) [Recovery of Outstanding Trade Debts](index=5&type=section&id=Recovery%20of%20Outstanding%20Trade%20Debts) As of year-end 2024, the company's total trade receivables were approximately **$224 million**, with formal repayment agreements reached with two major debtors accounting for over **80%** of the outstanding amount, though repayment progress is slow, prompting further negotiation for accelerated recovery Trade Receivables Summary | Item | 2024 (USD Thousands) | 2023 (USD Thousands) | | :--- | :--- | :--- | | **Total Trade Receivables** | **224,326** | **225,065** | | Of which: Debtor A | 111,356 | 111,468 | | Of which: Debtor B | 73,178 | 73,681 | - Formal repayment agreements have been reached with major debtors A and B, with each repaying **HKD 200,000** monthly since mid-2024; the company acknowledges the current repayment plan is not optimal and will continue negotiations to accelerate recovery[16](index=16&type=chunk)[18](index=18&type=chunk) [Cost Control](index=6&type=section&id=Cost%20Control) To control administrative costs, the company has implemented various measures, including optimizing staffing (reducing employees from **45 to 40**), adjusting to a performance-based compensation structure, and strictly controlling non-essential expenditures - Multiple cost control measures have been implemented, including optimizing staff allocation, with total employees reduced from **45** at year-end 2023 to **40** at year-end 2024[19](index=19&type=chunk) - Compensation structure has been adjusted from fixed salaries to performance-based incentives, while unnecessary business travel is restricted and online meetings are encouraged[19](index=19&type=chunk) [Petitions and Legal Status](index=6&type=section&id=Petitions%20and%20Legal%20Status) In 2021, the company proactively filed a 'light-touch' winding-up petition with the Cayman Court to facilitate debt restructuring while retaining business management; additionally, a statutory demand for approximately **RMB 251 million** was received, but its validity is disputed, and no winding-up proceedings have been initiated by the claimant - In June 2021, the company proactively filed a 'light-touch' winding-up petition with the Cayman Court to appoint joint provisional liquidators to assist with debt restructuring[20](index=20&type=chunk) - The company received a statutory demand for repayment of approximately **RMB 251 million**, but internal review raised doubts about its validity due to no prior business dealings with the claimant[22](index=22&type=chunk) - As of December 31, 2024, the company had not received any winding-up petitions or legal proceedings notices related to the aforementioned statutory demand[22](index=22&type=chunk) [Future Plans to Address the 'Disclaimer of Opinion' (FY2025)](index=8&type=section&id=Company%27s%20Resolution%20Plan%20for%20Disclaimer%20of%20Opinion) For FY2025, the company has formulated a comprehensive resolution plan to address issues leading to the 'disclaimer of opinion,' focusing on achieving at least **20%** sales growth in plant stem cell business, formalizing key debt agreements, introducing new partners for overall debt restructuring, pursuing financing opportunities, and targeting approximately **10%** administrative cost savings - **Business Growth**: Plans to achieve no less than **20%** sales growth in the plant stem cell business in FY2025 by launching new products like beauty and personal care items and adding **3-5** new distributors[24](index=24&type=chunk) - **Debt Management**: Plans to sign formal written agreements with shareholder Yutian and third-party lenders in 2025, and engage with a Beijing-based private equity fund to explore debt consolidation plans[24](index=24&type=chunk) - **Receivables Recovery**: Meetings will be held with major debtors A and B in Q4 FY2025 to negotiate methods for accelerating repayment progress[27](index=27&type=chunk) - **Cost Savings**: Aims to save approximately **10%** in administrative costs in FY2025 through measures including improving labor efficiency, salary reviews, and controlling capital expenditures[27](index=27&type=chunk)

Financial Performance - Revenue for the year 2024 was $13.764 million, a decrease of 49% compared to $27.255 million in 2023[4] - Loss attributable to the company's owners was $(48.128) million, representing a 22% increase from $(39.566) million in the previous year[4] - Total assets decreased by 27% to $79.803 million from $108.949 million in 2023[4] - The current ratio decreased to 0.25 from 0.4 in the previous year, indicating a decline in liquidity[4] - Basic loss per share increased to 3.21 cents from 2.63 cents in 2023[4] - The gross profit for 2024 was approximately $2.2 million, down from about $2.8 million in 2023[12] - The annual loss for 2024 was $48 million, an increase of 22% from the $40 million loss in 2023[12] - The company's sales revenue for the year ending December 31, 2024, was approximately $13.76 million, a decrease of 49.5% compared to $27.26 million in 2023[32] - The sales of health products amounted to $13.25 million in 2024, showing a slight increase of 1.79% from $13.02 million in 2023[32] - The cost of sales for the company decreased by approximately 52.5% to about $11.6 million in 2024, down from approximately $24.4 million in 2023[35] - The iron ore sales generated no revenue in 2024, compared to $8.6 million in 2023, primarily due to market uncertainties[34] - The group recorded a loss of approximately $48.2 million for the year ended December 31, 2024, compared to a loss of approximately $39.6 million in 2023, with the increase mainly attributed to higher impairment losses on financial assets[40] - As of December 31, 2024, the group had a capital deficiency of approximately $167.5 million, compared to $119.9 million as of December 31, 2023[41] - The net current liabilities increased from approximately $134.4 million as of December 31, 2023, to approximately $182.5 million as of December 31, 2024, primarily due to a decrease in trade receivables[47] - The company has a total of approximately $193.26 million in debts owed to the ultimate holding company, banks, and other borrowings[126] Operational Strategy - The company continued to invest in R&D and market expansion in the plant stem cell business, enhancing product efficacy and competitiveness[11] - The company aims to diversify applications of plant stem cell products in health, beauty, and pharmaceuticals to expand market coverage[11] - The company plans to establish a global R&D center and collaborate with renowned research institutions to focus on key technological breakthroughs in plant stem cell technology[22] - The company aims to install 10,000 vending machines nationwide to enhance market reach for its functional health products[16] - The company plans to open over 50 plant stem cell health management centers across the country in 2025 to provide personalized health solutions[22] - The company is actively seeking strategic investors to optimize production processes and enhance cash flow for future recovery[21] - The company plans to establish a production base and sales channels for functional health products based on plant stem cell research, expected to generate significant operating cash flow by 2025[123] Environmental Commitment - The company is committed to sustainable development, implementing environmental measures to ensure efficient resource use and reduce carbon emissions[11] - The group complies with all relevant environmental protection laws and regulations, with no confirmed non-compliance incidents or complaints reported for the fiscal year 2024[142] - The total air emissions are minimal due to the limited scale of mining and production activities, with no recorded data for the fiscal year 2024[143] - The group is committed to integrating sustainable development concepts into daily operations and continuously seeks opportunities to improve performance and reduce environmental impact[141] - The company has adhered to all relevant laws and regulations regarding waste management, with no significant non-compliance incidents reported in fiscal years 2024 and 2023[154] - The company has committed to a paperless operation system by promoting the use of technology in communications and encouraging double-sided printing[155] Employee and Governance - As of December 31, 2024, the company employed 40 employees, down from 45 in 2023, with total employee costs, including director remuneration, approximately 1.3 million dollars[62] - The company has a comprehensive support policy for pregnant employees, ensuring they can return to their original positions after maternity leave[166] - There were no reported injury cases in fiscal years 2024 and 2023, indicating a safe working environment[168] - The company emphasizes a competitive compensation policy to retain talent, adjusting salaries annually to meet market standards[165] - The company has established an audit committee, nomination committee, and remuneration committee to oversee specific matters, with most members being independent non-executive directors[86] - The board of directors consists of three executive directors and three independent non-executive directors as of December 31, 2024[78] - The company has implemented measures to address the "unable to express opinion" issue raised by auditors, focusing on improving its financial situation and operational cash flow[125] Risk Management - The company has established a robust risk management framework since 2016, following the COSO framework for effective risk management[101] - The main risk identified for 2024 is the potential decrease in business due to economic recession or political instability, particularly affecting iron ore sales[103] - The audit committee has reviewed the internal control and risk assessment reports, confirming the effectiveness of the internal control system[107] - The risk register is maintained to track identified risks and actions taken to mitigate them, with annual evaluations of risks based on their likelihood and potential impact[105] Market Trends - The health industry in China is projected to reach a market value of 16 trillion yuan by 2030, driven by rising health awareness and consumption upgrades[24] - The health supplement market in China reached a scale of 387.9 billion yuan in 2023, with a year-on-year growth of 29.78%, and is expected to grow to 506.7 billion yuan by 2028, reflecting a 19.59% increase[27] - The per capita disposable income of urban residents in China increased from 19,000 yuan in 2010 to 52,000 yuan in 2023, supporting the growth of the health supplement market[27] - The aging population in China, with those aged 60 and above increasing from 185 million (13.7%) in 2011 to 297 million (21.1%) in 2023, is expected to drive future demand in the health industry[28] Corporate Governance - The company has a policy regarding the health and safety of its products and services, ensuring compliance with relevant laws and regulations[189] - The company has implemented policies to prevent child labor and forced labor, with measures in place to review recruitment practices[189] - The group has fully complied with the Personal Data (Privacy) Ordinance and other relevant laws to protect the rights of employees, customers, and business partners[178] - The group maintains a clear policy against corruption and has established a confidential reporting channel for employees and external stakeholders to report unethical behavior[179]

Financial Performance - Revenue for the year ended December 31, 2024, was $13.764 million, a decrease of 49% compared to $27.255 million in 2023[6] - Loss attributable to owners of the company was $(48.128) million, representing a 22% increase from $(39.566) million in the previous year[6] - Total assets decreased by 27% to $79.803 million from $108.949 million in 2023[6] - Trade receivables fell by 34% to $59.239 million compared to $89.523 million in 2023[6] - The gross profit for 2024 was approximately $2.2 million, down from about $2.8 million in 2023[14] - The annual loss for 2024 was $48 million, an increase of 22% from the $40 million loss in 2023[14] - The company's sales revenue for the year ended December 31, 2024, was $13.76 million, a decrease of 49.5% compared to $27.26 million in 2023[34] - The sales cost for the year ended December 31, 2024, was approximately $11.6 million, a decrease of 52.5% from about $24.4 million in 2023[37] - Gross profit for the year ended December 31, 2024, was approximately $2.2 million, a decrease from approximately $2.8 million for the year ended December 31, 2023, primarily due to insufficient sales of iron ore and electronic products[38] - The group recorded a loss of approximately $48.2 million for the year ended December 31, 2024, compared to a loss of approximately $39.6 million in 2023, with the increase mainly attributed to higher impairment losses on financial assets[42] Business Operations and Strategy - The company continued to invest in research and development, focusing on plant stem cell products to enhance market competitiveness[13] - The company aims to expand the application of plant stem cell products in health, beauty, and pharmaceutical sectors[13] - The company plans to launch innovative plant stem cell traditional Chinese medicine products to meet the growing market demand for high-quality health products[17] - The company aims to install 10,000 vending machines in high-traffic areas to reach a broader consumer base for its functional health products[18] - The plant stem cell business has become one of the company's most important revenue sources, with significant growth momentum expected to continue in the second half of the year[17] - Future strategies include enhancing technology research, market expansion, and sustainable operations to maintain competitive advantages globally[13] - In 2025, the company plans to open over 50 plant stem cell health management centers nationwide to provide personalized health solutions[24] Market Trends and Industry Insights - The health industry in China is projected to reach a market value of 16 trillion yuan by 2030, driven by rising health awareness and consumption upgrades[26] - The Chinese health supplement market reached 387.9 billion yuan in 2023, growing by 29.78% year-on-year, and is expected to reach 506.7 billion yuan by 2028, with a CAGR of 19.59%[29] - The per capita disposable income of urban residents increased from 19,000 yuan in 2010 to 52,000 yuan in 2023, supporting the growth of the health supplement market[29] - The aging population in China, with those aged 65 and above reaching 14.27% in 2023, is expected to drive future demand for health products[30] Financial Position and Liabilities - Current liabilities increased from approximately $134.4 million as of December 31, 2023, to approximately $182.5 million as of December 31, 2024, primarily due to a decrease in trade receivables and an increase in notes payable[49] - The company has approximately $193.26 million in outstanding payments to the ultimate holding company, banks, and other borrowings, while cash and cash equivalents totaled only about $248,000[128] - The ultimate holding company has agreed not to demand repayment of approximately $60 million due by December 31, 2024, until the company's financial situation allows[125] - Independent third-party lenders have agreed not to demand repayment of approximately $18.34 million in principal and $9.74 million in interest due by December 31, 2024, until the company's financial situation allows[125] Governance and Compliance - The board of directors consists of three executive directors and three independent non-executive directors, ensuring accountability and transparency in governance[80] - The company has established an audit committee, nomination committee, and remuneration committee to oversee specific matters, with most members being independent non-executive directors[88] - The audit committee reviewed the audited financial statements for the year ending December 31, 2024, confirming compliance with applicable accounting standards and regulations[89] - The company has a diversity policy in place for evaluating potential board candidates, considering factors such as gender, age, and professional experience[97] - The company has established a robust risk management framework since 2016, following the COSO framework for effective risk management[103] Environmental and Social Responsibility - The company emphasizes sustainable development and environmental measures in its production processes[13] - The group complies with all relevant environmental protection laws and regulations, with no confirmed non-compliance incidents or complaints reported for the fiscal year 2024[144] - The group is committed to integrating sustainable development concepts into daily operations and continuously seeks opportunities to improve performance and reduce environmental impact[143] - The total greenhouse gas emissions for fiscal year 2024 amounted to 68,098.82 kg, a substantial increase of 194.5% compared to 23,126.59 kg in fiscal year 2023[159] - The company has implemented measures to reduce energy consumption, including using energy-saving facilities and turning off unused lighting and appliances[154] Employee and Workplace Practices - The company employed 40 employees as of December 31, 2024, a decrease of 11.1% from 45 employees in 2023[164] - The number of male employees decreased from 32 in 2023 to 22 in 2024, while female employees increased from 13 to 18 during the same period[164] - Employee turnover rates for fiscal year 2024 are as follows: under 30 years old at 15.00%, 31 to 50 years old at 65.00%, and over 51 years old at 20.00%[167] - The company has implemented policies to ensure a safe and healthy work environment, including regular safety inspections and fire drills[172] - The company has not reported any workplace injuries in fiscal years 2024 and 2023[170] Community Engagement and Ethical Practices - The group encourages employee participation in community service to contribute to a more sustainable and harmonious society[183] - The group has established a confidential reporting channel for employees and external stakeholders to report unethical behavior[181] - The group actively participates in industry initiatives to combat corruption and financial crimes, maintaining clear policies against such practices[181]

Financial Performance - For the six months ended June 30, 2024, the group's revenue was approximately $6.0 million, a decrease from $15.1 million for the same period in 2023, representing a decline of about 60.4%[4] - The gross profit for the period was approximately $1.0 million, down from $2.0 million in the previous period, indicating a decrease of 50%[4] - The group recorded a loss of approximately $9.0 million for the period, an improvement from a loss of $10.5 million in the previous period, reflecting a reduction in loss of about 14.3%[4] - The company recorded a revenue of 5.97 million USD in the first half of 2023, a decrease from 15.1 million USD in the same period last year[15] - The company reported a loss before tax of $8,980,000, an improvement from a loss of $10,213,000 in the previous year[54] - The net loss for the period was $8,996,000, compared to a net loss of $10,461,000 in 2023, indicating a 14.0% reduction in losses[54] - The company reported a net loss of approximately $9,223,000 for the six months ended June 30, 2024[68] - The company reported a loss of $8,966,000 for the six months ended June 30, 2024, compared to a loss of $10,461,000 for the same period in 2023, a reduction of 14.3%[92] Revenue Sources - The plant stem cell business has become one of the company's most important revenue sources, with expectations for continued growth in the second half of the year[7] - The company plans to expand its plant stem cell business into traditional Chinese medicine production, aiming to meet the growing market demand for high-quality health products[7] - Revenue from iron ore sales was $4,737 thousand, while health product sales generated $6,682 thousand, and other product sales contributed $3,632 thousand[76] - The health products segment reported a profit of $691 thousand, while the commercial trading segment incurred a loss of $1,743 thousand[79] Market Trends - The Chinese health supplement market is experiencing rapid growth, with a market size reaching approximately 415.12 billion yuan in 2023, indicating significant potential for future expansion[10] - The Chinese traditional medicine market accounted for approximately 23.7% of the overall pharmaceutical market in 2023, with a market size exceeding 400 billion CNY[11] - The market size of Chinese medicinal materials is projected to reach 223.29 billion CNY in 2023, representing a year-on-year growth of 7.1%[12] Cost and Expenses - The sales cost for the period was approximately 5.0 million USD, down from about 13.0 million USD in the previous period[17] - Administrative expenses decreased by 21.1% to approximately 1.2 million USD, down from about 1.6 million USD in the previous period[19] - Financing costs increased by approximately 15.6% to about 8.4 million USD due to increased interest expenses from issued notes[20] - The company reported a decrease in total expenses, with comprehensive expenses totaling $(9,195) thousand for the six months ended June 30, 2024, compared to $(9,165) thousand in the same period of 2023[67] Shareholder and Governance - The board did not recommend the payment of an interim dividend for the period, consistent with the previous period[4] - The company aims to create long-term value for shareholders and customers through continuous strategic innovation and operational optimization[9] - The company established a Remuneration Committee consisting of two independent non-executive directors and one executive director to oversee compensation policies and structures[43] - The company received independence confirmations from all independent non-executive directors as per listing rules[43] - The Nomination Committee, consisting of one executive director and two independent non-executive directors, is responsible for recommending suitable candidates for the board[43] Debt and Liabilities - As of June 30, 2024, the company's borrowings included approximately 36.5 million USD from a commercial bank and 71.9 million USD in notes and bonds[23] - As of June 30, 2024, the company recorded a capital deficit of approximately $129.0 million, compared to $119.9 million as of December 31, 2023[24] - Current liabilities increased to $232,946,000 from $225,358,000, reflecting a rise of 3.5%[55] - The company has overdue borrowings totaling approximately $54,683,000 in principal and $26,710,000 in interest as of June 30, 2024[68] - The company is actively negotiating with lenders regarding the extension and rescheduling of defaulted loans[71] Operational Measures - The company is exploring various financing options with different financial institutions to secure operational funding for the foreseeable future[71] - The company has taken measures to expedite the collection of outstanding trade receivables[71] - The company is implementing cost control measures, including optimizing human resources and adjusting management salaries[71] Compliance and Corporate Governance - The company has complied with the corporate governance code as per the Hong Kong Stock Exchange listing rules during the reporting period[38] - There were no significant events after the reporting period[29] - The company has not disclosed any new product developments or market expansion strategies in the current report[52] - The company has not disclosed any new product launches or technological advancements during this reporting period[64] Employee and Management - The company employed 47 staff members as of June 30, 2024, with total employee costs, including director remuneration, amounting to approximately $0.6 million, a slight decrease from $0.7 million in the previous period[28] - Total compensation for key management personnel for the six months ended June 30, 2024, was $120,000, compared to $155,000 for the same period in 2023[110]

Financial Performance - For the six months ended June 30, 2024, the company's revenue was approximately $6.0 million, a decrease from approximately $15.1 million for the same period in 2023, representing a decline of about 60.4%[5] - The gross profit for the period was approximately $1.0 million, down from approximately $2.0 million in the previous period, indicating a decrease of 50%[5] - The company recorded a loss of approximately $9.0 million for the period, an improvement from a loss of approximately $10.5 million in the previous period, reflecting a reduction in loss of about 14.3%[5] - Revenue for the six months ended June 30, 2024, was $5,969,000, a decrease of 60.3% compared to $15,051,000 for the same period in 2023[55] - Gross profit for the same period was $983,000, down 51.6% from $2,033,000 in 2023[55] - The company reported a loss before tax of $8,980,000, an improvement from a loss of $10,213,000 in the previous year[55] - The net loss for the period was $8,996,000, compared to a net loss of $10,461,000 in 2023, indicating a 14.0% reduction in losses[55] - The company reported a total loss of $(178,227,000) for the six months ended June 30, 2024, compared to a loss of $(91,221,000) for the same period in 2023[65] - The company reported a comprehensive loss of $(216,366,000) for the six months ended June 30, 2024[68] Business Operations - The plant stem cell business has become one of the company's most important revenue sources, with significant progress in both breadth and depth, and is expected to continue its growth momentum in the second half of the year[8] - The company plans to further expand its plant stem cell business into the traditional Chinese medicine production sector, aiming to launch innovative products to meet market demand for high-quality health products[8] - The company will continue to pursue a diversified development strategy, focusing on exploring new growth opportunities, particularly in the traditional Chinese medicine production area[10] - The company continues to focus on expanding its operations in the health products and electronic products sectors[79] Market Conditions - Due to a decline in international iron ore prices, the company suspended all iron ore production and sales activities during the period, as the average price fell to approximately $100 per dry ton, below the company's extraction and processing costs[9] - The Chinese health supplement market reached a production volume of 730,300 tons and a demand of 720,700 tons in 2023, with a market size of 415.12 billion yuan[11] - The penetration rate of health supplements in the 35-44 age group in China is 11%, compared to 51% in the US, indicating significant growth potential[11] - The Chinese traditional medicine market accounted for 23.7% of the overall pharmaceutical market in 2023, with a market size exceeding 400 billion yuan[12] - The transaction value of Chinese medicinal materials is projected to reach 223.29 billion yuan in 2023, reflecting a year-on-year growth of 7.1%[13] Financial Position - As of June 30, 2024, the group's borrowings include approximately $36.5 million from a commercial bank, $18.2 million in loans, and $71.9 million in notes and bonds[24] - The group's capital deficit was approximately $129.0 million as of June 30, 2024, compared to $119.9 million on December 31, 2023[25] - Current assets totaled approximately $90.0 million, primarily consisting of trade receivables of $88.8 million, cash and cash equivalents of $0.2 million, and other receivables of $0.2 million[25] - Current liabilities amounted to approximately $232.9 million, with significant components including trade payables of $5.4 million and bank borrowings of $54.7 million[25] - Total assets as of June 30, 2024, were $107,564,000, a slight decrease from $108,949,000 in 2023[56] - The company’s total liabilities amounted to $129,094,000, an increase from $119,899,000 in 2023, representing a 7.3% rise[56] Shareholder Information - As of June 30, 2024, Ng Khing Yeu holds 112,827,000 shares, representing 7.52% of the company's issued share capital[45] - Major shareholder Yutian holds 752,750,000 shares, accounting for 50.18% of the company's equity[49] - Ample Professional Limited has a pledged interest in 752,000,000 shares, which is approximately 50.13% of the equity[49] Debt and Financing - The company has overdue borrowings totaling approximately $54,683,000 in principal and $26,710,000 in interest as of June 30, 2024[69] - The company is actively negotiating with lenders regarding the extension and rescheduling of defaulted loans[72] - The ultimate holding company has agreed not to demand repayment of approximately $60,000,000 due on June 30, 2024, until the company is financially capable of repayment[72] - The company is exploring various financing options with different financial institutions to secure operational funding for the foreseeable future[72] Cost Management - Administrative expenses decreased by 21.1% to approximately $1.2 million, primarily due to reduced labor costs[20] - The company is implementing cost control measures, including optimizing human resources and adjusting management salaries[72] - Employee costs decreased from $696,000 in 2023 to $617,000 in 2024, a reduction of 11.3%[91] - The company recorded a significant decrease in inventory costs from $13,018,000 in 2023 to $4,986,000 in 2024, a decline of 61.7%[91] Corporate Governance - The company established a Remuneration Committee consisting of two independent non-executive directors and one executive director to oversee the remuneration policies and structures for all directors and senior management[44] - The Nomination Committee, consisting of one executive director and two independent non-executive directors, is responsible for identifying suitable candidates for the board[44] - The company believes that all independent non-executive directors are independent[44] - The company is committed to establishing transparent procedures for remuneration policies to ensure fairness and market competitiveness[44]

Financial Performance - For the fiscal year ending December 31, 2023, the company generated revenue of $8.6 million from iron ore sales, a significant increase from $2.8 million in the previous year, attributed to high international iron ore prices and the recovery of mining operations post-COVID[23] - Revenue for 2023 was approximately $27 million, a decrease of about 15.6% compared to $32 million in 2022[32] - The company recorded an annual loss of $40 million in 2023, a reduction of approximately 29% from the $56 million loss in 2022[32] - The gross profit for 2023 was around $2.8 million, compared to $2.5 million in 2022, indicating a slight improvement[32] - The gross margin improved to 10.45% in 2023 from 7.85% in 2022, reflecting better operational efficiency[27] - The company reported a net loss attributable to owners of approximately $39.57 million for the year ended December 31, 2023[184] Cost Management - The company's cost of sales for the fiscal year was approximately $24.4 million, a decrease of about 18% compared to $29.8 million in 2022, primarily due to reduced costs associated with iron ore and health products[24] - The company’s administrative expenses decreased by approximately 30.5% to about $4.1 million from $5.9 million in the previous year[64] - Financing costs increased by approximately 14.3% to about $15.2 million, up from $13.3 million in the previous year[64] Business Strategy and Expansion - The company plans to accelerate its expansion into electronic products and other fast-moving consumer goods while maintaining its diversified business strategy[17] - The company’s diversified business strategy has shown initial success, leading to a focus on expanding its core plant stem cell business while exploring new opportunities[17] - The plant stem cell business has become a significant revenue source, contributing to the overall growth of the company[34] - The company is focusing on diversifying its business and income sources in response to global economic and political changes[166] Market Trends - The health supplement market in China is experiencing rapid growth, with a penetration rate of 11% among the 35-44 age group, compared to 51% in the U.S., indicating significant potential for future growth[18] - The demand for health supplements is driven by increasing consumer awareness of health and wellness, particularly post-pandemic[18] - The health supplement market in China exceeded RMB 300 billion in 2023, driven by increasing health awareness and consumer demand[37] Operational Efficiency - The company continues to outsource its iron ore business to local teams in Malaysia, which has resulted in improved operational conditions and economic benefits[31] - Trade receivables decreased by 21% to $89.5 million from $113.9 million in the previous year[27] - Total assets decreased by 18% to $108.9 million from $133.6 million in 2022[27] Financial Health - The current ratio decreased to 0.4 in 2023 from 0.6 in 2022, indicating a decline in short-term financial health[27] - As of December 31, 2023, the company's current liabilities amounted to approximately $225.4 million, with a current ratio of 0.4, down from 0.5 in the previous year[46] - The company has cash and cash equivalents totaling approximately $131,000, indicating significant liquidity challenges[184] Governance and Compliance - The board is committed to maintaining appropriate corporate governance practices to protect shareholder interests and ensure compliance with legal standards[118] - The company has established an audit committee to oversee financial reporting procedures and internal controls[128] - The audit committee has held two meetings during the fiscal year, ensuring oversight of financial reporting and compliance[158] - The board confirmed the responsibility for preparing the consolidated financial statements and ensuring compliance with applicable regulations[136] Risk Management - The company has identified significant risks related to the economic downturn in China, particularly in the steel industry, which has led to overcapacity[142] - The company will continue to monitor daily operations and conduct regular internal audits and risk assessments[143] - The group conducts ongoing risk management activities, assessing the effectiveness of its risk management framework at least annually[189] Shareholder Communication - The company has established a shareholder communication policy to ensure timely and effective communication with all shareholders[169] - The company emphasizes transparency and communication with shareholders to enhance governance practices[151] Future Outlook - The global iron ore supply is expected to increase by 62 million tons in 2024, with China's import volume projected to rise by approximately 4 million tons[20] - The company aims to enhance its research and development in plant stem cell products to maintain its technological advantage and leadership in the industry[10]

Financial Performance - Revenue for the year ended December 31, 2023, was $27,255,000, a decrease of 16% compared to $32,347,000 in 2022[7] - Loss attributable to owners of the company improved to $(39,566,000), a 29% reduction from $(55,740,000) in the previous year[7] - The company's revenue for 2023 was approximately $27 million, a decrease of about 15.6% compared to $32 million in 2022[17] - The annual loss recorded in 2023 was $40 million, a reduction of about 29% from the $56 million loss in 2022[17] - The company's sales revenue for the year ended December 31, 2023, was $27.26 million, a decrease of 15.7% compared to $32.35 million in 2022[33] - The gross profit for the year ended December 31, 2023, was approximately $2.85 million, reflecting a 12.2% increase from $2.54 million in 2022, attributed to cost control measures[37] - Administrative expenses decreased by approximately 30.5% to $4.1 million in 2023 from $5.9 million in 2022, mainly due to reduced legal and professional fees[38] - The company recorded a loss of approximately $39.6 million for the year ended December 31, 2023, an improvement from a loss of $55.7 million in 2022, primarily due to a reduction in financial asset impairment losses[43] Business Operations - The plant stem cell business showed strong growth, becoming a significant revenue source and a strategic component of the company's overall operations[20] - The iron ore business was successfully outsourced to a local Malaysian team, resulting in improved operational conditions and economic benefits[21] - Revenue from iron ore sales significantly increased to $8.59 million in 2023, up 211.5% from $2.76 million in 2022, driven by high international iron ore prices and increased production capacity post-COVID[35] - The company plans to continue strengthening research and development in plant stem cell products to maintain technological advantages[13] - The iron ore business in Malaysia is expected to achieve steady growth through an outsourcing model, which has proven effective in reducing production costs[16] - The company plans to accelerate its expansion into electronic products and other fast-moving consumer goods while maintaining its diversified business strategy[24] Market and Economic Environment - The current economic environment is anticipated to support business development, with a focus on maintaining competitiveness and creating value for shareholders[16] - The health supplement market in China exceeded RMB 300 billion in 2023, driven by increased consumer health awareness and demand[25] - For the year 2024, global iron ore supply is expected to increase by 62 million tons, with domestic iron ore production in China projected to rise by 15 million tons due to the resumption of old mines and new capacity coming online[29] - China's iron ore imports from January to November 2023 reached 107.8 million tons, with a year-on-year increase of 6.2%[28] Sustainability and Environmental Impact - The company aims to enhance sustainability and resource efficiency, with minimal water, electricity, and other natural resource usage due to a focus on commodity trading in fiscal years 2022 and 2023[168] - The company has established a comprehensive materiality assessment to guide future environmental, social, and governance (ESG) work plans and goals, ensuring sustainable value creation for stakeholders[157] - The company reported compliance with all relevant environmental laws and regulations in Hong Kong, China, and Malaysia, with no confirmed incidents of non-compliance or complaints[160] - The company has implemented measures to optimize mining methods and processing technologies to reduce mining loss rates and improve recovery rates, thereby minimizing environmental impact[166] - The total carbon dioxide emissions from employee business flights amounted to 13,450 kg in the fiscal year 2023, a significant increase from 4,090 kg in 2022, with a total of 47 flights taken[165] Governance and Compliance - The company has complied with the corporate governance code, with deviations disclosed in the corporate governance report[78] - The audit committee reviewed the audited financial statements for the year ended December 31, 2023, ensuring compliance with applicable accounting standards and regulations[96] - The company has established an audit committee to oversee financial reporting and internal controls, in compliance with listing rules[95] - The company has received annual independence confirmation from all independent non-executive directors, affirming their independent status[107] - The board is responsible for maintaining a sound and effective internal control system, while management is tasked with designing and implementing this system[113] Employee and Workplace Practices - The total employee cost, including director remuneration, was approximately $1.3 million for the year ended December 31, 2023, compared to approximately $1.0 million for the year ended December 31, 2022[66] - The company employed 45 employees as of December 31, 2023, an increase of 40.6% from 32 employees in 2022[182] - The company has implemented policies to ensure a safe and healthy work environment, including regular safety checks and fire drills[192] - Employee benefits include comprehensive support for pregnant employees, ensuring their return to original positions post-maternity leave[188] - The company provided 72 hours of training for employees in both 2023 and 2022[194] Financial Liabilities and Management - The company's current liabilities amounted to approximately $225.4 million as of December 31, 2023, with a current ratio of 0.4, down from 0.5 in 2022[44] - The group did not engage in any exploration or development activities during the year ended December 31, 2023, and did not make any significant capital expenditures for upgrading property, plant, and equipment[70] - The company has outstanding debts totaling approximately $181,040,000, which includes amounts payable to the ultimate holding company, banks, and other borrowings[141] - The company is actively negotiating with financial institutions to secure various financing options for operational funding and commitments[142] - The company has taken measures to defer repayment of approximately $60,000,000 due to the ultimate holding company and approximately $18,150,000 in principal and $8,730,000 in interest from independent third-party lenders[138]

Financial Position - As of June 30, 2023, the group recorded a capital deficit of approximately $91.2 million, compared to $80.3 million as of December 31, 2022[2]. - Current assets amounted to approximately $112.5 million, primarily consisting of trade receivables of $110.5 million, cash and cash equivalents of $0.7 million, and other receivables[2]. - Current liabilities were approximately $218.4 million, including trade payables of $7.8 million and bank borrowings of $54.7 million[2]. - The current ratio as of June 30, 2023, was 0.5, unchanged from December 31, 2022[2]. - As of June 30, 2023, the group recorded negative equity, and the debt-to-equity ratio could not be calculated[3]. - As of June 30, 2023, the total non-current assets amounted to $17,689,000, a decrease from $18,688,000 as of December 31, 2022[26]. - Current assets totaled $112,529,000, down from $114,870,000 in the previous period[26]. - The total current liabilities increased to $218,395,000 from $210,601,000, resulting in a net current liability of $(105,866,000) compared to $(95,731,000) previously[26]. - As of June 30, 2023, total liabilities including amounts due to the ultimate holding company, bank and other borrowings, and bonds amounted to approximately $176,008,000, while cash and cash equivalents were only about $704,000[74]. - The total liabilities increased to $221,439,000 as of June 30, 2023, up from $213,878,000 at the end of December 2022, marking a rise of 3%[129]. Revenue and Loss - The company reported a total comprehensive loss of $(91,221,000) as of June 30, 2023, compared to $(80,320,000) at the end of 2022[26]. - The group reported a net loss of approximately $10,461,000 for the six months ended June 30, 2023[74]. - The company reported a loss before tax of $10,213 thousand for the period, with significant losses in the commercial trading segment amounting to $4,580 thousand[109]. - The company reported a net loss of $13,018,000 for the six months ended June 30, 2023, compared to a loss of $14,488,000 in the same period last year, showing an improvement of 10%[136]. Revenue Breakdown - For the six months ended June 30, 2023, total revenue was $18,433 thousand, with $1,773 thousand from iron ore sales and $16,660 thousand from other products[105]. - The revenue from the iron ore mining and washing business was $4,737 thousand, while the health product business generated $6,682 thousand[109]. - Revenue from iron ore products reached $4,737,000, a significant increase from $1,773,000 in the same period last year, representing a growth of 167%[122]. - Sales of health products amounted to $6,682,000, with no sales recorded in the previous year, indicating the establishment of a new trade line[122]. - Total revenue for the six months ended June 30, 2023, was $15,051,000, compared to $18,433,000 for the same period in 2022, reflecting a decrease of 18%[122]. Cash Flow and Financing - Cash and cash equivalents at the end of the period were $704,000, an increase from $274,000 in the previous year[69]. - The operating cash inflow for the period was $516,000, a turnaround from an outflow of $(857,000) in the same period last year[69]. - The company has a repayment obligation of approximately $21,019,178 (around $2,690,000) related to a statutory demand for debt repayment[182]. - The company has agreed to pay $500,000 monthly to Note 1 holders, with the total amount due on June 30, 2019, equaling all remaining unpaid debts related to Note 1[175]. - The company has not paid any accrued interest on corporate bonds as of June 30, 2023, remaining at zero[184]. Shareholder and Governance - Major shareholders include Yutian holding 50.18% of the shares, and Ample Professional Limited holding 50.13%[18]. - The company has a stock option plan aimed at attracting and retaining top talent, approved on April 12, 2013[21]. - The company has complied with the corporate governance code, except for specific provisions regarding the standards for securities trading by directors[10]. - The group has been continuously reviewing employee compensation packages to ensure competitiveness within the industry[5]. Legal and Compliance Issues - The company has faced legal challenges related to loan defaults, including a lawsuit from OCBC Bank for an outstanding amount of HKD 308,758,494[76]. - The group has implemented restructuring measures due to its inability to meet debt obligations[77]. - The company is seeking legal advice to properly handle a statutory demand for repayment of approximately RMB 250.97 million, which could lead to liquidation proceedings if not addressed[115]. - The group is actively negotiating with all lenders regarding the extension and deferral of defaulted loans, with the board believing that an agreement will be reached in due course[99]. Operational Measures - The group has taken measures to expedite the collection of outstanding trade receivables[80]. - The group is implementing cost control measures, including human resource optimization and management salary adjustments, to manage expenses effectively[118]. - The board has taken measures to alleviate liquidity pressure and improve cash flow, including discussions with various financial institutions for refinancing options[100].

Financial Performance - The company reported a net loss attributable to owners of approximately $55.74 million for the year ended December 31, 2022[14]. - Revenue for the year 2022 was $32,347,000, representing a 35% increase from $23,978,000 in 2021[24]. - The company reported a loss attributable to owners of $55,740,000, a slight improvement of 2% from a loss of $57,006,000 in the previous year[24]. - Gross profit for the year was $2,500,000, up from $200,000 in 2021, indicating significant growth in profitability[48]. - The total sales revenue for the year ended December 31, 2022, was $32.35 million, an increase of 34.9% compared to $23.98 million in 2021[79]. - Gross profit for the same period was $2.54 million, representing a significant increase of 1,448.2% from $164,000 in 2021[79]. - The gross profit margin improved to 7.85%, up by 7.17 percentage points from 0.68% in the previous year[79]. - The company recorded an annual loss of $5.5 million in 2022, a decrease of about 2% from a loss of $5.7 million in 2021[68]. Financial Position - As of December 31, 2022, the company's current liabilities net amount was approximately $95.73 million, and total liabilities net amount was approximately $80.32 million[14]. - The company has outstanding debts totaling approximately $171.57 million, which includes amounts payable to the ultimate holding company, bank loans, and guaranteed notes[15]. - The total assets decreased by 23% to $133,558,000 from $173,132,000 in 2021[24]. - The current ratio fell to 0.6 from 0.8, indicating a decline in short-term financial health[24]. - The total trade receivables decreased by 23% to $113,854,000 from $148,303,000 in the previous year[24]. - The total liabilities increased, with the debt-to-equity ratio rising to 190% from 120%, reflecting increased financial leverage[24]. - The company's asset-liability ratio as of December 31, 2022, was 187.8%, compared to 116.2% as of December 31, 2021[119]. - The company's current liabilities net increased from approximately $40.5 million as of December 31, 2021, to approximately $95.7 million as of December 31, 2022[114]. Operational Strategies - The company is actively negotiating with existing lenders for the renewal and extension of bank loans and credit financing[12]. - The company is exploring various financing options to secure operational funding and commitments for the foreseeable future[14]. - The company aims to implement measures effectively in 2023 to demonstrate sufficient operational funding for the next twelve months[14]. - The company has outsourced operations at the Ibam mine to local firms due to management and technical personnel being unable to travel to Malaysia[47]. - The company has established a wholly-owned subsidiary in Hong Kong to market plant stem cell products, contributing to diversified revenue streams[44]. - The company plans to diversify its business strategy, focusing on health products as consumer demand shifts from optional to essential[52]. - The company aims to enhance its market presence in the health supplement sector, which is witnessing significant growth in China[52]. Governance and Compliance - The company is committed to maintaining appropriate corporate governance practices to protect shareholder interests and ensure compliance with statutory regulations[155]. - The independent non-executive directors have confirmed their independence according to the listing rules[159]. - The audit committee reviewed the financial reporting procedures and internal controls, ensuring compliance with accounting standards and regulations[168]. - The board has established an audit committee, nomination committee, and remuneration committee to oversee specific matters of the company[191]. - The audit committee reviewed the audited financial statements for the year ended December 31, 2022, confirming compliance with applicable accounting standards and sufficient disclosure[193]. - The remuneration committee is responsible for proposing and approving the remuneration policy for all directors and senior management, ensuring transparency in the process[194]. - The nomination committee evaluates suitable candidates for the board, considering diversity in gender, age, cultural background, and professional experience[197]. Risk Management - The company has established a risk management framework following the COSO model to effectively manage risks[180]. - The company has identified two areas of medium to high risk, including the overall economic downturn in China and strategic risks due to global economic changes[181]. - The company aims to diversify its business and revenue sources in response to economic and political changes[182]. - The company plans to continue engaging external professionals annually to review and enhance its internal control and risk management systems[184].