Core Viewpoint - Pop Culture Group Co., Ltd. plans to enter the cryptocurrency sector to integrate innovative payment solutions into its business ecosystem, with initiatives set to launch in July 2025 [1][2]. Company Overview - Pop Culture Group Co., Ltd. is a leading enterprise in the Chinese cultural content industry, focusing on the industrialization of Chinese Pop Culture, with operations primarily in China and incorporated in the Cayman Islands [3]. - The company offers a variety of services, including live performances, artist management, intellectual property rights, film and television production, and entertainment marketing, evolving from a focus on hip-hop culture to a diversified group [3]. Cryptocurrency Integration - The company aims to leverage the technological architecture and token-based economic model of cryptocurrencies, which are seen as having significant commercial application value [2]. - The integration of cryptocurrency is expected to optimize asset allocation and lay the foundation for a future cultural technology ecosystem [2]. Value Propositions of Cryptocurrency 1. **Efficient Payment Ecosystem**: Cryptocurrencies will enhance the efficiency of global ticketing and merchandise payment systems due to low transaction costs and rapid settlement [5]. 2. **Scenario Integration Potential**: The adaptability of cryptocurrency technology allows for seamless integration across various operations, including offline events, digital collectibles, and artist fan economies [5]. 3. **Technological Innovation Advantage**: The unique consensus mechanisms and scalable architecture of cryptocurrencies support the company's ongoing digital transformation, fostering long-term innovation and growth [5].

Core Viewpoint - Pop Culture Group Co., Ltd has received a notification from Nasdaq regarding non-compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market [1][2]. Group 1: Compliance Notification - The notification letter indicates that the company is not in compliance with Nasdaq Listing Rule 5550(a)(2), which requires a minimum bid price of US$1.00 per share [1][2]. - The company has been given 180 calendar days, until September 15, 2025, to regain compliance by maintaining a closing bid price of at least US$1.00 for a minimum of 10 consecutive business days [3]. Group 2: Business Operations - The receipt of the notification letter does not impact the company's business operations [4]. - The company plans to monitor its Class A ordinary shares' closing bid price and may consider options such as a reverse share split to regain compliance [4]. Group 3: Company Overview - Pop Culture Group Co., Ltd is a hip-hop culture company based in Xiamen, China, focusing on promoting hip-hop culture and facilitating cultural exchanges between the U.S. and China [5]. - The company targets the younger generation and engages in hosting entertainment events, operating hip-hop-related online programs, and providing event planning and brand promotion services [5].

Core Insights - Pop Culture Group Co., Ltd. achieved consolidated total revenue of over US$47.38 million for the fiscal year ended June 30, 2024, marking a 56% year-on-year increase [1] - The company reported a turnaround in gross profits, moving from negative US$3.66 million in the previous fiscal year to positive US$2.88 million [1] Brand Promotion Services - The brand promotion business increased by over 310% year-on-year, contributing 83.6% of total revenue and 66% of total gross margin [2] - The establishment of the CPOP multi-channel network (MCN) agency has enhanced content output and online promotion efforts, collaborating with 122 KOLs who have a combined audience of approximately 45 million [2] - Partnerships with major brands, including Coca-Cola, have been secured, indicating a profitable business model [2] Event Hosting Business - As a leader in hip-hop culture, the company is developing a SaaS service platform for sports and art education, with over 3,990 hip-hop dance campuses and nearly 250,000 students engaged by January 2024 [3] Event Planning and Execution Business - The company has successfully organized concerts and released digital collections, generating US$153,888 from this segment [4] - Significant investments in film and television projects are ongoing, with expectations for successful outcomes [4] - The "Super Music Hero" concert series attracted over 25,000 attendees in Fuzhou and more than 35,000 in Chongqing [4] Future Outlook - In 2025, the company plans to increase investments in content creation and performing arts, anticipating substantial revenue growth and a return to pre-pandemic net profit levels [5] - The fiscal year ending June 30, 2025, will mark the conclusion of the first five years post-IPO on the Nasdaq, with a continued focus on high-profit growth areas like brand promotion [5]

VIE Structure and Legal Risks - The company operates as a holding entity incorporated in the Cayman Islands, conducting most operations through a Variable Interest Entity (VIE) and its subsidiaries in China[24]. - The VIE structure allows the company to consolidate financial results under U.S. GAAP, despite not holding direct equity interests in the VIE or its subsidiaries[29]. - The company faces risks associated with the VIE structure, including potential changes in PRC laws that could affect the validity and enforcement of the VIE Agreements[44]. - The VIE Agreements have not been tested in a court of law in the PRC, raising uncertainties regarding their effectiveness in providing operational control[45]. - The company may face material disruption to its business if the VIE Agreements are deemed illegal or invalid by PRC authorities, affecting its ability to consolidate financial results under U.S. GAAP[80]. - If the VIE Agreements are found to violate PRC laws, the company could lose rights to direct activities and receive economic benefits from Xiamen Pop Culture, leading to a significant decline in the value of its securities[81]. - The company relies on VIE Agreements to consolidate financial results of Xiamen Pop Culture, but these agreements may not provide effective control, risking adverse impacts on operations[82]. - The VIE Agreements are governed by PRC law, which may limit the company's ability to enforce rights and could affect its control over Xiamen Pop Culture for accounting purposes[86]. Financial Performance - For the fiscal year ended June 30, 2024, consolidated total revenue was $47,381,918, a decrease from $18,543,243 in the previous year, representing a decline of approximately 255.5%[10]. - The net income for the fiscal year ended June 30, 2024, was $(12,632,115), compared to $(25,257,696) for the fiscal year ended June 30, 2023, indicating an improvement of approximately 50%[10]. - The company reported a gross profit of $2,880,720 for the fiscal year ended June 30, 2024, compared to a gross loss of $(3,662,815) in the previous year, marking a turnaround of approximately 178.6%[10]. - The company’s comprehensive income for the fiscal year ended June 30, 2024, was $(12,695,799), compared to $(26,932,336) for the fiscal year ended June 30, 2023, reflecting an improvement of approximately 53.2%[10]. - The cash balance as of June 30, 2024, was $230,563, a significant increase from $2,751,309 as of June 30, 2023, indicating a growth of approximately 8.4%[73]. - The company reported net cash provided by financing activities of $3,373,609 for the fiscal year ended June 30, 2024, compared to $683,277 in the previous year, marking an increase of approximately 394%[76]. Regulatory Environment - The company is not currently required to complete filing procedures under the Trial Measures, as its initial public offering was completed on July 2, 2021[49]. - The company may face fines ranging from RMB1 million to RMB10 million for failing to complete filing procedures for new offerings or fundraising activities in the future[49]. - The company has successfully obtained all requisite licenses and approvals needed to engage in its current business operations in the PRC[50]. - The company is not subject to cybersecurity review under the Cybersecurity Review Measures, as it does not possess personal information of over one million users[49]. - The Chinese government has strengthened anti-monopoly supervision, but this has not impacted the company's ability to conduct business or accept foreign investments[49]. - The revised Provisions on Strengthening Confidentiality and Archives Administration require domestic companies to obtain approval for disclosing documents containing state secrets[54]. - The company is not required to obtain additional permissions from PRC authorities to maintain its listing status on U.S. exchanges[51]. - There are uncertainties regarding the interpretation and implementation of new regulatory requirements that may affect the company's future capital-raising activities[55]. - Recent regulations require domestic companies to complete filing procedures with the CSRC within three working days for overseas listings[129]. - The Chinese government has indicated an intent to increase oversight over overseas public offerings, potentially affecting the ability to offer securities[127]. - The PRC operating entities may face penalties for failing to comply with new filing requirements, including warnings and fines[129]. - The company has not received permission from Chinese authorities to list on U.S. exchanges, and future permission is uncertain[108]. Operational Risks - The company must maintain various approvals, licenses, and permits to operate its business, and failure to do so could adversely affect its operations[151]. - The PRC operating entities face risks related to the retention of existing clients in their Event Planning and Execution and Brand Promotion businesses[200]. - Revenue from sponsorship in the Event Hosting business is crucial, and failure to attract sponsors could adversely affect revenue[205]. - The PRC operating entities' success is tied to the popularity of hip-hop events, which may fluctuate due to competition and changing consumer preferences[208]. - The PRC operating entities face potential risks from public live events, including security threats and logistical challenges, which could affect profitability and event success[214]. - Poor execution and adverse conditions during events could lead to declining popularity and brand reputation for the PRC operating entities[215]. - Relationships with local authorities and third-party providers are crucial for the successful execution of events, particularly hip-hop events[221]. - The PRC operating entities' business could suffer if third-party service providers increase prices or fail to deliver services effectively[218]. Tax and Currency Risks - The PRC Enterprise Income Tax Law classifies offshore enterprises with "de facto management bodies" in the PRC as "resident enterprises," subjecting them to a 25% enterprise income tax rate on worldwide income[170]. - Fluctuations in exchange rates could materially affect the company's results of operations and the value of investments[165]. - The RMB appreciated over 20% against the U.S. dollar from July 2005 to July 2008, but has since fluctuated unpredictably[166]. - Limited hedging options are available in China to mitigate exposure to exchange rate fluctuations, and the company has not entered into hedging transactions to date[168]. - Changes in the conversion rate between the U.S. dollar and RMB will affect the amount of proceeds available for the PRC operating entities' business[167]. - Dividends payable to investors may be subject to a withholding tax of 10% for non-PRC enterprises or 20% for non-PRC individuals if deemed from PRC sources[171]. - The PRC government imposes controls on currency conversion, which may affect the ability to pay dividends in foreign currencies[180]. - Under the EIT Law, profits distributed to holding companies outside the PRC are subject to a withholding tax rate of 10%, which may be reduced to 5% under certain conditions[186]. Client and Supplier Dependency - Two major customers accounted for approximately 34% and 10% of total revenue for the fiscal year ended June 30, 2024[203]. - The top five customers represented approximately 75% of accounts receivable as of June 30, 2024, compared to 68% in 2023 and 72% in 2022[203]. - The PRC operating entities' revenue is increasingly dependent on a small number of customers, raising risks if any experience disruptions[202]. - For the fiscal year ended June 30, 2024, the PRC operating entities purchased 27.00% of their services from two major suppliers, down from 40.08% in the previous year[217]. - The PRC operating entities' reliance on third-party services poses risks, as disruptions could negatively impact business operations and customer growth[216].

Company Overview - Pop Culture Group (CPOP) experienced a stock price increase of 5.04%, trading at $1.25 per share with a volume of 38,635 shares and a turnover rate of 0.26% [1] - The stock's amplitude reached 5.88% [1] - The company generated $24.01 million in revenue, with a net loss of $2.37 million and an earnings per share (EPS) of -$0.97 [1] - The gross profit was reported at $1.78 million, and the price-to-earnings (P/E) ratio stands at -0.13 [1] - Currently, there are no institutional ratings available for Pop Culture Group [1] Industry Context - The overall entertainment sector experienced a 0.78% increase [2] - Notable active stocks in the sector include iQIYI, Sphere Entertainment Co., and Color Star Technology, with turnover rates of 4.79%, 3.22%, and 3.03% respectively [2] - Stocks with significant amplitude in the sector included Color Star Technology (19.63%), Alliance Entertainment Holding Corp (14.51%), and Liveone Inc. (12.73%) [2] - Pop Culture Group is known for organizing entertainment events and hip-hop-related online programs, offering event planning, execution, and marketing services to corporate clients [2] - The company generates revenue through sponsorship packages and ticket sales for hosted events [2]

Core Insights - Pop Culture Group (NASDAQ:CPOP) reported a significant revenue increase of 113% year-over-year, reaching $24 million for the last six months of 2023 compared to $11.25 million in the same period of 2022 [1] - The company achieved a consolidated gross profit of $1.78 million, a notable recovery from a loss of $2.34 million during the same timeframe in 2022 [1] - The online brand marketing and promotion business of Pop Culture Group experienced a remarkable growth of over 280% compared to the previous fiscal year [2] Stock Performance - CPOP stock saw a substantial increase of 84% on Thursday morning and has risen 177.7% since the beginning of the year [3] - The trading volume for CPOP stock exceeded 63 million shares, significantly higher than the average daily trading volume of approximately 2.6 million shares [3]

Revenue Performance - Total revenue for the six months ended December 31, 2023 was $24.0 million, representing an increase of $12.75 million, or 113%, compared to the same period in the prior year[18]. - Revenue for brand promotion increased by 280% from $5.56 million for the six months ended December 31, 2022 to $21.14 million for the same period in 2023, primarily due to cooperation with key opinion leaders (KOLs) and increased online promotion budgets[21]. - Revenue for event hosting decreased by 8% from $2.18 million in 2022 to $2.01 million in 2023, while revenue for event planning and execution decreased by 88% from $3.14 million to $0.38 million during the same period[20]. - Other revenue for the six months ended December 31, 2023 was $0.48 million, representing an increase of $0.12 million, or 33%, compared to the same period in 2022[22]. - Total revenue for the six months ended December 31, 2023, was $24,008,463, a significant increase from $11,255,771 for the same period in 2022, representing a growth of approximately 113%[51]. - For the six months ended December 31, 2023, total revenue reached $24,008,463, compared to $8,727,933 for the same period in 2022, indicating a significant increase[69]. Cost and Expenses - Cost of revenue for the six months ended December 31, 2023 increased by 63% to $22.23 million from $13.63 million in the previous period[23]. - Cost of brand promotion revenue increased by 318% from $4.74 million in 2022 to $19.83 million in 2023, in line with the growth in revenue for brand promotion[24]. - Total cost of revenue for the six months ended December 31, 2023, was $22,228,049, an increase of 63% compared to $13,627,203 for the same period in 2022[26]. - Operating expenses decreased by 26% to $4,171,201 for the six months ended December 31, 2023, compared to $2,248,683 in the same period of 2022[29]. - General and administrative expenses increased by 119% to $3,934,301 for the six months ended December 31, 2023, primarily due to bad debt allowance and increased R&D expenses[31]. - The company incurred total operating lease expenses of $43,390 for the six months ended December 31, 2023, a decrease from $91,984 in the same period of 2022[108]. Profitability and Loss - Gross profit improved to $1,780,414 in the six months ended December 31, 2023, from a loss of $2,371,432 in the same period of 2022, marking a change of $4,151,846[28]. - The operating loss narrowed to $2,390,000 in the six months ended December 31, 2023, from $4,650,000 in the same period of 2022[33]. - Net loss attributable to equity holders was $2,370,000 for the six months ended December 31, 2023, compared to a net loss of $4,710,000 in the same period of 2022[35]. - The net loss for the six months ended December 31, 2023, was $(648,451), a reduction from $(4,118,522) in the prior year[69]. - For the six months ended December 31, 2023, the company reported a net loss of $2,365,249, compared to a net loss of $4,714,381 for the same period in 2022, indicating a 49.8% improvement in net loss year-over-year[128]. Cash Flow and Liquidity - Cash and cash equivalents as of December 31, 2023, totaled $1,690,000, down from $3,630,000 as of June 30, 2023[36]. - Net cash used in operating activities was $586,093 for the six months ended December 31, 2023, significantly reduced from $5,787,201 in the same period of 2022[40]. - The company experienced a cash outflow of $586,093 from operating activities in 2023, a significant improvement from the outflow of $5,787,201 in 2022[55]. - The company’s cash balance at the end of the period was $192,894, down from $1,095,007 at the beginning of the period, indicating a decrease of approximately 82.4%[130]. Assets and Liabilities - Total current assets increased to $34,978,042 from $32,253,714, reflecting a growth of about 8.4%[47]. - Total current liabilities rose to $16,528,512, up from $12,827,546, marking an increase of approximately 28%[47]. - Total assets reached $41,191,052, compared to $39,045,328, showing an increase of about 5.5%[48]. - As of December 31, 2023, total assets amounted to $31,026,866, while total liabilities were $27,308,942[68]. - Accounts payable increased significantly to $5,556,663 from $2,697,089, representing a growth of about 106%[47]. - The total shareholders' equity decreased to $23,909,742 from $26,178,148, indicating a decline of approximately 8.6%[48]. Shareholder Information - The company conducted a share consolidation on October 27, 2023, converting every 10 Class A and Class B ordinary shares into one ordinary share, impacting all share numbers retrospectively[113]. - The company issued 1,500,000 Class A ordinary shares at a price of $2.86 per share, raising a total of $4,290,000 through subscription agreements on March 19, 2024[118]. - The company’s total shareholders' equity decreased from $26,735,296 as of June 30, 2023, to $24,603,915 as of December 31, 2023, a decline of approximately 8.0%[125]. Future Outlook - The company expects the adverse effects of the COVID-19 pandemic on its business operations to gradually phase out in the following years[15]. - The company expects to obtain a new credit line of not less than RMB8 million (approximately $1.1 million) in 2024[37].

VIE Structure and Regulatory Risks - The company operates primarily through a Variable Interest Entity (VIE) structure, which allows it to consolidate financial results under U.S. GAAP despite not holding direct equity interests in its subsidiaries[22]. - The VIE Agreements were established on March 30, 2020, and amended on February 19, 2021, to provide the company with operational control over Xiamen Pop Culture[27]. - The company faces regulatory risks associated with the VIE structure, including potential changes in PRC laws that could impact its operations and the value of its Class A Ordinary Shares[41]. - The company is subject to uncertainties regarding the enforcement of the VIE Agreements, which have not been tested in a court of law in the PRC[41]. - The VIE structure provides exposure to foreign investment in China-based companies, where direct foreign investment is prohibited[22]. - The company may face severe penalties or be forced to relinquish its interests in operations if the VIE Agreements are deemed non-compliant with PRC regulations[81]. - The VIE Agreements may not effectively provide control over Xiamen Pop Culture, potentially impacting the ability to consolidate its financial results[83]. - If the PRC government finds the VIE Agreements in violation of laws, the company may lose the right to consolidate Xiamen Pop Culture's financial results, adversely affecting its financial condition[82]. - The company relies on the performance of Xiamen Pop Culture and its shareholders under the VIE Agreements to exercise control, which may not be guaranteed[86]. - The legal environment in the PRC poses uncertainties that could limit the company's ability to enforce the VIE Agreements, affecting its control over Xiamen Pop Culture[87]. Financial Performance - Total revenue for the fiscal year ended June 30, 2023, was $18,543,243, a significant decrease compared to $32,281,543 in the previous year, representing a decline of approximately 42.5%[72]. - Net income for the fiscal year ended June 30, 2023, was $(25,257,696), compared to a net income of $687,888 in the previous year, indicating a substantial loss[72]. - Total assets as of June 30, 2023, amounted to $39,045,328, a decrease from $64,367,968 in the previous year, reflecting a decline of approximately 39.4%[74][75]. - Total liabilities as of June 30, 2023, were $12,867,180, compared to $11,595,616 in the previous year, showing an increase of approximately 11%[74][75]. - Cash and cash equivalents as of June 30, 2023, were $2,751,309, down from $14,396,032 in the previous year, indicating a decrease of approximately 80.9%[74][75]. - The company reported net cash used in operating activities of $(3,390,075) for the fiscal year ended June 30, 2023, compared to $(11,376,196) in the previous year, showing an improvement[76]. - The company incurred net cash used in investing activities of $(4,600,000) for the fiscal year ended June 30, 2023, compared to $(8,791,583) in the previous year, indicating a reduction in investment outflows[76]. Dividend and Earnings Distribution - As of the annual report date, no earnings have been distributed or settled under the VIE Agreements, and there are no plans to do so in the foreseeable future[57]. - No dividends or distributions have been made to shareholders, and future earnings are intended to finance business expansion[61]. - Under PRC law, dividends can only be paid from retained earnings, and companies must set aside at least 10% of after-tax profits for statutory reserves[63]. - The Company may face restrictions on dividend payments due to PRC foreign exchange regulations, which could limit the ability to pay dividends in foreign currencies[64]. - The Company has not made any cash dividends and does not anticipate paying any in the foreseeable future[61]. Compliance and Regulatory Environment - The company is not currently subject to any cybersecurity review by the Cyberspace Administration of China (CAC) as it does not possess personal information of over one million users[44]. - The company has not received any inquiries, notices, or sanctions from the CSRC, CAC, or other PRC authorities regarding its operations or securities offerings[55]. - The revised Provisions on Strengthening Confidentiality and Archives Administration require domestic companies to obtain approval for disclosing documents containing state secrets[52]. - The company is not required to obtain additional permissions from PRC authorities to maintain its listing status on U.S. exchanges[48]. - The company has not been involved in any investigations related to cybersecurity review initiated by PRC regulatory authorities[44]. - The company may be required to complete filing procedures for future offerings or fundraising activities under the Trial Measures[51]. - There remains uncertainty regarding the interpretation and implementation of new regulatory requirements that may affect the company's future capital-raising activities[53]. - The PCAOB has access to inspect the auditor, WWC, P.C., and if it cannot inspect for three consecutive years, trading may be prohibited under the Holding Foreign Companies Accountable Act[56]. - The company has not received permission from Chinese authorities to list on U.S. exchanges, and future permissions remain uncertain[121]. - New regulations from the CSRC require domestic companies to complete filing procedures for overseas listings within three working days[125]. - The company completed its initial public offering on July 2, 2021, and is currently not required to complete filing procedures under the new Trial Measures[127]. - The Chinese government may impose stricter regulations that could require additional compliance costs for the company[120]. - The company may face increased costs due to compliance with existing and newly adopted laws and regulations[118]. - The legal system in the PRC may present challenges in enforcing legal rights and obtaining necessary information for investigations[109]. - Future government actions could significantly limit the company's ability to offer securities to investors[122]. - The company may incur penalties for failing to comply with new filing requirements set by the CSRC[125]. Market and Operational Risks - The COVID-19 pandemic has significantly impacted the PRC operating entities' business, leading to delays in event execution and a decrease in advertising budgets from clients[204]. - The PRC operating entities' revenue from sponsorship in the Event Hosting business is expected to grow, contingent on the popularity of their hip-hop events and the offline advertising market[201]. - The PRC operating entities have shifted focus to hip-hop events, which may introduce risks and uncertainties in adapting to the evolving hip-hop ecosystem[195]. - The PRC operating entities' ability to retain existing clients is critical, as a significant portion of revenue is derived from a small number of customers[196]. - The PRC operating entities may face sanctions if CSRC approval is required for their offerings in the U.S., which could adversely affect their operations and financial condition[190]. - The popularity of hip-hop events is crucial for the PRC operating entities' success, as changes in consumer preferences could impact sponsorship and advertising demand[207]. - The PRC operating entities' financial performance may continue to be adversely affected by the COVID-19 pandemic in the upcoming fiscal periods[204]. - The PRC operating entities rely on a portfolio of concerts and hip-hop events for revenue generation through sponsorships and ticket sales, which is critical for their growth strategy[208]. - The PRC operating entities face risks related to their contractual obligations, including future payment obligations and minimum attendance guarantees for events, which could adversely affect their financial condition if not met[209]. - The success of live entertainment events is crucial for the PRC operating entities, but these events are susceptible to various risks such as security threats and logistical challenges, which could impact profitability[211]. - The PRC operating entities must maintain strong relationships with local authorities and third-party service providers to ensure successful event execution, as disruptions could harm their operations[219]. - Brand recognition is vital for the PRC operating entities, as failure to enhance their brands could hinder their ability to attract sponsors and clients, affecting overall business performance[220]. - The PRC operating entities' business model is heavily dependent on the success of live events, which require significant logistical capabilities and resources[212]. - Any adverse changes in relationships with third-party service providers could lead to service interruptions and increased costs, negatively impacting the PRC operating entities' financial results[216]. - The PRC operating entities are subject to complex contractual arrangements that impose numerous obligations, and any breach could result in penalties or termination of rights[211]. - The PRC operating entities focus on creating memorable experiences for fans, and any factors that negatively impact these experiences could lead to declining popularity of their events[213].

Revenue Performance - Total revenue for the six months ended December 31, 2022, was $11.26 million, a decrease of $8.89 million, or 44%, year-over-year[15]. - Revenue from event hosting decreased by 82% to $2.18 million, while revenue from event planning and execution decreased by 53% to $3.14 million[16]. - Brand promotion revenue increased by 282% to $5.56 million, driven by a growth in the number of advertisers[16]. - Total revenue for the six months ended December 31, 2022, was $8,727,933, a decline of 35.5% compared to $13,479,761 for the same period in 2021[58]. Profitability - Gross profit decreased by 158% to negative $2.34 million, with a gross margin of negative 21% compared to 20% in the previous period[20]. - Operating profit for the first six months of fiscal 2023 was $4.65 million, compared to $0.96 million in the same period of fiscal 2022[25]. - Net loss attributable to the Company's equity holders for the first six months of fiscal 2023 was $4.71 million, compared to a net profit of $0.45 million in the same period of fiscal 2022[28]. - Net income for the six months ended December 31, 2022, was $(4,118,522), compared to a net income of $1,090,050 for the same period in 2021, indicating a significant loss[58]. - The company reported a net income loss of $4,714,381 for the six months ended December 31, 2022, compared to a net income of $446,635 for the same period in 2021[119]. Expenses - Total operating expenses decreased by 26% to $2.25 million, but as a percentage of total revenue, it increased to 20.0% from 15.1%[22]. - Selling and marketing expenses for the six months ended December 31, 2022 were $448,371, representing a 131% increase year-over-year from $193,720 in the same period of the previous fiscal year[23]. - General and administrative expenses for the six months ended December 31, 2022 were $1.80 million, a decrease of 37% year-over-year from $2.84 million in the previous period[24]. - The company recorded bad debt expenses of $290,138 for the six months ended December 31, 2022, compared to $1,063,983 for the same period in 2021, showing a decrease of approximately 72.7%[64]. Cash Flow and Liquidity - As of December 31, 2022, the combined balance of cash, cash equivalents, term deposits, and short-term investments amounted to $3.86 million, down from $14.4 million as of June 30, 2022[29]. - Net cash used in operating activities was $5.79 million for the six months ended December 31, 2022, compared to $5.5 million for the same period of the last fiscal year[31]. - The net cash used in investing activities was $7.46 million for the six months ended December 31, 2022, an increase of $7.38 million compared to $0.07 million in the same period of fiscal 2022[32]. - The net cash generated from financing activities was $0.80 million for the six months ended December 31, 2022, a decrease of $32.4 million compared to the same period of the last fiscal year[33]. - The company reported a cash balance of $1,159,147 at the end of 2022, down from $28,510,993 at the end of 2021[45]. - Cash at the end of the period was $241,839, a significant decrease from $25,256,901 at the end of 2021[123]. Assets and Liabilities - Total assets as of December 31, 2022 were $61.17 million, down from $64.37 million as of June 30, 2022[39]. - Total liabilities as of December 31, 2022, were $13,229,412, an increase from $11,110,127 as of June 30, 2022, representing an increase of approximately 19.0%[58]. - Total current assets decreased from $13,335,153 as of June 30, 2022, to $7,991,911 as of December 31, 2022[114]. - The balance of restricted net assets was $16,665,441 as of December 31, 2022, compared to $16,557,042 as of June 30, 2022[109]. Shareholder Equity - As of June 30, 2022, total shareholders' equity was $52,772,352, with ordinary shares amounting to $24,050,000[43]. - The statutory reserve balance increased from $1,391,770 on December 31, 2021, to $1,608,689 on December 31, 2022[107]. - The company’s retained earnings increased from $7,813,333 as of December 31, 2021, to $12,527,714 as of December 31, 2022[116]. - The balance of retained earnings as of December 31, 2022, was $7,813,333, down from $12,527,714 in June 2022[121]. Foreign Currency and Other Adjustments - The company experienced a foreign currency translation loss of $(893,208) as of December 31, 2022[43]. - The company had a foreign currency translation adjustment of $(893,208) for the period ending December 31, 2022[121]. Acquisitions and Interests - The company has a 60% controlling interest in Shenzhen Jam box Technology Co., Ltd., and a 51% controlling interest in both Fujian Shuzhi Fuxin Exhibition Co., Ltd. and Zhongpu Shuyuan (Xiamen) Digital Technology Co., Ltd.[49]. - The company completed the acquisition of non-controlling interests in Pop Culture on February 9, 2021, gaining 100% control over Pop Culture[53].

Revenue Performance - Total revenue for fiscal year 2022 was $32.28 million, a 26% increase from $25.53 million in fiscal year 2021[1] - Revenue from brand promotion surged by 1,064% to $8.73 million, up from $0.75 million in fiscal year 2021[5] - Total revenue for 2022 was $32,281,543, representing a 26.8% increase from $25,526,557 in 2021[27] Profitability - Net income decreased to $0.69 million in fiscal year 2022, compared to $4.27 million in fiscal year 2021[2] - Gross profit fell by 14% to $6.25 million, with a gross margin of 19% compared to 28% in fiscal year 2021[11] - Gross profit decreased to $6,245,532 in 2022, down 13.5% from $7,224,063 in 2021[27] - Net income attributable to shareholders for 2022 was $787,958, a significant decline from $4,267,542 in 2021[27] - The company reported a comprehensive loss of $185,915 in 2022, contrasting with a comprehensive income of $5,603,299 in 2021[27] - Basic and diluted net income per share for 2022 was $0.04, down from $0.25 in 2021[27] - Net income for 2022 was $687,888, a significant decrease from $4,267,542 in 2021[30] Expenses - The cost of revenue increased by 42% to $26.04 million, up from $18.30 million in fiscal year 2021[8] - Operating expenses rose by 247% to $4.83 million, from $1.39 million in fiscal year 2021[13] - Operating expenses rose to $4,829,065 in 2022, up 3.5 times from $1,392,137 in 2021[27] - Total depreciation and amortization expenses increased to $310,343 in 2022 from $243,905 in 2021[30] - The company paid $398,370 in income tax for 2022, compared to $34,765 in 2021[30] - Interest expense paid was reported at $56,733, a decrease from $235,361 in the previous year[30] Cash and Assets - As of June 30, 2022, cash and cash equivalents were $14.40 million, significantly up from $1.32 million a year earlier[20] - Total current assets increased to $50,831,524 in 2022, up 56.9% from $32,410,117 in 2021[25] - Cash reserves surged to $14,396,032 in 2022, compared to $1,319,977 in 2021, marking a 1,087.5% increase[25] - The company reported a cash balance of $14,396,032 at the end of the year, up from $1,319,977 at the beginning of the year[30] Liabilities and Equity - Total liabilities decreased to $11,595,616 in 2022, down 23.3% from $15,101,230 in 2021[25] - Total shareholders' equity increased to $52,772,352 in 2022, up from $19,328,105 in 2021, reflecting a growth of 173.5%[25] Operational Highlights - The company served 21 clients in 56 events for event planning and execution during the fiscal year[2] - The company aims to enhance its SaaS platform, which had over 60,000 students using it as of June 30, 2022[3] - The company plans to invest in metaverse-related business to provide a comprehensive hip-hop experience to users[3] Cash Flow - Cash flows from operating activities showed a net cash outflow of $19,365,046 in 2022, compared to an outflow of $4,037,332 in 2021[30] - Cash used in investing activities totaled $802,733, with a significant purchase of intangible assets at $720,000[30] - The effect of exchange rate changes contributed an increase of $184,902 to cash flows[30] - Proceeds from the issuance of shares amounted to $33,630,162 in 2022, a notable increase compared to previous years[30] - The company incurred a loss from the disposal of property and equipment amounting to $1,237 in 2022[30]