Company Overview - Eason Technology Limited is engaged in real estate operation management and investment, as well as digital technology security business in Hong Kong, China [2]. Investment and Development - Renying Capital has invested HK $1.5 million in Hongkong Yiyou Digital Technology Development Limited, a wholly owned subsidiary of Eason, to advance blockchain applications for intellectual property protection and media transmission [1]. - Following the investment, Renying Capital will own 15% of the total equity interest in Hongkong Yiyou Digital Technology [1]. Strategic Focus - The company aims to lead the Asian market in 2025 by focusing on the research and application of blockchain technology [2]. - Eason plans to provide security solutions based on blockchain technology to copyright and intellectual property owners in various sectors, including literature, music, film and television, drama, and games [2].

Group 1 - Eason Technology Limited has acquired Hongkong Starlux Intelligent Technology, a blockchain technology company focused on blockchain security and applications [1] - The CEO of Eason stated that the company has successfully returned to the main board market and achieved operational results in both digital technology and real estate operations, marking a successful strategic transformation [2] - The real estate operation business provides stable cash flow and industrial application scenarios for the digital technology business, which includes sectors like industrial manufacturing, medical treatment, media content production, and cross-border e-commerce [2] Group 2 - The acquisition is expected to strengthen Eason's research and development team in science and technology, accelerating the development and commercialization of blockchain products [2] - The company plans to complete the development and release of its first blockchain product in the second quarter of 2025 [2]

Financial Performance - Eason Technology Limited reported revenue of RMB4.7 million (US$0.7 million) from new business in the first six months of 2024[4] - The company recorded a loss of RMB499.5 million (US$69.2 million) from the disposal of VIE and subsidiaries, primarily due to the write-off of investment costs[5] - Net loss for the first six months of 2024 was RMB500.9 million (US$69.3 million), compared to a profit of RMB30.5 million (US$4.4 million) in the same period of the prior year[7] - Loss per American Depositary Share (ADS) was US$1.75 in the first half of 2024, compared to earnings per ADS of US$0.34 in the same period of the prior year[7] Operating Expenses - Operating expenses increased from RMB4.2 million (US$0.6 million) in the first half of 2023 to RMB6.0 million (US$0.8 million) in the first half of 2024, mainly due to employee incentive shares[6] - Net cash used by operating activities was RMB3.3 million in the first half of 2024, compared to RMB164,000 in the same period of the prior year[10] Cash and Assets - As of June 30, 2024, cash and restricted cash decreased to RMB309,000 (US$43,000) from RMB2.5 million (US$0.4 million) as of December 31, 2023[8] - Eason Technology Limited's total assets decreased to RMB58.8 million (US$8.1 million) as of June 30, 2024, from RMB283.5 million (US$39.0 million) at the end of 2023[21] Business Strategy - The company fully exited the microfinance business in the first half of 2024, focusing on real estate management and digital technology services[9] - The company commenced two new business streams in 2023: real estate management and digital technology services, contributing to its future strategy[13]

Company Overview - Dunxin Financial Holdings Limited is engaged in real estate operation management and investment, as well as digital technology security business in Hong Kong, China [3] - The company was previously a licensed microfinance lender but has suspended loan offerings since 2020 [3] Leadership Changes - Mr. Longwen (Stanley) He has been appointed as the new Chief Executive Officer and Chairman of the Board of Directors [1] - Mr. Siyuan Xu has been appointed as a director of the Board and is currently leading the real estate operation business line [1] Strategic Focus - The company views real estate operation management and investment as a new main business line, believing it is a favorable time for global real estate investment due to economic recovery and increased consumption levels [2] - The application of digital technology is expected to enhance efficiency and operating income in real estate operations, contributing to stable cash flow for the company [2] - Mr. Xu's experience in real estate operations, mergers and acquisitions, and cross-border operations is anticipated to accelerate the expansion of the company's real estate business [2]

Core Viewpoint - Dunxin Financial Holdings Limited has received notification from NYSE American regarding the suspension of trading of its American Depositary Shares (ADS) and the initiation of delisting proceedings due to low selling prices, with plans to appeal this decision [1][2]. Group 1: Company Overview - Dunxin Financial Holdings Limited operates in real estate operation management and investment, as well as digital technology security in Hong Kong [3]. - The company previously functioned as a licensed microfinance lender in Hubei Province, China, but has ceased offering loans since 2020 [3]. Group 2: Recent Developments - Trading of Dunxin's ADS has transitioned to the OTC Pink market under the symbol "DXFFY" as of September 18, 2024 [2]. - The CEO, Longwen (Stanley) He, expressed confidence in the company's operational management and financial health following a successful business restructuring, noting that new ventures are contributing to revenue [2].

Core Viewpoint - Dunxin Financial Holdings Limited has filed its annual report for the fiscal year ended December 31, 2023, with the SEC, which includes an audit opinion highlighting a going concern emphasis of matter [1][2]. Company Overview - Dunxin Financial Holdings Limited operates in real estate operation management and investment, as well as digital technology security in Hong Kong, China [3]. - The company previously functioned as a licensed microfinance lender in Hubei Province, China, but has ceased offering loans since 2020 [3]. Financial Reporting - The annual report on Form 20-F was filed on May 16, 2024, and is accessible on both the SEC's website and the company's investor relations website [1]. - The audited financial statements for the year ended December 31, 2023, include an audit opinion from an independent registered public accounting firm, which contains a going concern emphasis of matter paragraph [2]. - The announcement regarding the audit opinion is made in compliance with NYSE American Company Guide Section 610(b) [2]. Shareholder Information - The company will provide a hard copy of its annual report, including audited consolidated financial statements, free of charge to shareholders and ADS holders upon request [1].

Business Transition and Operations - The company transitioned from an apparel business to a microfinance lending business in Hubei Province following the CIB Transaction, which closed on December 28, 2017[348]. - The CIB Transaction involved the acquisition of True Silver for a purchase price of approximately $34.59 million and the issuance of 772,283,308 shares at RMB1.00 ($0.15) per share[348]. - The company suspended offering loans in the second half of 2019 due to severe financial restraints and entered the digital security technology and real estate operation management sectors in 2023[351]. - The company is focusing on key industries such as medical and health services, commercial real estate, and emerging consumer sectors in its real estate operations[352]. - The digital security technology business is being developed in Hong Kong, targeting areas like digital asset security and AI computing power[353]. Financial Performance - Interest income on loans decreased by RMB33.6 million ($4.7 million) or 75.0% from RMB44.8 million ($6.6 million) in 2022 to RMB11.2 million ($1.6 million) in 2023, primarily due to the revaluation of recoverability of outstanding loans[386]. - Allowance for loan losses increased by RMB331.2 million ($46.7 million) or 780.8% from RMB42.4 million ($6.3 million) in 2022 to RMB373.6 million ($52.7 million) in 2023, reflecting a 100% impairment loss on long-aging loans[391]. - Net loss increased by RMB365.5 million ($51.3 million) or 1204.4% from RMB30.3 million ($4.5 million) in 2022 to RMB395.8 million ($55.8 million) in 2023[395]. - General and administrative expenses increased by RMB3.7 million ($0.4 million) or 35.6% from RMB10.5 million ($1.6 million) in 2022 to RMB14.2 million ($2.0 million) in 2023, mainly due to higher legal and professional service fees[393]. - Total operating costs and expenses increased from RMB11.0 million in 2022 to RMB14.2 million in 2023[384]. Cash Flow and Financing - As of December 31, 2023, total cash balances amounted to RMB2.5 million ($0.4 million) with positive cash flows of RMB3.8 million ($0.5 million) for the year[407]. - Net cash used in operating activities for the year ended December 31, 2023 was RMB11.0 million ($1.6 million), primarily due to a loss before income tax of RMB395.8 million ($55.8 million)[416]. - The company generated net cash of RMB14.8 million ($2.1 million) from financing activities for the year ended December 31, 2023, mainly due to the issuance of shares and convertible notes[418]. - The company plans to actively seek equity financing from private placements to meet its liabilities and continue operations for the next 12 months[410]. - The company expects to require additional capital to execute its longer-term business plan and may need to take measures to conserve liquidity[411]. Shareholder and Corporate Governance - The board of directors consists of six members, with three being independent directors, and the company is classified as a "controlled company" under the Company Guide[441][442]. - The principal shareholder, Ricky Qizhi Wei, beneficially owns 512,232,237 Class B ordinary shares, representing 4.35% of total ordinary shares and 69.45% of aggregate voting power[458]. - The group of all directors and executive officers collectively owns 363,840,000 ordinary shares, accounting for 3.09% of total ordinary shares[458]. - The company has entered into employment agreements with all executive officers, allowing for termination for cause and specifying severance payments upon termination without cause[453]. - The company has adopted an audit committee charter to review all related party transactions on an ongoing basis[464]. Legal and Regulatory Matters - Legal proceedings related to loan disputes have resulted in preservation orders freezing bank deposits of RMB 12.0 million ($1.7 million) for Chutian and Mr. Wei[495]. - The court issued a consumer restriction order against Mr. Wei for failing to repay the principal amount of RMB 10.0 million (USD 1.4 million)[497]. - The enforcement proceedings against Chutian may resume if new enforceable assets are located[501]. - There are ongoing labor disputes involving Yan Luo and Xiaohu Li against Hubei Chutian Microfinance Co., Ltd., with specific details currently unknown[498]. Taxation and Dividends - The Cayman Islands imposes no taxes on profits, income, or gains, and there are no exchange control restrictions, making it a favorable tax jurisdiction for corporations[535][534]. - Dividends on the ADSs may qualify as "qualified dividend income," potentially taxed at a lower capital gains rate if certain conditions are met[544]. - Dividends will be classified as foreign source income for U.S. foreign tax credit limitation purposes[545].

Financial Performance - Total interest income decreased by 10.9% to RMB51.5 million (US$7.4 million) in the first six months of 2023, down from RMB57.8 million in the same period of the prior year[2] - Net profit for the first six months of 2023 was RMB30.5 million (US$4.4 million), a decrease of 49.3% from RMB60.2 million in the same period of the prior year[2] - Earnings per American Depositary Share (ADS) was US$0.34 in the first six months of 2023, compared to US$0.99 in the same period of the prior year[2] - Profit before income taxes decreased from RMB 60,169 million in the first half of 2022 to RMB 30,463 million in the first half of 2023, a decline of about 49.3%[21] - Operating profit before working capital changes decreased from RMB 45,264 million to RMB 38,249 million, a drop of approximately 15.5%[21] Loan and Receivables - Total outstanding principal balance of loans was RMB753.0 million (US$103.8 million), unchanged from December 31, 2022[2] - Loans receivable, net of credit impairment losses, increased by 8.1% to RMB601.3 million (US$82.9 million) as of June 30, 2023, from RMB556.1 million as of December 31, 2022[2] - Loans receivable increased from RMB 556,112 million to RMB 601,346 million, reflecting a growth of approximately 8.1%[20] Credit and Impairment - Credit impairment losses amounted to RMB6.3 million (US$0.9 million) for the first six months of 2023, reflecting challenges in the economic environment for SMEs[7] Operating Expenses and Cash Flow - Operating expenses increased to RMB4.2 million (US$0.6 million) for the first six months of 2023, up from RMB3.9 million in the same period of the prior year[9] - Net cash used by operating activities for the first six months of 2023 was RMB164,000, compared to RMB29,000 in the same period of the prior year[13] - Net cash used in operating activities increased from RMB (29) million to RMB (164) million, indicating a worsening cash flow situation[21] Assets and Liabilities - Total assets increased from RMB 600,269 million as of December 31, 2022, to RMB 644,288 million as of June 30, 2023, representing a growth of approximately 7.3%[20] - Current assets rose from RMB 561,036 million to RMB 606,530 million, an increase of about 8.1%[20] - Total liabilities increased from RMB 312,111 million to RMB 324,022 million, a rise of about 3.8%[20] - Shareholders' equity grew from RMB 288,158 million to RMB 320,266 million, marking an increase of approximately 11.1%[20] Cash and Restricted Cash - Cash and restricted cash as of June 30, 2023, was RMB289,000 (US$40,000), slightly down from RMB295,000 as of December 31, 2022[11] - Cash and restricted cash at the end of the period increased from RMB 197 million to RMB 289 million, reflecting a growth of approximately 46.6%[21] Loans Payable - Loans payable to third parties, related parties, and shareholders amounted to RMB161.4 million (US$22.3 million), all overdue as of June 30, 2023[12] Interest Payable - The company reported an increase in interest payable from RMB 72,810 million to RMB 81,797 million, an increase of about 12.8%[20]

Operational Risks - The company faces significant risks related to its operations in China, including potential changes in government policies that could adversely affect its business and financial condition[31]. - The company is subject to extensive regulation and supervision by government authorities, which may impact its microfinance business operations[35]. - The company may face delisting of its American Depositary Shares (ADSs) if the Public Company Accounting Oversight Board (PCAOB) cannot inspect auditors located in China[31]. - The PRC government exercises substantial control over economic activities, which may adversely affect the company's operations and financial condition[45]. - The Foreign Investment Law introduces uncertainty regarding the recognition of VIE structures as foreign investment, which could impact business operations if deemed illegal[44]. - The company may encounter difficulties in protecting shareholder interests due to operational complexities in China and the location of its management[55]. - The recognition and enforcement of foreign judgments in China remain uncertain, which could complicate legal actions against the company[56]. - Adverse changes in PRC government policies could negatively impact overall economic growth, affecting the company's business operations[62]. - The company may face challenges in transferring funds to its PRC subsidiary due to regulatory limitations on foreign-invested enterprises, which could negatively impact liquidity and business expansion[66]. - Recent regulations from SAFE may limit the company's ability to effectively use proceeds from future financing activities, adversely affecting liquidity and business funding in the PRC[68]. - The PRC government has increased oversight on overseas offerings, which could hinder the company's ability to offer securities and may lead to a decline in their value[71]. - The CSRC has implemented new filing requirements for PRC domestic companies seeking to list securities overseas, which may affect the company's future offerings[75]. - The company may be classified as an Existing Listed Enterprise, subjecting it to new filing requirements that could complicate future securities offerings[80]. - Cybersecurity reviews are now required for online platform operators with over one million users before public listings, introducing additional regulatory hurdles for the company[81]. - The company must comply with confidentiality regulations when disclosing sensitive information during overseas offerings, which may complicate compliance efforts[82]. - Failure to obtain necessary regulatory approvals in a timely manner could result in sanctions, fines, or operational restrictions, adversely affecting the company's operations and investor interests[83]. - The approval from the CSRC or other PRC governmental authorities may be required for offerings, and the timeline for obtaining such approval is uncertain, which could lead to sanctions affecting the company's operations in China[84]. - The M&A Rules impose complex procedures for foreign investors, potentially making growth through acquisitions more difficult and time-consuming[87]. Financial Condition - The company has experienced severe liquidity issues due to difficulties in collecting loan payments, which have negatively impacted its ability to pay taxes and service providers[31]. - The company has limited cash reserves and requires additional capital, which may lead to dilution or significant debt obligations if not obtained on favorable terms[35]. - The company's independent auditors have expressed substantial doubt about its ability to continue as a going concern, indicating potential financial instability[35]. - The company has experienced an increase in delinquency rates on loans since 2019, materially affecting its business and operational results[31]. - The company incurred a net loss of RMB128.1 million (US$20.1 million) in 2021 and RMB30.3 million (US$4.5 million) in 2022[151]. - As of December 31, 2022, the company had cash balances totaling RMB295,000 (US$43,000), a decrease from RMB396,000 (US$62,000) as of December 31, 2021[156]. - The company provided credit loss allowances of RMB640.3 million (US$92.8 million) as of December 31, 2022, representing 53.5% of outstanding loans[164]. - The company has faced severe liquidity issues, leading to defaults on loans payable since early 2019[157]. - The company has not been able to pay employees on regularly scheduled payment dates due to severe financial constraints[144]. - The company has defaulted on loan repayments since 2019, leading to a cessation of financing options from securities exchanges, adversely affecting liquidity and operations[169]. Market and Economic Conditions - The Chinese economy's GDP growth was 3% in 2022, indicating a slowdown compared to previous years[61]. - China is liberalizing interest rates and deposit rates, which may increase competition and narrow the interest rate spread for loan products, potentially adversely affecting the company's business operations[14]. - Future inflation in China could lead to government actions that restrict credit availability, which may inhibit economic activity and adversely affect the company's operations[64]. - Changes in interest rates could negatively impact the company's revenues and financial condition due to reliance on net interest income[175]. - The company lacks product and business diversification, making future revenues and earnings more susceptible to fluctuations[178]. - Approximately 100% of the company's revenue was generated from operations in Wuhan City in 2022, limiting diversification and increasing exposure to local economic conditions[177]. - The company's operations are currently limited to Hubei Province, lacking diversification in products and business[35]. - The company does not foresee paying cash dividends in the foreseeable future, with investors relying on capital appreciation for returns[188]. - The company faces intense competition in the microfinance industry, with larger competitors potentially impacting market share and revenues[180]. Regulatory and Compliance Issues - The company relies on contractual arrangements with a Variable Interest Entity (VIE) for its operations, which may not provide the same level of control as direct ownership[36]. - The VIE Agreements have not been tested in a court of law, leading to uncertainties in enforceability[205]. - The PRC tax authorities may challenge the payment arrangements under the VIE Agreements, potentially resulting in higher tax liabilities[208]. - The company's PRC subsidiary is required to set aside at least 10% of its after-tax profits each year to fund a statutory reserve until it reaches 50% of its registered capital, limiting available cash for dividends[96]. - The company may face penalties for non-compliance with labor-related laws due to late payment of wages[144]. - The company may face scrutiny and negative publicity similar to other U.S.-listed Chinese companies, which could impact its reputation and stock price[112]. - Regulatory authorities in China may impose additional burdens on companies regarding data security and cybersecurity reviews for overseas listings[107]. - The company is monitoring regulatory developments regarding necessary approvals for overseas listings, with significant uncertainty remaining[110]. - The Holding Foreign Companies Accountable Act may lead to the delisting of the company's ADSs if PCAOB cannot inspect auditors in China[114]. - The SEC has implemented amendments to the HFCA Act, reducing the inspection period for auditors from three years to two years, increasing delisting risks[119]. Corporate Governance - The company's articles of association contain anti-takeover provisions that may adversely affect shareholders' rights and opportunities to sell shares at a premium[218]. - The board of directors has the authority to issue preferred shares, which could delay or prevent a change in control and adversely affect the rights of ordinary shareholders[218]. - Dunxin is incorporated under Cayman Islands law, which may limit shareholders' ability to protect their rights through U.S. federal courts[219]. - The rights of shareholders and fiduciary responsibilities of directors under Cayman Islands law are less clearly established compared to U.S. jurisdictions[219]. - There is uncertainty regarding the recognition and enforcement of U.S. court judgments in the Cayman Islands[220]. - Public shareholders may face more difficulties in protecting their interests compared to those in U.S. incorporated companies[221]. - The Cayman Islands do not have statutory recognition of U.S. judgments, although some non-penal judgments may be recognized under certain circumstances[220]. - The company may not have standing to initiate a shareholder derivative action in a U.S. federal court[219]. - The Cayman Islands have a less developed body of securities laws compared to the United States[219].

Financial Performance - Total interest income for the first six months of 2022 was RMB57.8 million (US$8.9 million), representing a decrease of 30.0% from RMB82.6 million in the same period of the prior year[2] - Net interest income fell by 34.5% to RMB47.7 million (US$7.3 million) in the first six months of 2022, down from RMB72.8 million in the same period of the prior year[5] - Net profit for the first six months of 2022 was RMB60.2 million (US$9.3 million), a decrease of 14.9% from RMB70.7 million in the same period of the prior year[10] - Earnings per American Depositary Share (ADS) was US$0.35 in the first six months of 2022, compared to US$0.52 in the same period of the prior year[10] - Operating profit before working capital changes was RMB 45,264,000, down from RMB 71,772,000, a decline of 37.0%[26] Loan and Asset Management - Total outstanding principal balance of loans decreased to RMB753.6 million (US$112.5 million) as of June 30, 2022, a decline of 0.1% from RMB754.4 million as of December 31, 2021[2] - Loans receivable, net of credit impairment losses, increased by 13.2% to RMB628.6 million (US$93.8 million) as of June 30, 2022, compared to RMB555.1 million as of December 31, 2021[2] - Loans receivable increased to RMB 628,608,000 from RMB 555,133,000, a rise of 13.2%[23] Cash and Liquidity - As of June 30, 2022, cash and restricted cash amounted to RMB197,000 (US$29,000), a decrease from RMB396,000 as of December 31, 2021[11] - Net cash used by operating activities for the first six months of 2022 was RMB29,000, compared to RMB1,000 in the same period of the prior year, indicating limited liquidity[13] - Cash and restricted cash at the end of the period was RMB 197,000, compared to RMB 396,000 at the beginning, showing a decrease of 50.3%[26] Expenses and Impairment - The company reversed credit impairment losses to RMB16.4 million for the first six months of 2022, primarily due to the revaluation of the present value of interest receivable[7] - Operating expenses increased to RMB3.9 million (US$0.6 million) for the first six months of 2022, up from RMB2.5 million in the same period of the prior year[9] Overall Growth and Equity - Total current assets rose to RMB 629,811,000, up from RMB 556,377,000, reflecting a 13.1% increase[23] - Total assets increased to RMB 670,519,000, compared to RMB 598,562,000, marking a 12.0% growth[24] - Total comprehensive income for the period was RMB 70,689,000, up from RMB 59,999,000, indicating an 18.3% increase[22] - Total liabilities increased to RMB 292,217,000 from RMB 280,259,000, reflecting a 4.0% increase[24] - Non-controlling interests in equity rose to RMB 75,661,000 from RMB 63,661,000, a growth of 18.8%[24] Earnings Per Share - Earnings per share (basic and diluted) increased to RMB 0.07 from RMB 0.05, representing a 40% growth[22]