Core Insights - GD Culture Group Limited (GDC) and its subsidiary AI Catalysis Corp. have launched an AI Advertising solution aimed at transforming digital marketing through efficient content creation and strategic optimization [1][2] - The AI-driven solution simplifies the ad creative process, significantly reducing costs and enhancing efficiency for marketers and agencies [1][2] - GDC's approach includes comprehensive support for social media marketing, providing end-to-end solutions that improve the execution and analysis of online campaigns [2] Company Overview - GD Culture Group Limited operates primarily through its subsidiaries, including AI Catalysis Corp. and Shanghai Xianzhui Technology Co, Ltd., focusing on AI-driven digital human technology and livestreaming e-commerce [3] - The company plans to enter the livestreaming market, emphasizing e-commerce and interactive games through its U.S. subsidiary, AI Catalysis, established in May 2023 [3]

NEW YORK, April 08, 2024 (GLOBE NEWSWIRE) -- GD Culture Group Limited ("GDC" or the "Company") (NASDAQ:GDC), and its subsidiary, AI Catalysis Corp. ("AI Catalysis"), unveil their latest venture into the convergence of art and AI technology with the debut of the captivating short film "Forgotten Planet" on the AI Catalysis website and social media platforms including Instagram, YouTube, X/Twitter, and LinkedIn, on April 5, 2024. The short film combines captivating storytelling with AI-generated video technol ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Nevada 47-3709051 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) Title of Each Class: Trading Symbol(s) Name of Each Exchange on Which Registered: Common Stock, par value $0.0001 per share GDC The Nasdaq Stock Market LLC Emerging growth company ☐ Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 ...

Group 1 - GD Culture Group Limited (GDC) has entered into a definitive agreement for the purchase and sale of 810,277 shares of its common stock at a price of $1.144 per share, expecting gross proceeds of approximately $926,957 [1] - The transactions are anticipated to close on or about March 26, 2024, subject to customary closing conditions [1] - Univest Securities, LLC is acting as the sole placement agent for this offering [1] Group 2 - The shares have been registered under a shelf registration statement on Form S-3, previously filed and declared effective by the SEC on March 26, 2021 [2] - A final prospectus supplement and accompanying prospectus will be filed with the SEC, detailing the terms of the proposed offering [2] Group 3 - GD Culture Group Limited is a Nevada holding company conducting business through its subsidiary AI Catalysis Corp, focusing on the livestreaming market, particularly in e-commerce and interactive games [4] - The company's main businesses include AI-driven digital human technology, live-streaming e-commerce, and live streaming interactive games [4]

Group 1 - GD Culture Group Limited (GDC) has adjourned its Special Meeting of Stockholders due to insufficient quorum and will reconvene on March 26, 2024 [1] - The record date for determining stockholders entitled to attend and vote at the Meeting remains January 11, 2024, and previously submitted proxies will be honored unless revoked [2] - GDC has filed its annual report on Form 10-K for the fiscal year ended December 31, 2022, which includes audited financial statements [2] Group 2 - GD Culture Group Limited is a Nevada holding company operating through its subsidiary, AI Catalysis Corp, and plans to enter the livestreaming market focusing on e-commerce and interactive games [3] - The company's main business areas include AI-driven digital human technology, live-streaming e-commerce, and live streaming interactive games [3]

Business Segments - The company focuses on three main segments: AI-driven digital human creation, live streaming and e-commerce, and live streaming interactive gaming [185]. - The AI-driven digital human sector utilizes AI algorithms to create realistic 3D or 2D digital human models, which can be customized for various industries [186]. - The e-commerce and live streaming sector integrates digital human technology into live streaming platforms, enhancing online commerce engagement [188]. Revenue Generation - The company generates revenue primarily from service and advertising revenue from digital human creation, product sales from live streaming e-commerce, and virtual paid gifts from interactive gaming [189]. Auditor Changes - On October 9, 2023, the company dismissed its auditor Enrome LLP and appointed HTL International, LLC as the new auditor [194]. Equity and Financing Activities - The company entered into an equity purchase agreement to acquire a 13.3333% interest in SH Xianzhui, issuing 400,000 shares valued at $2.7820 per share [196]. - A registered direct offering on November 1, 2023, involved the sale of 1,436,253 shares at a price of $3.019 per share, with net proceeds expected to be approximately $9.05 million [200]. - The company plans to use the net proceeds from the offering for working capital and general corporate purposes [200]. Market Competition and Strategy - The competitive landscape in e-commerce and live streaming includes various content creators, impacting the company's market share and sales [203]. - The company aims to expand its market presence on social media to enhance growth and penetration into new markets [204]. Financial Performance - Total revenues for the nine months ended September 30, 2023, were $150,000, a 100.0% increase compared to nil for the same period in 2022 [213]. - Gross profit for the nine months ended September 30, 2023, was $150,000, reflecting a 100.0% increase compared to nil for the same period in 2022 [215]. - Operating expenses decreased by approximately $15.8 million, from $19.7 million for the nine months ended September 30, 2022, to $3.9 million for the same period in 2023, an 80.0% reduction [216]. - Loss from continuing operations for the nine months ended September 30, 2023, was approximately $3.6 million, a decrease of approximately $16.1 million or 81.5% from $19.7 million for the same period in 2022 [218]. - Net loss for the nine months ended September 30, 2023, decreased by approximately $19.9 million, or 84.6%, to approximately $3.6 million from approximately $23.5 million for the same period in 2022 [219]. - Other income increased by approximately $147,000 during the nine months ended September 30, 2023, compared to nil for the same period in 2022, due to accrued interest from convertible notes [217]. - Operating expenses for the three months ended September 30, 2023, were $3,667,011, a 5,626.0% increase from $64,041 for the same period in 2022 [208]. - Loss from operations for the three months ended September 30, 2023, was $(3,667,011), a 5,626.0% increase from $(64,041) for the same period in 2022 [208]. - Net loss for the three months ended September 30, 2023, was $(3,528,275), a 13.8% decrease from $(4,091,971) for the same period in 2022 [212]. - Loss from discontinued operations for the three months ended September 30, 2023, was $(10,358), reflecting a 100.0% loss compared to nil for the same period in 2022 [208]. Cash Flow and Working Capital - As of September 30, 2023, the company's net working capital was approximately $6.3 million, with expectations to generate cash flow from operations through acquisitions in the next twelve months [239]. - Net cash used in operating activities for the nine months ended September 30, 2023, was approximately $6.5 million, compared to $1.0 million for the same period in 2022, primarily due to an increase in prepayments [244]. - Net cash used in investing activities was $5.0 million for the nine months ended September 30, 2023, a decrease from approximately $12.3 million in the same period in 2022, mainly due to purchases of intangible assets and investments in convertible notes [245]. - Net cash provided by financing activities was $12.7 million for the nine months ended September 30, 2023, compared to nil in the same period in 2022, driven by an increase in common stock issuance and contributions from noncontrolling shareholders [246]. - The company had cash of $1.6 million as of September 30, 2023, compared to $0.4 million as of December 31, 2022 [243]. Risk Factors - The company is exposed to credit risk primarily from cash and accounts receivable, with measures in place for credit approvals and monitoring [248]. - Liquidity risk is present, with the company potentially needing short-term funding from financial institutions or owners to meet commitments [250]. - The company is also exposed to inflation risk, which could impact operating results if raw material costs increase significantly [251]. - A majority of the company's operations and assets are denominated in RMB, exposing it to foreign currency risk due to regulatory controls on currency exchange [252]. - The company does not anticipate that recently issued accounting standards will have a material effect on its financial statements [238].

Financial Performance - Total revenues for the three months ended June 30, 2023, were approximately $206,799, compared to $0 for the same period in 2022, representing a significant increase due to the acquisition of Highlight Media and the start of operation of AI Catalysis[166] - Gross profit for the three months ended June 30, 2023, was approximately $165,385, an increase from approximately $0 for the same period in 2022, attributed to the same acquisitions[168] - Loss from operations for the three months ended June 30, 2023, was approximately $155,384, a decrease of approximately $19.47 million or 99.2% from the loss of $19.62 million for the same period in 2022[171] - Net loss for the three months ended June 30, 2023, was approximately $155,498, a decrease of approximately $20.21 million or 99.2% from the net loss of $20.37 million for the same period in 2022[172] - Total revenues for the six months ended June 30, 2023, were approximately $282,173, compared to $0 for the same period in 2022, driven by the acquisition of Highlight Media and the start of operation of AI Catalysis[173] - Gross profit for the six months ended June 30, 2023, was approximately $184,611, an increase from approximately $0 for the same period in 2022, due to the same acquisitions[176] - Loss from operations for the six months ended June 30, 2023, was approximately $177,496, a decrease of approximately $19.51 million or 99.1% from the loss of $19.69 million for the same period in 2022[178] - Net loss for the six months ended June 30, 2023, was approximately $176,807, a decrease of approximately $19.21 million or 99.1% from the net loss of $19.38 million for the same period in 2022[179] Cash Flow and Working Capital - As of June 30, 2023, the company's net working capital was approximately $8.86 million, with over 32% of current liabilities attributed to other payables related to major shareholders[197] - The company reported net cash used in operating activities of approximately $1.70 million for the six months ended June 30, 2023, compared to approximately $1.07 million for the same period in 2022[200] - Net cash provided by financing activities was $8.72 million for the six months ended June 30, 2023, primarily due to the issuance of common stock[203] - The company had cash of $7,400,739 as of June 30, 2023, significantly up from $389,108 as of December 31, 2022[199] - The company expects to continue generating cash flow from operations through acquisitions and loans from related parties in the next twelve months[197] Business Developments - Highlight Media has sold more than 200,000 copies of various best-selling books in corporate history, finance, and economics since 2018[144] - AI Catalysis Corp. plans to enter the livestreaming market with a focus on e-commerce and interactive gaming, utilizing AI digital human technology[148] - The company has posted 195 original articles on its financial self-media platform since 2019, accumulating over 10,000 followers[146] - The company terminated its business relationship with Wuge Network Games Co., Ltd. on September 28, 2022, ceasing to consolidate its financial results[150] - The company appointed new executives on April 21, 2023, including Mr. Xiao Jian Wang as CEO and Mr. Zihao Zhao as CFO[152] Offerings and Expenses - The net proceeds from the recent registered direct offering are approximately $8.5 million, intended for working capital and general corporate purposes[158] - In the recent registered direct offering, 310,168 shares of common stock were sold at a purchase price of $8.35 per share[154] - The Placement Agent received a total cash fee equal to 7.0% of the aggregate gross proceeds from the offering, along with a non-accountable expense allowance of 1%[157] - Operating expenses decreased by approximately $19.30 million, from approximately $19.62 million for the three months ended June 30, 2022, to approximately $320,883 for the same period in 2023, mainly due to the reduction of impairment of prepayments[170] - Operating expenses for the six months ended June 30, 2023, decreased by approximately $19.32 million, from approximately $19.69 million for the same period in 2022, primarily due to the reduction of impairment of prepayments[177] Risks and Accounting - The company does not anticipate that recently issued accounting standards will have a material effect on its consolidated financial statements[196] - The company is exposed to credit risk primarily from cash and accounts receivable, which are monitored through credit approvals and limits[205] - The company is also exposed to liquidity risk and may seek short-term funding from financial institutions or owners when necessary[207] - The company has concluded that it is the principal in its revenue arrangements, reporting revenues and costs on a gross basis[193] Impact of COVID-19 - The COVID-19 pandemic did not have a material impact on the company's business or results of operation during the six months ended June 30, 2023[164]

Corporate Structure and Strategy - GD Culture Group Limited reported a significant change in corporate structure, consolidating financial results of Highlight Media under U.S. GAAP due to a VIE agreement, which poses unique risks to investors [167]. - The company underwent a corporate name change to GD Culture Group Limited effective January 10, 2023, reflecting a strategic rebranding [174]. - The company appointed new executives, including a new CEO and CFO, on April 21, 2023, signaling potential shifts in leadership strategy [180]. - The company has established long-term cooperative relations with various financial industry companies, enhancing its market presence and resource network [171]. - The company discontinued operations related to Wuge Network Games and Jiangsu Rong Hai Electric Power Fuel, focusing on core business areas [168][173]. Financial Performance - Total revenues for the three months ended March 31, 2023, were approximately $75,374, an increase from approximately $0 for the same period in 2022, primarily due to the acquisition of Highlight Media [195]. - Total cost of revenues for the same period was approximately $56,148, also an increase from approximately $0 in 2022, attributed to the acquisition of Highlight Media [196]. - Gross profit for the three months ended March 31, 2023, was approximately $19,226, compared to approximately $0 for the same period in 2022, driven by the acquisition of Highlight Media [197]. - Operating expenses decreased by approximately $22,475, from approximately $63,699 for the three months ended March 31, 2022, to approximately $41,224 in 2023, mainly due to reduced employee benefits [198]. - Loss from operations for the three months ended March 31, 2023, was approximately $21,998, a decrease of approximately $41,701 or 65.5% from the loss of approximately $63,699 in 2022 [199]. - Net loss for the three months ended March 31, 2023, was approximately $21,309, a decrease of approximately $1.0 million or 102.2% from a net income of approximately $985,876 in the same period in 2022, primarily due to the disposition of Wuge [201]. Capital and Funding - The company completed a registered direct offering on May 1, 2023, selling 310,168 shares at a price of $8.27 each, raising significant capital [182]. - In the concurrent PIPE Offering, warrants to purchase up to 1,154,519 shares were sold, with an exercise price of $8.27, indicating ongoing investor interest [184]. - The company intends to use the net proceeds of approximately $8.53 million from its recent offering for working capital and general corporate purposes [185]. Risks and Challenges - The company has faced risks related to compliance with government regulations and market conditions, which could impact future performance [165]. - The company faces increasing cyber security risks that could adversely affect its business and financial condition [188]. - Credit risk is significant for the company, with cash held at major financial institutions in the PRC not insured by the government [223]. - The company manages credit risk through credit approvals, limits, and monitoring procedures, requiring prepayment from customers before production or delivery [224]. - The company is exposed to liquidity risk and may seek short-term funding from financial institutions or owners when necessary [226]. - Inflation risk could impair operating results, although the company does not believe it has had a material impact to date [227]. - A majority of the company's operating activities and assets are denominated in RMB, which is not freely convertible into foreign currencies [228]. Market Engagement - Highlight Media has published over 200,000 copies of various best-selling books in corporate history and finance since 2018, indicating strong market engagement [169]. - The financial self-media "Guangdian Finance" has accumulated more than 10,000 followers and posted 195 original articles since 2016, with some articles receiving over 60,000 views [170]. - The company’s growth strategy heavily relies on its ability to market its products and services successfully to prospective clients in China [187]. Cash Flow and Liquidity - As of March 31, 2023, the company's net working capital was approximately minus $0.3 million, with over 21% of current liabilities from related party payables [218]. - Net cash used in operating activities for the three months ended March 31, 2023, was approximately $380,634, a significant decrease from approximately $2.5 million for the same period in 2022 [222]. - The company had cash of $10,169 as of March 31, 2023, down from $389,108 as of December 31, 2022 [221]. - The company reported net cash used in investing activities as nil for the three months ended March 31, 2023, compared to approximately $6,961 for the same period in 2022 [222]. - The company believes that current cash levels and cash flows from operations will be sufficient to meet anticipated cash needs for at least the next twelve months [220]. Impact of COVID-19 - The COVID-19 pandemic did not have a material impact on the company's operations during the three months ended March 31, 2023 [193].

VIE Structure and Regulatory Risks - The company operates primarily through Highlight Media, a consolidated variable interest entity (VIE) in China, which generates all its revenue in Renminbi[108]. - Highlight Media is obligated to pay Highlight WFOE service fees amounting to 100% of its net income, while Highlight WFOE absorbs all losses[108]. - The company may face severe penalties or loss of interests in operations if VIE agreements are deemed non-compliant with PRC regulations[107]. - The VIE agreements have not been tested in court, creating uncertainty regarding their enforceability under PRC law[110]. - The PRC tax authorities may audit related party transactions within ten years, potentially leading to increased tax liabilities for Highlight Media[124]. - The evolving foreign exchange regulations may lead to stricter approval processes for outbound investments, potentially affecting financial conditions[130]. - Loans or capital contributions from offshore entities to PRC subsidiaries are subject to PRC regulations, which may hinder liquidity and operational funding[131]. - Compliance with PRC regulations regarding offshore investment activities may limit Highlight Media's ability to increase registered capital or distribute profits[171]. - The interpretation of the PRC Foreign Investment Law remains uncertain, impacting corporate structure and governance[147]. - The Foreign Investment Law, effective January 1, 2020, may redefine foreign investment criteria, affecting the classification of Highlight Media as a foreign-invested enterprise[148]. - The PRC Foreign Investment Law allows foreign invested enterprises to maintain their structure and corporate governance for five years post-implementation[150]. Financial Performance and Revenue - Total revenues for the year ended December 31, 2022, were $153,304, with a gross profit of $55,534[281]. - Operating expenses decreased significantly to $478,977 from $19,546,151, representing a 97.6% reduction[281]. - Loss from operations for 2022 was $423,443, a 97.8% improvement compared to the previous year[281]. - Loss from discontinued operations was $26,336,694, a 803.2% increase compared to a gain of $3,745,098 in 2021[281]. - The net loss for 2022 was $30,821,955, which is a 14.3% increase from the net loss of $26,970,892 in 2021[281]. - Total revenues for the year ended December 31, 2022, increased by approximately $153,304, compared to approximately $0 million for the year ended December 31, 2021, primarily due to the acquisition of Shanghai Highlight[283]. - Total cost of revenues for the year ended December 31, 2022, increased by approximately $97,770, compared to approximately $0 for the same period in 2021, also attributable to the acquisition of Shanghai Highlight[285]. - Gross profit for the year ended December 31, 2022, increased by approximately $55,534, from approximately $0 for the year ended December 31, 2021, due to the acquisition of Shanghai Highlight[286]. Compliance and Legal Risks - Compliance with the Foreign Corrupt Practices Act and Chinese anti-corruption laws is mandatory, with potential penalties for violations[139]. - Highlight Media may face various laws and regulations regarding privacy, data security, and cybersecurity, which could lead to business suspension or penalties[174]. - The PRC Cyber Security Law mandates that network operators must not collect personal information without user consent and only collect necessary data[179]. - The Data Security Law, effective September 1, 2021, imposes obligations on entities handling personal data, prohibiting illegal acquisition and limiting data collection[181]. - Companies holding data on over 1,000,000 users must apply for cybersecurity approval when seeking listings abroad, impacting potential overseas IPOs[181]. - The CSRC's Trial Measures require domestic companies seeking overseas listings to fulfill filing procedures, with penalties for non-compliance[187]. - Recent scrutiny of U.S.-listed Chinese companies may lead to significant resource expenditure for investigations, potentially harming business operations and reputation[190]. - The SEC and PCAOB have highlighted risks associated with investing in companies with substantial operations in China, emphasizing the lack of access for PCAOB inspections[195]. - Nasdaq has proposed stricter criteria for companies operating in "Restrictive Markets," which may affect Highlight Media's compliance and operational capabilities[197]. - The SEC has implemented rules requiring foreign companies to disclose if they are owned or controlled by a foreign government, with potential trading prohibitions if PCAOB cannot inspect auditors for two consecutive years[199]. - The PCAOB determined it could inspect registered public accounting firms in mainland China and Hong Kong as of December 15, 2022, but future access could be obstructed by PRC authorities[203]. Market and Economic Conditions - Highlight Media's operations are significantly influenced by China's political, economic, and social conditions, which could materially affect business prospects[133]. - The Chinese government maintains substantial control over economic growth and resource allocation, which may adversely impact business operations[134]. - Fluctuations in the RMB against the U.S. dollar could adversely affect Highlight Media's revenues and financial condition[167]. - Labor costs in the PRC are expected to continue increasing, which may adversely affect Highlight Media's financial condition unless passed on to consumers[171]. - Changes in global economic conditions may impact Highlight Media's ability to borrow funds, although current liquidity remains stable due to strong operating cash flow[230]. Strategic Operations and Management - Highlight Media's recent acquisition has placed significant strain on the company's management and operational infrastructure, impacting service deployment and customer satisfaction[216]. - Highlight Media commenced operations in 2016, leading to uncertainties in evaluating its business and future prospects due to its limited operating history[217]. - The company relies on strong relationships with clients and creative talent, and any weakening of these relationships could adversely affect its business performance[218]. - Highlight Media's major expense categories include employee compensation, which is influenced by general economic factors and could affect profitability[218]. - The company faces risks from third-party technology systems that may disrupt service availability, impacting overall business operations[221]. - Highlight Media may pursue strategic alliances and acquisitions to expand product offerings and improve technology, but faces risks such as sharing proprietary information and increased expenses[224]. - The costs of identifying and integrating acquisitions could divert resources from existing operations, potentially adversely affecting growth[225]. - Highlight Media's financial results could suffer if it fails to differentiate its offerings and meet market needs, impacting revenues and cash flows[227]. - Cybersecurity risks, including potential cyberattacks, could materially affect Highlight Media's business and financial condition[229]. Shareholder and Stock Information - The common stock price may experience significant volatility, making it difficult for investors to assess its value[232]. - As of March 31, 2023, Highlight Media had 1,711,544 shares of common stock issued and outstanding, with authorization to issue up to 200,000,000 shares[237]. - Highlight Media has not paid any cash dividends and does not plan to do so in the foreseeable future, intending to retain earnings for operations and growth[241]. - The company may seek additional capital through equity offerings and debt financing, which could dilute existing shareholders' ownership[238]. - The market for Highlight Media's common stock may not be sustained, potentially impairing its ability to raise capital or enter into strategic partnerships[240].