Business Operations - The company discontinued its restaurant business segment in Q2 2024 and now focuses on commercial real estate management, generating $0.56 million in revenue from this segment in 2024[315]. - The company expects continued growth in its commercial real estate management business in the near future[333]. - The company faced significant competition in the commercial real estate market, impacting its ability to lease space and rental rates[319]. - The Company discontinued its restaurant business in June 2024 and transitioned to commercial real estate management, impacting revenue streams[410]. Financial Performance - Revenue from continuing operations for the year ended December 31, 2024, was $563,726, a 74,630% increase compared to $754 in 2023, while petfood revenue dropped to $0 from $0.02 million in 2022[330][331]. - The gross profit for 2024 was $238,422, with a gross margin of 42.29%, compared to a gross loss of $222 in 2023[330]. - The company reported a loss from operations of $1,832,657 in 2024, a 70% improvement from a loss of $6,185,523 in 2023[330]. - Net income for the year ended December 31, 2024, was $2,500,561, a significant recovery from a net loss of $23,631,516 in 2023[358]. - Revenue from the commercial real estate management business increased by approximately $0.56 million in 2024 compared to 2023, with total revenue of $563,726 in 2024[340][361]. - Gross margin improved to 42.29% in 2024 from a negative 29.39% in 2023, attributed to the shift towards commercial real estate management[344]. Revenue and Expenses - The total revenues from continuing operations decreased by $23,971 or 96.95% when comparing 2023 to 2022, primarily due to the discontinuation of the petfood manufacturing segment[334]. - The company’s general and administrative expenses decreased by 45% from $3,145,280 in 2023 to $1,745,247 in 2024[330]. - Operating expenses decreased by $4,114,223 or 66.52% in 2024 compared to 2023, with the ratio of operating expenses as a percentage of revenue dropping from 819,951.18% to 367.39%[346]. - The ratio of cost of revenues as a percentage of revenue was 57.71% in 2024, down from 129.39% in 2023[342]. Cash Flow and Assets - Cash used in operating activities for 2024 was $233,987, a decrease from $2,492,725 in 2023[366]. - As of December 31, 2024, the company had cash and cash equivalents of approximately $15.70 million and short-term investments of approximately $12.95 million[362]. - Total assets increased by 15% from $28,901,397 in 2023 to $33,338,661 in 2024, with cash and cash equivalents rising by 20% to $15,699,562[382]. - Accounts receivable as of December 31, 2024 were $5,748, reflecting a 100% increase from $0 in 2023[388]. - Net property, plant and equipment increased to $2,363,989 as of December 31, 2024, up from $657,124 as of December 31, 2023, representing a growth of 261%[390]. Liabilities and Obligations - The balance of due to related parties decreased by 90% from $1,963,794 in 2023 to $200,318 in 2024[389]. - The Company has total contractual obligations of $2,224,492, with $584,825 due within one year and $1,347,541 due in 1-3 years[394]. - Accounts payable rose by $56,269 to $122,251 as of December 31, 2024, compared to $65,982 as of December 31, 2023, primarily due to commercial real estate accounts payables[391]. - Taxes payable increased by $5,391, or 58%, to $14,681 as of December 31, 2024, from $9,290 as of December 31, 2023[392]. Impairments and Gains - The company recognized a goodwill impairment of $325,832 in 2024 related to the discontinued restaurant business[352]. - The Company recorded an impairment loss of $325,832 for goodwill for the year ended December 31, 2024, compared to $0 in 2023[403]. - The company reported a realized gain of approximately $3.37 million and an unrealized income of approximately $0.44 million from marketable securities for the year ended December 31, 2024[387]. Compliance and Regulatory Matters - The company expects to incur additional costs associated with compliance with the Sarbanes-Oxley Act, which may require seeking other sources of financing[375]. - The company has no off-balance sheet arrangements that require disclosure under SEC regulations[396]. - The company is evaluating the impact of new accounting standards issued by FASB, including ASU 2023-07 and ASU 2023-09, which will require additional disclosures[429][430]. Currency and Economic Factors - The exchange rate for translating RMB to USD for the year ended December 31, 2024, was 7.1884, and for 2023, it was 7.0827, indicating a depreciation of RMB against USD[420]. - The RMB depreciated against the USD by 1.49% in 2024 and by 1.69% in 2023, which may impact the financial results reported in USD terms[529]. - The company does not expect the impact of inflation to be material, with inflation rates in China being 0.8% in 2024, 2.6% in 2023, and 3.7% in 2022[433]. - The company has not engaged in foreign currency hedging and manages price risks through productivity improvements and cost-containment measures[434]. - The company has generally been able to pass on cost increases through price adjustments, depending on market conditions influenced by the overall economic conditions in China[433].

BEIJING, April 28, 2025 /PRNewswire/ -- TDH Holdings, Inc. (NASDAQ: PETZ) ("TDH" or the "Company"), a PRC-based company that is an operator and manager of commercial real estate properties, announced today its financial results for the fiscal year ended December 31, 2024. Full Year 2024 Financial Highlights: | | | For the Twelve Months Ended December 31, | | | --- | --- | --- | --- | | ($ millions, except per share data) | 2024 | 2023 | % Change | | Revenues from continuing operations | $0.56 | - | 74,664.7 ...

Core Viewpoint - TDH Holdings, Inc. has shifted its focus from the restaurant business to commercial real estate, resulting in significant changes in its financial performance for the first half of 2024, including a notable increase in revenues and net income despite ongoing operational losses [1][6][14]. Financial Performance - Revenues from continuing operations increased by 13,399.98% to $0.10 million for the first half of 2024, compared to no revenues in the same period of 2023 [2][6]. - Gross profit was $0.04 million for the first half of 2024, a significant improvement from a gross loss of $226 in the same period of the prior year [3][8]. - The gross profit margin improved to 35.26% for the first half of 2024, compared to a gross loss margin of -29.50% for the same period in 2023, reflecting better performance in the commercial real estate sector [2][8]. - Net income attributable to common stockholders was $1.32 million, or earnings per share of $0.13, compared to $0.06 million, or $0.01 per share, for the same period of the prior year [5][15]. Operational Changes - The company discontinued its restaurant business in June 2024 due to recurring losses, allowing it to concentrate resources on its commercial real estate operations [1][4]. - Operating loss was $1.08 million for the first half of 2024, an increase from a loss of $0.66 million in the same period of the prior year, primarily due to the transition and associated costs [4][12]. - Total operating expenses increased by 68.95% to $1.12 million for the first half of 2024, driven by higher general and administrative expenses and impairment losses on goodwill [11][12]. Investment and Cash Flow - Total net other income increased by approximately 205.88% to $2.74 million, primarily due to increased investment income from equity securities [13]. - Net cash used in operating activities was $2.34 million for the first half of 2024, slightly lower than $2.35 million for the same period in 2023 [17]. - Cash and cash equivalents as of June 30, 2024, were $12.91 million, compared to $13.13 million at the end of 2023, indicating stable liquidity [16].

Group 1 - TDH Holdings, Inc. will hold its Annual General Meeting (AGM) on October 29, 2024, at 9:30 a.m. Beijing time [1] - Stockholders of record as of September 19, 2024, will be entitled to vote at the AGM [1] Group 2 - TDH Holdings, Inc. was founded in April 2002 and is a commercial property manager based in the People's Republic of China [2]

Financial Performance - The company reported a net loss of approximately $23.63 million in fiscal year 2023, compared to a net income of $0.86 million in 2022 and a net loss of $6.7 million in 2021[215]. - Revenue from continuing operations for 2023 was $3,175,809, representing a 2.49% increase from $3,098,733 in 2022, and a significant increase of 186.63% from $1,081,095 in 2021[235]. - Gross profit for 2023 was $1,029,594, a decrease of 2.18% from $1,052,533 in 2022, with a gross margin of 32.42%[235]. - Total revenue from continuing operations for 2023 was $3,175,809, an increase of $77,076 or 2% compared to 2022[237]. - Loss from operations for the year ended December 31, 2023, was $6,370,157, representing an increase from a loss of $3,048,016 in 2022, with operating loss as a percentage of total revenues at negative 200.58%[258]. - Total net loss for the year ended December 31, 2023, was $23,631,516, a significant decline from a net income of $855,013 in 2022[262]. Revenue Sources - The company generated revenue from two sources: sales of pet food products and restaurant operations, with revenue recognized upon transfer of control of goods or services rendered[318][319]. - Revenue from the restaurant business segment increased by $101,048 or 3% in 2023 compared to 2022, contributing to overall revenue growth[239]. - The acquisition of 51% equity interests in Far Ling's Inc. and 100% equity interests in Bo Ling's Chinese Restaurant, Inc. resulted in an increase of $3.2 million in food service revenue for 2023[215]. Cost and Expenses - The cost of revenues from continuing operations increased to $2,146,215 in 2023, up 4.89% from $2,046,200 in 2022, and a 165.75% increase from $769,967 in 2021[235]. - General and administrative expenses rose to $4,269,092 in 2023, a 6.66% increase from $4,002,346 in 2022[235]. - Operating expenses for 2023 were $7,399,751, an increase of $3,299,202 or 80.46% compared to 2022, with the operating expenses ratio rising to 233%[253]. - The company reported a significant increase in stock-based compensation expense to $3,040,000 in 2023, reflecting a 100% increase from previous periods[235]. - General and administrative expenses rose by $3,306,746 or 82.62% in 2023, mainly due to increased payroll and stock-based compensation[254]. Discontinued Operations - The company discontinued its petfood manufacturing segment in Q1 2023 due to increased raw material costs and decreased demand, redirecting focus to the restaurant segment[214]. - Domestic pet food sales decreased by $25,095 or 97% in 2023, with no e-commerce or overseas sales recorded[238]. - The company discontinued its pet food manufacturing business segment in Q1 2023, leading to significant declines in pet food sales[240]. - Net loss from discontinued operations amounted to $15,095,547 for the year ended December 31, 2023, compared to $339,054 in 2022[260]. Cash Flow and Assets - Cash used in operating activities for the year ended December 31, 2023, totaled $2,492,725, compared to $2,072,715 in 2022[270]. - Cash used in investing activities for the year ended December 31, 2023, was $6,067,051, primarily from the purchase of short-term investments[274]. - Cash provided by financing activities for the year ended December 31, 2023, was $1,921,554, with borrowing from related parties amounting to $1,928,329[275]. - As of December 31, 2023, the company had cash and cash equivalents of approximately $13.66 million and short-term investments of approximately $13.32 million[265]. - The total current assets decreased to $27,221,277 as of December 31, 2023, down from $33,781,754, representing a decline of $6,560,477 or 19%[286]. - Total assets decreased to $28,901,397 as of December 31, 2023, down from $36,513,397, a reduction of $7,612,000 or 21%[286]. Liabilities and Obligations - Total liabilities decreased to $3,852,240 as of December 31, 2023, down from $15,359,494, a decline of $11,507,254 or 75%[286]. - Due to related parties increased to $1,983,430 as of December 31, 2023, an increase of $1,927,683 or 3457% compared to $55,747 on December 31, 2022[295]. - The Company has total contractual obligations of $683,113, with $240,000 due in less than one year and $443,113 due in 1-3 years[301]. Accounting and Regulatory Matters - The Company has adopted ASC Topic 842 for lease accounting, recognizing lease expenses on a straight-line basis over the lease term[313][314]. - The Company is evaluating the impact of ASU 2020-04 on its consolidated financial statements, which provides optional expedients for reference rate reform[330]. - The updated guidance on Disclosures for Income Taxes will require additional disclosure and is effective January 1, 2025, with early adoption permitted[335]. - The Company does not have any off-balance sheet arrangements that require disclosure under SEC regulations[304]. Market Conditions - The RMB depreciated against the U.S. dollar by 1.69% in 2023 and by 9.23% in 2022, which may affect the Company's financial results reported in U.S. dollar terms[433]. - The inflation rates in China were 2.6% in 2023, 3.7% in 2022, and 1.1% in 2021, with the Company not believing the impact of inflation is material[336]. - The Company has generally been able to pass on cost increases through price adjustments, depending on market conditions influenced by the overall economic conditions in China[337].

Revenue and Profitability - Revenues from continuing operations increased by 6.97% to $1.55 million for the first half of 2023, compared to $1.45 million for the same period in 2022[2] - Gross profit rose by 20.96% to $0.48 million, with a gross profit margin of 31.14%, up from 27.54% in the prior year[2] - Net income attributable to common stockholders was $0.06 million, or earnings per share of $0.01, compared to a net loss of $0.09 million, or loss per share of $0.14, in the prior year[2] - The net loss attributable to TDH Holdings, Inc. was $64,600 for the six months ended June 30, 2023, a significant improvement from a loss of $896,000 in the same period of 2022[24] - The company reported a comprehensive income of $1,201,781 for the six months ended June 30, 2023, compared to $517,179 in the same period of 2022, an increase of 132.2%[24] - Basic earnings per share attributable to TDH Holdings, Inc. was $0.01 for the six months ended June 30, 2023, compared to a loss of $0.14 in the same period of 2022[24] Operating Expenses - Total operating expenses decreased by 46.46% to $1.38 million, primarily due to reduced general and administrative expenses following the discontinuation of the pet food business[8] - Total operating expenses decreased to $1,377,963 for the six months ended June 30, 2023, down from $2,573,806 in the same period of 2022, a reduction of 46.3%[24] Cash Flow and Assets - Cash, cash equivalents, and restricted cash totaled $19.19 million as of June 30, 2023, down from $23.15 million at December 31, 2022[12] - Net cash used in operating activities was $2.35 million for the first half of 2023, compared to $0.87 million for the same period in the prior year[13] - Cash and cash equivalents decreased to $17,977,195 as of June 30, 2023, from $21,857,125 at December 31, 2022, a decline of about 17.5%[20] - Total current assets decreased to $32,992,695 as of June 30, 2023, from $33,781,754 at December 31, 2022, representing a decline of approximately 2.3%[20] - Current liabilities decreased to $12,696,876 as of June 30, 2023, from $14,675,344 at December 31, 2022, a reduction of approximately 13.5%[20] Strategic Focus - The company plans to focus resources on expanding and improving its restaurant segment following the discontinuation of the pet food manufacturing business[2] Other Income and Expenses - Total net other income decreased by 38.67% to $0.91 million, primarily due to a decline in investment income[10] Changes in Shareholders' Equity - Total shareholders' equity increased to $22,286,583 as of June 30, 2023, compared to $21,153,903 at December 31, 2022, marking an increase of approximately 5.3%[21] Investment Activities - Net cash used in investing activities from continuing operations was $2,151,459,000, a decrease from $6,058,766,000 in the last period[29] - The company experienced a fair value change of short-term investments resulting in a loss of $917,411,000, compared to a loss of $1,075,565,000 previously[29] Depreciation and Amortization - The company reported depreciation and amortization expense of $87,175,000, compared to $14,449,000 in the previous period[29]

Business Segments - The company discontinued its petfood manufacturing segment in Q1 2023 due to increased raw material costs, decreased demand, and operational challenges[227] - Petfood revenue declined from approximately $0.8 million in 2020 to $0.02 million in 2022, prompting the focus shift to the restaurant segment[228] - The company terminated the lease of the Jiaozhou plant in 2021, resulting in no remaining petfood production facilities[230] - The company plans to discontinue its petfood manufacturing segment in the first quarter of 2023 to focus on its restaurant business[249] - The company suspended its petfood manufacturing business segment in Q1 2023 due to operational challenges and bankruptcy proceedings[266] Financial Performance - The company reported a net income of approximately $0.86 million in fiscal year 2022, compared to a net loss of $6.7 million in 2021 and a net loss of $0.87 million in 2020[228] - Total revenue from continuing operations increased by $2,017,638 or 186.63% from 2021 to 2022, reaching $3,098,733[267] - Revenue from the restaurant business segment increased by $2,467,544 or 407% in 2022 compared to 2021, primarily due to the acquisition of Far Ling's Inc. and Bo Ling's Chinese Restaurant, Inc.[272] - Gross profit for 2022 was $1,052,533, representing a gross margin of 33.97%, an increase from 28.78% in 2021[267] - Net income for 2022 was $855,013, a significant recovery from a net loss of $6,715,958 in 2021[6] Legal and Bankruptcy Issues - As of December 31, 2022, the company faced 57 pending lawsuits related to non-payment of invoices, with total claims amounting to RMB13.86 million (USD$2.12 million)[234] - The company has been involved in bankruptcy proceedings since March 2022, with expectations for completion by the end of 2023[234] - The company faced 98 labor arbitration claims totaling RMB3.68 million (USD0.56 million) from former employees, with bankruptcy proceedings affecting these claims[242] - The company faced 57 lawsuits from suppliers and vendors since November 2019, impacting its credit and cost of revenues[262] Operational Challenges - Future growth will depend on the company's ability to effectively manage and acquire new restaurants, as well as resolve ongoing legal issues[232] - The company is currently facing challenges related to debt burden and limited production capacity, which may hinder future revenue growth[254] - The ongoing COVID-19 pandemic continues to pose risks to the company's operations and financial results, despite achieving 100% indoor dining capacity at Bo Lings[253] - The company has not guaranteed future profitability and may continue to incur operating losses in the near term[229] Capital and Financing - The company needs to raise substantial capital and improve operational efficiencies to sustain future growth[233] - The company completed a private placement on July 26, 2022, raising gross proceeds of $6.04 million by selling 4,000,000 common shares at $1.50 each[247] - The company expects to incur additional costs associated with being a reporting company in the U.S., which may require seeking additional financing sources[318] - The company may need to raise capital from outside investors to fully implement its business plan and sustain growth[302] - The company is currently exploring additional debt or equity financing possibilities to improve liquidity and capital sources[302] Assets and Liabilities - As of December 31, 2022, the company had cash and cash equivalents of approximately $23.1 million and short-term investments of about $9.92 million[8] - Total assets decreased by 4%, totaling $36,513,397 compared to $37,868,760 in 2021[328] - Total liabilities decreased by 37%, amounting to $15,359,494 compared to $24,498,693 in the previous year[328] - The company had $4,980,334 in short-term loans outstanding, a decrease from $5,440,350 as of December 31, 2021[317] Revenue Recognition and Accounting - The company recognizes revenue from product sales upon transfer of control, with restaurant revenue recognized at the point of service[362] - The company measures certain financial instruments at fair value, including cash equivalents and accounts receivable, due to their short maturities[376] - The fair value measurement for certain financial assets is based on observable inputs, categorized into three levels, with Level 1 being the most reliable[374] Market and Economic Conditions - The RMB depreciated against the U.S. dollar by 9.23% in 2022, impacting financial results reported in U.S. dollar terms[481] - The company experienced inflation rates in China of 3.7% in 2022, 1.1% in 2021, and 2.6% in 2020, which were considered not material[378] - The company has generally been able to pass on cost increases from raw material price fluctuations through price adjustments[379]

Financial Performance - The company reported net losses of $874,668 in 2020 and $6,715,958 in 2021[318]. - Total revenue for the year ended December 31, 2021, was $1,091,889, an increase of $276,664 or 34% compared to 2020, but a decrease of $11,833,030 or 93.55% compared to 2019[367]. - Gross loss for 2021 was $(20,574), with a gross margin of -1.88%, an improvement from -5.13% in 2020[365]. - Net loss for the year ended December 31, 2021, was $6,715,958, compared to a net loss of $874,668 in 2020[390]. - Cash used in operating activities amounted to approximately $3.45 million in 2021, raising concerns about the company's ability to continue as a going concern[391]. - The company recorded a net cash inflow of $12,766,911 for the year ended December 31, 2021, compared to $244,486 in 2020[423]. Revenue Sources - Revenue from the restaurant business increased by $606,463 or 100% in 2021, primarily due to the acquisition of 51% equity interests in Far Ling's Inc. and 100% in Bo Ling's Chinese Restaurant[369]. - E-commerce sales in 2021 were $34,590, accounting for 3% of total revenue, with a 107% increase from 2020, although it was down 80% from 2019[368]. - Revenue from pet chews decreased by $12,984 or 22%, while wet canned pet food revenue decreased by $73,357 or 87% in 2021 compared to 2020[374]. Legal and Bankruptcy Issues - As of December 31, 2021, the company faced pending legal claims totaling RMB13.86 million (approximately $2.12 million) related to non-payment of invoices[324]. - The company is subject to 57 lawsuits from vendors and lenders since November 2019, with 44 cases reaching civil conciliation[324]. - The company is in bankruptcy proceedings as of March 16, 2022, affecting its ability to resolve legal claims and continue operations[324]. - The company has not made loan repayments totaling RMB20 million (approximately $3.18 million) to Qingdao Lingang Real Estate Co., Ltd. as of December 31, 2021[325]. Production and Operational Challenges - The total production capacity decreased by 14.81% from 5.4 tons per day in 2020 to 4.6 tons per day as of December 31, 2021[319]. - The company’s ability to recover operations is hindered by the COVID-19 pandemic and rising raw material prices[318]. - The company’s daily production capacity is currently limited to 4.6 tons due to operational challenges and legal proceedings[319]. - The company faced significant challenges due to competitive pressures in the pet food market, including pricing pressure and the presence of larger competitors[351]. Financial Position and Assets - Total assets as of December 31, 2021, were $32,047,957, reflecting a 74% increase from $18,452,910 in 2020[418]. - As of December 31, 2021, cash and cash equivalents increased to $18,027,322, a 175% increase from $6,566,549 in 2020[422]. - Inventory balance decreased to $51,423, a 79% decrease from $247,245 in 2020, attributed to rising raw material prices and decreased sales orders[427]. - Accounts receivable, net as of December 31, 2021, was $39,512, a decrease of 77% compared to $168,499 in 2020[426]. Financing Activities - The company completed a registered direct offering on September 30, 2021, raising approximately $8.2 million from the sale of 10,000,000 common shares[336]. - A second registered direct offering on November 3, 2021, raised approximately $8.9 million from the sale of 15,000,000 common shares[337]. - The company reported net cash provided by financing activities of $18,098,314 for the year ended December 31, 2021, primarily from the issuance of common shares[402]. Cost and Expenses - Cost of revenues for 2021 was $1,112,463, a 29.80% increase from 2020, reflecting rising raw material costs and operational challenges[365]. - General and administrative expenses surged by 123.36% to $3,944,709 in 2021, reflecting increased operational costs[365]. - Operating expenses rose by $2,709,378 or 143.80% in 2021, with a ratio of operating expenses to revenue increasing from 231.11% in 2020 to 420.69% in 2021[382]. Impairments and Liabilities - The company recognized an impairment of goodwill of $355,570 for the year ended December 31, 2021, due to significant net loss[387]. - The company recorded an impairment loss on long-lived assets of $217,257 for the year ended December 31, 2021[447]. - Total contractual obligations as of December 31, 2021, amounted to $10,555,513, with $5,440,350 due within one year[436]. Market and Economic Conditions - The company considers commodity price risks arising from fluctuations in raw material prices but has generally been able to pass on cost increases through price adjustments[471]. - The RMB appreciated against the U.S. dollar by 2.7% in 2021 and 6.5% in 2020, which may affect the financial results reported in U.S. dollar terms[585]. - The company does not believe the impact of inflation is material, with inflation rates in China being 1.1% in 2021, 2.6% in 2020, and 2.3% in 2019[470].

Financial Performance - Revenues decreased by 52.46% to $0.13 million for the first half of 2021, down from $0.28 million in the same period of 2020[2] - Gross loss was $0.18 million for the first half of 2021, compared to a gross profit of $0.07 million for the same period of the prior year[3] - Operating loss increased by 20.23% to $1.17 million for the first half of 2021, compared to $0.97 million for the same period of 2020[3] - Net loss attributable to common stockholders was $0.94 million, or loss per share of $0.02, for the first half of 2021, compared to a net loss of $0.60 million, or loss per share of $0.01, for the same period of the prior year[3] - The company reported a comprehensive loss of $(1,013,225) for the six months ended June 30, 2021, compared to $(509,668) for the same period in 2020[27] - Basic loss per common share attributable to TDH Holdings, Inc. for the six months ended June 30, 2021, was $(0.02), compared to $(0.01) for the same period in 2020[27] - The company reported a net loss of $942,773 for the period ended June 30, 2021, compared to a net loss of $604,008 for the same period in 2020[30] Sales Performance - Domestic sales decreased by 48.20% to $0.12 million for the first half of 2021, down from $0.22 million in the same period of 2020[5] - E-commerce sales increased by 100% to $0.02 million for the first half of 2021, compared to $0 million for the same period of the prior year[5] Operating Expenses - Total operating expenses increased by 10.17% to $0.99 million for the first half of 2021, compared to $0.90 million for the same period of the prior year[10] - Total operating expenses for the six months ended June 30, 2021, were $990,195, an increase of 10.2% from $898,754 in the same period of 2020[27] Cash Flow and Liquidity - Cash, cash equivalents, and restricted cash increased to $7.39 million as of June 30, 2021, compared to $6.75 million at December 31, 2020[14] - Net cash used in operating activities was $4.84 million for the first half of 2021, compared to $0.81 million for the same period of the prior year[15] - Cash and cash equivalents as of June 30, 2021, were $5,975,713, down from $6,566,549 as of December 31, 2020[24] - Cash, cash equivalents, and restricted cash at the end of the period totaled $7,392,772, up from $1,370,395 at the end of the previous year[31] Assets and Liabilities - Total current assets as of June 30, 2021, were $12,177,548, an increase from $10,516,955 as of December 31, 2020[24] - Total liabilities as of June 30, 2021, were $12,982,464, a decrease from $19,345,690 as of December 31, 2020[24] - Total stockholders' equity (deficit) as of June 30, 2021, was $823,995, an improvement from $(892,780) as of December 31, 2020[24] Investment Activities - The company generated net cash provided by investing activities of $5,813,826, a turnaround from a net cash used of $4,482,418 in the previous year[30] - Proceeds from the auction of property, plant, and equipment amounted to $4,434,580, contributing to the positive cash flow from investing activities[30] Financing Activities - The company received approximately $8.2 million net proceeds from a registered direct offering closed on September 30, 2021[16] - The company raised $2,730,000 from the issuance of common shares during the financing activities[30] - Interest paid increased to $203,550 from $37,640 in the previous year, indicating higher financing costs[30] Other Financial Metrics - The company experienced a fair value change of short-term investments resulting in a loss of $1,617,467, compared to a loss of $879,520 in the prior year[30] - The company reported a significant loss on judicial auctions related to litigations, totaling $964,266 for the period[30] - The company’s accounts receivable increased to $151,852 from a negative $32,902, indicating improved collection efforts[30]

Financial Performance - The company experienced a significant revenue decline of 93.6%, amounting to $11.8 million in 2020 compared to 2019 due to COVID-19 and operational challenges [225]. - Revenue in fiscal year 2020 decreased by approximately 93.6%, or $11.8 million, compared to fiscal year 2019, primarily due to COVID-19 impacts [250]. - Total revenue for the year ended December 31, 2020, was $815,225, a decrease of $11,833,030 or 93.55% compared to 2019 [267]. - The company's revenue decreased by approximately $11.83 million from approximately $12.65 million in 2019 to approximately $0.82 million in 2020, representing a decline of 93.55% [290]. - Domestic sales in 2020 were $574,921, a decline of 79% from $2,711,445 in 2019 [268]. - Sales to China in 2020 were $713,257, down 73% from $2,662,247 in 2019 [275]. - E-commerce sales in 2020 were $16,708, accounting for 2% of total revenue, a significant drop from 16% in 2018, indicating a need for market expansion [254]. Operational Challenges - Total production capacity decreased by 32.5%, from 8.0 tons per day in 2019 to 5.4 tons per day as of December 31, 2020 [226]. - The COVID-19 pandemic significantly disrupted supply chains and sales activities, contributing to decreased revenue [269]. - The company is facing 57 pending lawsuits related to non-payment of invoices, with total claims amounting to RMB13.86 million (approximately $2.12 million) [231]. - The company faced 57 lawsuits from suppliers and vendors since November 2019, impacting its credit and operational costs [261]. - The company has not made loan repayments totaling RMB20 million (approximately $3.18 million) to Qingdao Lingang Real Estate Co., Ltd. and anticipates potential bankruptcy proceedings if obligations are not settled [232]. - A court ruling mandated the company to repay RMB19.93 million (approximately $3.08 million) to China Construction Bank, with property auctioned for $5,098,461 (RMB33.14 million) to partially settle this debt [233]. - The company has not repaid RMB4.85 million (approximately $0.75 million) to Shanghai Pudong Development Bank, with potential bankruptcy risks if obligations remain unsettled [235]. - Labor arbitration claims from former employees total RMB 3.68 million ($0.56 million), with 98 cases initiated, of which 6 have been settled [239]. Financial Position - The company reported a working capital deficit of approximately $8.55 million as of December 31, 2020, compared to $7.3 million as of December 31, 2019 [290]. - Cash used in operating activities for the year ended December 31, 2020, totaled $2,628,255, primarily due to a net loss and changes in working capital [296]. - The company recorded a net cash inflow of $244,486 for the year ended December 31, 2020, compared to a net cash inflow of $3,804,073 in 2019 [8]. - The company was in default on substantially all outstanding loans, with total contractual obligations of $9,917,382 due by the end of 2025 [9]. - The company anticipates incurring additional costs related to compliance with the Sarbanes-Oxley Act, which may require seeking additional financing [307]. - As of December 31, 2020, total current liabilities increased by 32% to $19,070,896 from $14,461,900 as of December 31, 2019 [1]. Investment and Financing - The company raised approximately $2.73 million from the sale of 9,100,000 common shares at $0.30 per share to accredited investors [241]. - The company entered into subscription agreements for the sale of 9,100,000 common shares at $0.30 per share, raising approximately $2.73 million [294]. - Net cash provided by investing activities for the year ended December 31, 2020 was $3,355,189, including proceeds from the sale of short-term investments of $42,146,183 [297]. - Net cash used in financing activities for the year ended December 31, 2020 was $589,358, with repayments of short-term loans totaling $746,437 [300]. Future Outlook - The company is committed to developing new products and expanding its customer base to recover from operational challenges and improve financial performance [227]. - Future growth will require significant capital investments and effective management of operational challenges to ensure sustainability [230]. - The company plans to improve profitability and generate sufficient cash flow while exploring strategic acquisition opportunities to enhance operations [294]. - The company is closely monitoring COVID-19 developments and expects the negative impact to gradually mitigate as the outbreak is controlled in China [225]. - There is substantial doubt about the company's ability to continue as a going concern for the next 12 months due to ongoing financial challenges [295]. Cost and Expenses - Cost of revenues for 2020 was $857,060, down 93.87% from $13,992,499 in 2019 [266]. - General and administrative expenses were $1,766,109 in 2020, a reduction of 52.29% from $3,702,035 in 2019 [266]. - Operating expenses decreased by $3,551,514 or 65.34% from $5,435,616 in 2019 to $1,884,102 in 2020, but the ratio of operating expenses as a percentage of revenue increased to 231.11% [280]. - Research and Development expenses were $0 in 2020, compared to $1,062,582 in 2018, indicating a shift in strategy [265]. Assets and Liabilities - Total current assets increased by 46% from $7,192,890 in 2019 to $10,516,955 in 2020 [314]. - Cash and cash equivalents rose by 28% from $5,114,175 in 2019 to $6,566,549 in 2020 [314]. - Accounts receivable, net increased significantly by 678% from $21,657 in 2019 to $168,499 in 2020 [314]. - Total assets increased by 22% from $15,087,210 in 2019 to $18,452,910 in 2020 [314]. - Short-term loans outstanding increased from $7,624,061 as of December 31, 2019 to $8,391,323 as of December 31, 2020 [306]. - Inventory decreased by 47.75% to $247,245 from $473,216 as of December 31, 2019 due to reduced sales orders and rising raw material prices [4]. - Accounts payable decreased by $227,176 to $3,209,763 as of December 31, 2020, reflecting a reduction in material purchases due to a shortage of sales orders [7].