Top KingWin (TCJH) - 2022 Q4 - Annual Report

Financial Performance - Total revenues decreased by 50% or $3,172,343, from$ 6,294,667 in 2021 to $3,122,324 in 2022[384]. - Revenues from advisory and transaction services decreased by 48% to$ 2,000,219, accounting for 64% of total revenues in 2022[387]. - Revenues from corporate business training services fell by 83% to $256,356, representing 8% of total revenues in 2022[387]. - Corporate consulting services revenues increased by 3% to$ 862,081, making up 28% of total revenues in 2022[387]. - Gross profit for 2022 was $2,165,212, which is 69% of total revenues, down from 78% in 2021[384]. - Operating expenses increased significantly to$ 3,085,002, representing 98% of total revenues in 2022[384]. - The net loss for 2022 was $771,483, compared to a net income of$ 2,308,626 in 2021[384]. - Total revenue for the year ended December 31, 2022, was $3,122,324, a decrease from$ 6,294,667 in 2021, representing a decline of 50%[398]. - Gross profit for 2022 was $2,165,212, with a gross margin of 69%, down from$ 4,937,869 and 78% in 2021, indicating a 9% decrease in overall gross profit rate[399]. - Operating expenses increased significantly to $3,085,002 in 2022, up 63% from$ 1,894,647 in 2021, primarily due to a 133% rise in general and administrative expenses[400]. - The company reported a net loss of $771,483 for the year ended December 31, 2022, compared to a net income of$ 2,308,626 in 2021[408]. Revenue Recognition - The company’s corporate consulting services are recognized at the point in time when deliverables, such as reports, are delivered to clients[289]. - Revenue from advisory and transaction services is recognized upon completion of fundraising transactions, with service fees based on a percentage of funds raised[458]. - Revenue from corporate consulting services is recognized when specific services are completed, with fixed prices for each service[459]. Business Model and Strategy - The company’s business model focuses on building long-term relationships with clients, enhancing client satisfaction and loyalty, which drives recurring revenue[272]. - The company aims to provide comprehensive services to address clients' needs throughout all phases of their development and growth[269]. - The company aims to assist SMEs in China in achieving their goal of becoming public companies through tailored fundraising strategies[320]. - The company plans to enhance client acquisition through free or low-priced seminars to attract new clients[375]. Market and Industry Insights - The number of SMEs in China is expected to grow at a CAGR of 9.8% from 2021 to 2026, providing a solid foundation for the company's future development[266]. - The market size of new economy industries in China reached $4.0 trillion (RMB 25.2 trillion) by the end of 2021, growing at a CAGR of 28.2% from 2016 to 2021[269]. Operational Highlights - As of the end of 2022, the company had conducted over 100 seminars across various cities in China, with more than 10,000 attendees participating[277]. - The company has held over 29 first-level seminars, 36 second-level seminars, and 13 third-level seminars as of the end of 2022[284]. - The first-level seminars, which are free, typically attract 150-200 attendees each, aimed at introducing basic knowledge of capital markets[285]. - The company has developed a comprehensive range of services to meet the evolving demands of clients, including corporate business training[323]. - The company engages in building long-term cooperative relationships with local chambers of commerce to facilitate equity investment opportunities[327]. Legal and Regulatory Environment - The Company operates under the legal regime of the PRC, governed by various authorities including the National People's Congress and the State Council[328]. - The 2021 Negative List, effective from January 1, 2022, allows the Company to conduct business through its wholly owned PRC subsidiary without restrictions, as none of its businesses are listed on the Negative List[331]. - The Foreign Investment Law, effective from January 1, 2020, establishes a system of pre-establishment national treatment plus a negative list for foreign investment, ensuring no material adverse effects on the Company's business[335]. - The Company must comply with the Company Law of the People's Republic of China, which governs the establishment and operation of limited liability companies[329]. - The China Securities Regulatory Commission (CSRC) issued new rules for overseas listings, effective March 31, 2023, requiring filing-based administration for both direct and indirect offerings[351]. Financial Position and Cash Flow - Cash and restricted cash as of December 31, 2022, amounted to$ 2,654,185, a decrease from $3,895,401 as of December 31, 2021[434]. - Net cash used in operating activities for the year ended December 31, 2022, was$ 1,395,937, compared to net cash provided of $3,774,372 in 2021[438]. - The company believes its current cash and financing are sufficient to support operations for at least the next 12 months, but may require additional resources for future expansions or acquisitions[447]. Risks and Uncertainties - The financial review indicates that actual results may differ materially from forward-looking statements due to various risks and uncertainties[372]. - The impact of COVID-19 led to the cancellation of multiple seminars and training courses, affecting revenue generation[382].