Risks and Challenges - The company faces significant risks related to the performance and reliability of its high-capacity anode and high-energy solid-state battery technology, which may lead to defects and recalls, adversely affecting sales and brand reputation [90]. - The company has only conducted preliminary safety testing on its battery technology, and extensive testing is required before acceptance by automotive OEMs, which may delay commercialization [93]. - The battery cell market is highly competitive, with traditional lithium-ion battery manufacturers potentially reducing costs and expanding supply, impacting the company's market position [109]. - The company relies on third-party suppliers for raw materials and components, facing risks of price increases and supply chain challenges that could delay development and commercialization [99]. - The company must continue to invest significant resources in developing its battery technology without assurance of market acceptance, which could adversely affect its business [112]. - The company’s manufacturing facilities require large-scale machinery that may malfunction, leading to production delays and increased costs [96]. - The company is dependent on attracting and retaining key personnel, and losing such talent could severely disrupt operations and growth [104]. - The company may face substantial costs related to compliance with supply chain requirements, which could impact its financial condition [100]. - The company’s insurance coverage may not be adequate to protect against all business risks, potentially leading to significant financial losses [106]. - The company’s battery technology may become obsolete if competitors develop superior technologies or if market demands shift, adversely affecting growth prospects [111]. - The company may struggle to attract customers during the development stage or for high-volume commercial production, which could harm its business [116]. - The company is subject to risks associated with selling to large automotive OEMs, including longer sales cycles and increased purchasing power of these customers [117][119]. - The company has limited operating history and faces challenges in establishing its business model, which could adversely affect its operating results and reputation [121]. - The company may not succeed in establishing and maintaining its brand, which is critical for customer acceptance and competitive positioning in the automotive industry [135]. - The company may face significant litigation and regulatory actions that could adversely impact profitability and financial position [156]. - Compliance with evolving regulations related to electric vehicles and battery technology is expected to incur significant costs [157]. - Changes in U.S. trade policy, including tariffs and increased scrutiny on foreign investments, could negatively affect sourcing and sales [158]. - Environmental laws and regulations may lead to increased compliance costs and operational restrictions, potentially impacting financial results [170]. - The company is subject to anti-corruption and anti-bribery laws, with non-compliance potentially resulting in significant penalties and reputational damage [176]. - The risk of information security breaches and system disruptions could lead to substantial operational and financial consequences [165]. - The company may face challenges in maintaining the security and integrity of its systems, especially in light of increasing cyber threats [163]. - Future changes in privacy and data protection laws may require substantial resources for compliance and could lead to legal liabilities [169]. - The company relies on third parties for compliance with environmental laws, which could result in liability and increased costs if not managed properly [173]. Financial Performance and Projections - The company incurred a net loss of approximately $5.3 million for the year ended December 31, 2023, and approximately $25.9 million for the year ended December 31, 2024 [123]. - The company expects the rate of losses to increase significantly in future periods due to ongoing expenses related to the design, development, and manufacturing of its high-capacity anode and high-energy solid-state battery technology [124]. - The company anticipates that its capital expenditures and working capital requirements will increase materially as it accelerates research and development efforts and scales up production operations [129]. - The company faces substantial doubt about its ability to continue as a going concern, requiring sufficient funding to finance operations and potentially needing to liquidate assets if unable to raise capital [125][126]. - The company may require additional capital to support business growth, which might not be available on commercially reasonable terms [127]. - Significant increased expenses and administrative burdens as a public company may adversely affect the company's financial condition and results of operations [150]. - The company anticipates that its internal control over financial reporting will not be effective until material weaknesses are remediated, which may impact investor confidence and stock value [149]. - Incorrect estimates or assumptions in financial reporting could adversely affect reported assets, liabilities, income, and expenses, impacting overall business performance [145]. Intellectual Property and Compliance - The company relies heavily on owned intellectual property, including patents, trade secrets, and trademarks, which are crucial for maintaining competitive advantage [136]. - Patent applications may not result in issued patents, potentially allowing competitors to exploit similar technologies, adversely affecting revenue and competitive position [138]. - The company has identified five material weaknesses in internal control over financial reporting, which could lead to misstatements in financial statements if not remediated [147]. - The company may incur substantial costs defending against intellectual property infringement claims, which could divert resources and management attention [140]. - The unavailability or reduction of government subsidies and economic incentives could materially affect the company's competitiveness and financial condition [154]. - The company anticipates increased compliance burdens and costs related to battery products and supply chain oversight [166]. - Increased tariffs or trade restrictions could have a material adverse effect on Solidion's business and financial condition [180]. - Sustained uncertainty in global economic conditions may lead to a global economic slowdown, impacting Solidion's operations [181]. - Solidion qualifies as an "emerging growth company," allowing it to take advantage of certain reporting exemptions until specific revenue or market value thresholds are met [196]. - This election allows the company to delay the adoption of certain accounting standards until they apply to private companies, potentially complicating financial statement comparisons with other public companies [197]. - There is uncertainty regarding investor perception of the company's common stock due to reliance on these exemptions, which may affect trading activity and stock price volatility [198]. Shareholder and Market Considerations - Solidion's Common Stock has a significant portion (78,616,000 shares) subject to registration rights, which could lead to a decline in market price if sold [183]. - The maximum number of shares underlying Series C and Series D Warrants is approximately 123,076,923 and 49,320,990 shares, respectively, included in a shelf registration statement [184]. - G3 holds approximately 85.3% of the voting power, qualifying Solidion as a "controlled company" under Nasdaq standards, potentially limiting shareholder protections [187]. - Solidion may issue additional shares of Common Stock or other equity securities without shareholder approval, which could dilute ownership interests [189]. - The exercise price for Public Warrants is $11.50 per share, with no assurance they will be in the money before expiration [192]. - Solidion may redeem unexpired warrants at a price of $0.01 per Warrant, which could disadvantage warrant holders [193]. - Changes in laws and regulations could materially adversely affect Solidion's business and results of operations [195].

IPO and Financing - The company completed its IPO on October 6, 2022, raising gross proceeds of $50 million from the sale of 5,000,000 units at $10.00 per unit[20]. - An additional 417,180 units were sold under the over-allotment option, generating gross proceeds of $4.17 million[21]. - A total of $54,984,377 from the IPO and private placements has been deposited in a trust account for the benefit of public stockholders[150]. - The company received unsecured promissory notes totaling $849,626 from the Sponsor to support transaction costs and working capital[25]. - The company has received loans totaling $449,780 from the Sponsor during 2023 to cover transaction costs related to the business combination[183]. Business Combination and Mergers - The company extended its business combination period to May 6, 2025, by depositing $20,000 for each one-month extension[27]. - The Bestpath Merger Agreement was terminated on July 12, 2024, to allow for a new business combination agreement following a reorganization[39]. - The company is contemplating mergers with Huture, primarily based in mainland China, and does not expect these mergers to result in "control" of a "U.S. business" by a "foreign person" under CFIUS regulations[62]. - The company has structured the business combination with Huture to acquire 100% of its equity interests, but may consider alternatives if necessary[71]. - The Mergers imply a current equity value of Huture at $1.0 billion prior to the closing of the Mergers[42]. Compliance and Regulatory Issues - The company faced non-compliance with Nasdaq Listing Rules, including a failure to maintain at least 300 public holders and a minimum market value of listing securities of $35 million[30][35]. - The Nasdaq notified the company of its delisting determination on March 6, 2025, due to non-compliance with listing rules[36]. - The company intends to seek waivers from third parties regarding claims to the trust account to limit potential liabilities[88]. - The company plans to seek a waiver from Nasdaq regarding its delisting, but there is no assurance that it will be granted[110]. - The company must comply with the Sarbanes-Oxley Act regarding internal control audits for the fiscal year ending December 31, 2024[101]. Financial Performance - For the fiscal year ended December 31, 2024, the company reported a net loss of $357,114, primarily due to general and administrative expenses of approximately $881,677 and income tax expense of $347,586[177]. - For the fiscal year ended December 31, 2023, the company achieved a net income of $997,917, with interest earned on investments held in the Trust Account amounting to approximately $1,980,430[178]. - As of December 31, 2024, the company had cash of $7,830 and a working capital deficit of $2,886,242, indicating liquidity challenges[183]. - The company has incurred significant expenses related to being a public entity and anticipates further costs associated with the search for a business combination[177]. - The company has recorded an excise tax liability of $546,877 for fiscal year 2024 and $259,438 for fiscal year 2023 due to stock redemptions[161]. Redemption and Liquidation - An aggregate of 2,124,738 shares with a redemption value of approximately $23.18 million were tendered for redemption during the annual stockholder meeting[27]. - Public stockholders may redeem their shares for their pro rata share of the trust account, regardless of their vote on the proposed business combination[72]. - If the company liquidates, public stockholders may only receive up to $11.62 per share based on the trust account balance as of March 31, 2025[61]. - Public stockholders will receive a pro rata portion of the trust account upon redemption, which may be less than approximately $10.15 per share due to potential claims from creditors[89]. - The company will cease all operations and redeem 100% of outstanding public shares if a business combination is not completed by May 6, 2025[83]. Internal Controls and Governance - Management has identified deficiencies in internal control over financial reporting, concluding that disclosure controls and procedures were not effective as of December 31, 2024[202]. - The company identified a material weakness in internal controls over financial reporting as of December 31, 2023, related to the classification of Investment held in Trust Account and Deferred underwriting fee payable accounts[208]. - Management has taken remediation measures and concluded that the material weakness has been remediated as of December 31, 2024[208]. - The independent registered public accounting firm did not provide an attestation report due to the company's status as an emerging growth company[207]. - The company acknowledges that its disclosure controls and procedures can only provide reasonable, not absolute, assurance against errors and fraud[204]. Management and Strategy - The management team includes experienced professionals, such as CEO Ms. Yi Zhou and CFO Mr. Qingze Zhao, with backgrounds in consultancy and corporate strategy[63]. - The company intends to utilize cash from the IPO and private placements for its initial business combination, without designating proceeds for specific purposes[65]. - Target business candidates are expected to be sourced from various unaffiliated financial community members, including investment bankers and venture capital funds[66]. - The company has the flexibility to identify and select prospective acquisition candidates, with a target business having a fair market value of at least 80% of the trust account balance[69]. - The company has a diverse board of directors with extensive experience in finance, consulting, and management[213][214][215][216][217].

IPO and Financial Proceeds - The company completed its IPO on October 6, 2022, raising gross proceeds of $50 million from the sale of 5,000,000 units at $10.00 per unit[20]. - An additional 417,180 units were sold under the over-allotment option, generating gross proceeds of $4,171,800[21]. - As of March 31, 2025, the trust account held $9,361,505.81, which is part of the net proceeds from the IPO and private placements[27]. - A total of $54,984,377 of net proceeds from the IPO and private placements were deposited in a trust account for public stockholders[150]. - The company incurred total expenses of $812,577 in underwriting discounts and commissions and $835,549 for other IPO-related costs[153]. Business Combination and Mergers - The company extended its business combination period to May 6, 2025, by depositing $20,000 for each one-month extension[27]. - The company entered into a merger agreement with Bestpath on March 23, 2023, which was later terminated on July 12, 2024, due to a reorganization[39]. - The Mergers imply a current equity value of Huture at $1.0 billion prior to the closing of the Mergers[42]. - Each outstanding PubCo Ordinary Share will have a value at the time of the Closing of $10.00[42]. - Holdco shareholders will receive up to 10,000,000 Earn-out Shares if PubCo's consolidated revenue reaches RMB60,000,000 for the fiscal year ended December 31, 2024, and RMB100,000,000 for the fiscal year ended December 31, 2025[45]. - The company has structured the business combination with Huture to acquire 100% of its equity interests, but may consider alternatives if necessary[71]. Compliance and Regulatory Issues - The company was notified by Nasdaq on February 28, 2024, for not meeting the Minimum Public Holders Rule, requiring a plan for compliance[30]. - On November 20, 2024, the company was notified of failing to maintain a minimum Market Value of Listing Securities of $35 million[35]. - The company received a delisting notification from Nasdaq on March 6, 2025, due to non-compliance with listing rules[173]. - Following the delisting notification, the company opted not to request a review and expects to file a Form 25-NSE to remove its securities from Nasdaq[174]. - The company intends to seek a waiver from Nasdaq regarding its delisting, but there is no assurance that this will be granted[110]. Financial Performance - For the fiscal year ended December 31, 2024, the company reported a net loss of $357,114, primarily due to general and administrative expenses of approximately $881,677[177]. - For the fiscal year ended December 31, 2023, the company achieved a net income of $997,917, with interest earned on investments held in the Trust Account amounting to approximately $1,980,430[178]. - As of December 31, 2024, the company had cash of $7,830 and a working capital deficit of $2,886,242[183]. - The company has recorded an excise tax liability of $546,877 for fiscal year 2024 and $259,438 for fiscal year 2023 due to stock redemptions[161]. Shareholder Actions and Redemption - An aggregate of 2,487,090 shares with a redemption value of approximately $25,943,773 were tendered for redemption during the special meeting on June 28, 2023[26]. - Public stockholders may seek to redeem their shares for their pro rata share of the trust account, regardless of their vote on the proposed business combination[72]. - If the company liquidates, public stockholders may only receive up to $11.62 per share based on the trust account balance as of March 31, 2025[61]. - Following an annual stockholder meeting on April 30, 2024, an additional 2,124,738 shares were tendered for redemption, valued at $23,176,909 (or approximately $10.91 per share), reducing outstanding public shares to 805,352[120]. Management and Governance - The management team includes CEO Ms. Yi Zhou and CFO Mr. Qingze Zhao, with significant experience in consultancy and corporate strategy, respectively[63]. - The Chief Executive Officer, Yi Zhou, has extensive experience in consultancy and private equity, having co-founded Ease Consulting[214]. - The Chief Financial Officer, Qingze Zhao, has a strong background in asset management and quant-trading[215]. - The independent directors bring diverse expertise in healthcare, education consulting, and auditing to the board[216][217]. Internal Controls and Compliance - The company identified a material weakness in internal controls over financial reporting as of December 31, 2023, related to the classification of investments and deferred underwriting fees[208]. - Management has taken remediation measures and concluded that the material weakness has been remediated as of December 31, 2024[208]. - The company acknowledges that its disclosure controls and procedures cannot prevent all errors and instances of fraud[204]. - Management is responsible for establishing and maintaining adequate internal control over financial reporting in accordance with GAAP[205]. Future Outlook and Challenges - The company is contemplating mergers with Huture, primarily based in mainland China, and does not expect these mergers to result in "control" of a "U.S. business" by a "foreign person" under CFIUS regulations[62]. - The company may face challenges in completing a business combination due to foreign investment regulations and potential CFIUS review, which could limit the pool of potential targets[113][114]. - The company expects to incur significant professional costs to remain publicly traded and may need additional financing to complete its business combination[184]. - If the company cannot complete a business combination by May 6, 2025, it will cease operations and liquidate[185].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number: 001-39445 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such fi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number: 001-39445 MSP Recovery, Inc. (Exact name of Registrant as specified in its Charter) Delaware 84-4117825 (State or other jurisdiction of ...

Company Overview - SFHG's fiscal year ends on December 31[21] - The company operates through its subsidiaries in Hong Kong and the PRC, specifically Samfine HK, Samfine SZ, and Samfine SZ Technology[20] - The reporting currency for SFHG is HKD, with translations to U.S. dollars calculated at a rate of US$1 = HK$7.7677 as of December 31, 2024[20] - The company is classified as an emerging growth company[13] Regulatory and Compliance Risks - The audit report is prepared by U.S. auditors subject to PCAOB inspections, but future inspections may be affected by political changes between mainland China and Hong Kong[34] - The company faces risks related to potential delisting from U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years[40] - The SEC has implemented rules under the HFCA Act that may require additional disclosures from companies whose auditors cannot be inspected by the PCAOB[39] - The company must comply with new SEC rules if identified as having a "non-inspection" year under the HFCA Act[39] - The company is subject to various risks that could materially affect its financial condition and results of operations[32] - PCAOB determined it could secure complete access to inspect registered public accounting firms in mainland China and Hong Kong as of December 15, 2022[44] - The Consolidated Appropriations Act mandates the SEC to prohibit trading of an issuer's securities on U.S. exchanges if its auditor is not PCAOB inspected for two consecutive years[45] - Regulatory developments in the PRC may lead to increased compliance costs and additional disclosure requirements for companies operating in Hong Kong and mainland China[48] - The PRC Data Security Law requires data collection to be conducted legitimately and mandates a data classification and protection system[50] - Stricter labor laws in the PRC may adversely affect the business operations and financial results of the company's subsidiaries[53] - The Hong Kong National Security Law could materially impact the operations and financial position of the company's Hong Kong subsidiary[60] - Increased scrutiny of U.S.-listed Chinese companies has led to significant declines in stock value and potential shareholder lawsuits[59] - The SEC and PCAOB have highlighted challenges in overseeing financial audits of U.S.-listed companies with significant operations in the PRC[56] - The company may face penalties for inadequate contributions to employee benefit plans as required by PRC regulations[52] Economic and Political Risks - Economic downturns or changes in PRC policies could materially affect the company's business and financial condition[63] - Economic conditions in Hong Kong and the PRC are sensitive to global economic conditions, with potential negative impacts on business and financial condition due to prolonged slowdowns[64] - The PRC government’s political and economic policies significantly affect the company’s growth and expansion strategies, with uncertainties in U.S.-China relations posing risks[65] - The PRC economy has experienced uneven growth, and government measures to control economic activity, such as interest rate adjustments, may adversely affect the company’s operations[67] - Tariffs and international trade disputes could increase costs and negatively impact customer confidence, affecting the company’s business operations[73] - The PRC government’s control over capital investments and changes in tax regulations could materially affect the company’s financial condition and results of operations[79] - The legal system in the PRC presents uncertainties that could adversely affect the company’s operations and ability to enforce contractual rights[84] - The company’s operations in Hong Kong are subject to political risks, including potential changes in the economic and legal environment that could impact business stability[69] - The PRC's evolving legal framework may restrict foreign investments, creating challenges for the company in navigating regulatory compliance[85] Financial Performance and Risks - For the year ended December 31, 2024, three customers accounted for 27.9%, 25.8%, and 23.6% of total revenue, indicating significant customer concentration risks[101] - One vendor accounted for 18.7% of total purchases for the year ended December 31, 2024, highlighting dependency on major suppliers[102] - Operating subsidiaries do not enter into long-term contracts, leading to potential fluctuations in sales based on customer demand[99] - The production base in Shenzhen is critical; any operational disruptions could significantly impact the ability to meet delivery schedules[104] - The company anticipates that the provision of printing services to Hong Kong-based book traders will continue to represent most of its revenue in the near future[100] - Operating subsidiaries face challenges from technological advancements and increased digitalization, which may reduce demand for printed products[105] - The company has continuously upgraded production facilities to enhance competitiveness, but failure to keep pace with technological developments may adversely affect operations[106] - The competitive landscape in the printing service industry is highly fragmented, with larger competitors potentially having advantages in technology and capital access[107] - Under PRC laws, dividends can only be paid out of accumulated profits, with at least 10% of after-tax profits required to be set aside as a statutory reserve[94] - Any limitations on the ability of subsidiaries to pay dividends could materially affect the company's growth and investment capabilities[97] - The operating subsidiaries experience significant revenue fluctuations due to seasonality, with lower revenue in Q1 and higher revenue in Q4, driven by customer inventory increases ahead of holidays[108] - A decline in the financial condition of customers may adversely affect cash flows and working capital, increasing exposure to credit risks and allowances for doubtful receivables[109] - The operating subsidiaries face risks related to payment deferrals by customers, which could impact financial condition and operational results[110] - Data transfer risks in the production process may lead to discrepancies in printing products, potentially resulting in additional costs or loss of revenue[111] Operational and Management Risks - The operating subsidiaries have obtained all necessary licenses and permits for operations, but there is no assurance of timely renewal, which could adversely affect business operations[120] - The company relies on key management for operations, and loss of key personnel may impact business performance[121] - Quality of raw materials is critical; failure to meet specifications could lead to delivery delays and loss of orders[122] - The company may face litigation risks, which could result in significant costs and reputational harm[123] - The company holds 18 patents in the PRC, but faces challenges in safeguarding intellectual property rights and potential infringement claims[125] - The company may need to obtain licenses for disputed intellectual property, which could disrupt business if not secured on reasonable terms[126] - The operating subsidiaries generated revenue primarily from printing products for book traders in Hong Kong, with a focus on markets in the U.S. and Europe[139] - The company faces risks from natural disasters, health epidemics, and geopolitical issues that could disrupt operations and adversely affect financial performance[134][135] - The global economic downturn, exacerbated by the COVID-19 pandemic, has led to increased market volatility and diminished expectations for economic growth[136] Shareholder and Governance Issues - The company's largest shareholder holds approximately 69.97% of the voting power, which may lead to actions not in the best interests of other shareholders[143] - Future business plans may be hindered by competition, financial risks, and operational challenges, potentially affecting growth and performance[131] - The company may pursue acquisitions and joint ventures as part of its growth strategy, which could introduce new risks and integration challenges[132] - The internal control system may not be adequate to address all risks, potentially impacting financial condition and operational results[133] - The market price of the company's ordinary shares may experience significant volatility, making it difficult for investors to assess value[142] - The board of directors has complete discretion over dividend distributions, which may depend on future financial performance and conditions[147] - The company is classified as a "controlled company," which may allow it to follow exemptions from certain corporate governance requirements[146] - The company does not intend to pay dividends for the foreseeable future, opting to retain future earnings for business operations and expansion[151] - The company qualifies as a foreign private issuer, which allows for less detailed and less frequent reporting compared to U.S. domestic companies[163] - If the company loses its foreign private issuer status, it would face increased regulatory and compliance costs, as well as potential changes in corporate governance practices[164] - The company is subject to periodic reporting requirements under the Exchange Act, but its disclosure controls may not prevent all errors or acts of fraud[149] - There is uncertainty regarding the enforcement of foreign judgments against the company or its directors in jurisdictions like China and Hong Kong[156][157] - Shareholders of the company have limited rights under Cayman Islands law to access corporate records, which may complicate shareholder actions[159] - The company’s board of directors has discretion over dividend distribution, subject to Cayman Islands law requirements for solvency[151] - The company may face challenges in attracting research coverage from securities analysts, which could impact its share price and trading volume[152] - The company’s operations are primarily conducted in Mainland China and Hong Kong, which may complicate legal processes for shareholders[153] - The company is not required to satisfy the economic substance test under Cayman Islands law as long as it is tax resident outside the Cayman Islands[162] IPO and Financial Transactions - The company closed its IPO on October 16, 2024, raising total gross proceeds of $8,000,000 from the sale of 2,000,000 Ordinary Shares at $4.00 per share[177] - Following the IPO, the underwriters exercised an over-allotment option, resulting in additional gross proceeds of $1,200,000 from 300,000 Ordinary Shares[177] - The total net proceeds from the IPO, after deducting underwriting discounts and commissions, amounted to approximately HK$63.9 million (US$8.2 million)[177] - The company incurred approximately HK$18.6 million (US$2.4 million) in total offering expenses during the IPO process[177] - The authorized share capital was increased to US$50,000 divided into 800,000,000 Ordinary Shares following a 1-to-1.6 share split[176] Product and Service Offerings - The company operates as a one-stop printing service provider, offering a wide range of printed products including children's books, educational books, and packaging products[182] - The company emphasizes high-quality printing services and has implemented a stringent quality control system throughout its production process[184] - The company has extensive experience in customized and personalized book printing, catering to diverse customer needs[183] - The company has diversified its product offerings, including children's books, educational books, and novelty packaging products[189] - The company does not own any real property and relies on leased facilities for its operations[199] - The company maintains a good working relationship with suppliers and has a well-diversified supplier base to mitigate concentration risk[213] - The company does not enter into long-term contracts with customers, relying instead on individual orders[210] - The production capacity at the company's facilities increased due to investments in additional machines and equipment[203] - The company has not experienced material labor disputes and maintains a good relationship with its employees[216] - The Shenzhen Factory has a total of 6 multi-color printing presses, enhancing the company's production capacity[203] - The company employed 216 full-time employees as of December 31, 2024, a slight decrease from 221 in 2023[214] - The company recorded a lower revenue in the first quarter of each calendar year due to the Chinese New Year holiday, while the fourth quarter typically sees increased demand[217]

Production and Revenue - For the year ended December 31, 2024, the average daily production was 798 BOE per day, a decrease of 22% from 1,022 BOE per day in 2023[333]. - Oil production for the year ended December 31, 2024, was 256 MBbl, down 27% from 349 MBbl in 2023, while natural gas production decreased from 355 MMcf in 2023 to 213 MMcf in 2024[347]. - Total revenues for the year ended December 31, 2024, were $19,418,919, a 15% decrease from $24,238,482 in 2023, primarily due to a 28% decrease in production volumes[346]. Pricing and Costs - The average realized oil price per barrel after reflecting settled derivatives was $73.61 for the year ended December 31, 2024, compared to $69.06 for 2023, reflecting a 6% increase[340]. - The company's oil price differential to the NYMEX benchmark was $(1.03) per barrel in 2024, an improvement from $(4.95) per barrel in 2023[335]. - Lease operating expenses for the year ended December 31, 2024, were $8,614,080, with a per BOE increase of 19% to $29.59 due to higher maintenance and labor costs[351]. - Production taxes, transportation, and processing costs were $1,715,792 for 2024, representing 8.7% of oil and natural gas sales, consistent with 8.9% in 2023[352]. Financial Performance - The company recorded a loss on derivative contracts of $850,374 for the year ended December 31, 2024, compared to a gain of $392,765 in 2023[349]. - Depletion, depreciation and amortization (DD&A) increased to $2,407,098 for the year ended December 31, 2024, from $1,849,876 in 2023, with a DD&A rate of $8.27 per BOE, up 48% from $4.53 per BOE in 2023[353]. - Accretion expense decreased to $144,988 in 2024 from $859,102 in 2023, with a per BOE cost of $0.50 compared to $2.32 in 2023, driven by changes in inflation and discount rate assumptions[354]. - General and administrative expenses rose to $10,381,095 in 2024 from $7,253,384 in 2023, including stock-based compensation of $2,778,991[355]. - Interest expense increased significantly to $7,643,200 in 2024 from $1,043,312 in the Successor period of 2023, primarily due to the Senior Secured Term Loan[357]. - The company reported a positive cash flow from operations of $3,700,686 for the year ended December 31, 2024, compared to $484,474 in the Successor period of 2023[368]. Debt and Liabilities - As of December 31, 2024, the company had outstanding debt of $23,641,517 under the Senior Secured Term Loan and a working capital deficit of $31,213,674[365]. - The company recognized a gain on extinguishment of liabilities of $1,638,138 during the year ended December 31, 2024, including a gain of $1,720,000 related to the settlement of royalties payable[360][361]. - The change in fair value of warrant liabilities resulted in a loss of $804,004 in 2024, compared to a gain of $187,704 in the Successor period of 2023[362]. Investments and Equity - Net cash used in investing activities for 2024 was primarily due to the development of crude oil and gas properties, with significant cash outflows in the previous year for compliance upgrades[370]. - The company has a three-year equity line with a maximum funding limit of $150,000,000, having received $6,992,906 in cash proceeds from the sale of 7,000,000 shares under this agreement[367]. Risk Management - The Company uses derivative financial instruments to mitigate commodity price risk, with fair value changes recognized in consolidated statements of operations[386]. - Realized and unrealized gains and losses from derivative financial instruments are reported as a component of revenues in the consolidated statements of operations[386]. - Cash flows from derivative contract settlements are reflected in operating activities in the consolidated statements of cash flows[386]. - The Company records liabilities for ongoing litigation and environmental remediation, with actual costs potentially varying from estimates due to legal interpretations and regulatory changes[384]. - The fair value of the Forward Purchase Agreement liability was estimated using a Monte-Carlo Simulation, considering future stock price simulations and contractual terms[385]. - The Company is classified as a smaller reporting company and is not required to provide additional market risk disclosures[388].

Production and Revenue - Average daily production for the year ended December 31, 2024, was 798 BOE per day, a decrease of 22% from 1,022 BOE per day in 2023[333]. - Total revenues for the year ended December 31, 2024, were $19,418,919, a decrease of 15% from $24,238,482 in 2023[345]. - Oil production decreased by 28% from 349 MBbl in 2023 to 256 MBbl in 2024, while natural gas production decreased from 355 MMcf to 213 MMcf[347]. Pricing and Costs - The average realized oil price per barrel for the year ended December 31, 2024, was $73.61, compared to $69.06 in 2023, reflecting a 6% increase[340]. - The average NYMEX oil price for the year ended December 31, 2024, was $76.55 per barrel, a 1% decrease from $77.64 in 2023[339]. - Lease operating expenses for the year ended December 31, 2024, were $8,614,080, down from $10,146,119 in 2023, but per BOE increased by 19% to $29.59[351]. - Production taxes, transportation, and processing costs were $1,715,792 for the year ended December 31, 2024, representing 8.7% of oil and natural gas sales[352]. Financial Performance - The company recorded a loss on derivative contracts of $850,374 for the year ended December 31, 2024, compared to a gain of $392,765 in 2023[349]. - Depletion, depreciation and amortization (DD&A) increased to $2,407,098 for the year ended December 31, 2024, from $1,849,876 in 2023, with a DD&A rate of $8.27 per BOE, up 48% from $4.53 per BOE in 2023[353]. - Accretion expense decreased to $144,988 in 2024 from $859,102 in 2023, with a per BOE rate of $0.50 compared to $2.32 in 2023, driven by changes in inflation and discount rate assumptions[354]. - General and administrative expenses rose to $10,381,095 in 2024 from $7,253,384 in 2023, including stock-based compensation of $2,778,991[355]. - Interest expense increased significantly to $7,643,200 in 2024 from $1,043,312 in the Successor period of 2023, primarily due to the Senior Secured Term Loan[357]. - The company reported a positive cash flow from operations of $3,700,686 for the year ended December 31, 2024, compared to $484,474 in the Successor period of 2023[368]. Debt and Liabilities - As of December 31, 2024, the company had outstanding debt of $23,641,517 under the Senior Secured Term Loan and a working capital deficit of $31,213,674[365]. - The company recognized a gain on extinguishment of liabilities of $1,638,138 in 2024, including a gain of $1,720,000 related to the settlement of royalties payable[360][361]. - The change in fair value of warrant liabilities resulted in a loss of $804,004 in 2024, compared to a gain of $187,704 in the Successor period of 2023[362]. Investments and Equity - Net cash used in investing activities for 2024 was primarily due to the development of crude oil and gas properties, with significant cash paid for oil and gas property costs in the Predecessor period[370]. - The company has a three-year equity line with a maximum funding limit of $150,000,000, having received $6,992,906 in cash proceeds from the sale of 7,000,000 shares of common stock under this agreement[367]. Risk Management - Derivative financial instruments are used to mitigate commodity price risk, recorded at fair value, with changes recognized in consolidated statements of operations[386]. - Realized and unrealized gains and losses from derivative instruments are reported as a component of revenues in the consolidated statements of operations[386]. - Cash flows from derivative contract settlements are reflected in operating activities in the consolidated statements of cash flows[386]. - The Company records liabilities for ongoing litigation and environmental remediation, with actual costs potentially varying from estimates due to legal interpretations and regulatory changes[384]. - The fair value of the Forward Purchase Agreement liability was estimated using a Monte-Carlo Simulation, considering future stock price simulations and contractual terms[385]. - The Company is classified as a smaller reporting company and is not required to provide additional market risk disclosures[388].

Financial Performance - In 2024, Onfolio Holdings Inc. achieved a revenue increase of 50% year-over-year, reaching $7.8 million, primarily due to the acquisition of three new businesses[274]. - The gross profit margin slightly declined to 58% in 2024 from 62% in 2023, attributed to new acquisitions with lower margins[275]. - Operating loss significantly improved from $9.2 million to $2.5 million, driven by profitable acquisitions and disciplined expense management[275]. - In Q4 2024, Onfolio recorded a positive net income of $136,000, marking a crucial step towards sustained profitability[276]. - The Company reported a net loss of $1,773,942 for the year ended December 31, 2024, a significant improvement compared to a net loss of $9,150,066 in 2023[303]. - Total revenue increased by $2,622,091, or 50%, to $7,862,077 for the year ended December 31, 2024, driven by acquisitions including RevenueZen, DDS Rank, and Eastern Standard[303]. - Cost of revenue increased by $1,320,045, or 66%, to $3,317,200, with gross profit margins decreasing to 57% from 62%[304]. - B2B revenue surged by $2,996,664, or 218%, primarily due to the RevenueZen acquisition, while B2C revenue decreased by $374,573, or 10%[315][319]. - Total other income rose to $733,906 in 2024 from $92,778 in 2023, driven by changes in fair value related to the RevenueZen acquisition[310]. - Net cash used in operating activities decreased to $1,168,363 in 2024 from $2,751,838 in 2023, attributed to increased revenues and reduced general and administrative costs[323]. Acquisitions and Investments - The company acquired three new businesses in 2024, contributing a total of $6 million in revenue, with Eastern Standard being the largest acquisition at $4 million in revenue[279][281]. - The acquisition of Eastern Standard was completed for $2.16 million, with Onfolio holding a 70% ownership stake[294]. - The company holds a 35.8% interest in Onfolio JV IV, LLC, which focuses on acquiring and operating online businesses for advertising revenue[330]. - The company has entered into two asset purchase agreements with contingent earn-out payments: up to $60,000 for BWPS Business Acquisition and $680,662 for RevenueZen Acquisition, both contingent on performance criteria[340]. - The company has not made any earn-out payments as of December 31, 2024, for the contingent payments related to the acquisitions[340]. Capital and Financing - Series A preferred shares were quoted on the OTCQB on October 30, 2024, allowing the company to raise additional capital and reduce reliance on the OA SPV Capital Model[289]. - The Company raised $600,000 through a private offering of Series A preferred stock by December 31, 2023, and an additional $693,000 thereafter[321]. - The OA SPV Capital Model was launched in March 2024, enabling accredited retail investors to co-invest in acquisitions, facilitating the DDSRank and Eastern Standard acquisitions[285]. Operational Efficiency - General and Administrative expenses decreased by $263,355, or 4%, mainly due to reduced advertising and marketing costs[306]. - The Company incurred an impairment loss of $121,000 in 2024, a significant reduction from total impairment losses of $5,016,764 in 2023[309]. - Cash provided by investing activities was $451,000 in 2024, compared to cash used of $850,000 in 2023, primarily from the sale of WP Folio subsidiary assets[325]. Revenue Recognition and Accounting Policies - Revenue is primarily generated from website management, digital services, advertising, content placement, and product sales, with revenue recognized as services are provided or products are shipped[334]. - The company receives management fees of 10% and 20% from OA SPV and OA SPV 2, respectively, based on cash distributions, which are accounted for as revenue contracts[332]. - The company recognizes revenue from online course subscriptions on a deferred basis until performance obligations are satisfied[334]. - The company accounts for its investments in joint ventures under either the cost or equity method, depending on ownership interest, and does not classify them as variable interest entities[331]. - The company reviews long-lived assets for impairment at least annually, comparing carrying amounts to expected undiscounted cash flows[338]. - The company amortizes acquired definite-lived intangible assets over their estimated useful lives, while indefinite-lived assets are subject to annual impairment tests[335]. - No off-balance sheet arrangements are reported that could materially affect the company's financial condition[339]. Future Outlook - The company expects to achieve positive free cash flow in the near term and plans to continue pursuing fundraising and acquisition activities to accelerate growth[290]. - Onfolio aims to focus on finding profitable businesses, acquiring them, and improving operations to drive long-term value creation in 2025[291].

Revenue Performance - Worldwide revenue for Q1 2025 increased by $59.9 million, or 1.6%, to $3,690.4 million compared to $3,630.5 million in Q1 2024[67] - Organic revenue growth contributed $121.9 million, or 3.4%, primarily driven by Media & Advertising and Precision Marketing disciplines[67] - Revenue from Media & Advertising increased by $94.0 million, while Branding & Retail Commerce decreased by $26.0 million in Q1 2025 compared to Q1 2024[68] - North America revenue increased by $70.6 million, or 3.5%, while Middle East and Africa revenue decreased by $8.8 million, or 11.1%[69] - Revenue for the three months ended March 31, 2025, was $3,690.4 million, an increase of $59.9 million or 1.6% compared to $3,630.5 million in the same period of 2024[73] - Organic growth contributed $121.9 million or 3.4% to revenue, primarily driven by increased client spending in Media & Advertising and Precision Marketing[82] - Revenue from Media & Advertising increased by $94.0 million, representing a 7.2% growth, while Public Relations and Healthcare disciplines saw declines of $20.8 million and $11.3 million, respectively[82] - In Asia-Pacific, organic revenue increased by 6.0%, driven by Media & Advertising, with positive growth in India and Australia[91] - In the U.K., organic revenue decreased by 0.7% for the three months ended March 31, 2025[89] Income and Expenses - Operating income decreased by $26.3 million, or 5.5%, to $452.6 million, with an operating margin of 12.3% compared to 13.2% in the prior year[70] - Net income for Omnicom Group Inc. was $287.7 million, down $30.9 million, or 9.7%, from $318.6 million in Q1 2024[70] - Operating income decreased to $452.6 million, down $26.3 million from $478.9 million in the prior year, resulting in an operating margin of 12.3% compared to 13.2%[73] - Net income for Omnicom Group Inc. was $287.7 million, a decrease of $30.9 million from $318.6 million in the same period last year, with diluted net income per share dropping to $1.45 from $1.59[73] - Operating expenses increased by $86.2 million, or 2.7%, to $3,237.8 million, with salary and service costs rising by $53.7 million[94] - Acquisition-related costs of $33.8 million were recorded in Q1 2025 as part of the merger expenses[57] - Acquisition-related costs of $33.8 million impacted both operating income and EBITA[98] - The effective tax rate increased to 28.5% from 25.7%, primarily due to non-deductible acquisition costs[101] Client Concentration - The largest client accounted for 2.7% of total revenue, while the top 100 clients represented approximately 53.6% of revenue for the twelve months ended March 31, 2025[65] - The ten largest clients represented 19.1% of revenue for the twelve months ended March 31, 2025, down from 20.0% in the prior year[83] - The largest client represented only 2.7% of revenue for the twelve months ended March 31, 2025, indicating a diversified client base[123] Cash Flow and Debt - Cash and cash equivalents decreased by $961.1 million from December 31, 2024, with $786.8 million used in operating activities[108] - The company's net debt increased by $1.0 billion to $2.8 billion from December 31, 2024, primarily due to cash usage of $786.8 million for operating activities[112] - The components of net debt as of March 31, 2025, included total debt of $6.1356 billion and cash and cash equivalents of $3.3783 billion[113] - The company maintained a Leverage Ratio of 2.4 times as of March 31, 2025, complying with the financial covenant requiring a maximum of 3.5 times[118] - The company's long-term and short-term debt ratings were BBB+ and A2 by S&P, and Baa1 and P2 by Moody's as of March 31, 2025[119] - The company has a $2.5 billion unsecured multi-currency revolving credit facility, expiring on June 2, 2028[106] - The company has the ability to issue up to $2 billion of U.S. Dollar-denominated commercial paper and $500 million in British Pounds or Euro under a Euro commercial paper program[110] Foreign Exchange Impact - Foreign exchange rate impacts reduced revenue by $59.2 million or 1.6%, mainly due to the weakening of currencies like the Euro and Brazilian Real against the U.S. Dollar[82] - The company expects a negative impact of 0.5% from foreign exchange rates in Q2 and a negative 1.0% for the full year, assuming current rates remain unchanged[77] - The company uses forward foreign exchange contracts to manage cash flow volatility arising from foreign exchange rate fluctuations[129] Strategic Focus - The company is focusing on leveraging generative AI to enhance service delivery and productivity while addressing associated risks and ethical considerations[63] - Discretionary spending for the first three months of 2025 was $253.7 million, significantly lower than $1.2 billion in the same period of 2024[108] - During the three months ended March 31, 2025, there were no drawings under the Credit Facility, and no commercial paper issuances were made[121] - The company has a policy governing counterparty credit risk with financial institutions that hold its cash and cash equivalents, ensuring minimum credit standards are met[110]