Financial Performance - The company reported revenues of $11.6 million, $16.8 million, and $10.5 million for the fiscal years ended December 31, 2024, 2023, and 2022, respectively[306]. - Revenue from application development services represented 46.1%, 58.1%, and 36.7% of total revenue for the fiscal years ended December 31, 2024, 2023, and 2022, respectively[306]. - For the fiscal year ended December 31, 2024, sales and marketing expenses were approximately $1.1 million, representing 9.5% of total revenues[339]. - Research and development expenses for the fiscal year ended December 31, 2024, were $4.1 million, compared to $4.8 million in 2023 and $3.5 million in 2022[344]. - Rent expenses for the fiscal years ended December 31, 2024, 2023, and 2022 were $460,284, $344,775, and $162,799, respectively[355]. Business Strategy and Operations - The company plans to expand its bitcoin cryptomining operations with a sizable fleet in the near term, leveraging sustainable energy sources[301]. - The company aims to develop scalable renewable energy projects, focusing on new energy vehicles and agriculture machinery in targeted markets[322]. - The company collaborates with global partners to enhance agricultural efficiency using big data, AI, blockchain, and IoT technologies[327]. - The company operates in diverse industries, including digital technologies, cryptomining, renewable energy, and agriculture technologies[299]. - The company has adopted an asset-light model for its cryptomining operations, focusing on investment in mining machines rather than infrastructure[318]. - The company emphasizes a diversified business strategy to ensure sustained growth and effectively counter market uncertainties[308]. - The company plans to expand into international markets by leveraging partnerships with infrastructure builders in Belt and Road Initiative countries[342]. Human Resources - The company has a total of 137 full-time employees, with 62 in research and development[307]. - The company maintains a total of 137 full-time employees across various departments, including R&D, sales and marketing, technical services, and administration[357]. - The company has 62 full-time R&D personnel, indicating a strong commitment to innovation and technology development[357]. - The company’s sales team consists of 10 full-time sales and marketing personnel, supported by sales engineers and service consultants[339]. Intellectual Property - The company has 20 registered patents, 136 registered software copyrights, and 46 registered trademarks in the PRC, highlighting its focus on intellectual property protection[351]. Regulatory Compliance - The company must comply with regulations protecting customer confidential information in the IT and technological BPO services sector[366]. - Internet information service providers are prohibited from collecting users' personal information without consent[368]. - The Cyber Security Law mandates compliance with national security and privacy protection standards for all network users[371]. - The Data Security Law establishes a classification and grading protection system for important data, with penalties for violations[372]. - The Personal Information Protection Law outlines responsibilities for handling sensitive personal information and imposes penalties for non-compliance[374]. - Employers in China are required to execute written labor contracts and comply with local minimum wage standards[375]. - Companies must contribute to mandatory employee benefit plans, with penalties for non-compliance[377]. - Wholly foreign-owned enterprises can only pay dividends from retained profits and must allocate a portion to reserve funds[383]. - New M&A regulations require approval from the CSRC for offshore special purpose vehicles before overseas listings[386]. Financial Risks and Currency - The RMB depreciated by 8.2% in fiscal year 2022, 2.9% in fiscal year 2023, and 2.8% in fiscal year 2024, impacting financial results reported in U.S. dollar terms[687]. - A majority of the company's expense transactions and significant assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies[686]. - The company’s functional currency is RMB, while financial statements are presented in U.S. dollars, leading to potential exchange rate impacts[687]. - The company has not been exposed to material risks due to changes in market interest rates, as it has not used derivative financial instruments to manage interest rate risk exposure[685]. - The company has not been materially affected by inflation in the past, but future higher rates of inflation in China may pose risks[689]. - Remittances in currencies other than RMB must be processed through the PBOC or other regulatory bodies, requiring supporting documentation[686]. - Shareholder loans from offshore parent holding companies to PRC subsidiaries are regarded as foreign debts and must be registered with SAFE[390]. - The increase of registered capital for foreign-invested enterprises in China requires prior approval from the original approval authority[390]. - The total amount of foreign debts that can be borrowed by PRC subsidiaries, including shareholder loans, is subject to governmental approval[390]. - Year-over-year percent changes in the consumer price index for December 2022, 2023, and 2024 were 2.0%, 0.2%, and 0.2%, respectively, indicating low inflation impact on operations[689].
X3 Holdings(XTKG) - 2024 Q4 - Annual Report