EPWK(EPWK) - 2025 Q4 - Annual Report

Financial Performance - Total net revenue for the year ended June 30, 2025, was $27,841,607, an increase from $20,215,245 in 2024, representing a growth of approximately 37.5%[506] - The company reported a net loss of $765,653 for the year ended June 30, 2025, compared to a net loss of $1,200,039 in 2024, indicating an improvement in financial performance[506] - The total assets as of June 30, 2025, were $4,110,737, a decrease from $4,511,386 in 2024, while total liabilities increased to $12,183,945 from $11,709,424[506] - Contract liabilities as of June 30, 2025, were $2,384,192, an increase from $2,225,461 in 2024, reflecting growth in unsatisfied performance obligations[521] Business Operations - The company enabled approximately $180 million of gross merchandise volume (GMV) across 521,500 projects in the first half of 2025, compared to $348 million across 0.99 million projects in 2024[500] - The company maintained an annual growth rate of about 30% since 2015, with a decline to 1.64% during the first half of 2025, reflecting challenges in user growth[494] - As of June 30, 2025, variable interest entities accounted for 34.01% of total assets and 99.95% of total liabilities, highlighting significant reliance on this structure[506] Strategic Initiatives - The company plans to enhance its artificial intelligence and big data technology capabilities to improve user experience and service offerings[497] - The company aims to selectively pursue acquisition and investment opportunities to integrate and refine its services, including local office sharing brands[504] - The company has a research and development team of 14 staff focused on improving the online marketplace and user matching accuracy[501] Revenue Recognition - The Company recognizes revenue from Premium Business Solutions upon customer acceptance, with service fees typically paid within one month after fulfillment[514] - Revenue from Online Promotion is recognized on a gross basis, with payments made in advance and amortized over the subscription period[516] - Value-Added Services revenue is recognized when the service has been rendered, with the Company acting as the primary obligor in contracts[517] - Shared office rental revenue is recognized on a straight-line basis over the lease term, regardless of actual cash receipts[518] - Digital marketing revenue is recognized when advertisements are posted, with service fees typically paid in advance[519] - The Company applies ASC 606 for revenue recognition, following a five-step process to determine revenue from contracts with customers[512] - The Company has not made any material changes to its accounting estimates or assumptions for the years ended June 30, 2025, and 2024[508] - The Company records revenue on a gross basis as it acts as a principal in its service offerings, assuming primary responsibility for the services rendered[515] - The Company has no material incremental costs of obtaining contracts with customers that need to be recognized as assets[522]