Infobird(IFBD) - 2025 Q2 - Quarterly Report

Financial Performance - Total revenues for the six months ended June 30, 2025, were $3,443,594, a significant increase from $20,000 in the same period of 2024[5] - Gross profit for the same period was $1,281,226, compared to $1,622 in 2024, indicating a substantial improvement in operational efficiency[5] - The net loss attributable to Infobird Co., Ltd for the six months ended June 30, 2025, was $1,597,213, compared to a net loss of $811,951 in 2024[5] - For the six months ended June 30, 2025, Infobird reported a net loss of $1.61 million, compared to a net loss of $0.81 million for the same period in 2024, indicating a 97.5% increase in losses year-over-year[8] - The company reported a basic and diluted loss per share of $0.41 for the six months ended June 30, 2025, compared to $0.43 in 2024[5] - For the six months ended June 30, 2025, the pro forma revenue was $3,443,594, compared to $6,437,248 for the same period in 2024, indicating a significant decline[92] - The net loss for the six months ended June 30, 2025 was $(1,608,992), compared to a net loss of $(244,714) for the same period in 2024[92] Operating Expenses - Total operating expenses rose to $2,374,659, up from $828,632 in 2024, primarily driven by increased selling and administrative costs[5] - Employee benefits expenses for the six months ended June 30, 2025, were $116,886, compared to $19,950 for the same period in 2024[74] Assets and Liabilities - Total assets decreased to $72,380,837 as of June 30, 2025, down from $73,777,893 at the end of 2024[3] - Total current liabilities decreased to $3,434,318 from $3,814,028, reflecting improved liquidity management[3] - The company reported total current assets of $12,019,639 and total liabilities of $3,501,363 as of June 30, 2025[86] - As of June 30, 2025, total accounts receivable, net was $2,353,951, down from $3,859,493 as of December 31, 2024[93] - Accounts payable as of June 30, 2025 was $2,609,609, down from $2,787,656 as of December 31, 2024[97] Cash Flow - Cash and cash equivalents increased to $5,242,616 as of June 30, 2025, compared to $4,693,725 at the end of 2024, showing improved cash flow[3] - Net cash provided by operating activities for the first half of 2025 was $1.11 million, a decrease of 74.3% from $4.32 million in the same period of 2024[8] - Infobird's cash flow from investing activities showed a net usage of $0.69 million for the first half of 2025, compared to $3.92 million in the same period of 2024[8] - The Company reported cash at the end of the period of $5.24 million, a decrease from $6.16 million at the end of the same period in 2024[8] Shareholder Equity - Shareholders' equity attributable to Infobird Co., Ltd increased to $66,687,127 from $64,772,183, indicating a strengthening balance sheet[3] - The company has issued 8,188,574 ordinary shares as of June 30, 2025, up from 5,456,974 shares at the end of 2024, reflecting capital raising efforts[6] - The Company issued 3,846,000 ordinary shares on February 28, 2023, generating net proceeds of $4,522,314[129] - On July 24, 2023, the Company sold 88,105,727 ordinary shares, resulting in net proceeds of $30,000,000 for working capital and corporate purposes[132] Customer and Vendor Concentration - For the six months ended June 30, 2025, two customers accounted for 93.8% of the Company's total revenues, compared to one customer accounting for 100.0% in the same period of 2024[117] - As of June 30, 2025, two customers represented 64.9% and 29.4% of the total balance of accounts receivable, indicating increased customer concentration risk compared to December 31, 2024[118] - For the six months ended June 30, 2025, three vendors accounted for 83.6% of the Company's total purchases, a significant increase from the previous year where no vendor exceeded 10%[119] Regulatory and Compliance - The Company is subject to statutory reserves, requiring annual appropriations of 10% of after-tax profit until reaching 50% of registered capital[75] - Infobird PRC entities are required to set aside at least 10% of after-tax profits for statutory reserve funds until they reach 50% of registered capital[147] - The Company anticipates no significant changes in unrecognized tax benefits in the next twelve months from June 30, 2025[112] Acquisitions - Infobird completed the 100% acquisition of Inforbird Technologies on July 14, 2023, which provides cloud-based customer relationship management services[11] - The Company acquired a 65% ownership stake in Pure Tech for an aggregate purchase price of $40,000,000 and an additional 32% stake for $25,737,818[87] - The total consideration for the acquisition of Pure Tech amounted to $65,737,818, including $5,953,095 in a convertible promissory note and $59,784,723 in cash[89] - The total purchase price for the acquisition of Pure Tech was $67,770,946, which includes $62,435,299 in goodwill[91] Financial Reporting and Accounting Policies - The Company recognized revenue under ASC Topic 606, reflecting the transfer of goods and services to customers[53] - The Company adopted ASU No. 2016-13 for estimating expected credit losses, impacting accounts receivable and other receivables[40] - The Company’s deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion will not be realized[68] - The Company’s comprehensive loss includes a foreign currency translation adjustment due to not using the U.S. dollar as its functional currency[70] Other Financial Information - The Company has established contractual arrangements to control its variable interest entities (VIEs), Pinmu Century and Zhenxi Brand, enabling it to consolidate their financial results[27] - The Company has sufficient funds to meet its working capital requirements and debt obligations over the next twelve months[30] - The Company has no dilutive shares for the six months ended 2025 and 2024, resulting in basic and diluted EPS being the same[71] - The effective tax rate for the six months ended June 30, 2025 was (0.2)%, influenced by a preferential tax rate reduction of (13.6)%[110] - As of June 30, 2025, total taxes payable amounted to $425,009, a decrease from $528,950 as of December 31, 2024, representing a reduction of approximately 19.6%[114] - The Company’s VAT payable is recorded when output VAT exceeds input VAT, and VAT recoverable is recorded when input VAT exceeds output VAT[66] - Translation adjustments included in accumulated other comprehensive income (loss) amounted to $88,382 as of June 30, 2025[37] - The average translation rates for the six months ended June 30, 2025, and 2024 were 7.2526 RMB and 7.2150 RMB to $1, respectively[37] - The Company’s short-term investments primarily include bank wealth management financial products with original maturities of one month[43] - Short-term investments as of June 30, 2025 had a carrying value of $697,973, with gains of $541 for the six months ended June 30, 2025[96] - The company had operating lease liabilities totaling $485,293 as of June 30, 2025, with future lease payments amounting to $501,716[150] - The company is restricted in transferring assets to the parent company due to PRC regulations, with restricted amounts totaling $1.5 million as of June 30, 2025[148] - The company does not plan to cancel existing lease agreements prior to their expiration dates, which extend to various dates in 2027[150] - There were no subsequent events requiring recognition or disclosure after June 30, 2025[153]