Core Viewpoint - A major state-owned bank in China, specifically Bank of China, plans to include litigation fees related to credit card delinquencies in the bills of affected credit cards starting from September 14, 2025, which has sparked significant industry discussion [2][5]. Summary by Relevant Sections Business Adjustment - The Bank of China will incorporate various litigation-related fees into the credit card bills for overdue accounts, including but not limited to litigation fees, arbitration fees, property preservation fees, travel expenses, execution fees, evaluation fees, auction fees, notarization fees, delivery fees, announcement fees, and attorney fees [5]. - These fees will be charged based on judicial or arbitration decisions, either individually or collectively, but will not accrue interest or penalties [5]. Implementation Timeline - The pilot program will first be implemented in the Changning branch of the Bank of China in Shanghai starting September 14, 2025, with adjustments in other regions beginning from October 19, 2025 [5]. Industry Reaction - The adjustment is considered unusual by many banking professionals, indicating a shift in how banks manage delinquent accounts and associated costs [5][8]. - A representative from a joint-stock bank noted that the high costs of handling non-performing loans, including legal fees, are a driving factor behind this initiative aimed at reducing costs and increasing efficiency [8]. Credit Card Delinquency Data - According to the central bank, the total amount of credit card loans overdue for more than six months reached 123.964 billion yuan in 2024, marking a year-on-year increase of 26.31%, which represents 1.43% of the total credit card receivables, an increase of 0.3 percentage points from the end of the previous year [9].

Financial Data and Key Metrics Changes - The company reported a consolidated operating income of $1,500,000 in Q4 2024, down from $4,600,000 in Q4 2023 [12] - Adjusted EBITDA decreased to $2,100,000 from $4,900,000 year-over-year [12] - The company recorded a net loss of $200,000 or $0.01 per diluted share compared to a net income of $4,900,000 or $0.13 per diluted share in the same quarter last year [12] - Stockholders' equity increased to $65,200,000 as of December 31, 2024, up from $61,100,000 a year earlier [13] Business Line Data and Key Metrics Changes - The Industrial Assets division reported operating income of $800,000 in Q4 2024, down from $1,600,000 in the prior year [9] - The Financial Assets division reported total divisional operating income of $1,900,000, while the Brokerage business recorded operating income of $1,700,000, down from $2,700,000 in Q4 2023 [10] Market Data and Key Metrics Changes - Demand for used equipment is at an all-time high due to tightening supply chains and potential tariffs on new equipment [7] - Charge-offs of credit cards and delinquencies hit decade-plus highs, indicating a strong market for the next 6 to 18 months [7] Company Strategy and Development Direction - The company is focused on capitalizing on increased charge-offs in non-performing loans and anticipates a robust auction market in 2025 [10][11] - The company has expanded its warehouse size and staffing to meet increased asset flow and demand [4] - M&A efforts are ongoing, with a focus on acquiring companies in the bio sector to enhance presence at ALT [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic pressures and anticipates increased momentum in the auction pipeline [10] - The company is optimistic about the future, citing a favorable market environment for auctioneers and a strong cash flow position [8][16] Other Important Information - The company ended the year with no long-term debt and a strong cash balance, allowing for share repurchases [14][15] - A new mortgage loan agreement for $4,100,000 was entered into for expanded corporate headquarters [15] Q&A Session Summary Question: Did the company increase provisions on the loan book? - Management stated that they have not increased or substantially decreased the reserve against the loan book, maintaining a consistent reserve [21][22] Question: What is needed for the financial asset business to grow? - Management indicated that an increase in defaults will lead to more charge-offs, which will benefit their marketplace [25] Question: What is the capacity to serve the market now? - The company has increased its capacity significantly to handle a wave of plant closings and asset relocations [30] Question: Is the company able to earn interest on its cash balance? - The company is taking advantage of short-term vehicles to earn interest income, but is primarily focused on deploying cash into the business [73] Question: What is the current status of the share repurchase program? - The company has approximately $3,000,000 remaining under the share repurchase program, which is expected to be deployed in the first half of 2025 [74]