Financial Performance - Revenues for Q1 2023 decreased to $6.316 million, compared to $7.652 million in Q1 2022, representing a decline of 17.5%[186] - Gross loss for Q1 2023 was $314 thousand, compared to a gross profit of $134 thousand in Q1 2022[186] - Total operating expenses for Q1 2023 decreased to $998 thousand, down from $1.685 million in Q1 2022, a reduction of 40.8%[186] - Net loss for Q1 2023 was $1.143 million, compared to a net loss of $717 thousand in Q1 2022[187] - Total revenues decreased to $6.32 million for Q1 2023 from $7.65 million in Q1 2022, primarily due to a decline in Internet advertising and related data services[189] - Internet advertising revenues dropped to $0.13 million in Q1 2023 from $1.06 million in Q1 2022, impacted by COVID-19 and shifts to cheaper advertising channels like search engine marketing[190] - Revenues from search engine marketing services decreased to $6.16 million in Q1 2023 from $6.59 million in Q1 2022, affected by COVID-19 peak infections in China[191] - Blockchain-based SaaS services generated $0.03 million in subscription fee revenues for Q1 2023[193] - Gross loss of $0.31 million in Q1 2023 compared to a gross profit of $0.13 million in Q1 2022, with gross margin rate dropping to -5% from 2%[199] - Operating expenses decreased to $1.00 million in Q1 2023 from $1.69 million in Q1 2022, with reductions in sales, marketing, and R&D expenses[201] - Sales and marketing expenses decreased to $0.05 million in Q1 2023 from $0.07 million in Q1 2022 due to COVID-19 impacts[202] - General and administrative expenses decreased to $0.93 million in Q1 2023 from $1.55 million in Q1 2022, driven by cost reduction plans and COVID-19 impacts[203] - Research and development expenses decreased to $0.02 million in Q1 2023 from $0.07 million in Q1 2022 due to headcount reductions[204] - Net loss increased to $1.14 million in Q1 2023 from $0.72 million in Q1 2022[206] Cash Flow and Liquidity - Cash and cash equivalents as of March 31, 2023, were approximately US$1.59 million[216] - Net cash used in operating activities for Q1 2023 was approximately US$0.92 million, primarily due to net loss and changes in operating assets and liabilities[221][222] - Net cash used in investing activities for Q1 2023 was approximately US$1.88 million, including a US$2.0 million short-term loan provided to an unrelated party[226] - No cash was provided by or used in financing activities for Q1 2023 and Q1 2022[228] - The company anticipates a slow recovery of performance and improvement in cash flow status over the next 12 months due to the impact of COVID-19 on SMEs[231] - The company is actively seeking acquisitions or joint ventures to expand its core business, which may decrease liquidity in the short term but improve gross margins and cash flow in the long term[230] - The company expects SaaS services to generate positive cash flow and improve liquidity due to self-developed software platform technology[232] - The company anticipates collecting short-term working capital loans and related interest income within the next 12 months[233] - The company plans to negotiate more favorable payment terms with major suppliers and reduce operating costs through personnel optimization and office space reduction[233] - The company believes current cash, anticipated cash flows, and liquidity measures will ensure sufficient cash to meet obligations within the next 12 months[234] - The company may pursue additional equity financing in the U.S. capital market to enhance liquidity or increase cash reserves for future investments[235] Business Operations and Strategy - The company introduced SaaS services in early 2022, offering blockchain-powered enterprise management solutions via its BIF platform[179] - The company operates through PRC subsidiaries and VIEs, providing Internet advertising, precision marketing, and blockchain-based SaaS services[178] - The company introduced SaaS services in early 2022, offering blockchain-powered enterprise management solutions, but COVID-19 measures negatively impacted promotion efforts[232] - The company modified SaaS services to be more SME-friendly, including a pay-per-NFT-generation model, though revenues and profitability have not met expectations[232] - The company plans to broaden blockchain-based SaaS application scenarios, expand core advertising business through acquisitions, and target overseas users[235] - The company obtained a 9.9% equity interest in Guangdong Yong Fu Xiang Health Management Co., Ltd. for RMB6.73 million (approximately US$0.98 million)[236] - The company obtained a 9% equity interest in Guangzhou Yuan Qi Man Man Technology Co., Ltd. for RMB0.09 million (approximately US$0.01 million)[236] Regulatory and Compliance - The PCAOB secured complete access to inspect and investigate PCAOB-registered public accounting firms in China mainland and Hong Kong in 2022[175] - The company's auditor, located in Hong Kong, was previously not subject to PCAOB inspections, which could have impacted investor confidence in the quality of financial statements[169] - The company faces risks of delisting from U.S. exchanges under the HFCAA if PCAOB inspections are obstructed in the future[177] - Net assets restricted due to PRC regulations were approximately US$13.68 million as of March 31, 2023, and US$13.31 million as of December 31, 2022[209] - Dividends payable by foreign-invested enterprises to holding companies outside China are subject to a 10% withholding tax, with a potential reduction to 5% under certain conditions[210] Financial Instruments and Valuation - The fair value of warrant liabilities is determined based on unobservable inputs such as stock price volatility and risk-free interest rate[184]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2022 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 NO. 001-34647 ZW DATA ACTION TECHNOLOGIES INC. (Exact name of registrant as specified in its charter) Nevada 20-4672080 (State or other jurisdict ...

Revenue Performance - Total revenues decreased to US$7.65 million for the three months ended March 31, 2022, down from US$8.40 million for the same period last year, primarily due to a decline in Internet advertising revenues [146]. - Revenues from Internet advertising and related services decreased to US$1.06 million and US$6.59 million, respectively, compared to US$1.40 million and US$6.87 million for the same period in 2021, attributed to regional COVID-19 outbreaks affecting SMEs [147]. - For the three months ended March 31, 2022, total revenues were approximately US$7.65 million, a decrease from US$8.40 million for the same period in 2021 [156]. Cost and Profitability - Cost of revenues decreased to US$7.52 million for the three months ended March 31, 2022, from US$9.11 million for the same period in 2021, reflecting a decrease in costs associated with search engine marketing services [150]. - Gross profit for the three months ended March 31, 2022, was US$134,000, compared to a gross loss of US$717,000 for the same period in 2021 [143]. - The gross margin rate for Internet advertising and related services was 8% for the three months ended March 31, 2022, compared to 9% for the same period in 2021 [151]. - The gross margin rate for the distribution of search engine marketing services improved to 1% for the three months ended March 31, 2022, from -9% in the same period last year [152]. - Gross profit for the three months ended March 31, 2022, was approximately US$0.13 million, compared to a gross loss of approximately US$0.72 million for the same period in 2021, resulting in an overall gross margin improvement to 2% from -9% [154]. Operating Expenses - Operating expenses increased to US$1.69 million for the three months ended March 31, 2022, from US$1.10 million in the same period last year, driven by higher general and administrative expenses [143]. - Total operating expenses increased to approximately US$1.69 million for the three months ended March 31, 2022, from US$1.10 million for the same period in 2021, representing 22.0% of total revenues [156]. Net Income and Loss - Net loss attributable to ZW Data Action Technologies Inc. was US$717,000 for the three months ended March 31, 2022, compared to a net income of US$685,000 for the same period in 2021 [143]. - The company incurred a loss from operations of approximately US$1.55 million for the three months ended March 31, 2022, compared to a loss of US$1.82 million for the same period in 2021 [157]. - The net loss attributable to ZW Data Action Technologies Inc. was approximately US$0.72 million for the three months ended March 31, 2022, compared to a net income of approximately US$0.69 million for the same period in 2021 [165]. Cash Flow and Investments - Net cash used in operating activities was approximately US$0.89 million for the three months ended March 31, 2022, a significant improvement from US$3.71 million for the same period in 2021 [170]. - Net cash used in investing activities resulted in an outflow of approximately US$1.46 million for the three months ended March 31, 2022, compared to US$1.87 million for the same period in 2021 [175]. - The company had cash and cash equivalents of approximately US$4.82 million as of March 31, 2022 [166]. - The company acquired a 9.09% equity interest in Shenzhen Global Best Products for RMB5.0 million (approximately US$0.79 million) and made an initial cash investment of RMB2.0 million (approximately US$0.32 million) in 2021 [184]. - The remaining investment amount of RMB3.0 million (approximately US$0.47 million) in Global Best Products is expected to be paid by December 31, 2022 [184]. Tax and Legal Matters - The company recognized an income tax benefit of approximately US$0.002 million for the three months ended March 31, 2022, compared to US$0.10 million for the same period in 2021 [163]. - The current PRC Enterprise Income Tax Law imposes a 10% withholding income tax on dividends distributed by foreign invested enterprises, which was previously exempted [180]. - The company is currently not a party to any legal or administrative proceedings, indicating a stable legal standing [189]. Internal Controls and Procedures - The company’s disclosure controls and procedures were evaluated as effective as of March 31, 2022, ensuring timely reporting of required information [186]. - There were no changes in internal control over financial reporting that materially affected the company during the first fiscal quarter of 2022 [188]. Future Expectations - The company anticipates maintaining the gross margin rate for Internet advertising services at current levels in the following quarters of fiscal 2022 [151]. - The company expects slight improvement in the gross margin rate for search engine marketing services in the upcoming quarters of fiscal 2022 [152].