Bitcoin Holdings and Strategy - As of December 31, 2024, the Company has accumulated Bitcoin holdings valued at 78,322,430,withafairvaluegainof53,332,430 since the original cost basis of 24,990,000[20].−TheCompanypurchasedBitcoinworth24,990,000 during the year, resulting in a total of 833 Bitcoin held[20]. - The fair value of the Company's Bitcoin holdings increased by 10,147,576fromDecember31,2022,toDecember31,2023[20].−TheCompanyplanstocontinueitsstrategyofacquiringBitcoinusingliquidassetsexceedingworkingcapitalrequirementsandmayengageincapitalraisingtransactionstofundadditionalpurchases[17].−TheCompanyviewsitsBitcoinholdingsastradingassetsandhasnotsetaspecifictargetfortheamountofBitcointohold,indicatingaflexibleapproachbasedonmarketconditions[18].−TheCompanymayperiodicallysellBitcoinforcorporatepurposes,includingtreasurymanagementandtaxbenefitstrategies[19].−ThecompanyholdssubstantiallyallofitsBitcoinincustodyaccountsatinstitutional−gradecustodians,withastrategytoacquireBitcoinusingliquidassetsexceedingworkingcapitalrequirements[60].−ThecompanyenteredintoanAmendedBTCTradingContracttopurchaseupto5,167BTCatUS30,000 per BTC over a 12-month period, indicating a strategic move to expand its digital asset holdings[197]. Regulatory Environment - The regulatory environment in Hong Kong currently does not impose significant restrictions on the Company's operations, but future changes in PRC laws could impact its business[21]. - The Company is not currently required to obtain regulatory approvals from PRC authorities for its operations in Hong Kong, but future changes in regulations could pose risks[31]. - The evolving regulatory landscape for digital assets may affect the Company's operations, as different jurisdictions have varying approaches to the legality and regulation of Bitcoin and other digital assets[35]. - The company's business operations are not currently impacted by the cryptocurrency restrictions imposed by the Chinese government[42]. - The People's Bank of China has issued multiple notices emphasizing that Bitcoin is a virtual commodity and prohibiting financial institutions from providing Bitcoin-related services[43][44]. - The most recent regulatory measure from the People's Bank of China bans overseas cryptocurrency exchanges from providing services to residents in mainland China[45]. - The U.S. federal government is actively considering regulatory measures for digital assets, including the potential creation of a U.S. CBDC[49]. - The European Union's Markets in Crypto Assets Regulation became effective in June 2023, with various requirements phasing into effect through 2024[50]. - The SEC has filed complaints against major cryptocurrency exchanges, alleging violations related to the operation of unregistered securities exchanges[50]. - Binance Holdings Ltd. agreed to pay 4.3billioninpenaltiestoresolveamulti−yearinvestigationbyU.S.regulatoryagencies[50].−TheSECisevaluatingthedefinitionof"exchange"toencompasstradingsystemsfordigitalassetsecurities,whichcouldsignificantlyimpactdigitalassettradingvenues[49].−TheU.S.TreasuryDepartment′sOfficeofForeignAssetsControlhasupdatedadvisoriesregardingtheuseofvirtualcurrenciesandhasengagedinenforcementactionsagainstdigitalassetexchanges[41].−FuturechangesinbusinessstrategiescouldexposethecompanytoevolvingPRCCryptoRestrictions,potentiallyimpactingoperations[48].FinancialPerformance−ForthefiscalyearendedDecember31,2024,totalrevenuewas1.80 million, a decrease of 28% from 2.50millionin2023[173].−Grossprofitfor2024was1.07 million, down from 1.43millionin2023,reflectingadeclineinservicerevenue[172].−Generalandadministrativeexpensesdecreasedsignificantlyto1.09 million in 2024 from 2.67millionin2023,areductionofapproximately5943.19 million in 2024, compared to 4.39millionin2023,primarilyduetoBitcoinvalueappreciation[177].−Thecompanyreportedanetincomefromcontinuingoperationsof21.54 million for 2024, a substantial increase from 3.02millionin2023[172].−Animpairmentoflong−terminvestmentof13.40 million was recognized in 2024 following the acquisition of 20% of an associate company[176]. - Total assets as of December 31, 2024, amounted to US92.92million,upfromUS48.93 million in 2023, with digital assets increasing from US35.14milliontoUS78.32 million[182][183]. - The company reported total liabilities of US11.29millionin2024,comparedtoUS4.22 million in 2023, with deferred tax liabilities of US8.24million[182][183].−CashandcashequivalentsremainedstableatUS668,387 for both 2024 and 2023, despite fluctuations in cash flows from operating activities[184]. - The company had net cash flows used in continued operating activities of US0in2024,arecoveryfromUS12.70 million in 2023[184][186]. - Cash flows used in continued investing activities were nil in 2024, contrasting with US37.12millionin2023,primarilyduetosignificantBitcoinacquisitions[188].−Thetotalstockholders′equityincreasedtoUS81.63 million in 2024 from US$44.71 million in 2023, reflecting strong financial growth[182][183]. Corporate Governance and Legal Matters - The Company remains under the control of its current board of directors, consisting of Lichen Dong (Chairman), Tian Yang, Mahesh Thapaliya, and Jianbo Sun[82]. - On April 8, 2024, the Chancery Court dismissed the plaintiffs' case with prejudice, allowing the Company to reserve its right to seek fees[82]. - The Company faced a new lawsuit on September 6, 2024, in the Wyoming State District Court, seeking inspection of certain corporate records[83]. - The Company opposed a motion for preliminary injunction filed on December 9, 2024, asserting it was without merit[84]. - The Company moved to dismiss a case in the NY Court on September 9, 2024, citing unauthorized guarantees as null and void[85]. - The company has not declared or paid any dividends to shareholders as of the date of the annual report, and there are no current cash management policies in place[53]. - The company has not made any distributions of dividends or assets among the holding company or subsidiaries as of the date of the annual report[53]. - The company is subject to the Holding Foreign Company Accountable Act, which could lead to delisting if its auditor cannot be inspected for two consecutive years[51]. - A temporary restraining order was granted on November 7, 2023, to prevent unauthorized individuals from claiming to act on behalf of the company[133]. - A derivative lawsuit was filed on September 28, 2023, but was dismissed without prejudice on October 18, 2023[131]. Employee and Operational Matters - The company currently has 6 full-time employees across various functions, including 2 in technology and 2 in the financial department[73]. - The company has not formed any employee union or association and maintains a good working relationship with its employees[74]. - The company has complied with local regulations regarding social security and employee insurance[113]. - The company has established procedures for managing cybersecurity risks, including regular risk assessments and employee training[125]. - The company has not identified any significant cybersecurity risks that could materially affect its business strategy or financial condition[127]. - Inflation has not materially affected the company's business or operational results[190]. - No changes in internal control over financial reporting that materially affected the company during the most recently completed fiscal quarter[209]. Taxation - The Enterprise Income Tax rate for resident enterprises is set at 25%[104]. - The VAT rate for taxpayers selling goods is 17%, with specific rates for other services[106]. - The applicable VAT rate for the company is currently 6%, and the income tax rate is 25%[107]. - The company is eligible for receiving tax refunds according to certain favorable government policies starting from 2021[107]. - The Hong Kong profits tax is imposed at rates of 8.25% on assessable profits up to HKD 2,000,000 and 16.5% on profits over HKD 2,000,000[120]. - The Hong Kong stamp duty is currently charged at an ad valorem rate of 0.1% on the higher of the consideration or market value of shares, totaling 0.2% for a typical transaction[121]. Management Experience - Weihong Liu, the CEO, has over 10 years of experience in investment and research in crypto assets and blockchain technology[214]. - Nan Ding, the COO, has over 24 years of operational management experience in cross-border investment and international trade[215].
WeTrade Group(WETG)2025-03-27 18:58