Business Operations - The company discontinued its restaurant business segment in Q2 2024 and now focuses on commercial real estate management, generating 0.56millioninrevenuefromthissegmentin2024[315].−Thecompanyexpectscontinuedgrowthinitscommercialrealestatemanagementbusinessinthenearfuture[333].−Thecompanyfacedsignificantcompetitioninthecommercialrealestatemarket,impactingitsabilitytoleasespaceandrentalrates[319].−TheCompanydiscontinueditsrestaurantbusinessinJune2024andtransitionedtocommercialrealestatemanagement,impactingrevenuestreams[410].FinancialPerformance−RevenuefromcontinuingoperationsfortheyearendedDecember31,2024,was563,726, a 74,630% increase compared to 754in2023,whilepetfoodrevenuedroppedto0 from 0.02millionin2022[330][331].−Thegrossprofitfor2024was238,422, with a gross margin of 42.29%, compared to a gross loss of 222in2023[330].−Thecompanyreportedalossfromoperationsof1,832,657 in 2024, a 70% improvement from a loss of 6,185,523in2023[330].−NetincomefortheyearendedDecember31,2024,was2,500,561, a significant recovery from a net loss of 23,631,516in2023[358].−Revenuefromthecommercialrealestatemanagementbusinessincreasedbyapproximately0.56 million in 2024 compared to 2023, with total revenue of 563,726in2024[340][361].−Grossmarginimprovedto42.2923,971 or 96.95% when comparing 2023 to 2022, primarily due to the discontinuation of the petfood manufacturing segment[334]. - The company’s general and administrative expenses decreased by 45% from 3,145,280in2023to1,745,247 in 2024[330]. - Operating expenses decreased by 4,114,223or66.52233,987, a decrease from 2,492,725in2023[366].−AsofDecember31,2024,thecompanyhadcashandcashequivalentsofapproximately15.70 million and short-term investments of approximately 12.95million[362].−Totalassetsincreasedby1528,901,397 in 2023 to 33,338,661in2024,withcashandcashequivalentsrisingby2015,699,562[382]. - Accounts receivable as of December 31, 2024 were 5,748,reflectinga1000 in 2023[388]. - Net property, plant and equipment increased to 2,363,989asofDecember31,2024,upfrom657,124 as of December 31, 2023, representing a growth of 261%[390]. Liabilities and Obligations - The balance of due to related parties decreased by 90% from 1,963,794in2023to200,318 in 2024[389]. - The Company has total contractual obligations of 2,224,492,with584,825 due within one year and 1,347,541duein1−3years[394].−Accountspayableroseby56,269 to 122,251asofDecember31,2024,comparedto65,982 as of December 31, 2023, primarily due to commercial real estate accounts payables[391]. - Taxes payable increased by 5,391,or5814,681 as of December 31, 2024, from 9,290asofDecember31,2023[392].ImpairmentsandGains−Thecompanyrecognizedagoodwillimpairmentof325,832 in 2024 related to the discontinued restaurant business[352]. - The Company recorded an impairment loss of 325,832forgoodwillfortheyearendedDecember31,2024,comparedto0 in 2023[403]. - The company reported a realized gain of approximately 3.37millionandanunrealizedincomeofapproximately0.44 million from marketable securities for the year ended December 31, 2024[387]. Compliance and Regulatory Matters - The company expects to incur additional costs associated with compliance with the Sarbanes-Oxley Act, which may require seeking other sources of financing[375]. - The company has no off-balance sheet arrangements that require disclosure under SEC regulations[396]. - The company is evaluating the impact of new accounting standards issued by FASB, including ASU 2023-07 and ASU 2023-09, which will require additional disclosures[429][430]. Currency and Economic Factors - The exchange rate for translating RMB to USD for the year ended December 31, 2024, was 7.1884, and for 2023, it was 7.0827, indicating a depreciation of RMB against USD[420]. - The RMB depreciated against the USD by 1.49% in 2024 and by 1.69% in 2023, which may impact the financial results reported in USD terms[529]. - The company does not expect the impact of inflation to be material, with inflation rates in China being 0.8% in 2024, 2.6% in 2023, and 3.7% in 2022[433]. - The company has not engaged in foreign currency hedging and manages price risks through productivity improvements and cost-containment measures[434]. - The company has generally been able to pass on cost increases through price adjustments, depending on market conditions influenced by the overall economic conditions in China[433].
