Taoping(TAOP) - 2024 Q4 - Annual Report

Financial Performance - The company incurred a net loss of $1.8 million for the year ended December 31, 2024, compared to a net loss of$0.7 million for 2023[438]. - Net cash used in operating activities was $2.4 million for the year ended December 31, 2024, slightly higher than$2.3 million in 2023[433]. - As of December 31, 2024, the company had cash and cash equivalents of $1.6 million, an increase from$1.3 million in 2023[438]. - As of December 31, 2024, the company's cash and cash equivalents totaled $1,576,632, an increase from$1,300,855 in 2023, representing a growth of approximately 21.2%[450]. - Cash held by entities located in the PRC increased to $906,180 in 2024 from$647,217 in 2023, marking an increase of approximately 40%[450]. Credit Losses and Assets - The allowance for credit losses decreased from approximately $25.6 million in 2023 to$7.7 million in 2024, reflecting significant write-offs[429]. - As of December 31, 2024, restricted net assets represented 64.33% of consolidated net assets, down from 79.99% in 2023[449]. - The company maintains an allowance for credit losses based on historical trends and estimates of future economic conditions[471]. Financing Activities - Net cash provided by financing activities was $3.7 million for the year ended December 31, 2024, primarily from short-term and long-term loans[435]. - The company had total short-term and long-term bank loans of approximately$7.9 million as of December 31, 2024[437]. - The company entered into standby equity purchase agreements in July 2023, allowing it to sell up to $11 million in ordinary shares over the next 36 months[441]. - The company sold an unsecured convertible promissory note with a principal amount of$609,000 in September 2023, which may be converted into shares at a price of $8.00[442]. Revenue Recognition - The company recognizes revenue from product sales, software sales, advertising, and other sales, with revenue recognized upon delivery of goods and services[454]. - Revenue from product sales is primarily generated from Cloud-Application-Terminal based digital ads display terminals and high-end data storage servers[455]. - The company follows ASC 606 for revenue recognition, ensuring revenues are recognized net of applicable taxes when obligations are satisfied[453]. Operations and Investments - The company has ceased its cryptocurrency mining operations by December 2022, resulting in no revenue from this segment for the years ended December 31, 2023 and 2024[464]. - The company has a lease agreement for office space with fixed monthly rental payments, extended to April 30, 2026, generating consistent rental income[467]. - The company emphasizes continuous expenditures on research and development to enhance existing products and create new ones, crucial for maintaining competitiveness in a rapidly changing industry[451]. - The company plans to invest in developing a smart agricultural planting base in Mengla County, Yunnan Province, starting in 2025[439]. Accounting and Compliance - Recent accounting pronouncements discussed in the audited consolidated financial statements[486]. - The company accounts for cryptocurrencies as intangible assets, assessing for impairment annually, with no cash flows from cryptocurrencies included in operating activities[474][476].