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What changed in MMTec, Inc.'s 20-F — 2024 vs 2025

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Paragraph-level year-over-year comparison of MMTec, Inc.'s 2024 and 2025 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+177 added−170 removedSource: 20-F (2026-04-02) vs 20-F (2025-04-09)

Top changes in MMTec, Inc.'s 2025 20-F

177 paragraphs added · 170 removed · 148 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

35 edited+14 added−3 removed416 unchanged
Biggest changeOne such exclusion, Rule 3a-2 under the Investment Company Act, allows a transient investment company a grace period of one year from the earlier of (a) the date on which an issuer owns securities and/or cash having a value exceeding 50% of the issuer’s total assets on either a consolidated or unconsolidated basis and (b) the date on which an issuer owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive of government securities and cash items) on an unconsolidated basis.
Biggest changeOne such exclusion, Rule 3a-2 under the Investment Company Act, allows a transient investment company a grace period of one year from the earlier of (a) the date on which an issuer owns securities and/or cash having a value exceeding 50% of the issuer’s total assets on either a consolidated or unconsolidated basis and (b) the date on which an issuer owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive of government securities and cash items) on an unconsolidated basis. 11 In the event we are deemed to be a transient investment company as a result of the XChange Note, we believe we would qualify for the grace period.
Strategic alliances, acquisitions, joint ventures involve a number of risks and present financial, managerial and operational challenges, including: ● potential disruption of our ongoing business and product development and distraction of management, ● difficulty retaining and integrating personnel and integrating financial and other systems, ● the necessity of hiring additional management and other critical personnel and integrating them into our current operations, ● increasing the scope, geographic diversity and complexity of our operations, ● potential dependence upon, and exposure to liability, losses or reputational damage relating to systems, controls and personnel that are not under our control, ● potential unfavorable reaction to our strategic alliance, acquisition or joint venture strategy by our customers, ● to the extent that we pursue business opportunities outside the U.S., exposure to political, economic, legal, operational and other risks that are inherent in operating in a foreign country, including risks of possible nationalization, expropriation, price controls, capital controls, exchange controls and other restrictive governmental actions, as well as the outbreak of hostilities, ● conflicts or disagreements between any strategic alliance or joint venture partners and us, and ● exposure to additional liabilities of any acquired business, strategic alliance or joint venture.
Strategic alliances, acquisitions, and joint ventures involve a number of risks and present financial, managerial and operational challenges, including: ● potential disruption of our ongoing business and product development and distraction of management, ● difficulty retaining and integrating personnel and integrating financial and other systems, ● the necessity of hiring additional management and other critical personnel and integrating them into our current operations, ● increasing the scope, geographic diversity and complexity of our operations, ● potential dependence upon, and exposure to liability, losses or reputational damage relating to systems, controls and personnel that are not under our control, ● potential unfavorable reaction to our strategic alliance, acquisition or joint venture strategy by our customers, ● to the extent that we pursue business opportunities outside the U.S., exposure to political, economic, legal, operational and other risks that are inherent in operating in a foreign country, including risks of possible nationalization, expropriation, price controls, capital controls, exchange controls and other restrictive governmental actions, as well as the outbreak of hostilities, ● conflicts or disagreements between any strategic alliance or joint venture partners and us, and ● exposure to additional liabilities of any acquired business, strategic alliance or joint venture.
Our operations depend on our ability to protect our systems against damage or interruption from natural disasters, power or telecommunications failures, air quality issues, environmental conditions, computer viruses, or attempts to harm our systems, criminal acts and similar events.
Our operations depend on our ability to protect our systems against damage or interruption from natural disasters, power or telecommunications failures, air quality issues, environmental conditions, computer viruses, or attempts to harm our systems, criminal acts and similar events.
On February 13, 2015, SAFE further promulgated the Circular on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, or SAFE Circular 13, which took effect on June 1, 2015.
On February 13, 2015, SAFE further promulgated the Circular on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, or SAFE Circular 13, which took effect on June 1, 2015.
In the event that a PRC resident holding interests in a special purpose vehicle fails to complete the required SAFE registration, the PRC subsidiary of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiary.
In the event that a PRC resident holding interests in a special purpose vehicle fails to complete the required SAFE registration, the PRC subsidiary of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiary.
Furthermore, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls. We cannot provide any assurances that all such registration will be completed in a timely manner.
Furthermore, failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls. We cannot provide any assurances that all such registration will be completed in a timely manner.
Failure by such shareholder or beneficial owners of our company to comply with Circular 37 could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our PRC subsidiary’s ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.
Failure by such shareholder or beneficial owners of our company to comply with Circular 37 could subject us to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our PRC subsidiary’s ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.
Furthermore, the Standing Committee of the National People’s Congress passed the Personal Information Protection Law of the PRC (“PIPL”), which will become effective from November 1, 2021, and requires general network operators to obtain a personal information protection certification issued by recognized institutions in accordance with the CAC regulation before such information can be transferred out of China. 15 On July 30, 2021, in response to the recent regulatory developments in China and actions adopted by the PRC government, the Chairman of the SEC issued a statement requesting additional disclosures from offshore issuers with China-based operating companies before their registration statements will be declared effective, including detailed disclosure related to VIE structures and whether the VIE and the issuer, when applicable, received or were denied permission from the PRC authorities to list on U.S. exchanges and the risks that such approval could be denied or rescinded.
Furthermore, the Standing Committee of the National People’s Congress passed the Personal Information Protection Law of the PRC (“PIPL”), which will become effective from November 1, 2021, and requires general network operators to obtain a personal information protection certification issued by recognized institutions in accordance with the CAC regulation before such information can be transferred out of China. 16 On July 30, 2021, in response to the recent regulatory developments in China and actions adopted by the PRC government, the Chairman of the SEC issued a statement requesting additional disclosures from offshore issuers with China-based operating companies before their registration statements will be declared effective, including detailed disclosure related to VIE structures and whether the VIE and the issuer, when applicable, received or were denied permission from the PRC authorities to list on U.S. exchanges and the risks that such approval could be denied or rescinded.
The availability of additional financing will depend on a variety of factors such as: ● market conditions, ● the general availability of credit, ● the volume of trading activities, ● the overall availability of credit to the financial services industry, ● our credit ratings and credit capacity, and ● the possibility that our lenders could develop a negative perception of our long- or short-term financial prospects is a result of industry- or company-specific considerations.
The availability of additional financing will depend on a variety of factors such as: ● market conditions, ● the general availability of credit, ● the volume of trading activities, ● the overall availability of credit to the financial services industry, ● our credit ratings and credit capacity, and ● the possibility that our lenders could develop a negative perception of our long- or short-term financial prospects as a result of industry- or company-specific considerations.
Prior to this transaction, all outstanding securities of MMBD Advisory were owned by Hinman Au, a director, and 1.7% shareholder of the Company. MMBD Advisory was formed in January 2018 in the U.S. and is registered as an investment advisor firm under the laws of the State of New York on May 7, 2018.
Prior to this transaction, all outstanding securities of MMBD Advisory were owned by Hinman Au, a director and 1.7% shareholder of the Company. MMBD Advisory was formed in January 2018 in the U.S. and was registered as an investment advisor firm under the laws of the State of New York on May 7, 2018.
At present, the PRC tax authorities will neither confirm nor deny that they would enforce Circular 698, in conjunction with other tax collection and tax withholding rules, to make claims against our PRC subsidiaries as being indirectly liable for unpaid taxes, if any, arising from Indirect Transfers by shareholders who did not obtain their common shares in the public offering of our common shares. 20 PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to personal liability and limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries, limit their ability to distribute profits to us, or otherwise materially and adversely affect us.
At present, the PRC tax authorities will neither confirm nor deny that they would enforce Circular 698, in conjunction with other tax collection and tax withholding rules, to make claims against our PRC subsidiaries as being indirectly liable for unpaid taxes, if any, arising from Indirect Transfers by shareholders who did not obtain their common shares in the public offering of our common shares. 21 PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to personal liability and limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries, limit their ability to distribute profits to us, or otherwise materially and adversely affect us.
This SAFE Circular 13 has amended SAFE Circular 37 by requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. 21 These circulars require PRC residents to register with qualified banks in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, which is referred to in SAFE Circular 37 as a “special purpose vehicle.” These circulars further require amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as an increase or decrease of capital contributed by PRC residents, share transfer or exchange, merger, division or other material events.
This SAFE Circular 13 has amended SAFE Circular 37 by requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. 22 These circulars require PRC residents to register with qualified banks in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, which is referred to in SAFE Circular 37 as a “special purpose vehicle.” These circulars further require amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as an increase or decrease of capital contributed by PRC residents, share transfer or exchange, merger, division or other material events.
These draft measures also set forth certain regulatory red lines for overseas offerings and listings by PRC enterprises. 17 On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, which will become effective on March 31, 2023.
These draft measures also set forth certain regulatory red lines for overseas offerings and listings by PRC enterprises. 18 On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, which will become effective on March 31, 2023.
On or after March 31, 2023, any failure or perceived failure by the Company or PRC Subsidiaries to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in that the relevant entities would be held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime. 18 In addition, we cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on us.
On or after March 31, 2023, any failure or perceived failure by the Company or PRC Subsidiaries to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in that the relevant entities would be held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime. 19 In addition, we cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on us.
It is unclear whether, if we are considered a PRC resident enterprise, holders of our common shares would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas. 23 We may rely on dividends paid by our subsidiaries for our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business.
It is unclear whether, if we are considered a PRC resident enterprise, holders of our common shares would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas. 24 We may rely on dividends paid by our subsidiaries for our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business.
We may also be subject to fines or other penalties, which could materially and adversely affect our business, financial condition, and results of operations. 14 We may be subject to PRC laws relating to, among others, data security and restrictions over foreign investments in value-added telecommunications services and other industry sectors set out in the Special Administrative Measures (Negative List) for the Access of Foreign Investment (2020 Edition).
We may also be subject to fines or other penalties, which could materially and adversely affect our business, financial condition, and results of operations. 15 We may be subject to PRC laws relating to, among others, data security and restrictions over foreign investments in value-added telecommunications services and other industry sectors set out in the Special Administrative Measures (Negative List) for the Access of Foreign Investment (2020 Edition).
Such developments could adversely affect our businesses, lead to reduction in demand for our services and adversely affect our competitive position. 13 Uncertainties with respect to the PRC legal system could have a material adverse effect on us. The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value.
Such developments could adversely affect our businesses, lead to reduction in demand for our services and adversely affect our competitive position. 14 Uncertainties with respect to the PRC legal system could have a material adverse effect on us. The PRC legal system is based on written statutes. Prior court decisions may be cited for reference but have limited precedential value.
As a result of all of the above, holders of our common shares may have more difficulty in protecting their interests through actions against our management, directors or major shareholders than they would as shareholders of a U.S. company. 26 BVI companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect their interests.
As a result of all of the above, holders of our common shares may have more difficulty in protecting their interests through actions against our management, directors or major shareholders than they would as shareholders of a U.S. company. 27 BVI companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect their interests.
See “Major Shareholders.” 25 We will incur increased costs and become subject to additional regulations and requirements as a result of becoming a newly public company, and our management will be required to devote substantial time to new compliance matters, which could lower our profits or make it more difficult to run our business.
See “Major Shareholders.” 26 We will incur increased costs and become subject to additional regulations and requirements as a result of becoming a newly public company, and our management will be required to devote substantial time to new compliance matters, which could lower our profits or make it more difficult to run our business.
These reserves represent appropriations of retained earnings determined according to Chinese law. 12 Our failure to obtain prior approval of the China Securities Regulatory Commission for the listing and trading of our common shares on a foreign stock exchange could have a material adverse effect upon our business, operating results, reputation and trading price of our common shares.
These reserves represent appropriations of retained earnings determined according to Chinese law. 13 Our failure to obtain prior approval of the China Securities Regulatory Commission for the listing and trading of our common shares on a foreign stock exchange could have a material adverse effect upon our business, operating results, reputation and trading price of our common shares.
If we fail to complete such registrations or obtain such approvals, our ability to capitalize or otherwise fund our PRC operations may be negatively affected, which could adversely and materially affect our liquidity and our ability to fund and expand our business. 22 Governmental control of currency conversion may limit our ability to use our future revenues effectively and the ability of our PRC subsidiary to obtain financing.
If we fail to complete such registrations or obtain such approvals, our ability to capitalize or otherwise fund our PRC operations may be negatively affected, which could adversely and materially affect our liquidity and our ability to fund and expand our business. 23 Governmental control of currency conversion may limit our ability to use our future revenues effectively and the ability of our PRC subsidiary to obtain financing.
If the Company chooses to implement a reverse stock split, it must complete the split no later than ten business days prior to the expiration of the second compliance period. 24 A delisting would materially reduce the liquidity of our common stock and have an adverse effect on our market price.
If the Company chooses to implement a reverse stock split, it must complete the split no later than ten business days prior to the expiration of the second compliance period. 25 A delisting would materially reduce the liquidity of our common stock and have an adverse effect on our market price.
However, if such other adverse regulations or policies are adopted in China, our operations in China will be materially and adversely affected, which may significantly disrupt our operations and adversely affect our business. 16 We may be subject to anti-monopoly concerns as a result of our doing business in China.
However, if such other adverse regulations or policies are adopted in China, our operations in China will be materially and adversely affected, which may significantly disrupt our operations and adversely affect our business. 17 We may be subject to anti-monopoly concerns as a result of our doing business in China.
Our failure to obtain such permits, authorizations and approvals may materially and adversely affect our business, financial condition and the results of operations. 19 U.S. regulators’ ability to conduct investigations or enforce rules in China is limited. The majority of our operations are conducted outside of the U.S.
Our failure to obtain such permits, authorizations and approvals may materially and adversely affect our business, financial condition and the results of operations. 20 U.S. regulators’ ability to conduct investigations or enforce rules in China is limited. The majority of our operations are conducted outside of the U.S.
Future dividends, if any, will be at the discretion of our Board of Directors, and will depend upon our results of operations, cash flows, financial condition, payment to us of cash dividends by our subsidiaries, capital needs, future prospects and other factors that our directors may deem appropriate. 27
Future dividends, if any, will be at the discretion of our Board of Directors, and will depend upon our results of operations, cash flows, financial condition, payment to us of cash dividends by our subsidiaries, capital needs, future prospects and other factors that our directors may deem appropriate. 28
Following and as a result of this acquisition, MMBD has become a wholly-owned subsidiary of the Company. In March 23, 2020, the Company acquired all outstanding securities of MMBD Investment Advisory Company Limited (“MMBD Advisory”) for a consideration of $1,000.
Following and as a result of this acquisition, MMBD has become a wholly-owned subsidiary of the Company. On March 23, 2020, the Company acquired all outstanding securities of MMBD Investment Advisory Company Limited (“MMBD Advisory”) for a consideration of $1,000.
In addition, our platform and internal systems depend on the ability of such software to store, retrieve, process and manage immense amounts of data. The software on which we rely has contained, and may now or in the future contain, undetected errors or bugs.
Our platforms and internal systems rely on software that is highly technical and complex. In addition, our platform and internal systems depend on the ability of such software to store, retrieve, process and manage immense amounts of data. The software on which we rely has contained, and may now or in the future contain, undetected errors or bugs.
Our net loss for the year ended December 31, 2024 was primarily attributable to the allowance for credit losses on notes receivable. Our net income for the year ended December 31, 2023 was primarily attributable to Alpha Mind, a subsidiary we acquired in June 2023 and sold in December 2023. We may incur losses in future periods.
Our net income for the year ended December 31, 2023 was primarily attributable to Alpha Mind, a subsidiary we acquired in June 2023 and sold in December 2023. We may incur losses in future periods.
We recorded net loss of approximately $91.2 million for the year ended December 31, 2024, net income of approximately $45.5 million for the year ended December 31, 2023, and net loss of approximately $5.6 million for the year ended December 31, 2022, respectively.
We recorded net loss of approximately $56.1 million and $91.2 million for the years ended December 31, 2025 and 2024, respectively, and net income of approximately $45.5 million for the year ended December 31, 2023.
The XChange Note is convertible into shares of XChange if the remaining balance of approximately of $147.86 million of the XChange Note is not paid in full by June 30, 2025, the extended maturity date.
The XChange Note is convertible into shares of XChange if the remaining balance of approximately of $93.86 million of the XChange Note is not paid in full by the maturity date.
In connection with the sale of Alpha Mind to XChange TEC.INC (formerly known as “FLJ Group Limited”) (“XChange”), we were issued a Secured Promissory Note in the amount of $153 million (the “XChange Note”). As of the date of this report, we have received repayment from XChange of approximately $5.14 million.
In connection with the sale of Alpha Mind to XChange TEC.INC (formerly known as “FLJ Group Limited”) (“XChange”), we were issued a Secured Promissory Note in the amount of $153 million (the “XChange Note”).
We are unable to predict with certainty the impact, if any, that future legislation, judicial precedents or regulations relating to the online consumer finance industry will have on our business, financial condition and results of operations.
We are unable to predict with certainty the impact, if any, that future legislation, judicial precedents or regulations relating to the online consumer finance industry will have on our business, financial condition and results of operations. Furthermore, the growth in the popularity of online consumer finance increases the likelihood that the PRC government will seek to further regulate this industry.
These factors could prevent us from processing loans, damage our brand and reputation, divert our employees’ attention, subject us to liability and cause customers, investors and institutional funding partners to abandon our platforms, any of which could adversely affect our business, financial condition and results of operations.
These factors could prevent us from processing loans, damage our brand and reputation, divert our employees’ attention, subject us to liability and cause customers, investors and institutional funding partners to abandon our platforms, any of which could adversely affect our business, financial condition and results of operations. 9 Our platforms and internal systems rely on software that is highly technical, and if it contains undetected errors, our business could be adversely affected.
Any significant disruption in service on our platforms, our computer systems or third-party service providers’ systems, including events beyond our control, could reduce the attractiveness of our platforms and result in a loss of customers or investors.
Our operations may be adversely affected by international communication failures, which may affect trade executions and data updates. Any significant disruption in service on our platforms, our computer systems or third-party service providers’ systems, including events beyond our control, could reduce the attractiveness of our platforms and result in a loss of customers or investors.
The cost of such compliance would result in our incurring substantial additional expenses, and the failure to register if required would have a materially adverse impact to conduct our operations. 11 Risks Relating to Our Corporate Structure We will likely not pay dividends in the foreseeable future.
The cost of such compliance would result in our incurring substantial additional expenses, and the failure to register if required would have a materially adverse impact on our ability to conduct our operations.
Removed
Furthermore, the growth in the popularity of online consumer finance increases the likelihood that the PRC government will seek to further regulate this industry. 9 Our operations may be adversely affected by international communication failures, which may affect trade executions and data updates.
Added
Our net loss for the year ended December 31, 2025 was primarily attributable to the allowance for credit losses on notes receivable, loss on sale of notes receivable, and interest expense on convertible promissory notes. Our net loss for the year ended December 31, 2024 was primarily attributable to the allowance for credit losses on notes receivable.
Removed
Our platforms and internal systems rely on software that is highly technical, and if it contains undetected errors, our business could be adversely affected. Our platforms and internal systems rely on software that is highly technical and complex.
Added
As of the date of this report, we have received repayment from XChange of approximately $9.14 million, and sold $51,988,242 of the outstanding amount, of which the unpaid principal is $50,000,000 and unpaid interest is $1,988,242, to a third party.
Removed
In the event we are deemed to be a transient investment company as a result of the XChange Note, we believe we would qualify for the grace period.
Added
The maturity date of the XChange Note was extended to December 31, 2025, with a provision that if any balance remains outstanding on that date, it will automatically extend to the end of the following year, pursuant to the Amendments to Secured Promissory Notes entered into by the Company and XChange dated June 30, 2025.
Added
The XChange Note is subject to collection risk due to XChange’s going concern uncertainty, which may result in impairment of the XChange Note or receipt of XChange shares with limited value. The XChange Note has an outstanding principal balance of approximately $93.86 million as of the date of this report.
Added
The XChange Note is secured by all of the issued and outstanding equity of Alpha Mind and all of the assets of Alpha Mind and its subsidiaries.
Added
In its Annual Report on Form 20-F for the fiscal year ended September 30, 2025, XChange disclosed that its independent registered public accounting firm included an explanatory paragraph in its audit report questioning XChange’s ability to continue as a going concern.
Added
XChange reported that it generated net losses of RMB 71.3 million, RMB 226.8 million, and RMB 748.4 million (approximately $105.1 million) in fiscal years 2023, 2024, and 2025, respectively, and had an accumulated deficit of RMB 4,605.2 million (approximately $646.9 million) as of September 30, 2025.
Added
XChange further reported that its current liabilities exceeded its current assets by RMB 909.3 million as of September 30, 2025. XChange’s auditors noted that these factors, among others, raise substantial doubt about XChange’s ability to continue as a going concern.
Added
XChange has disclosed that it intends to repay the XChange Note using cash flows generated by its operations or through debt or equity offerings or loans, but that it may not be able to obtain financing or fundraising on favorable terms or at all.
Added
If XChange fails to perform its payment obligations under the XChange Note, we may exercise our collateral rights with respect to the equity and assets of Alpha Mind. However, there can be no assurance that the value of such collateral will be sufficient to satisfy the amounts owed under the XChange Note.
Added
Alpha Mind operates through contractual arrangements with variable interest entities (VIEs) in China, and the enforceability of such arrangements and the ability to realize value from the collateral may be subject to significant legal and regulatory uncertainties in China.
Added
If XChange is unable to continue as a going concern or if the value of the collateral securing the XChange Note declines, we may be required to record an impairment of the XChange Note and may not recover the full amount owed to us.
Added
Additionally, if we convert the XChange Note into shares of XChange in accordance with our conversion rights, the value of such shares may be limited or may decline substantially due to XChange’s financial difficulties.
Added
Any impairment of the XChange Note or decline in the value of XChange shares we receive could have a material adverse effect on our financial condition and results of operations. 12 Risks Relating to Our Corporate Structure We will likely not pay dividends in the foreseeable future.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

40 edited+12 added−7 removed135 unchanged
Biggest changeThe cash transfers within the organization during the above-referenced periods were as follows: For The Period From January 1, 2025 through April 9, 2025 Company (Wire transfer from) Company (Wire transfer to) Amount Equivalent to amount (USD) Purpose Asset Type MMTEC MM Future US$ 2,130,000 2,130,000 Capital contribution Cash MM Future Gujia RMB 12,202,867 1,700,000 Capital contribution Cash For The Year 2024 Company (Wire transfer from) Company (Wire transfer to) Amount Equivalent to amount (USD) Purpose Asset Type MMTEC MMBD Trading US$ 480,000 480,000 Capital contribution Cash MMTEC MM Future US$ 2,700,000 2,700,000 Capital contribution Cash MMTEC HC Securities HK$ 1,948,898 250,000 Capital contribution Cash MMTEC HAI TEC HK$ 120,000 15,379 Capital contribution Cash MM Future Gujia RMB 13,141,334 1,850,000 Capital contribution Cash MMBD Trading MM Global US$ 465,000 465,000 Capital contribution Cash For The Year 2023 Company (Wire transfer from) Company (Wire transfer to) Amount Equivalent to amount (USD) Purpose Asset Type MMTEC MMBD Trading US$ 355,000 355,000 Capital contribution Cash MMTEC MM Future US$ 205,000 205,000 Capital contribution Cash MMTEC HC Securities HK$ 5,779,911 740,000 Capital contribution Cash MM Global MMBD Trading US$ 220,000 220,000 Withdraw investment Cash MM Future HC Securities HK$ 1,482,779 190,000 Intercompany loan for working capital Cash MM Future Gujia RMB 5,896,208 825,000 Capital contribution Cash MMBD Trading MM Future US$ 220,000 220,000 Intercompany loan for working capital Cash MMBD Trading MM Global US$ 355,000 355,000 Capital contribution Cash 42 For The Year 2022 Company (Wire transfer from) Company (Wire transfer to) Amount Equivalent to amount (USD) Purpose Asset Type MMTEC MMBD Trading US$ 850,000 850,000 Capital contribution Cash MMTEC MM Future US$ 6,350,000 6,350,000 Capital contribution Cash MMTEC HC Securities HK$ 1,500,000 191,522 Capital contribution Cash MM Future Gujia RMB 24,642,492 3,700,000 Capital contribution Cash MM Future Fundex US$ 5,000 5,000 Intercompany loan for working capital Cash MMBD Trading MM Global US$ 850,000 850,000 Capital contribution Cash Gujia MM Future RMB 716,680 100,000 Consulting service fee Cash The enforceability and treatment of the intercompany agreements within our organization, including the intercompany loan agreements described above used in connection with intercompany cash transfers, have not been tested in court.
Biggest changeThe cash transfers within the organization during the above-referenced periods were as follows: For The Year 2025 Company (Wire transfer from) Company (Wire transfer to) Amount Equivalent to amount (USD) Purpose Asset Type MMTEC MM Future US$ 3,230,000 3,230,000 Capital contribution Cash MMTEC HAI TEC HK$ 4,000 514 Capital contribution Cash MMTEC HAI TEC US$ 670,000 670,000 Capital contribution Cash MM Future Gujia RMB 15,033,356 2,100,000 Capital contribution Cash MM Global MMBD Trading US$ 500,000 500,000 Withdraw investment Cash For The Year 2024 Company (Wire transfer from) Company (Wire transfer to) Amount Equivalent to amount (USD) Purpose Asset Type MMTEC MMBD Trading US$ 480,000 480,000 Capital contribution Cash MMTEC MM Future US$ 2,700,000 2,700,000 Capital contribution Cash MMTEC HC Securities HK$ 1,948,898 250,000 Capital contribution Cash MMTEC HAI TEC HK$ 120,000 15,379 Capital contribution Cash MM Future Gujia RMB 13,141,334 1,850,000 Capital contribution Cash MMBD Trading MM Global US$ 465,000 465,000 Capital contribution Cash For The Year 2023 Company (Wire transfer from) Company (Wire transfer to) Amount Equivalent to amount (USD) Purpose Asset Type MMTEC MMBD Trading US$ 355,000 355,000 Capital contribution Cash MMTEC MM Future US$ 205,000 205,000 Capital contribution Cash MMTEC HC Securities HK$ 5,779,911 740,000 Capital contribution Cash MM Global MMBD Trading US$ 220,000 220,000 Withdraw investment Cash MM Future HC Securities HK$ 1,482,779 190,000 Intercompany loan for working capital Cash MM Future Gujia RMB 5,896,208 825,000 Capital contribution Cash MMBD Trading MM Future US$ 220,000 220,000 Intercompany loan for working capital Cash MMBD Trading MM Global US$ 355,000 355,000 Capital contribution Cash The enforceability and treatment of the intercompany agreements within our organization, including the intercompany loan agreements described above used in connection with intercompany cash transfers, have not been tested in court. 44 C.
For such funds, we will provide (i) a package solution that will optimize the set-up process and reduce the set-up cost to help them to invest in overseas markets; (ii) personal service to help them to solve issues related to the regulations and supervision of overseas funds and account set-up; (iii) completely Chinese language based PTN investment management system, free of charge to provide fund valuation, redemption management, and risk-control financial management system, free estimate of fund value, and a system for risk control and financial management that is customized for China’s private equity funds; (iv) assistance in brand promotion and marketing, by providing additional market information, and organizing industry gatherings to promote their development; and (v) providing quantitative interface and open data to meet needs for access to small scale funds by localizing the U.S. financial industry standards so that more local quantitative funds can be interfaced with the U.S. stock market according to native technical standards. ● Minimize technical barriers to securities trading – We aim to assist small- to medium-sized securities dealers, online financial management enterprises, Internet traffic platforms and individuals in their efforts to expand their respective businesses and lower the threshold for participation of the traditional securities industry. ● Utilize cloud computing technologies, open financial platforms, and more diversified financial product - We help small and medium- sized securities brokerage firms build system on the cloud, we focus on providing backstage support for institutional clients, and develop a wide variety of technical and financial products for them. 36 ● Support PRC private equity funds to participate in overseas markets –We strive to minimize and possibly eliminate the cost of setting up the private equity funds, allowing our customers to use and rely on our technologies.
For such funds, we will provide (i) a package solution that will optimize the set-up process and reduce the set-up cost to help them to invest in overseas markets; (ii) personal service to help them to solve issues related to the regulations and supervision of overseas funds and account set-up; (iii) completely Chinese language based PTN investment management system, free of charge to provide fund valuation, redemption management, and risk-control financial management system, free estimate of fund value, and a system for risk control and financial management that is customized for China’s private equity funds; (iv) assistance in brand promotion and marketing, by providing additional market information, and organizing industry gatherings to promote their development; and (v) providing quantitative interface and open data to meet needs for access to small scale funds by localizing the U.S. financial industry standards so that more local quantitative funds can be interfaced with the U.S. stock market according to native technical standards. ● Minimize technical barriers to securities trading – We aim to assist small- to medium-sized securities dealers, online financial management enterprises, Internet traffic platforms and individuals in their efforts to expand their respective businesses and lower the threshold for participation of the traditional securities industry. ● Utilize cloud computing technologies, open financial platforms, and more diversified financial product - We help small and medium- sized securities brokerage firms build system on the cloud, we focus on providing backstage support for institutional clients, and develop a wide variety of technical and financial products for them. 38 ● Support PRC private equity funds to participate in overseas markets –We strive to minimize and possibly eliminate the cost of setting up the private equity funds, allowing our customers to use and rely on our technologies.
We also help Chinese language speaking hedge funds, mutual funds, proprietary trading groups to speed up their integration with the overseas market and offer them additional services, such as fund establishment, issuance, custody, transaction and settlement. In 2019, our company added financial advisory and investment banking business line to the roster of services it offers to its customers.
We also help Chinese language speaking hedge funds, mutual funds, proprietary trading groups to speed up their integration with the overseas market and offer them additional services, such as fund establishment, issuance, custody, transaction and settlement. 30 In 2019, our company added financial advisory and investment banking business line to the roster of services it offers to its customers.
Other than MM Global, we are currently not involved in any legal proceedings; nor are we aware of any claims that could have a material adverse effect on our business, financial condition, results of operations or cash flows. 40 Government Regulation Regulation of Foreign Currency Exchange and Dividend Distribution Foreign Currency Exchange.
Other than MM Global, we are currently not involved in any legal proceedings; nor are we aware of any claims that could have a material adverse effect on our business, financial condition, results of operations or cash flows. Government Regulation Regulation of Foreign Currency Exchange and Dividend Distribution Foreign Currency Exchange.
At present, there are no U.S. securities technology suppliers specialized in providing services for the Chinese market, most of U.S. securities technology suppliers have focus on domestic market, and there is no entire indigenous overseas investment system suit for Chinese market. 33 ● The traditional retail brokerage system development company in Hong Kong.
At present, there are no U.S. securities technology suppliers specialized in providing services for the Chinese market, most of U.S. securities technology suppliers have focus on domestic market, and there is no entire indigenous overseas investment system suit for Chinese market. ● The traditional retail brokerage system development company in Hong Kong.
Employees Our principal offices are located in Hong Kong Special Administrative Region; we also have a technical research & development center in Beijing, office in Shenzhen, Shanghai, China, and we also operate a broker-dealer in New York City.
Employees Our principal offices are located in Hong Kong Special Administrative Region; we also have a technical research & development center in Beijing, office in Shenzhen, China, and we also operate a broker-dealer in New York City.
As wholesalers of these products, we anticipate deriving revenue from this approach in the future, and ● Establish an internal system where are able to connect different securities firms from one technical platform, so that their structured financial products and fixed income products can be circulated on one (our) platform. 35 Many small and medium-sized brokers do not have the capacity for research and development and are unwilling to bear high development costs.
As wholesalers of these products, we anticipate deriving revenue from this approach in the future, and ● Establish an internal system where are able to connect different securities firms from one technical platform, so that their structured financial products and fixed income products can be circulated on one (our) platform. 37 Many small and medium-sized brokers do not have the capacity for research and development and are unwilling to bear high development costs.
One-stop private fund investment management fund solution – for small and medium-sized private funds with a management scale of more than $1 million and less than $100 million, we provide the following one-stop establishment and investment trading solutions to assist with: ● establishing private equity funds, registration, administration, and management of such funds. ● building PTN investment management system, deployment of investment transaction, fund management, risk control, ERP and other modules. ● opening trading accounts, handling valuation, liquidation and investment redemptions. ● marketing. 30 Corporate History and Background ● MMTEC, INC. –We formed MMTEC, INC., our BVI holding company on January 4, 2018. ● MM Future – Our wholly-owned Hong Kong subsidiary, was incorporated on October 31, 2017. ● Gujia – Our operating company in China and a wholly-owned subsidiary of MM Future. ● Meimei Zhengtong (Beijing) Technology Co., Ltd., – A PRC incorporated entity (dissolved effective as of June 8, 2018). ● MM Fund – Our wholly-owned Cayman Islands subsidiary, which was incorporated on April 20, 2018 and dormant as of December 31, 2024. ● MM Capital – Our wholly-owned Cayman Islands subsidiary, was incorporated on May 28, 2018, and was disposed on November 18, 2023. ● HC Securities (HK) Limited – Formerly known as MM Global Capital Limited, a wholly-owned Hong Kong subsidiary, was incorporated on March 15, 2019. ● MM SPC – MM SPC was incorporated on August 8, 2018, as a wholly-owned subsidiary of MM Capital, was disposed on November 18, 2023. ● MMBD Trading – Our wholly-owned subsidiary of MMTEC, acquired in October 2019. ● MM Global Securities, INC. – Our operating company in New York and a wholly-owned subsidiary of MMBD Trading Limited. ● MMBD Investment Advisory Company Limited – Our wholly-owned subsidiary of MMTEC, acquired in March 2020, was disposed on November 18, 2023. ● Fundex SPC – Fundex SPC was incorporated on September 13, 2021, as a wholly-owned subsidiary of MM Capital, was disposed on November 18, 2023. ● Haichuan Zhixin – Our wholly-owned subsidiary of MM Future, was incorporated in April 2023. ● Alpha Mind – Our 85% owned subsidiary of MMTEC, acquired on June 7, 2023 and disposed on December 28, 2023. ● HAI TEC- Our wholly-owned subsidiary of MMTEC, was incorporated on February 16, 2024.
One-stop private fund investment management fund solution – for small and medium-sized private funds with a management scale of more than $1 million and less than $100 million, we provide the following one-stop establishment and investment trading solutions to assist with: ● establishing private equity funds, registration, administration, and management of such funds. ● building PTN investment management system, deployment of investment transaction, fund management, risk control, ERP and other modules. ● opening trading accounts, handling valuation, liquidation and investment redemptions. ● marketing. 32 Corporate History and Background ● MMTEC, INC. –We formed MMTEC, INC., our BVI holding company on January 4, 2018. ● MM Future – Our wholly-owned Hong Kong subsidiary, was incorporated on October 31, 2017. ● Gujia – Our operating company in China and a wholly-owned subsidiary of MM Future. ● Meimei Zhengtong (Beijing) Technology Co., Ltd., – A PRC incorporated entity (dissolved effective as of June 8, 2018). ● MM Fund – Our wholly-owned Cayman Islands subsidiary, which was incorporated on April 20, 2018 (dissolved effective as of June 30, 2025). ● MM Capital – Our wholly-owned Cayman Islands subsidiary, was incorporated on May 28, 2018, and was disposed on November 18, 2023. ● HC Securities (HK) Limited – Formerly known as MM Global Capital Limited, a wholly-owned Hong Kong subsidiary, was incorporated on March 15, 2019. ● MM SPC – MM SPC was incorporated on August 8, 2018, as a wholly-owned subsidiary of MM Capital, was disposed on November 18, 2023. ● MMBD Trading – Our wholly-owned subsidiary of MMTEC, acquired in October 2019. ● MM Global Securities, INC. – Our operating company in New York and a wholly-owned subsidiary of MMBD Trading Limited. ● MMBD Investment Advisory Company Limited – Our wholly-owned subsidiary of MMTEC, acquired in March 2020, was disposed on November 18, 2023. ● Fundex SPC – Fundex SPC was incorporated on September 13, 2021, as a wholly-owned subsidiary of MM Capital, was disposed on November 18, 2023. ● Haichuan Zhixin – Our wholly-owned subsidiary of MM Future, was incorporated in April 2023 (dissolved effective as of December 26, 2025). ● Alpha Mind – Our 85% owned subsidiary of MMTEC, acquired on June 7, 2023 and disposed on December 28, 2023. ● HAI TEC – Our wholly-owned subsidiary of MMTEC, was incorporated on February 16, 2024. ● Hai Capital – Our wholly-owned subsidiary of MMTEC, was incorporated on September 26, 2025. ● HC Investment – Our wholly-owned subsidiary of HAI TEC, was incorporated on October 3, 2025.
Members of this diverse backgrounds teamwork in their respective areas with efficiency and professionalism. ● Better ecology and environment - With the acquisition of MMBD Trading and MM Global in the United States, we are able to provide better services to non-U.S. small and medium-sized brokerage firms to access the U.S. market, and also to the small and medium-sized private equity funds with deeper understanding of their needs. 37 ● Market opportunities - Traditional financial markets rely more and more on information technology.
Members of this diverse backgrounds teamwork in their respective areas with efficiency and professionalism. ● Better ecology and environment - With the acquisition of MMBD Trading and MM Global in the United States, we are able to provide better services to non-U.S. small and medium-sized brokerage firms to access the U.S. market, and also to the small and medium-sized private equity funds with deeper understanding of their needs. 39 ● Market opportunities - Traditional financial markets rely more and more on information technology.
It supports multi-dimensional risk control and eliminates the transaction of highly risky stocks by setting up a stock pool in which such highly risky stocks are stored. ● Our fast transaction system features in one-click booking, fast transaction and combined booking to rapidly and efficiently integrate the centralized transaction system to ensure efficiency and accuracy of transactions. 29 Private Fund Investment Management System The Private Fund Trading Network Management System (“PTN”) is an in-house developed system that supports institutional customers.
It supports multi-dimensional risk control and eliminates the transaction of highly risky stocks by setting up a stock pool in which such highly risky stocks are stored. ● Our fast transaction system features in one-click booking, fast transaction and combined booking to rapidly and efficiently integrate the centralized transaction system to ensure efficiency and accuracy of transactions. 31 Private Fund Investment Management System The Private Fund Trading Network Management System (“PTN”) is an in-house developed system that supports institutional customers.
These entities, in turn, offer investment opportunities to individual investors to invest in overseas stocks and fixed return securities. 32 ● Qualified Domestic Limited Partner : this status allows qualified domestic limited partners to invest in overseas private funds and private equities.
These entities, in turn, offer investment opportunities to individual investors to invest in overseas stocks and fixed return securities. ● Qualified Domestic Limited Partner : this status allows qualified domestic limited partners to invest in overseas private funds and private equities.
From trading API document to technology support, we make our customers more competitive in trading space by providing service in their native language. 38 Marketing We aim to offer these and other similarly situated financial services providers with a full spectrum of technical system solutions.
From trading API document to technology support, we make our customers more competitive in trading space by providing service in their native language. 40 Marketing We aim to offer these and other similarly situated financial services providers with a full spectrum of technical system solutions.
Its solutions are engineered to perform a variety of functions for both front office and back office. 34 In addition to the above-referenced companies, we compete with the following entities for providing services to the private equity/fund industry: ● OP Investment Management Ltd .
Its solutions are engineered to perform a variety of functions for both front office and back office. 36 In addition to the above-referenced companies, we compete with the following entities for providing services to the private equity/fund industry: ● OP Investment Management Ltd .
All of the facilities are leased. We believe our facilities are adequate for our current needs and we do not believe we will encounter any difficulty in extending the terms of the leases by which we occupy our respective premises.
We believe our facilities are adequate for our current needs and we do not believe we will encounter any difficulty in extending the terms of the leases by which we occupy our respective premises.
MM Future became the sole shareholder of Gujia. 31 Pursuant to the Securities Purchase Agreement dated as of April 25, 2019, the Company agreed to purchase the remaining 75.1% of outstanding securities of MMBD Trading.
MM Future became the sole shareholder of Gujia. 33 Pursuant to the Securities Purchase Agreement dated as of April 25, 2019, the Company agreed to purchase the remaining 75.1% of outstanding securities of MMBD Trading.
Beijing Research & Development Center AF, 16/F, Block B, Jiacheng Plaza, 18 Xiaguangli, Chaoyang District, Beijing 100027 December 1, 2022 – November 30, 2025 6,920.66. sq. Ft. Beijing Center Room 2501, Block A, Yuanyangxinganxian Building, Xiaguangli, Chaoyang District, Beijing 100027 Octorber 8, 2024 – October 7, 2026 4,262.72 sq. Ft.
Beijing Research & Development Center AF, 16/F, Block B, Jiacheng Plaza, 18 Xiaguangli, Chaoyang District, Beijing 100027 December 1, 2025 – November 30, 2027 6,920.66. sq. Ft. Beijing Center Room 2501, Block A, Yuanyangxinganxian Building, Xiaguangli, Chaoyang District, Beijing 100027 October 8, 2024 – October 7, 2026 4,262.72 sq. Ft.
A summary description of our facilities locations follows: Office Address Rental Term Space Headquarters Room 2302, 23/F, 308 Central Des Voeux, 308 Des Voeux Road Central, Hong Kong October 25, 2024 – October 24, 2025 969 sq. Ft. New York Center 575 Lexington Avenue New York, NY, 10022, USA February 1, 2024 – January 31, 2025 Approximately 200 sq. Ft.
A summary description of our facilities locations follows: Office Address Rental Term Space Headquarters Room 2302, 23/F, 308 Des Voeux Road Central, Hong Kong October 25, 2025 – October 24, 2026 969 sq. Ft. New York Center 575 Lexington Avenue New York, NY, 10022, USA February 1, 2025 – February 28 , 2026 Approximately 200 sq. Ft.
We applied to National Copyright Administration of the P.R.C. for 27 software copyrights, which was approved on June 28, 2018, March 14, 2019 and September 1, 2021. 39 Properties Our headquarters is located at Room 2302, 23/F, 308 Central Des Voeux, 308 Des Voeux Road Central, Hong Kong. Our research and development center is located in Beijing.
We applied to National Copyright Administration of the P.R.C. for 27 software copyrights, which was approved on June 28, 2018, March 14, 2019 and September 1, 2021. 41 Properties Our headquarters is located at Room 2302, 23/F, 308 Des Voeux Road Central, Hong Kong. Our research and development center is located in Beijing. All of the facilities are leased.
These financial institutions may “white label” our trading interface (i.e., put their logos on it, make our trading interface available to their customers without referencing our name), or they can select from among our modular functionalities, such as order routing, trade reporting or clearing on specific products or exchanges to offer their customers a comprehensive range of services and products. 28 Our Company was founded on January 4, 2018.
These financial institutions may “white label” our trading interface (i.e., put their logos on it, make our trading interface available to their customers without referencing our name), or they can select from among our modular functionalities, such as order routing, trade reporting or clearing on specific products or exchanges to offer their customers a comprehensive range of services and products.
C. Organizational Structure The following chart illustrates the Company’s organizational structure as of April 9, 2025: D. Property, Plant and Equipment For a listing of our properties, see “Item 4.B. Business Overview - Properties.” ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
Organizational Structure The following chart illustrates the Company’s organizational structure as of April 2, 2026: D. Property, Plant and Equipment For a listing of our properties, see “Item 4.B. Business Overview - Properties.” ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
The disposition was closed on November 18, 2023. As a result of the transaction, the Company no longer holds an interest in MM Capital or its two wholly-owned subsidiaries, MM SPC and Fundex SPC. On February 16, 2024, the Company incorporated HAI TEC INC.
As a result of the transaction, the Company no longer holds an interest in MM Capital or its two wholly-owned subsidiaries, MM SPC and Fundex SPC. On February 16, 2024, the Company incorporated HAI TEC INC.
On November 18, 2023, the Company entered into a Share Transfer Agreement (the “Share Transfer Agreement 2”) with Capital Jasmine Ltd. Pursuant to the Share Transfer Agreement 2, the Company agreed to transfer all outstanding securities of MM Capital, the wholly-owned subsidiary of the Company, to Capital Jasmine Ltd., for a total consideration of $500.
Pursuant to the Share Transfer Agreement 2, the Company agreed to transfer all outstanding securities of MM Capital, the wholly-owned subsidiary of the Company, to Capital Jasmine Ltd., for a total consideration of $500. The disposition was closed on November 18, 2023.
We maintain a corporate website at www.haisc.com. The information contained in, or accessible from, our website or any other website does not constitute a part of this Annual Report on Form 20-F. B.
The information contained in, or accessible from, our website or any other website does not constitute a part of this Annual Report on Form 20-F. B.
As of April 9, 2025, we employed 34 people on a full-time basis, comprised of 4 employees in management, 23 employees in sales and marketing, 1 employee in research and development, and 6 employees in administration. Intellectual Property Rights We rely on our technology copyright to protect our domestic business interests and ensure our competitive position in our industry.
As of April 2, 2026, we employed 31 people on a full-time basis, comprised of 3 employees in management, 20 employees in sales and marketing, 2 employee in research and development, and 6 employees in administration. Intellectual Property Rights We rely on our technology copyright to protect our domestic business interests and ensure our competitive position in our industry.
Our registered office in the British Virgin Islands is located at the offices of Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. Our agent for service of process in the United States is Corporation Services Company, located 251 Little Falls Drive, Wilmington, DE 19808. We maintain our website at http://www.haisc.com.
Our telephone number at this address is +852 36908356. Our registered office in the British Virgin Islands is located at the offices of Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. Our agent for service of process in the United States is Corporation Services Company, located at 251 Little Falls Drive, Wilmington, DE 19808.
A Chinese subsidiary owned by a foreign company must apply for registration of foreign exchange with the SAFE after the issuance of a business license and obtain a foreign exchange registration certificate.
The Authority dealing with foreign exchange in China is the SAFE and its local branches. A Chinese subsidiary owned by a foreign company must apply for registration of foreign exchange with the SAFE after the issuance of a business license and obtain a foreign exchange registration certificate.
There are two main channels which can currently be utilized by Chinese investors to invest in the U.S. securities markets: Ways to invest from within the PRC : ● Qualified Domestic Institutional Investor (“QDII”): this status allows domestic investors to invest in publicly trading securities on foreign securities markets (excluding venture capital and private equity funds securities) via certain fund management institutions, insurance companies, securities companies and other assets management institutions which have been approved by China Securities Regulatory Commission (“CSRC”).
Industry and Market Background Over the past several years, China has seen a steady increase in the rate of individual net worth and investment appetite for domestic and overseas equity investments, including an increase in investment demand of private equity funds. 34 There are two main channels which can currently be utilized by Chinese investors to invest in the U.S. securities markets: Ways to invest from within the PRC : ● Qualified Domestic Institutional Investor (“QDII”): this status allows domestic investors to invest in publicly trading securities on foreign securities markets (excluding venture capital and private equity funds securities) via certain fund management institutions, insurance companies, securities companies and other assets management institutions which have been approved by China Securities Regulatory Commission (“CSRC”).
Pursuant to the Share Transfer Agreement 1, the Company agreed to transfer all outstanding securities of MMBD Advisory, the wholly-owned subsidiary of the Company, to Top Fintech Inc., for a total consideration of $1,000. The disposition was closed on November 18, 2023, after the signing of Share Transfer Agreement 1 and ending in five days.
On November 18, 2023, the Company entered into a Share Transfer Agreement (the “Share Transfer Agreement 1”) with Top Fintech Inc. Pursuant to the Share Transfer Agreement 1, the Company agreed to transfer all outstanding securities of MMBD Advisory, the wholly-owned subsidiary of the Company, to Top Fintech Inc., for a total consideration of $1,000.
During that same period, there have been no distributions or dividends by any of our direct or indirectly held subsidiaries to MMTEC. During that same period MMTEC has not declared any dividends or made any distributions to its shareholders, including its U.S. investors, and we do not anticipate declaring a dividend in the foreseeable future.
During that same period MMTEC has not declared any dividends or made any distributions to its shareholders, including its U.S. investors, and we do not anticipate declaring a dividend in the foreseeable future. 43 MMTEC routinely provides cash to its subsidiaries either by way of capital contribution or by way of loan.
MMTEC is a holding company incorporated in the British Virgin Islands, and we do not have any substantive operations other than indirectly holding the equity interest in our operating subsidiaries in China and other countries and regions. MMTEC relies on dividends paid by our subsidiaries and capital raised from the sale of our securities to satisfy our cash needs.
Cash transferred outside of our organization to satisfy our obligations to third parties are also effected via wire transfer. MMTEC is a holding company incorporated in the British Virgin Islands, and we do not have any substantive operations other than indirectly holding the equity interest in our operating subsidiaries in China and other countries and regions.
Any increase in the amount of the total investment and registered capital must be approved by the MOFCOM or its local counterpart. We may not be able to obtain these government approvals or registrations on a timely basis, if at all, which could result in a delay in the process of making these loans.
We may not be able to obtain these government approvals or registrations on a timely basis, if at all, which could result in a delay in the process of making these loans. 42 The dividends paid by the subsidiary to its shareholder are deemed shareholder income and are taxable in China.
The proceeds of any such loan will be wired to the borrower subsidiary and will be recorded on our books as “Inter-Company due.” Such loan amounts are eliminated in our consolidated financial statements. Cash transferred outside of our organization to satisfy our obligations to third parties are also effected via wire transfer.
All such loans are interest-free, unsecured and payable on demand. The proceeds of any such loan will be wired to the borrower subsidiary and will be recorded on our books as “Inter-Company due.” Such loan amounts are eliminated in our consolidated financial statements.
We used internally designed and built system with the US brokerage license and the Cayman fund management qualification to form a series of MOM funds, with the main goal of discovering small and medium-sized institutional investors and helping them set up the fund to issue securities fund products.
We used internally designed and built system with the US brokerage license and the Cayman fund management qualification to form a series of MOM funds, with the main goal of discovering small and medium-sized institutional investors and helping them set up the fund to issue securities fund products. 29 Our principal place of business is located at c/o MM Future Technology Limited, Room 2302, 23rd Floor, 308 Des Voeux Road Central, Sheung Wan, Hong Kong.
There are several types of entities that provide investment system support in the U.S. securities markets for domestic (PRC) brokers and private funds. ● The traditional retail brokerage system development company in USA.
Financial technology companies provide various financial transaction solutions for their customers, including financial transactions such as online trading, front desk transactions and backstage clearing systems, which charge different costs according to different technical solutions. 35 There are several types of entities that provide investment system support in the U.S. securities markets for domestic (PRC) brokers and private funds. ● The traditional retail brokerage system development company in USA.
The Maturity Date of the XChange Note was extended to June 30, 2025 pursuant to a Amendments to Secured Promissory Notes entered into by the Company and XChange dated December 31, 2024. On November 18, 2023, the Company entered into a Share Transfer Agreement (the “Share Transfer Agreement 1”) with Top Fintech Inc.
The Maturity Date of the XChange Note was extended to December 31, 2025, with a provision that if any balance remains outstanding on that date, it will automatically extend to the end of the following year, pursuant to the Amendments to Secured Promissory Notes entered into by the Company and XChange dated June 30, 2025.
If we use our equity interest to purchase the assets or equity interest of a Chinese company owned by Chinese residents in the future, such Chinese residents will be subject to the registration procedures described in Circular 37. 41 Cash Transfers Within Our Organization During the first three months of 2025 and each of the fiscal years ended December 31, 2022, 2023 and 2024, the only transfer of assets among MMTEC and its subsidiaries have consisted of cash.
If we use our equity interest to purchase the assets or equity interest of a Chinese company owned by Chinese residents in the future, such Chinese residents will be subject to the registration procedures described in Circular 37.
The payment of dividends to MMTEC by our subsidiaries is effected by means of dividends by those entities to their direct parent and, as applicable, a redividend by that entity to MMTEC. Such dividends are effected by resolution of the board of directors of each such entity (after provision for applicable tax obligations). China is a foreign exchange administration country.
Such dividends are effected by resolution of the board of directors of each such entity (after provision for applicable tax obligations). China is a foreign exchange administration country. Capital injections, cross-border trade and services transactions settled in foreign exchange, overseas financing and profit repatriations are subject to the foreign exchange administration regulations.
Terminated in May 2024. Legal Proceedings In the normal course of business, MM Global is engaged in various trading and brokerage activities on a principal and agency basis through a clearing broker.
Shenzhen Center Room 401-10, Fangda Building, Keji Nan 12 th Road, Nanshan District, Shenzhen, Guangdong March 13, 2025 – March 12, 2026 269.1 sq. Ft. Legal Proceedings In the normal course of business, MM Global is engaged in various trading and brokerage activities on a principal and agency basis through a clearing broker.
The information contained on, or linked from, our website is not a part of this annual report. The Company had 25,186,864 ordinary shares issued and outstanding as of December 31, 2024. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. which can be accessed at www.sec.gov.
We maintain our website at http://www.haisc.com. The information contained on, or linked from, our website is not a part of this annual report. The Company had 99,587,811 ordinary shares issued and outstanding as of December 31, 2025.
The Company elect to pay the fine via a 36 months’ installment plan with $38,250 installment fee. As of December 31, 2024 the Company has total unpaid balance of $83,700, recorded the current portion as “Accrued liabilities and other payables”.
The Company elected to pay the fine via a 36 months’ installment plan with $38,250 installment fee. As of December 31, 2025, all the Company’s fine has been fully paid.
Removed
Our principal place of business is located at c/o MM Future Technology Limited, Room 2302, 23rd Floor, 308 Central Des Voeux, 308 Des Voeux Road Central, Sheung Wan, Hong Kong. Our telephone number at this address is +852 36908356.
Added
On March 12, 2025, the Company transferred all outstanding shares in HC Securities to HAI TEC, for a total consideration of HK$16,573,925 (equivalent to approximately $2.13 million). The share transfer was completed on March 12, 2025, resulting in HC Securities becoming a wholly-owned subsidiary of HAI TEC.
Removed
Industry and Market Background Over the past several years, China has seen a steady increase in the rate of individual net worth and investment appetite for domestic and overseas equity investments, including an increase in investment demand of private equity funds.
Added
On June 30, 2025, MM Fund was struck from the Company Register and thereupon dissolved. Haichuan Zhixin, our wholly-owned subsidiary of MM Future incorporated on April 13, 2023, was dissolved on December 26, 2025. On September 26, 2025, the Company incorporated Hai Capital Management Ltd (“Hai Capital”) under the laws of the BVI.
Removed
Traditional brokers mainly rely on conventional financial system providers for solutions. Financial technology companies provide various financial transaction solutions for their customers, including financial transactions such as online trading, front desk transactions and backstage clearing systems, which charge different costs according to different technical solutions.
Added
Hai Capital is a wholly-owned subsidiary of MMTEC. On October 3, 2025, the Company incorporated HC Investment Limited (“HC Investment”), a Hong Kong company. HC Investment is a wholly-owned subsidiary of HAI TEC.
Removed
Shenzhen Center Room 401-10, Fangda Building, Keji Nan 12 th Road, Nanshan District, Shenzhen, Guangdong March 13, 2024 – March 12, 2025 269.1 sq. Ft. Shanghai Center 3/A, Jiali Building, 1155 Fandian Street, Pudong District, Shanghai March 8, 2022 – April 30, 2022* 2 sq. Ft. * Expiration can continue to use, termination notice period 1-2 months.
Added
The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. which can be accessed at www.sec.gov. We maintain a corporate website at www.haisc.com.
Removed
The dividends paid by the subsidiary to its shareholder are deemed shareholder income and are taxable in China.
Added
Our Company was founded on January 4, 2018.
Removed
MMTEC routinely provides cash to its subsidiaries either by way of capital contribution or by way of loan. All such loans are interest-free, unsecured and payable on demand.
Added
The disposition was closed on November 18, 2023, after the signing of Share Transfer Agreement 1 and ending in five days. On November 18, 2023, the Company entered into a Share Transfer Agreement (the “Share Transfer Agreement 2”) with Capital Jasmine Ltd.
Removed
Capital injections, cross-border trade and services transactions settled in foreign exchange, overseas financing and profit repatriations are subject to the foreign exchange administration regulations. The Authority dealing with foreign exchange in China is the SAFE and its local branches.
Added
On March 12, 2025, the Company transferred all outstanding shares in HC Securities to HAI TEC, for a total consideration of HK$16,573,925 (equivalent to approximately $2.13 million). The share transfer was completed on March 12, 2025, resulting in HC Securities becoming a wholly-owned subsidiary of HAI TEC. MM Fund was dissolved on June 30, 2025.
Added
Haichuan Zhixin was dissolved on December 26, 2025. On September 26, 2025, the Company incorporated Hai Capital Management Ltd (“Hai Capital”) under the laws of the BVI. Hai Capital is a wholly-owned subsidiary of MMTEC. On October 3, 2025, the Company incorporated HC Investment Limited (“HC Investment”), a Hong Kong company. HC Investment is a wholly-owned subsidiary of HAI TEC.
Added
Traditional brokers mainly rely on conventional financial system providers for solutions.
Added
Any increase in the amount of the total investment and registered capital must be approved by the MOFCOM or its local counterpart.
Added
Cash Transfers Within Our Organization During each of the fiscal years ended December 31, 2023, 2024 and 2025, the only transfer of assets among MMTEC and its subsidiaries have consisted of cash. During that same period, there have been no distributions or dividends by any of our direct or indirectly held subsidiaries to MMTEC.
Added
MMTEC relies on dividends paid by our subsidiaries and capital raised from the sale of our securities to satisfy our cash needs. The payment of dividends to MMTEC by our subsidiaries is effected by means of dividends by those entities to their direct parent and, as applicable, a redividend by that entity to MMTEC.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

60 edited+3 added−12 removed66 unchanged
Biggest changeBecause the exchange rate conversion is different for the consolidated balance sheets and the consolidated statements of cash flows, the changes in assets and liabilities reflected on the consolidated statements of cash flows are not necessarily identical with the comparable changes reflected on the consolidated balance sheets. 50 Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 The following summarizes the key components of our cash flows for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, 2024 Year Ended December 31, 2023 Year Ended December 31, 2022 Net cash provided by (used in) operating activities $ 722,853 $ (5,151,508 ) $ (5,590,567 ) Net cash provided by (used in) investing activities 629,540 (86,538,549 ) (3,544,105 ) Net cash provided by (used in) financing activities (241,750 ) 89,666,750 1,750,140 Effect of exchange rate on cash and cash equivalents (1,188 ) (27,104 ) 3,789 Net increase (decrease) in cash and cash equivalents $ 1,109,455 $ (2,050,411 ) $ (7,380,743 ) Net cash flow provided by operating activities for the year ended December 31, 2024 was $722,853, which primarily reflected our net loss from continuing operations of $91,168,280, and the changes in operating assets and liabilities primarily consisting of a decrease in accounts receivable of approximately $92,000, a decrease in notes receivable of approximately $5,141,000, a decrease of operating lease liability of approximately $430,000, a decrease in accrued liabilities and other payables of approximately $1,735,000, a decrease in prepaid expenses and other current assets of approximately $105,000, an increase in salary payable of $29,000, and adjusted for non-cash items consisting of noncash lease expense $422,000, depreciation of approximately $47,000, allowance for credit losses on notes receivable of approximately $90,236,000, allowance for bad debt of approximately $165,000, accrued taxes of approximately $25,000, imputed interest expense of approximately $2,272,000 and interest income of approximately of $4,471,000.
Biggest changeBecause the exchange rate conversion is different for the consolidated balance sheets and the consolidated statements of cash flows, the changes in assets and liabilities reflected on the consolidated statements of cash flows are not necessarily identical with the comparable changes reflected on the consolidated balance sheets. 52 Cash Flows for the Years Ended December 31, 2025, 2024 and 2023 The following summarizes the key components of our cash flows for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023 Net cash provided by (used in) operating activities $ (3,693,655 ) $ 722,853 $ (5,151,508 ) Net cash provided by (used in) investing activities 9,000,000 629,540 (86,538,549 ) Net cash provided by (used in) financing activities - (241,750 ) 89,666,750 Effect of exchange rate on cash and cash equivalents 9,916 (1,188 ) (27,104 ) Net increase (decrease) in cash and cash equivalents $ 5,316,261 $ 1,109,455 $ (2,050,411 ) Net cash flow used in operating activities for the year ended December 31, 2025 was $3,693,655, which primarily reflected our net loss from continuing operations of $56,075,245, and the changes in operating assets and liabilities primarily consisting of a decrease of operating lease liability of approximately $427,000, a decrease in accrued liabilities and other payables of approximately $123,000, an increase in prepaid expenses and other current assets of approximately $23,000, an increase in advance from customer of $100,000, a decrease in salary payable of $143,000, and adjusted for non-cash items consisting of noncash lease expense $403,000, depreciation of approximately $84,000, allowance for credit losses on notes receivable of approximately $23,887,000, imputed interest expense of approximately $8,686,000, loss on sale of notes receivable of approximately $21,292,000 and interest income of approximately of $1,363,000.
Selling and Marketing Expenses Selling and marketing expenses totaled $715,976 for the year ended December 31, 2024, as compared to $901,319 for the year ended December 31, 2023, a decrease of $185,343 or 20.6%. During the year ended December 31, 2024, the decrease was primarily attributable to the decreased need of related expenses of investment banking business.
Selling and marketing expenses totaled $715,976 for the year ended December 31, 2024, as compared to $901,319 for the year ended December 31, 2023, a decrease of $185,343 or 20.6%. During the year ended December 31, 2024, the decrease was primarily attributable to the decreased need of related expenses of investment banking business.
Payroll and Related Benefits Payroll and related benefits totaled $2,082,886 for the year ended December 31, 2024, as compared to $2,512,781 for the year ended December 31, 2023, a decrease of $429,895 or 17.1%. As a result of the reduction of software development business, the Company decreased the level of spending on software development department.
Payroll and related benefits totaled $2,082,886 for the year ended December 31, 2024, as compared to $2,512,781 for the year ended December 31, 2023, a decrease of $429,895 or 17.1%. As a result of the reduction of software development business, the Company decreased the level of spending on software development department.
Net Loss from Continuing Operations Our net loss from continuing operations was $91,168,280 for the year ended December 31, 2024, as compared to net loss from continuing operations of $7,848,380 for the year ended December 31, 2023, a decrease of $83,319,900, or 1,061.6%.
Our net loss from continuing operations was $91,168,280 for the year ended December 31, 2024, as compared to net loss from continuing operations of $7,848,380 for the year ended December 31, 2023, a decrease of $83,319,900, or 1,061.6%.
At the closing of the transaction, which occurred on June 7, 2023, the the Company paid the Purchase Price to the Sellers as follows: (a) $1.0 million credited from an earlier good faith deposit made by the MMTEC to the Sellers on May 8, 2023, (b) $91,650,000 was paid by MMTEC to the Sellers in cash, and (c) remaining $7.0 million was paid by MMTEC to the Sellers in the form of a convertible promissory note.
At the closing of the transaction, which occurred on June 7, 2023, the Company paid the Purchase Price to the Sellers as follows: (a) $1.0 million credited from an earlier good faith deposit made by the MMTEC to the Sellers on May 8, 2023, (b) $91,650,000 was paid by MMTEC to the Sellers in cash, and (c) remaining $7.0 million was paid by MMTEC to the Sellers in the form of a convertible promissory note.
Other expense, net, totaled $88,083,323 for the year ended December 31, 2024, as compared to other expense of $3,008,043 for the year ended December 31, 2023, a decrease of $85,075,280, which was mainly attributable to an increase in interest income from notes receivable of $4,553,242, increase in interest expense from the convertible promissory notes of $2,272,292, increase in allowance for credit losses on notes receivable of $90,236,242.
Other expense, net, totaled $88,083,323 for the year ended December 31, 2024, as compared to other expense of $3,008,043 for the year ended December 31, 2023, an increase of $85,075,280, which was mainly attributable to an increase in interest income from notes receivable of $4,553,242, decrease in interest expense from the convertible promissory notes of $2,272,292, increase in allowance for credit losses on notes receivable of $90,236,242.
Other Income (Expense) Other income (expense) mainly includes interest income from bank deposits and receivables, interest income from notes receivable, interest expense on convertible promissory notes, impairment on long-term investment and recovery of the impairment, recovery of bad debt allowance on loan receivable, allowance for credit losses on notes receivable, other income (expense), foreign currency transaction gain (loss).
Other Income (Expense) Other income (expense) mainly includes interest income from bank deposits and receivables, interest income from notes receivable, interest expense on convertible promissory notes, impairment on long-term investment and recovery of the impairment, recovery of bad debt allowance on loan receivable, allowance for credit losses on notes receivable, loss on sale of notes receivable, other income (expense), and foreign currency transaction gain (loss).
The Company currently intends to use the net proceeds from the transaction for growth capital and general working capital purposes. 52 On August 10, 2022, the Company entered into a common stock purchase agreement, with VG Master Fund SPC, under which, subject to specified terms and conditions, the Company may sell to Investor up to $6.0 million of shares of common stock, par value $0.01 ($0.08 given effect of the 2024 Reverse Stock Split) per share, from time to time during the term of the Purchase Agreement.
The Company currently intends to use the net proceeds from the transaction for growth capital and general working capital purposes. 54 On August 10, 2022, the Company entered into a common stock purchase agreement, with VG Master Fund SPC, under which, subject to specified terms and conditions, the Company may sell to Investor up to $6.0 million of shares of common stock, par value $0.01 ($0.08 given effect of the 2024 Reverse Stock Split) per share, from time to time during the term of the Purchase Agreement.
Unless otherwise indicated, references to the “Company”, “us” or “we” refer to MMTEC and its consolidated subsidiaries. 43 Special Note Regarding Forward-looking Statements All statements other than statements of historical fact included in this report including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements.
Unless otherwise indicated, references to the “Company”, “us” or “we” refer to MMTEC and its consolidated subsidiaries. 45 Special Note Regarding Forward-looking Statements All statements other than statements of historical fact included in this report including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion and analysis of our financial condition and results of operations for the years ended December 31, 2024, 2023 and 2022 should be read in conjunction with our consolidated financial statements and related notes to those consolidated financial statements that are included elsewhere in this report.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion and analysis of our financial condition and results of operations for the years ended December 31, 2025, 2024 and 2023 should be read in conjunction with our consolidated financial statements and related notes to those consolidated financial statements that are included elsewhere in this report.
The Investor waived the interest under the Note in connection with the full conversion of the Note. The Company fulfilled all its obligations under the Note upon conversion. 53 On March 31, 2023, the Company commenced a registered direct offering of Senior Convertible Promissory Notes with an institutional investor pursuant to a securities purchase agreement of the same date.
The Investor waived the interest under the Note in connection with the full conversion of the Note. The Company fulfilled all its obligations under the Note upon conversion. 55 On March 31, 2023, the Company commenced a registered direct offering of Senior Convertible Promissory Notes with an institutional investor pursuant to a securities purchase agreement of the same date.
The regulatory fees mainly consist of the fine paid by the Company in connection with a settlement entered into with FINRA in 2022. ● Other general and administrative expenses were primarily comprised of office supplies, internet service fee, and depreciation.
The regulatory fees mainly consist of SEC filing fee and the fine paid by the Company in connection with a settlement entered into with FINRA in 2022. ● Other general and administrative expenses were primarily comprised of office supplies, internet service fee, and depreciation.
These reserves are not distributable as cash dividends. 49 In addition, a majority of our businesses and assets are denominated in RMB, which is not freely convertible into foreign currencies.
These reserves are not distributable as cash dividends. 51 In addition, a majority of our businesses and assets are denominated in RMB, which is not freely convertible into foreign currencies.
The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments. 55
The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments. 57
Thus, our revenues and operating results may be impacted by exchange rate fluctuations between RMB and US dollars. For the years ended December 31, 2024, 2023 and 2022 we had unrealized foreign currency translation gain of approximately $70,000, unrealized foreign currency translation loss of approximately $138,000 and $185,000 respectively, because of changes in the exchange rate.
Thus, our revenues and operating results may be impacted by exchange rate fluctuations between RMB and US dollars. For the years ended December 31, 2025, 2024 and 2023 we had unrealized foreign currency translation gain of approximately $20,000 and $70,000, unrealized foreign currency translation loss of approximately $138,000, respectively, because of changes in the exchange rate.
Research and development, patents and licenses Expenditures for research and product development costs are expensed as incurred. For the years ended December 31, 2024, 2023 and 2022, research and development expenses were $73,285, $363,958, and $828,869, respectively, included in “Cost of revenue”, “Payroll and related benefits” and “Other general and administrative” on the accompanying consolidated income statements. D.
Research and development, patents and licenses Expenditures for research and product development costs are expensed as incurred. For the years ended December 31, 2025, 2024 and 2023, research and development expenses were $40,215, $73,285, and $363,958, respectively, included in “Cost of revenue”, “Payroll and related benefits” and “Other general and administrative” on the accompanying consolidated income statements. D.
All significant intercompany accounts and transactions have been eliminated in consolidation. 44 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Comparison of Results of Operations for the Years Ended December 31, 2024, 2023 and 2022.
All significant intercompany accounts and transactions have been eliminated in consolidation. 46 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Comparison of Results of Operations for the Years Ended December 31, 2025, 2024 and 2023.
This non-cash adjustment had the effect of decreasing our reported comprehensive loss in 2024, and decreasing our reported comprehensive income in 2023, and increasing our reported comprehensive loss in 2022.
This non-cash adjustment had the effect of decreasing our reported comprehensive loss in 2025 and 2024, and decreasing our reported comprehensive income in 2023.
Revenue The following table sets forth the components of our net revenues by amounts and percentages of our total net revenues for the periods presented: For the Year Ended December 31, 2024 2023 US$ % US$ % Net revenues: Consulting services - - % 800,000 92.0 % Software development and maintenance - - % 24,098 2.8 % Placement agent services 1,860,000 99.6 % 45,837 5.2 % Other revenue 8,333 0.4 % - - % Total net revenues 1,868,333 100.0 % 869,935 100.0 % For the years ended December 31, 2024 and 2023, we had revenue from Consulting service of nil and $800,000, which relating to our financial advisory and investment banking business.
For the Year Ended December 31, 2024 2023 US$ % US$ % Net revenues: Consulting services - - % 800,000 92.0 % Software development and maintenance - - % 24,098 2.8 % Placement agent services 1,860,000 99.6 % 45,837 5.2 % Other revenue 8,333 0.4 % - - % Total net revenues 1,868,333 100.0 % 869,935 100.0 % For the years ended December 31, 2024 and 2023, we had revenue from Consulting service of nil and $800,000, which relating to our financial advisory and investment banking business.
As a result of foreign currency translations, which are a non-cash adjustment, we reported a foreign currency translation gain of $69,610 for the year ended December 31, 2024, and a foreign currency translation loss of $138,414 and $184,885 for the years ended December 31, 2023 and 2022 respectively.
As a result of foreign currency translations, which are a non-cash adjustment, we reported a foreign currency translation gain of $20,277 and $69,610 for the years ended December 31, 2025 and 2024 respectively, and a foreign currency translation loss of $138,414 for the year ended December 31, 2023.
The other provisions of the Notes remain unchanged. On May 16, 2023, the Company entered into an Equity Acquisition Agreement (the “Purchase Agreement”) with Alfa Crest Investment Limited, a British Virgin Islands company (“Alfa Crest”), CapitoLabs Limited, a British Virgin Islands company (“CapitoLabs”, and together with Alfa Crest, the “Sellers”) and Alpha Mind.
On May 16, 2023, the Company entered into an Equity Acquisition Agreement (the “Purchase Agreement”) with Alfa Crest Investment Limited, a British Virgin Islands company (“Alfa Crest”), CapitoLabs Limited, a British Virgin Islands company (“CapitoLabs”, and together with Alfa Crest, the “Sellers”) and Alpha Mind.
During the year ended December 31, 2024, the Company made payments for purchases of property and equipment of approximately $5,000, received from loan from third parties of approximately $635,000.
During the year ended December 31, 2025, the Company received $4,000,000 from notes receivable and $5,000,000 from the sale of notes receivable. During the year ended December 31, 2024, the Company made payments for purchases of property and equipment of approximately $5,000, received from loan from third parties of approximately $635,000.
As of December 31, 2024 and 2023, we had cash balance of approximately $2,870,000 and $1,760,000, respectively. A portion of these funds are kept in financial institutions located in China.
As of December 31, 2025 and 2024, we had cash balance of approximately $8,190,000 and $2,870,000, respectively. A portion of these funds are kept in financial institutions located in China.
The increase in income from discontinued operations was mainly due to gain on sale of discontinued operations of approximately $53.82 million as the Company sold Alpha Mind to XChange for a total consideration of $153,000,000. 48 Net Income (Loss) As a result of the factors described above, our net loss was $91,168,280 for the year ended December 31, 2024.
The increase in income from discontinued operations was mainly due to gain on sale of discontinued operations of approximately $53.82 million as the Company sold Alpha Mind to XChange for a total consideration of $153,000,000. 50 Net Income (Loss) As a result of the factors described above, our net loss was $56,075,245 for the year ended December 31, 2025.
Net cash flow provided by investing activities was $629,540 for the year ended December 31, 2024 as compared to net cash flow used in investing activities of $86,538,549 and $3,544,105 for the year ended December 31, 2023 and 2022.
Net cash flow provided by investing activities was $9,000,000 for the year ended December 31, 2025 as compared to net cash flow provided by investing activities of $629,540 and net cash flow used in investing activities of $86,538,549 for the year ended December 31, 2024 and 2023.
We have retroactively restated all share and per share data for all of the periods presented pursuant to ASC 260 to reflect the 2022 and 2024 Reverse Stock Split. As a result, the Company has 25,186,864 ordinary shares issued and outstanding as of December 31, 2024. 54 C.
We have retroactively restated all share and per share data for all of the periods presented pursuant to ASC 260 to reflect the 2022 and 2024 Reverse Stock Split. As a result, the Company has 99,587,811 ordinary shares issued and outstanding as of December 31, 2025. 56 C.
Income Taxes We have $24,525 of income tax expense for the year ended December 31, 2024, and nil for the years ended December 31, 2023 and 2022.
Income Taxes We have $8,973 of income tax expense for the year ended December 31, 2025, $24,525 of income tax expense for the year ended December 31, 2024, and nil for the year ended December 31, 2023.
Our net income was $45,419,381 for the year ended December 31, 2023. Our net loss was $5,645,376 for the year ended December 31, 2022. Foreign Currency Translation Adjustment Our reporting currency is the U.S. dollar.
Our net loss was $91,168,280 for the year ended December 31, 2024. Our net income was $45,419,381 for the year ended December 31, 2023. Foreign Currency Translation Adjustment Our reporting currency is the U.S. dollar.
Comprehensive Income (Loss) As a result of our foreign currency translation adjustment, we had a comprehensive loss of $91,098,670, a comprehensive income of $45,372,059, and a comprehensive loss of $5,830,261 for the years ended December 31, 2024, 2023 and 2022, respectively. Foreign Currency Exchange Rate Risk Our operations are in China.
Comprehensive Income (Loss) As a result of our foreign currency translation adjustment, we had a comprehensive loss of $56,054,968 and $91,098,670 for the years ended December 31, 2025 and 2024, a comprehensive income of $45,372,059 for the year ended December 31, 2023. Foreign Currency Exchange Rate Risk We have operations in China.
The decrease was primarily attributable to demand for technical service reduction in 2024 and 2023. ● For the year ended December 31, 2024, NASDAQ application and listing fees increased by $31,019, or 57.5%, as compared to the year ended December 31, 2023. The increase was primarily attributable to the increase of NASDAQ annual listing fees.
The decrease was primarily attributable to demand for technical service reduction in 2025 and 2024. ● For the year ended December 31, 2025, NASDAQ application and listing fees increased by $5,100, or 6.0%, as compared to the year ended December 31, 2024.
The Company fully recorded allowance for bad debts of loan receivable from HY Future Limited of $164,800 and $100,000 in 2024 and 2022, respectively. ● For the year ended December 31, 2024, regulatory fees increased by $6,721, or 118.4%, as compared to the year ended December 31, 2024.
The Company fully recorded allowance for bad debts of loan receivable from HY Future Limited of $164,800 in 2024. ● For the year ended December 31, 2025, regulatory fees increased by $44,301, or 357.3%, as compared to the year ended December 31, 2024.
During the year ended December 31, 2023, the Company made payments for purchases of property and equipment of approximately $1,000, paid for business acquisition, net of cash required of $87,000,000, offset by proceeds from disposal of property and equipment of approximately $8,000, cash received from return of long-term investment of approximately $439,000, and loan repayment from third parties of approximately $878,000.
During the year ended December 31, 2023, the Company made payments for purchases of property and equipment of approximately $1,000, paid for business acquisition, net of cash required of $87,000,000, offset by proceeds from disposal of property and equipment of approximately $8,000, cash received from return of long-term investment of approximately $439,000, and loan repayment from third parties of approximately $878,000. 53 Net cash flow provided by or used in financing activities was nil for the year ended December 31, 2025, as compared to net cash flow used in financing activities $241,750 and net cash flow provided by financing activities $89,666,750 for the years ended December 31, 2024 and 2023.
For the year ended December 31, 2023, NASDAQ application and listing fees decreased by $5,519, or 9.3%, as compared to the year ended December 31, 2022.
For the year ended December 31, 2024, NASDAQ application and listing fees increased by $31,019, or 57.5%, as compared to the year ended December 31, 2023.
This increase was primarily attributable to more office supplies used in headquarter and Beijing center. 47 Loss from Operations As a result of the foregoing, for the year ended December 31, 2024, loss from operations amounted to $3,060,432, as compared to $4,840,337 for the year ended December 31, 2023, a decrease of $1,779,905, or 36.8%.
For the year ended December 31, 2024, loss from operations amounted to $3,060,432, as compared to $4,840,337 for the year ended December 31, 2023, a decrease of $1,779,905, or 36.8%.
The variances were primarily attributable to the normal fluctuation of the Company’s business. 46 Other General and Administrative Expenses For the years ended December 31, 2024, 2023 and 2022, other general and administrative expenses consisted of the following: Year Ended Year Ended Year Ended December 31, December 31, December 31, 2024 2023 2022 Rent and related utilities $ 468,298 $ 458,422 $ 413,238 ETC clearing cost - - 32,000 Technical service fee 7,986 27,363 192,957 NASDAQ application and listing fee 85,000 53,981 59,500 Travel and entertainment 65,386 153,475 70,905 Fund SPC service fee - - 190,347 Training fee - - 27,981 Bad debt expense 164,800 - 100,000 Regulatory Fee 12,398 5,677 516,234 Others 277,753 393,032 322,777 $ 1,081,621 $ 1,091,950 $ 1,925,939 ● For the year ended December 31, 2024, rent and related utilities increased by $9,876, or 2.2%, as compared to the year ended December 31, 2023.
The variances were primarily attributable to the normal fluctuation of the Company’s business. 48 Other General and Administrative Expenses For the years ended December 31, 2025, 2024 and 2023, other general and administrative expenses consisted of the following: Year Ended Year Ended Year Ended December 31, December 31, December 31, 2025 2024 2023 Rent and related utilities $ 436,912 $ 468,298 $ 458,422 Technical service fee 7,743 7,986 27,363 NASDAQ application and listing fee 90,100 85,000 53,981 Travel and entertainment 176,519 65,386 153,475 Bad debt expense - 164,800 - Regulatory Fee 56,699 12,398 5,677 Others 331,665 277,753 393,032 $ 1,099,638 $ 1,081,621 $ 1,091,950 ● For the year ended December 31, 2025, rent and related utilities decreased by $31,386, or 6.7%, as compared to the year ended December 31, 2024.
The NASDAQ application and listing fees decrease was primarily attributable to decreasing annual listing fee and service fees charged by NASDAQ. ● For the year ended December 31, 2024, travel and entertainment expenses decreased by $88,089, or 57.4%, as compared to the year ended December 31, 2023.
For the year ended December 31, 2024, travel and entertainment expenses decreased by $88,089, or 57.4%, as compared to the year ended December 31, 2023.
For the years ended December 31, 2024, 2023 and 2022, cost of revenue was $343,083, $172,948 and $231,084, respectively. Gross Profit and Gross Margin Our gross profit was $1,525,250 for the year ended December 31, 2024, representing gross margin of 81.6%. Gross profit was $696,987 for the year ended December 31, 2023, representing gross margin of 80.1%.
Gross Profit and Gross Margin Our gross profit was $174,500 for the year ended December 31, 2025, representing gross margin of 21.6%. Gross profit was $1,525,250 for the year ended December 31, 2024, representing gross margin of 81.6%. Gross profit was $696,987 for the year ended December 31, 2023, representing gross margin of 80.1%.
Professional Fees For the years ended December 31, 2024, 2023 and 2022, Professional Fees consisted of the following: Year Ended Year Ended Year Ended December 31, December 31, December 31, 2024 2023 2022 Audit fees $ 326,498 $ 581,909 $ 267,283 Legal fees 183,809 230,499 286,508 Financial consulting fees 166,225 191,255 518,736 Advisory fees - - 83,333 Others 28,667 27,611 54,585 $ 705,199 $ 1,031,274 $ 1,210,445 ● For the year ended December 31, 2024, audit fees decreased by $255,411, or 43.9%, as compared to the year ended December 31, 2023.
Professional Fees For the years ended December 31, 2025, 2024 and 2023, Professional Fees consisted of the following: Year Ended Year Ended Year Ended December 31, December 31, December 31, 2025 2024 2023 Audit fees $ 305,417 $ 326,498 $ 581,909 Legal fees 190,982 183,809 230,499 Financial consulting fees 84,842 166,225 191,255 Others 43,911 28,667 27,611 $ 625,152 $ 705,199 $ 1,031,274 ● For the year ended December 31, 2025, audit fees decreased by $21,081, or 6.5%, as compared to the year ended December 31, 2024.
For the year ended December 31, 2024, other general and administrative expenses decreased by $115,279, or 29.3%, compared to the year ended December 31, 2023. The decrease was primarily attributable to the stabilization of office expenditures at routine operational levels, in contrast to the costs incurred in 2023.
For the year ended December 31, 2024, other general and administrative expenses decreased by $115,279, or 29.3%, compared to the year ended December 31, 2023.
The increase was primarily attributable to the changes in short-term lease. For the year ended December 31, 2023, rent and related utilities increased by $45,184, or 10.9%, as compared to the year ended December 31, 2022.
The decrease was primarily attributable to the reduction in rental price in renewed lease agreement. For the year ended December 31, 2024, rent and related utilities increased by $9,876, or 2.2%, as compared to the year ended December 31, 2023.
For the years ended December 31, 2023 and 2022, we had revenue from performing market data services for our customers of nil and $20,619, respectively. Cost of Revenue Cost of revenue consists primarily of internal labor cost and related benefits, and other overhead costs that are directly attributable to services provided.
Cost of Revenue Cost of revenue consists primarily of internal labor cost and related benefits, and other overhead costs that are directly attributable to services provided. For the years ended December 31, 2025, 2024 and 2023, cost of revenue was $633,000, $343,083 and $172,948, respectively.
Our increased gross margin was primarily attributable to our consulting services in 2023, which have a higher gross profit and gross margin than our other businesses. 45 Operating Expenses During the years ended December 31, 2024, 2023 and 2022, operating expenses included selling and marketing, payroll and related benefits, professional fees, and other general and administrative expenses.
Our gross margin decreased primarily attributable to increased costs associated with placement agent service for the year ended December 31, 2025. 47 Operating Expenses During the years ended December 31, 2025, 2024 and 2023, operating expenses included selling and marketing, payroll and related benefits, professional fees, and other general and administrative expenses.
For the year ended December 31, 2023, regulatory fees decreased by $510,557, or 98.9%, as compared to the year ended December 31, 2022.
For the year ended December 31, 2024, regulatory fees increased by $6,721, or 118.4%, as compared to the year ended December 31, 2023.
The increase was primarily attributable to the newly increased audit fee for acquisition of Alpha Mind. ● For the year ended December 31, 2024, legal fees decreased by $46,690, or 20.3%. The decrease was primarily attributable to the reduced expenditures associated with SEC- related legal matters. For the year ended December 31, 2023, legal fees decreased by $56,009, or 19.5%.
For the year ended December 31, 2024, legal fees decreased by $46,690, or 20.3%. The decrease was primarily attributable to the reduced expenditures associated with SEC- related legal matters. ● For the year ended December 31, 2025, financial consulting fees decreased by $81,383, or 49.0%. For the year ended December 31, 2024, financial consulting fees decreased by $25,030, or 13.1%.
The decrease was primarily due to the absence of audit fees associated with business acquisitions or material corporate actions during 2024. For the year ended December 31, 2023, audit fees increased by $314,626, or 117.7%, as compared to the year ended December 31, 2022.
The decrease was primarily due to the absence of audit fees associated with business acquisitions or material corporate actions during 2024. ● For the year ended December 31, 2025, legal fees increased by $7,173, or 3.9%. The increase was primarily attributable to the Company incurred additional legal expenses in connection with its F-3 Shelf Registration on Nasdaq .
For the year ended December 31, 2023, financial consulting fees decreased by $327,481, or 63.1%. The decrease was primarily attributable to the less demand for financial consulting in 2024 and 2023 respectively. ● For the year ended December 31, 2024, advisory fees were nil.
The decrease was primarily attributable to the less demand for financial consulting in 2025 and 2024 respectively. ● For the year ended December 31, 2025, other miscellaneous items increased by $15,244, or 53.2%. For the year ended December 31, 2024, other miscellaneous items increased by $1,056, or 3.8%.
The following table sets forth a summary of changes in our working capital from December 31, 2023 to December 31, 2024: December 31, 2023 to December 31, 2024 December 31, December 31, Percentage 2024 2023 Change Change Working capital: Total current assets $ 3,020,546 $ 3,023,537 $ (2,991 ) (0.1 )% Total current liabilities 7,320,692 5,450,348 1,870,344 34.3 % Working capital $ (4,300,146 ) $ (2,426,811 ) $ (1,873,335 ) 77.2 % Our working capital deficiency increased by $1,873,335 to $4,300,146 as of December 31, 2024 from working capital deficiency of $ 2,426,811 as of December 31, 2023.
The following table sets forth a summary of changes in our working capital from December 31, 2024 to December 31, 2025: December 31, 2024 to December 31, 2025 December 31, December 31, Percentage 2025 2024 Change Change Working capital: Total current assets $ 8,363,307 $ 3,020,546 $ 5,342,761 176.9 % Total current liabilities 669,202 7,320,692 (6,651,490 ) (90.9 )% Working capital $ 7,694,105 $ (4,300,146 ) $ 11,994,251 (278.9 )% Our working capital increased by $11,994,251 to $7,694,105 as of December 31, 2025 from working capital deficiency of $4,300,146 as of December 31, 2024.
Our net loss from continuing operations was $7,848,380 for the year ended December 31, 2023, as compared to net loss from continuing operations of $5,664,379 for the year ended December 31, 2022, a decrease of $2,184,001, or 38.6%.
Net Loss from Continuing Operations Our net loss from continuing operations was $56,075,245 for the year ended December 31, 2025, as compared to net loss from continuing operations of $91,168,280 for the year ended December 31, 2024, a decrease of $35,093,035, or 38.5%.
Net cash flow used in operating activities for the year ended December 31, 2022 was $5,590,567, which primarily reflected our net loss from continuing operations of $5,664,379, and the changes in operating assets and liabilities primarily consisting of a decrease in prepaid expenses and other current assets of approximately $33,000, an increase in salary payable of approximately $108,000, an increase in accrued liabilities and other payables of approximately $242,000, offset by a decrease of operating lease liability of approximately $390,000, an increase in accounts receivable of approximately $78,000, a decrease in deferred revenue of approximately $117,000, an increase in security deposits of approximately $27,000, and adjusted for noncash items consisting of non-cash lease expense of approximately $368,000, depreciation of approximately $66,000, allowance for bad debt expense of $100,000, foreign currency transaction gain of approximately $147,000, and other noncash income of approximately $89,000.
Net cash flow provided by operating activities for the year ended December 31, 2024 was $722,853, which primarily reflected our net loss from continuing operations of $91,168,280, and the changes in operating assets and liabilities primarily consisting of a decrease in accounts receivable of approximately $92,000, a decrease in notes receivable of approximately $5,141,000, a decrease of operating lease liability of approximately $430,000, a decrease in accrued liabilities and other payables of approximately $1,735,000, a decrease in prepaid expenses and other current assets of approximately $105,000, an increase in salary payable of $29,000, and adjusted for non-cash items consisting of noncash lease expense $422,000, depreciation of approximately $47,000, allowance for credit losses on notes receivable of approximately $90,236,000, allowance for bad debt of approximately $165,000, accrued taxes of approximately $25,000, imputed interest expense of approximately $2,272,000 and interest income of approximately of $4,471,000.
During the year ended December 31, 2022, we received proceeds from issuance of stocks of approximately $1,750,000. Our capital requirements for the next twelve months primarily relate to working capital requirements, including salaries, fees related to third parties’ professional services, reduction of accrued liabilities, and the development of business opportunities.
Our capital requirements for the next twelve months primarily relate to working capital requirements, including salaries, fees related to third parties’ professional services, reduction of accrued liabilities, and the development of business opportunities. These uses of cash will depend on numerous factors including our future sales revenue and our ability to control costs.
The decrease was mainly attributable to the reduced employee training activities from outside in the year ended December 31, 2024 and 2023. ● For the year ended December 31, 2024, 2023 and 2022, bad debt expense was $164,800, nil, and $100,000, respectively.
The decrease was primarily due to the reduction of corporate travel expenditures of the Company’s management. ● For the year ended December 31, 2025, 2024 and 2023, bad debt expense was nil, $164,800, and nil, respectively.
The decrease was primarily attributable to MM Global’s suspension of the development of a retail broker dealer business line. ● For the year ended December 31, 2024, technical service fee decreased by $19,377, or 70.8%. For the year ended December 31, 2023, technical service fee decreased by $165,594, or 85.8%.
The increase was primarily attributable to the changes in short-term lease. ● For the year ended December 31, 2025, technical service fee decreased by $243, or 3.0%. For the year ended December 31, 2024, technical service fee decreased by $19,377, or 70.8%.
Selling and marketing expenses totaled $901,319 for the year ended December 31, 2023, as compared to $1,007,652 for the year ended December 31, 2022, a decrease of $106,333 or 10.6%. During the year ended December 31, 2023, the decrease was primarily attributable to the decreased need of marketing and investor relation management service providing by other parties.
Selling and Marketing Expenses Selling and marketing expenses totaled $342,816 for the year ended December 31, 2025, as compared to $715,976 for the year ended December 31, 2024, a decrease of $373,160 or 52.1%. During the year ended December 31, 2025, the decrease was primarily attributable to the decreased need of related expenses of investment banking business.
For the year ended December 31, 2023, other general and administrative expenses increased by $70,255, or 21.8%, compared to the year ended December 31, 2022.
For the year ended December 31, 2025, other general and administrative expenses increased by $53,912, or 19.4%, compared to the year ended December 31, 2024. The increase is mainly attributable to higher miscellaneous office expenses in 2025.
The increase in working capital deficiency was primarily attributable to an increase in cash and cash equivalents of approximately $1,110,000, a decrease in accounts receivables of approximately $92,000, a decrease in loan receivable of approximately $635,000, a decrease in deferred offering cost of approximately $113,000, a decrease in prepaid expenses and other current assets of approximately $272,000, a decrease in loan payable of approximately of $242,000, an increase in accrued liabilities and other payables of approximately $2,075,000.
The increase in working capital was primarily attributable to an increase in cash and cash equivalents of approximately $5,316,000, a decrease in salary payable of approximately $141,000, an increase in advance from customer of approximately of $100,000, a decrease in accrued liabilities and other payables of approximately $6,518,000.
For the year ended December 31, 2023, travel and entertainment expenses increased by $82,570, or 116.5%, as compared to the year ended December 31, 2022, which was mainly attributable to an increase in the employee’s travelling expenses of the Company’s investment banking department in 2023. ● For the year ended December 31, 2024 and 2023, Fund SPC service fees was nil, compared to $190,347 for the year ended December 31, 2022.
The increase was primarily attributable to the increase of NASDAQ annual listing fees. ● For the year ended December 31, 2025, travel and entertainment expenses increased by $111,133, or 170.0%, as compared to the year ended December 31, 2024. The increase was primarily due to the increase of travel expenses for management.
These uses of cash will depend on numerous factors including our future sales revenue and our ability to control costs. All funds received have been expended in the furtherance of growing the business.
All funds received have been expended in the furtherance of growing the business.
Payroll and related benefits totaled $2,512,781 for the year ended December 31, 2023, as compared to $2,609,849 for the year ended December 31, 2022, a decrease of $97,068 or 3.7%. As a result of the reduction of software development business, the Company decreased the level of spending on software development department.
Payroll and Related Benefits Payroll and related benefits totaled $1,909,154 for the year ended December 31, 2025, as compared to $2,082,886 for the year ended December 31, 2024, a decrease of $173,732 or 8.3%. The decrease in payroll and related benefits is primarily due to personnel changes of the Company.
Other expense, net, totaled $3,008,043 for the year ended December 31, 2023, as compared to other income of $247,239 for the year ended December 31, 2022, representing a net decrease of $3,255,282, which was mainly attributable to an increase in interest expense from convertible promissory notes of $4,200,000, a recovery of impairment on long-term investment of $439,111, and a recovery of bad debt allowance of $550,000.
Other expense, net, totaled $52,264,012 for the year ended December 31, 2025, as compared to other expense of $88,083,323 for the year ended December 31, 2024, a decrease of $35,819,311, which was mainly attributable to a decrease in interest income from notes receivable of $3,190,193 and increase in interest income from bank deposits of $283,952, increase in interest expense from the convertible promissory notes of $6,263,338, decrease in allowance for credit losses on notes receivable of $66,348,938, and increase in loss on sale of notes receivable of $21,292,430.
For the year ended December 31, 2023, advisory fees decreased by $83,333, or 100.0% compared to the prior year. The decrease was primarily attributable to a reduction in consulting services due to decreased commission business activities in 2023. ● For the year ended December 31, 2024, other miscellaneous items increased by $1,056, or 3.8%.
The decrease was primarily due to the decrease of annual audit fee. For the year ended December 31, 2024, audit fees decreased by $255,411, or 43.9%, as compared to the year ended December 31, 2023.
Removed
For the Year Ended December 31, 2023 2022 US$ % US$ % Net revenues: Consulting services 800,000 92.0 % - - % Software development and maintenance 24,098 2.8 % 676,049 63.0 % Placement agent services 45,837 5.2 % 372,677 34.7 % Market data services - - % 20,619 1.9 % Other revenue - - % 4,006 0.4 % Total net revenues 869,935 100.0 % 1,073,351 100.0 % For the years ended December 31, 2023 and 2022, we had revenue from Consulting service of $800,000 and nil, which relating to our financial advisory and investment banking business.
Added
Revenue The following table sets forth the components of our net revenues by amounts and percentages of our total net revenues for the periods presented: For the Year Ended December 31, 2025 2024 US$ % US$ % Net revenues: Placement agent services 807,500 100.0 % 1,860,000 99.6 % Other revenue - - % 8,333 0.4 % Total net revenues 807,500 100.0 % 1,868,333 100.0 % For the years ended December 31, 2025 and 2024, our fully owned subsidiary, MM Global, operates as a securities broker-dealer, generated Placement agent services revenue of $807,500 and $1,860,000, and other related revenue of nil and $8,333, for the years ended December 31, 2025 and 2024, respectively.
Removed
Our revenue from Software development and maintenance sales to our customers were $24,098 and $676,049 for the years ended December 31, 2023 and 2022, respectively.
Added
The decrease was primarily attributable to the stabilization of office expenditures at routine operational levels, in contrast to the costs incurred in 2023. 49 Loss from Operations As a result of the foregoing, for the year ended December 31, 2025, loss from operations amounted to $3,802,260, as compared to $3,060,432 for the year ended December 31, 2024, an increase of $741,828, or 24.2%.
Removed
As a result of business development and our acquisition of MMBD Trading, which has a fully owned subsidiary, MM Global, that engages in a single line of business as a securities broker-dealer, our Company also had Placement agent services revenue of $45,837 and $372,677, and other related revenue of nil and $4,006, for the years ended December 31, 2023 and 2022, respectively.
Added
The other provisions of the Notes remain unchanged. On September 19, 2025, the Company completed the conversion of $36,475,000 of outstanding balance of the note and 7,495,960 accrued interests payable into ordinary shares, at a conversion price of $0.591 per share, which represents 74,400,947 ordinary shares.
Removed
Gross profit was $842,267 for the year ended December 31, 2022, representing gross margin of 78.5%.
Removed
The decrease was primarily attributable to the fact that legal services incurred in 2023 were relatively routine in contrast to 2022 when the Company incurred additional legal expenses in connection with its F-3 Shelf Registration on Nasdaq . ● For the year ended December 31, 2024, financial consulting fees decreased by $25,030, or 13.1%.
Removed
For the year ended December 31, 2023, other miscellaneous items decreased by $26,974, or 49.4%.
Removed
The increase was primarily attributable to the increase in our office space resulting from our business needs. ● For the year ended December 31, 2024 and 2023, no ETC clearing cost for broker dealer incurred, as compared to $32,000 for the year ended December 31, 2022.
Removed
The decrease was primarily due to the reduction of corporate travel expenditures of the Company’s management.
Removed
The Company disposed its investment advisory business in 2023, resulting in the cessation of fund management operations. Consequently, no fund management services were rendered during 2024 and 2023. ● For the year ended December 31, 2024 and 2023, training fee was nil, compared to $27,981 for the year ended December 31, 2022.
Removed
For the year ended December 31, 2023, loss from operations amounted to $4,840,337, as compared to $5,911,618 for the year ended December 31, 2022, a decrease of $1,071,281, or 18.1%.
Removed
The Company’s current liabilities primarily consist of accrued interest expense on convertible promissory notes, shall be settled through issuance of shares. Furthermore, the Company has predominantly sourced capital via equity financing activities, to maintain operational liquidity.
Removed
During the year ended December 31, 2022, the Company made payments for purchases of property and equipment of approximately $4,000, made loans to third parties of $2,615,000, and made deposits for business acquisitions of $1,000,000, offset by collection of loan to third parties of $75,000. 51 Net cash flow used in financing activities was $241,750 for the year ended December 31, 2024, as compared to net cash flow provided by financing activities $89,666,750 and $1,750,140 for the years ended December 31, 2023 and 2022.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeCompensation Executive Compensation The following table shows the annual compensation paid by us for the years ended December 31, 2024, 2023 and 2022: Equity All Other Total Name/principal position Year Salary Compensation Compensation Paid Xiangdong Wen, CEO 2022 $ 305,101 $ - $ 8,974 $ 314,075 2023 $ 320,329 $ - $ 7,929 $ 328,258 2024 $ 186,594 $ - $ - $ 186,594 Min Kong, CFO 2022 $ 108,342 $ - $ 8,981 $ 117,323 2023 $ 108,310 $ - $ 8,934 $ 117,244 2024 $ 107,320 $ - $ - $ 107,320 Under Chinese law, we may only terminate employment agreements without cause and without penalty by providing notice of non-renewal one month prior to the date on which the employment agreement is scheduled to expire.
Biggest changeCompensation Executive Compensation The following table shows the annual compensation paid by us for the years ended December 31, 2025, 2024 and 2023: Equity All Other Total Name/principal position Year Salary Compensation Compensation Paid Xiangdong Wen, CEO 2023 $ 320,329 $ - $ 7,929 $ 328,258 2024 $ 186,594 $ - $ - $ 186,594 2025 $ 141,527 $ - $ - $ 141,527 Min Kong, CFO 2023 $ 108,310 $ - $ 8,934 $ 117,244 2024 $ 107,320 $ - $ - $ 107,320 2025 $ 107,541 $ - $ 8,989 $ 116,530 Under Chinese law, we may only terminate employment agreements without cause and without penalty by providing notice of non-renewal one month prior to the date on which the employment agreement is scheduled to expire.
Xiaofei Ren qualifies as an “audit committee financial expert” as such term is currently defined in Item 407(d)(5) of Regulation S-K and meets the financial sophistication requirements of the NASDAQ rules. 59 Compensation Committee The Compensation Committee will be responsible for, among other matters: ● reviewing and approving, or recommending to the Board of Directors to approve the compensation of our CEO and other executive officers and directors, ● reviewing key employee compensation goals, policies, plans and programs, ● administering incentive and equity-based compensation, ● reviewing and approving employment agreements and other similar arrangements between us and our executive officers, and ● appointing and overseeing any compensation consultants or advisors.
Xiaofei Ren qualifies as an “audit committee financial expert” as such term is currently defined in Item 407(d)(5) of Regulation S-K and meets the financial sophistication requirements of the NASDAQ rules. 61 Compensation Committee The Compensation Committee will be responsible for, among other matters: ● reviewing and approving, or recommending to the Board of Directors to approve the compensation of our CEO and other executive officers and directors, ● reviewing key employee compensation goals, policies, plans and programs, ● administering incentive and equity-based compensation, ● reviewing and approving employment agreements and other similar arrangements between us and our executive officers, and ● appointing and overseeing any compensation consultants or advisors.
The functions and powers of our Board include, among others: ● appointing officers and determining the term of office of the officers, ● authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable, ● exercising the borrowing powers of the company and mortgaging the property of the company, ● executing checks, promissory notes and other negotiable instruments on behalf of the company, and ● maintaining or registering a register of mortgages, charges or other encumbrances of the company. 58 Director Independence Our board has reviewed the independence of our directors, applying the NASDAQ independence standards.
The functions and powers of our Board include, among others: ● appointing officers and determining the term of office of the officers, ● authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable, ● exercising the borrowing powers of the company and mortgaging the property of the company, ● executing checks, promissory notes and other negotiable instruments on behalf of the company, and ● maintaining or registering a register of mortgages, charges or other encumbrances of the company. 60 Director Independence Our board has reviewed the independence of our directors, applying the NASDAQ independence standards.
We are, however, permitted to terminate an employee for cause without penalty to our company, where the employee has committed a crime or the employee’s actions or inactions have resulted in a material adverse effect to us. 57 Director Compensation All directors hold office until the next annual meeting of shareholders at which their respective class of directors is re-elected and until their successors have been duly elected and qualified.
We are, however, permitted to terminate an employee for cause without penalty to our company, where the employee has committed a crime or the employee’s actions or inactions have resulted in a material adverse effect to us. 59 Director Compensation All directors hold office until the next annual meeting of shareholders at which their respective class of directors is re-elected and until their successors have been duly elected and qualified.
We intend to disclose on our website any amendments to the Code of Business Conduct and Ethics and any waivers of the Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions. 60 Interested Transactions A director may vote, attend a Board of Directors meeting or sign a document on our behalf with respect to any contract or transaction in which he or she is interested.
We intend to disclose on our website any amendments to the Code of Business Conduct and Ethics and any waivers of the Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions. 62 Interested Transactions A director may vote, attend a Board of Directors meeting or sign a document on our behalf with respect to any contract or transaction in which he or she is interested.
Meng was member of the comprehensive brand management expert committee of China Association for Quality. 56 Dan Fu has served as the Marketing Department Manager at Beijing Yingding Education Technology Co., Ltd. from July 2015 to July 2016. Ms. Fu then served as Brand Department Manager at Baoding Huazhong Group from August 2016 to March 2021.
Meng was member of the comprehensive brand management expert committee of China Association for Quality. 58 Dan Fu has served as the Marketing Department Manager at Beijing Yingding Education Technology Co., Ltd. from July 2015 to July 2016. Ms. Fu then served as Brand Department Manager at Baoding Huazhong Group from August 2016 to March 2021.
Directors and senior management The following table sets forth our executive officers and directors, their ages and the positions held by them: Name Age Gender Position Xiangdong Wen (1) (2) 40 Male Chairman of the Board and Chief Executive Officer Min Kong (1) (4) 36 Male Chief Financial Officer, Director Qingshun Meng (1) (3) (5) (6) (7) 65 Male Independent Director Dan Fu (1) (4) (5) (6) (7) 38 Female Independent Director Xiaofei Ren (1) (3) (5) (6) (7) 53 Female Independent Director, Chairman of Audit Committee (1) The individual’s business address is c/o Gujia (Beijing) Technology Co., Ltd ., AF, 16/F, Block B, Jiacheng Plaza, 18 Xiaguangli, Chaoyang District, Beijing, 100027 China.
Directors and senior management The following table sets forth our executive officers and directors, their ages and the positions held by them: Name Age Gender Position Xiangdong Wen (1) (2) 41 Male Chairman of the Board and Chief Executive Officer Min Kong (1) (4) 37 Male Chief Financial Officer, Director Qingshun Meng (1) (3) (5) (6) (7) 66 Male Independent Director Dan Fu (1) (4) (5) (6) (7) 39 Female Independent Director Xiaofei Ren (1) (3) (5) (6) (7) 54 Female Independent Director, Chairman of Audit Committee (1) The individual’s business address is c/o Gujia (Beijing) Technology Co., Ltd ., AF, 16/F, Block B, Jiacheng Plaza, 18 Xiaguangli, Chaoyang District, Beijing, 100027 China.
We consider our relations with our employees to be good. 2022 2023 2024 Number of Employees 57 42 34 E. Share Ownership See Item 7 below. 61
We consider our relations with our employees to be good. 2023 2024 2025 Number of Employees 42 34 31 E. Share Ownership See Item 7 below. 63

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeApplicable percentage ownership is based on 25,186,864 common shares outstanding as of April 9, 2025. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o MM Future Technology Limited., Room 2302, 23rd Floor, 308 Central Des Voeux, 308 Des Voeux Road Central, Sheung Wan, Hong Kong.
Biggest changeApplicable percentage ownership is based on 99,587,811 common shares outstanding as of April 2, 2026. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o MM Future Technology Limited. Room 2302, 23rd Floor, 308 Des Voeux Road Central, Sheung Wan, Hong Kong.
Beneficial Ownership Name of Beneficial Owner Common Shares Percentage Xiangdong Wen * (1) 40,950 0.2 % Min Kong * 4,375 0.0 % Qingshun Meng * - ** Dan Fu * - ** Xiaofei Ren * - ** All officers and directors as a group (5 persons) 45,325 0.2 % 5% or greater beneficial owners - ** % 5% or greater beneficial owners as a group - ** % * Officer and/or director of our company ** Less than 1% (1) Represent (i) 38,700 shares owned by Mr.
Beneficial Ownership Name of Beneficial Owner Common Shares Percentage Xiangdong Wen * (1) 40,950 0.0 % Min Kong * 4,375 0.0 % Qingshun Meng * - ** Dan Fu * - ** Xiaofei Ren * - ** All officers and directors as a group (5 persons) 45,325 0.0 % 5% or greater beneficial owners - ** % 5% or greater beneficial owners as a group - ** % * Officer and/or director of our company ** Less than 1% (1) Represent (i) 38,700 shares owned by Mr.
Related Party Transactions Due to Related Parties As of December 31, 2024 and 2023, balances of due to related parties were $0. Shareholders’ Contribution During the years ended December 31, 2024, 2023 and 2022, there were no shareholder contributions to the Company for working capital needs. C. Interests of Experts and Counsel Not required.
Related Party Transactions Due to Related Parties As of December 31, 2025 and 2024, balances of due to related parties were $0. Shareholders’ Contribution During the years ended December 31, 2025, 2024 and 2023, there were no shareholder contributions to the Company for working capital needs. C. Interests of Experts and Counsel Not required.
MMBD Information Technology Limited, a Hong Kong corporation with the mailing address of Rm 18D 27/F Ho King Comm. Ctr., 2-16 Fayuen St. Mongkok, Hong Kong 999077 China. 62 As of April 9, 2025, there were 45 registered holders of record of our common shares, based upon information received from our stock transfer agent.
MMBD Information Technology Limited, a Hong Kong corporation with the mailing address of Rm 18D 27/F Ho King Comm. Ctr., 2-16 Fayuen St. Mongkok, Hong Kong 999077 China. 64 As of April 2, 2026, there were 62 registered holders of record of our common shares, based upon information received from our stock transfer agent.
Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to subscribe for within 60 days of April 30, 2025.
Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to subscribe for within 60 days of April 2, 2026.