GD Culture Group Reports $14.1 Million Net Loss for Fiscal Year 2024 Amid Restructuring Efforts

GD Culture Group Limited, a Nevada-based company, reported a net loss of approximately $14.1 million for the fiscal year ending December 31, 2024, a slight decrease of 1.6% from the previous year's loss of $14.3 million. The company's revenue remained minimal, with no significant transactions recorded in its subsidiaries, reflecting a strategic shift in operations. The company’s total operating expenses increased by 18.1% to approximately $14.2 million, primarily due to a notable impairment of intangible assets amounting to $2.8 million and a provision for credit losses of $3.2 million. This contrasts with the previous year, where the company did not report such expenses.

In terms of operational changes, GD Culture Group has undergone significant restructuring, including the termination of its Variable Interest Entity (VIE) structures with Highlight Media and other subsidiaries, which were completed in September 2023. The company now operates without a VIE structure, which it believes reduces regulatory risks associated with its operations in China. Additionally, the company has focused on its two main business segments: AI-driven digital human creation and customization, and live streaming e-commerce, with plans to enhance its offerings on platforms like TikTok.

The company has also made strategic investments, including acquiring a 73.33% equity interest in Shanghai Xianzhui, a joint venture established for social media marketing. This acquisition is part of GD Culture Group's broader strategy to leverage AI technologies in digital human creation and enhance its e-commerce capabilities. The company has also engaged in several capital-raising activities, including a registered direct offering in March 2024, which generated approximately $910,000 for working capital purposes.

As of December 31, 2024, GD Culture Group reported cash and cash equivalents of $22,538, a significant decrease from $5.2 million in the previous year. The company’s working capital was approximately $1.4 million, indicating a tight liquidity position. The company has relied on loans from its CEO and other shareholders to support its operations, highlighting the need for additional capital to sustain its business model. The management has expressed intentions to continue seeking financing through equity and debt offerings to support future growth.

Looking ahead, GD Culture Group faces challenges related to market competition, particularly in the rapidly evolving e-commerce and digital content sectors. The company acknowledges the need to attract and retain users on platforms like TikTok to drive revenue growth. Additionally, the regulatory landscape in China remains a concern, as the company must navigate potential changes in laws that could impact its operations and market access. The management has indicated a commitment to enhancing its internal controls and compliance measures to address identified weaknesses, particularly in U.S. GAAP expertise, as it continues to adapt to the evolving business environment.