Greenpro Capital Corp. 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our results of operations and financial condition for fiscal years ended December 31, 2024, and 2023, should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Annual Report. Some of the information contained in this management’s discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks, uncertainties, and assumptions. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Annual Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in this Annual Report. Company Overview Greenpro Capital Corp. (the “Company” or “Greenpro”), was incorporated in the State of Nevada on July 19, 2013. We provide cross-border business solutions and accounting outsourcing services to small and medium-sized businesses located in Asia, with an initial focus on Hong Kong, China and Malaysia. Greenpro provides a range of services as a package solution (the “Package Solution”) to our clients, and we believe that our clients can reduce their business costs and improve their revenues. In addition to our business solution services, we also operate a venture capital business through Greenpro Venture Capital Limited, an Anguilla corporation. One of our venture capital business segments focuses on (1) establishing a business incubator for start-up and high-growth companies to support such companies during critical growth periods, which will include education and support services, and (2) searching the investment opportunities in selected start-up and high-growth companies, which may generate significant returns to the Company. Our venture capital business focuses on companies located in Southeast Asia and East Asia, including Hong Kong, China, Malaysia, Thailand, and Singapore. Another venture capital business segment focuses on rental activities of commercial properties and the sale of investment properties. One of our Labuan subsidiaries, Green-X Corp. (“Green-X”), was approved and compliant with all the requirements by Labuan Financial Services Authority (Lembaga Perkhidmatan Kewangan Labuan) in 2022 to establish a platform under Part IX of the Labuan Financial Services and Securities Act 2010 (LFSSA), pursuant to Section 134 of the LFSSA. Green-X is a platform operator licensed under the LFSSA whereby security token issuers (“Issuers”) offer their security tokens for subscription and trading by investors (“Investors”) through the Green-X digital asset exchange (“Green-X DAX”) platform. ISRA International Consulting Sdn. Bhd. (“ISRA Consulting/Shariah Adviser of the platform”) is responsible for advising on and ensuring end-to-end Shariah compliance for the Green-X DAX platform’s operations. ISRA Consulting issued a Shariah pronouncement for the Green-X DAX platform (the “Pronouncement”) on June 22, 2023. The Pronouncement was valid for one (1) renewable year from the signing date it was born. Following the expiration of the Pronouncement, ISRA Consulting conducted a Shariah review exercise in preparation for its renewal. The Shariah review followed a specific methodology and serves as the basis for the renewal decision. Pursuant to the Shariah review, the Green-X DAX platform’s operations and related documents complied with the principles of Shariah, the Pronouncement was renewed on September 20, 2024. Results of Operations For information regarding our controls and procedures, see Part–II, Item 9A - Controls and Procedures, of this Annual Report. During the years ended December 31, 2024, and 2023, we principally operated in three regions: Hong Kong, China, and Malaysia. We derived revenues from the provision of business services, digital platform services and trading of digital assets, and leasing or trading of our commercial properties, respectively. A table further describing our revenues and the cost of revenues is set forth below: Year ended December 31, 2024 2023 REVENUES: Service revenue (including $364,336 and $1,425,577 of service revenue from related parties for the years ended December 31, 2024, and 2023, respectively) $ 3,091,903 $ 3,379,596 Digital revenue (including $21,000 of digital revenue from related parties for the year ended December 31, 2024) 327,802 - Rental revenue 76,700 98,068 Total revenues 3,496,405 3,477,664 COST OF REVENUES: Cost of service revenue (including $10,934 and $23,280 of cost of revenue to related parties for the years ended December 31, 2024, and 2023, respectively) (355,120 ) (534,965 ) Cost of digital revenue (48,495 ) - Cost of rental revenue (22,825 ) (36,613 ) Total cost of revenues (426,440 ) (571,578 ) GROSS PROFIT 3,069,965 2,906,086 OPERATING EXPENSES: General and administrative (including $149,817 and $122,880 of general and administrative expenses to related parties for the years ended December 31, 2024, and 2023, respectively) (4,039,243 ) (4,409,264 ) LOSS FROM OPERATIONS (969,278 ) (1,503,178 ) 62 Comparison of the years ended December 31, 2024, and 2023 Total Revenues Total revenue was $3,496,405 and $3,477,664 for the years ended December 31, 2024, and 2023, respectively. An increase of revenue was mainly due to the revenue generated from our digital platform and trading of digital assets of $327,802 during the year ended December 31, 2024. We expect revenue from our new business segment to steadily improve as we are expanding into the digital business. Service Business Revenue Revenue from the provision of business services was $3,091,903 and $3,379,596 for the years ended December 31, 2024, and 2023, respectively. It was derived principally from the provision of business consulting and advisory services as well as company secretarial, accounting, and financial analysis services. We expect revenue from our business services segment to recovery slightly as we are exploring new markets. Digital Revenue Revenue from digital platforms and trading digital assets was $327,802 and $0 for the years ended December 31, 2024, and 2023, respectively. It was derived from the digital platform service of $195,881 and the trading of digital assets of $131,921, respectively, during 2024. Real Estate Business Rental Revenue Revenue from rentals was $76,700 and $98,068 for the years ended December 31, 2024, and 2023, respectively. It was derived principally from leasing properties in Hong Kong and Malaysia. We expect our rental income will be stable. Sale of Properties There was no revenue generated from the sale of real estate properties for the year ended December 31, 2024, and 2023, respectively. As opportunities permit, management expects the Company will continuously purchase and sell commercial properties. Accordingly, we expect revenue and costs attributable to the sale of properties to fluctuate on a going forward basis. Total Operating Costs and Expenses Total operating costs and expenses were $4,465,683 and $4,980,842 for the years ended December 31, 2024, and 2023, respectively. They consist of cost-of-service revenue, cost of digital revenue, cost of rental revenue and general and administrative expenses “G&A”. Loss from operations was $969,278 and $1,503,178 for the years ended December 31, 2024, and 2023, respectively. The decrease in loss from operations was mainly due to an increase in gross profit from our digital business of $279,307 and a decrease in G&A expenses of $370,021 for the year ended December 31, 2024. Cost of business services revenue The cost of revenue for the provision of business services was $355,120 and $534,965 for the years ended December 31, 2024, and 2023, respectively. It primarily consists of employee compensation and related payroll benefits, company formation costs and other professional fees directly attributable to costs related to the services rendered. 63 Cost of digital revenue Cost of revenue for the provision of digital platform services and trading of digital assets was $48,495 and $0 for the years ended December 31, 2024, and 2023, respectively. It primarily consists of the cost of technical advisory and IT support to blockchain-based services directly attributable to the cost of digital platforms and digital assets. Cost of rental revenue Cost of rental revenue was $22,825 and $36,613 for the years ended December 31, 2024, and 2023, respectively. It includes the costs associated with governmental charges, repairs and maintenance, property management fees and insurance, depreciation, and other related administrative costs. Utility expenses are borne and paid directly by individual tenants. A decrease in the cost of rental revenue was mainly due to 40% of FWIL’s real estate properties being distributed to its NCI in April 2024. As a result, fewer property units were available for leasing and lower costs were incurred. Cost of real estate properties sold During the years ended December 31, 2024, and 2023, no real estate property was sold, and hence no cost was incurred. General and Administrative Expenses General and administrative (“G&A”) expenses were $4,039,243 and $4,409,264 for the years ended December 31, 2024, and 2023, respectively. In 2024, our G&A expenses primarily consisted of employees’ salaries and allowances of $1,492,531, directors’ salaries and compensation of $720,658, advertising and marketing of $262,326, consulting fee of $141,512, provision for credit losses of $90,223, rent and rates of $114,208, and audit, legal, and other professional fees of $447,342. In 2023, our G&A expenses primarily consisted of employees’ salaries and allowances of $1,409,361, directors’ salaries and compensation of $702,685, advertising and marketing of $189,536, consulting fee of $163,783, provision for credit losses of $584,919, rent and rates of $114,401, and audit, legal, and other professional fees of $497,919. The decreased G&A expense of $370,021 was mainly derived from the decrease of provision for credit losses of $494,696 offset by the increase of employees’ salaries and allowances of $83,170 during the same period from 2023 to 2024. We expect our G&A expenses will slightly increase as we are developing our digital platform businesses through our Labuan subsidiary, Green-X Corp. and digital banking businesses through Global Business Hub Limited, a newly acquired subsidiary in Labuan. Other Income or Expenses Net other income was $247,890 and $2,559,706 for the year ended December 31, 2024, and 2023, respectively. In 2024, net other income mainly consisted of other income from gain on disposal of investments of $324,917, gain on disposal of real estate held for investment of $21,634 and interest income of $19,161, while other expenses mainly consisted of impairment of other investments of $87,425 and impairment of goodwill of $82,561. In 2023, other income mainly consisted of a reversal of impairment of the other investment of $6,882,000, a reversal of write-off notes receivable of $600,000 and interest income of $41,401, while other expenses mainly consisted of impairment of other investments of $4,982,000 and impairment of the other receivable of $60,000. Net Loss Attributable to Noncontrolling Interests The Company recorded a net loss attributable to noncontrolling interest in the consolidated statements of operations for a non-controlling interest (the “NCI”) of a consolidated subsidiary, Forward Win International Limited (“FWIL”), which is principally engaged in trading and leasing of properties in Hong Kong. The Company has been a 60% shareholder of FWIL since inception. On April 15, 2024, the Company acquired the remaining 40% shares of FWIL from the NCI by distribution of 40% of FWIL’s real estate properties for consideration of its acquisition and settlement of loan from the NCI (the “Acquisition”). After the Acquisition, FWIL becomes the wholly owned subsidiary of the Company and no profit or loss attributable to the NCI thereafter. The Company recorded net losses attributable to noncontrolling interests of $10,543 and $23,886 for the years ended December 31, 2024, and 2023, respectively. The amount of $10,543 represents the share of net loss attributable to the NCI prior to the Acquisition. During 2024 and 2023, the net loss attributable to noncontrolling interests was primarily due to a net loss incurred by FWIL and its share of loss allocated to the noncontrolling interests. Net Income (Loss) Net loss was $725,827 for the year ended December 31, 2024, while net income was $1,049,699 for the year ended December 31, 2023. In 2023, net income was mainly derived from a reversal of impairment of other investment of $6,882,000 and a reversal of write-off notes receivable of $600,000, but no such reversals occurred during 2024. There were no seasonal aspects that had a material effect on the financial condition or results of operations of the Company. Other than as disclosed elsewhere in this Annual Report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2024 that are reasonably likely to have a material adverse effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions. 64 Off-Balance Sheet Arrangements We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of December 31, 2024. Contractual Obligations As of December 31, 2024, one of our subsidiaries, leases one office in Hong Kong under a non-cancellable operating lease, with a term of two years commencing from March 15, 2023, to March 14, 2025. On December 31, 2024, the future minimum rental payment under this lease in the aggregate is approximately $20,041 and is due as follows: 2025: $20,041. In June 2023, one of our subsidiaries in Malaysia purchased a motor vehicle and the majority amount of the purchase, $18,957 was funded by Maybank Islamic under a finance lease agreement with a term of five years commencing from June 3, 2023, to June 2, 2028. As of December 31, 2024, the future minimum lease payments under this lease in the aggregate are approximately $15,745 and are due as follows: 2025: $4,609, 2026: $4,609 and 2027 and thereafter: $6,527. Related Party Transactions For the years ended December 31, 2024, and 2023, related party service revenue totaled $364,336 and $1,425,577, respectively. During 2024, related party service revenue principally includes service revenue generated from Celmonze Wellness Corporation (“Celmonze”) of $149,459 and REBLOOD Biotech Corp. (“REBLOOD”) of $66,245, in aggregate representing approximately 59% of the related party service revenue and 7% of the service revenue for the year ended December 31, 2024, respectively. During 2023, related party service revenue principally includes the service revenue generated from Angkasa-X Holdings Corp. (“Angkasa-X”) of $354,116, catTHIS Holdings Corp. (“catTHIS”) of $326,195, Leader Capital Holdings Corp. of $258,250, Simson Wellness Tech. Corp. of $191,218 and Hypercube Inc. of $140,000, in aggregate representing approximately 89% of the related party service revenue and 38% of the service revenue for the year ended December 31, 2023, respectively. For the year ended December 31, 2024, digital revenue from related parties totaled $21,000. During 2024, related party digital revenue principally includes revenue generated from our Chief Executive Officer, Lee, Chong Kuang (“Mr. Lee”), of $20,000, representing approximately 95% of revenue from the related party digital revenue for the year ended December 31, 2024. For the years ended December 31, 2024, and 2023, cost of service revenue to related parties was $10,934 and $23,280, respectively. During 2024, related party cost of service revenue includes cost of services paid to Falcon Management Limited (“FML”) of $5,054, Falcon Consulting Limited (“FCL”) of $2,130 and Loke Yu (“Jimmy”) of $3,750, respectively. FML is wholly owned by our Chief Financial Officer, Loke, Che Chan Gilbert (“Mr. Loke”), FCL is wholly owned by Mr. Loke’s spouse and Jimmy is Mr. Loke’s brother. During 2023, related party cost of service revenue includes cost of revenue paid to SEATech Ventures Corp. (“SEATech”) of $23,280. For the years ended December 31, 2024, and 2023, related party G&A expenses totaled $149,817 and $122,880, respectively. During 2024, related party general and administrative (“G&A”) expenses include consulting fees paid to Ms. Yap Pei Ling (“Ms. Yap”), spouse of our Chief Executive Officer, Mr. Lee of $14,996, Ms. Yap’s wholly owned company, Bright Interlink Sdn. Bhd. (“BISB”) of $13,814 and Mr. Loke’s company, FCL of $40,293, and management fees paid to Greenpro Global Capital Village Sdn. Bhd. (“GGCVSB”) of $80,714, a Malaysian company jointly owned by Mr. Lee and Mr. Loke. During 2023, related party G&A expenses include computer expenses paid to First Bullion Holdings Inc. (“FBHI”) of $21,780, consulting fees paid to Ms. Yap of $37,799 and her wholly owned company, BISB, of $15,762, management fees paid to GGCVSB of $44,475 and marketing expenses paid to catTHIS of $3,064. 65 For the years ended December 31, 2024, and 2023, related party other income was $47,635 and $47,609, respectively. During 2024, related party other income includes other income generated from Acorn Finance Limited (“Acorn”) of $11,895, Greenpro Trust Limited (“GTL”) of $35,685, and SEATech Ventures Corp. (“SEATech”) of $55. During 2023, the related party other income includes other income generated from Acorn of $8,862, GTL of $5,747 and SEATech of $33,000. For the year ended December 31, 2024, related party interest income was $5,073. During 2024, the related-party interest income includes interest income generated from GTL of $962 and GTL’s subsidiary, Greenpro Custodian Service Limited of $4,111. For the year ended December 31, 2024, gain on disposal of related party investments was $324,917. During 2024, gain on disposal of related party investments includes the gain from the sale of common stock of Agape ATP Corporation (“Agape”) of $307,597 and MU Global Holding Limited (“MUGH”) of $17,320, respectively. Impairment of related party investments was $87,425 and $4,982,000 for the years ended December 31, 2024, and 2023, respectively. During 2024, impairment of related party investments includes impairment from investment of New Business Media Sdn. Bhd. (“NBMSB”) of $82,000, Angkasa-X of $2,800, Global Leaders Corporation of $900, ACT Wealth Academy Inc. of $600, Best2bid Technology Corp. of $550, Ata Global Inc. of $225, catTHIS of $200 and Jocom Holdings Corp. of $150, respectively. During 2023, impairment of related party investments includes impairment from investment of Millennium Fine Art Inc. of $4,000,000, Ata Plus Sdn. Bhd. (“APSB”) of $736,000 and First Bullion Holdings Inc. of $246,000, respectively. Loss on disposal of a related party investment, REBLOOD Biotech Corp. was $100 for the year ended December 31, 2024. Impairment of other receivables from a related party, Greenpro KSP Holding Group Company Limited was $60,000 for the year ended December 31, 2023. A reversal of impairment of related party investment, Innovest Energy Fund $6,882,000 for the year ended December 31, 2023. As of December 31, 2024, the net accounts receivable from a related party, was due from Mr. Loke of $41. Amounts due from related parties were $954,184 and $750,860 as of December 31, 2024, and 2023, respectively. Amounts due to related parties were $57,497 and $389,274 as of December 31, 2024, and 2023, respectively. As of December 31, 2024, amounts due from related parties mainly include amounts due from GGCVSB of $772,311, GTL of $90,207 and FBHI of $90,000, while amounts due to related parties mainly include Mr. Loke’s wholly owned company, Falcon Certified Public Accountants Limited (“FCPA”) of $22,820 and Mr. Lee of $20,677, respectively. As of December 31, 2023, amounts due from related parties mainly include the amount due from GGCVSB of $723,889, while amounts due to related parties mainly include the amount due to the noncontrolling interests of our 60% ownership subsidiary, Forward Win International Limited of $336,636. 66 Deferred costs of revenue to related party were $18,750 as of December 31, 2024, while deferred revenue from related party was $157,500 as of December 31, 2023, respectively. As of December 31, 2024, deferred costs of revenue to related party were $11,250 and 7,500 associated with Jimmy and FML, respectively. As of December 31, 2023, deferred revenue from related parties includes APSB of $15,800, REBLOOD of $60,000 and Celmonze of $81,700, respectively. As of December 31, 2024, and 2023, other investments in related parties were $12,073 and $100,106, respectively. As of December 31, 2024, related party investments mainly include investment in GTL of $11,981. As of December 31, 2023, related party investments mainly include investments in NBMSB of $82,000 and GTL of $11,981, respectively. Our related parties are mainly those companies in which Greenpro Venture Capital Limited or Greenpro Resources Limited owns a certain number of shares or a certain percentage of interest in those companies, or the Company can exercise significant influence over those companies’ financial and operating policy decisions. Some of the related parties are either controlled by or under the common control of Mr. Loke, Che Chan Gilbert or Mr. Lee, Chong Kuang, executive officers and directors of the Company. Critical Accounting Policies and Estimates Use of estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, the allowance for credit losses, impairment analysis of real estate assets and other long-term assets including goodwill, valuation allowance on deferred income taxes, and the accrual of potential liabilities. Actual results may differ from these estimates. Revenue recognition The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts . ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. The Company’s revenue consists of revenue from providing business consulting and corporate advisory services (“service revenue”), revenue from the provision of digital platforms and trading of digital assets (“digital revenue”), revenue from the rental of real estate properties and revenue from the sale of real estate properties. Impairment of long-lived assets Long-lived assets primarily include real estate held for investment, real estate held for use, furniture and equipment, and intangible assets. In accordance with the provisions of ASC 360, the Company generally conducts its annual impairment evaluation to its long-lived assets, usually in the fourth quarter of each year, or more frequently if indicators of impairment exist, such as a significant sustained change in the business climate. The recoverability of long-lived assets is measured at the reporting unit level. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and the carrying amount of the asset. Recent accounting pronouncements Refer to Note 1 in the accompanying consolidated financial statements. 67 Liquidity and Capital Resources Our cash balance on December 31, 2024, was $1,124,818, as compared to $2,223,197 on December 31, 2023, a decrease of $1,098,379. We estimate the Company has sufficient cash available to meet its anticipated working capital for the next twelve months. The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the year ended December 31, 2024, the Company recorded a net loss of $725,827 and net cash used in operations of $1,360,454, and as of December 31, 2024, the Company incurred accumulated deficit of $37,264,379. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s financial statements on December 31, 2024, has expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its major shareholders. Management believes the existing shareholders or external financing will provide additional cash to meet the Company’s obligations as they become due. Despite the amount of funds that the Company has raised, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company can obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its shareholders, in the case of equity financing. Operating activities Net cash used in operating activities was $1,360,454 and $1,594,718 for the years ended December 31, 2024, and 2023, respectively. The net cash used in operating activities in 2024 primarily consisted of a net loss of $725,827, a gain on disposal of other investments of $324,917, a decrease in deferred revenue of $862,404, an increase in digital assets of $192,398 and offset by an increase in accounts payable and accrued liabilities of $250,412 and a decrease in prepaids and other current assets of $179,857, while the net cash used in operating activities in 2023 was mainly from a reversal of impairment of other investment of $6,882,000, a reversal of write-off notes receivable of $600,000 and a decrease in deferred revenue of $758,840 and offset by net income for the year of $1,049,699, impairment of other investments of $4,982,000, impairment of other receivable of $60,000 and provision for credit losses of $584,919. Non-cash net expenses totaled $159,679 and non-cash net income totaled $1,617,347 and for the years ended December 31, 2024, and 2023, respectively. Non-cash expenses, net was comprised of non-cash expenses from depreciation and amortization of $245,921, provision for credit losses of $90,223, impairment of other investments of $87,425, impairment of goodwill of $82,561 and loss of disposal of investment of $100 and offset by non-cash income from gain on disposal of investments of $324,917 and gain on disposal of real estate held for investment of $21,634 for the year ended December 31, 2024. Non-cash income, net was composed of non-cash income of reversal of investment impairment of $6,882,000, reversal of write-off notes receivable of $600,000 and other gains of $154 and offset by non-cash expenses of depreciation and amortization of $237,888, provision of credit losses of $584,919, impairment of other investments of $4,982,000, impairment of other receivable of $60,000 for the year ended December 31, 2023. The Company incurred operating losses and had net cash used in operating activities during the past two years. Investing activities Net cash provided by investing activities was $601,277 for the year ended December 31, 2024, as compared to net cash used in investing activities of $94,640 for the year ended December 31, 2023. During 2024, cash provided by investing activities was composed of the proceeds from the disposal of other investments of $322,820, proceeds from real estate held for investment of $267,985 and proceeds from real estate held for sale of $15,632, offset by the purchase of equipment of $5,068 and purchase of other investment of $92. During 2023, cash used in investing was composed of the purchase of equipment of $85,069. Financing activities Net cash used in financing activities was $208,768 and $5,968 for the year ended December 31, 2024, and 2023 respectively. During 2024, net cash used in financing activities was mainly due to the advances to related parties of $205,321. During 2023, net cash used in financing activities was mainly due to the advances to related parties of $604,066, offset by the collection of notes receivable of $600,000. During 2024 and 2023, the Company did not issue any shares of its Common Stock, and as of December 31, 2024, there were 7,575,813 shares of Common Stock issued and outstanding. 68 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements required by this item are located following the signature page of this Annual Report. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.