Baosheng Media Group Holdings Ltd

Baosheng Media Group Holdings Ltd. is an online marketing solution provider based in China, dedicated to assisting advertiser clients in managing their online marketing activities to achieve business goals ¹. The company advises on online marketing strategies, offers value-added advertising optimization services, and facilitates the deployment of various online ad forms, including search ads, in-feed ads, mobile app ads, and social media marketing ads ¹. Concurrently, Baosheng Media Group Holdings Ltd. acts as an authorized agency for popular online media, such as Super Huichuan, helping them procure advertisers to purchase ad inventory and facilitating ad deployment on their advertising channels ¹. The company's business model revolves around serving both advertisers and media, connecting them to enable effective and economical online marketing activities for advertisers, and assisting media in monetizing their ad inventory by identifying advertisers and facilitating transactions ¹.

The company generates revenue primarily through two models: rebates and incentives offered by media (or their authorized agencies, referred to as publishers) for procuring advertisers, and net fees earned from advertisers when the company purchases ad inventory on their behalf and provides advertising services ¹. The rebates and incentives from publishers are typically calculated with reference to the advertising spend of advertisers and are closely correlated to the company's gross billing ¹. Net fees from advertisers represent the gross fees charged to advertisers, net of media costs and other advertising service procurement costs ¹.

Baosheng Media Group Holdings Ltd. offers two main categories of advertising services: SEM services and Non-SEM services ¹. SEM services encompass the deployment of ranked search ads and other display search ads provided by search engine operators ¹. Non-SEM services include social media marketing, in-feed advertising, and mobile app advertising, with ads deployed on platforms such as social media, short-video platforms, news portals, and mobile apps in various formats like in-feed ads, banner ads, button ads, interstitial ads, and social media posts ¹. The company did not provide mobile app ad deployment services during the fiscal years ended December 31, 2023, 2024, and 2025 ¹.

For the fiscal year ended December 31, 2025, total revenue decreased by $55,094 ⁴, or 8.8% ⁵, to $568,993 ⁶ from $624,087 ⁷ in 2024 ⁴. Rebates and incentives from publishers increased by $86,230 ⁸, or 21.4% ⁹, to $488,692 ¹⁰ in 2025 from $402,462 ¹¹ in 2024 ⁴. Conversely, net fees from advertisers decreased by $141,324 ¹², or 63.8% ¹³, to $80,301 ¹⁴ in 2025 from $221,625 ¹⁵ in 2024 ⁴. The gross profit for 2025 was $71,383 ¹⁶, a decrease of $119,216 ¹⁷, or 62.5% ¹⁸, from $190,599 ¹⁹ in 2024 ⁴. Operating expenses totaled $10,309,682 ²⁰ in 2025, a decrease of $16,627,258 ²¹, or 61.7% ²², from $26,936,940 ²³ in 2024 ⁴. This led to a loss from operations of $10,238,299 ²⁴ in 2025, an improvement of $16,508,042 ²⁵, or 61.7% ²⁶, compared to a loss of $26,746,341 ²⁷ in 2024 ⁴. The net loss for 2025 was $12,021,649 ²⁸, an improvement of $14,849,585 ²⁹, or 55.3% ³⁰, from a net loss of $26,871,234 ³¹ in 2024 ⁴. Net cash used in operating activities was $2,260,994 ³² in 2025, compared to $1,520,419 ³³ in 2024 ³⁴. Cash and cash equivalents at the end of 2025 were $1,265,845 ³⁵, down from $1,480,528 ³⁶ in 2024 ³⁴. Total current liabilities were $9.1 million ³⁷ as of December 31, 2025 ³⁷.

Year-over-year, SEM services revenue increased by $22,083 ³⁸, or 102.5% ³⁹, to $43,619 ⁴⁰ in 2025 from $21,536 ⁴¹ in 2024, despite a decrease in gross billings from SEM services due to reduced cooperation with publishers ⁴. Non-SEM services revenue decreased by $77,177 ⁴², or 12.8% ⁴³, to $525,374 ⁴⁴ in 2025 from $602,551 ⁴⁵ in 2024, primarily due to an increase in media costs incurred in net fees from advertisers ⁴. The company's gross accounts receivable decreased from $29.4 million ⁴⁶ as of December 31, 2024, to $4.7 million ⁴⁷ as of December 31, 2025 ¹. This decrease was attributed to writing off accounts receivable due to remote collection ¹.

During 2025, Baosheng Hong Kong established Beijing Zhiding Baosheng Network Technology Co. Ltd. on March 4, 2025, to provide information consulting and marketing planning services ¹. On April 24, 2025, Beijing Zhiding established Yuansheng Meiyan Healthcare Service (Hainan) Co., Ltd. for similar services ¹. Kashi Baosheng was dissolved in May 2025 ¹. On July 18, 2025, Beijing Xunhuo entered into a Sale and Purchase Agreement to sell certain real property for RMB 7,102,827.56 (approximately US$989,583) ⁴⁸, with RMB 5,600,000 paid in cash and the remainder offset against lease payments under a three-year sale-and-leaseback arrangement ¹. In August 2025, Baosheng Network drew down approximately $0.4 million (RMB 3.0 million) ⁴⁹ from a two-year revolving credit facility with China Merchant Bank, which was fully repaid in December 2025 ¹. In September 2025, Baosheng Network borrowed approximately $0.4 million (RMB 3.0 million) ⁵⁰ from Bank of China, repayable by August 31, 2026 ¹. In November 2025, Beijing Xunhuo borrowed approximately $0.3 million (RMB 2.1 million) ⁵¹ from Bank of Beijing, repayable by November 2026 ¹.

The company plans to support its future operations primarily through cash generated from operations, existing cash on hand, borrowings from third parties and banks, and proceeds from equity instrument financing as needed ³⁷. The company expects to renew its one-year bank borrowings upon maturity ³⁷. Management assesses that current working capital is sufficient to meet its obligations for the next 12 months from the issuance date of this report ³⁷.

A significant growth area for the company is the continued rapid growth of the online marketing industry, driven by further internet penetration, particularly on mobile devices ⁴. The company believes it is well-positioned to capitalize on this trend due to its experience and insights in the online advertising industry ⁴. The company's strategy includes expanding its advertiser and media bases and exploring new market opportunities ¹.

The company's operational outlook indicates a focus on managing its growth effectively, which will involve increasing the scale and diversity of its operations ¹. This growth is expected to place demands on managerial, operational, and financial resources ¹. The company must continue to hire, train, and effectively manage new employees, and ensure the consistency of its service offerings to maintain its market reputation ¹. The company's future plans also involve addressing evolving industry standards and government regulations, particularly in content dissemination ¹.

Planned capital allocation includes funding future capital expenditures with existing cash balances and cash flow from operating activities ³⁷. Capital expenditures were $3,988 ⁵² in 2025, $30,108 ⁵³ in 2024, and $1.5 million ⁵⁴ in 2023 ³⁷. The company will continue to make capital expenditures to support the expected growth of its business ³⁷. In April 2026, Beijing Xunhuo transferred its 42.8571% ⁵⁵ partnership interest in Guangzhou Shanxingzhe Technology Investment LLP to a third-party buyer for cash consideration of RMB15,000,000 (approximately US$2,179,408.94) ⁵⁶, with full receipt expected before June 30, 2026 ³⁷.

The company has identified structural headwinds and execution risks related to its growth plan. These include the potential for cutbacks on advertising budgets by advertisers, changes in rebate and incentive policies by media, and the failure to maintain and grow its advertiser base and secure emerging media resources ¹. The willingness of advertisers to spend their online advertising budget through the company is critical, and demand can be influenced by macro-economic and social factors, industry-related factors (such as audience trends and new media formats), and advertiser-specific factors ¹. Changes in these factors could lead to reduced revenue and weakened negotiating positions with media on rebate policies ¹. Media may also change rebate and incentive policies based on economic outlook, competitive landscape, and their business strategies, which could adversely affect revenue and financial condition ¹. The company's ability to maintain its advertiser base is linked to securing popular and emerging media resources, and a failure to do so could result in loss of advertisers and revenue ¹.

The company faces several material risks, including ongoing legal proceedings in the PRC, the United States, and the Cayman Islands, which have incurred substantial legal fees and expenses, adversely affecting cash flow and diverting management's attention ¹. Customer concentration is a significant risk, with the top five customers contributing 83.4% ⁵⁷ of total gross billing in 2025 ¹. The loss of business from one or more significant customers or any downward adjustment of rebate rates could materially impact financial performance ¹. The online advertising industry in China is highly competitive, and failure to compete successfully could lead to reduced market share and adverse financial performance ¹. The company's ability to forecast future operating results is difficult due to its limited operating history in a rapidly evolving industry ¹. There is a risk of insufficient cash flow from operating activities, with net cash used in operating activities of $2.3 million ³² in 2025, $1.5 million ³³ in 2024, and $2.3 million ⁵⁸ in 2023 ¹. This raises substantial doubt about the company's ability to continue as a going concern ³⁷. The regulatory environment in China, particularly regarding internet-related businesses, data security, and overseas listings, is rapidly evolving and uncertain, potentially leading to additional compliance requirements, fines, or restrictions on operations ¹. The company has identified material weaknesses in its internal control over financial reporting, specifically a lack of sufficient financial reporting and accounting personnel with U.S. GAAP knowledge and a lack of comprehensive accounting policies and procedures manual ¹. Natural disasters and health epidemics, such as the ongoing effects of COVID-19, could materially and adversely affect the business, as evidenced by a full provision for bad debt in 2025 due to uncollected receivables ¹.

Management's message to shareholders emphasizes the company's position as an online marketing solution provider in China, leveraging extensive industry experience, deep insights, and a well-established network of media resources to help advertisers achieve business goals ⁴. The company highlights its rapid growth from a start-up in 2014 to a multi-channel provider ⁴. Management anticipates continued expansion by growing its advertiser and media bases and exploring new market opportunities, driven by the increasing use of online advertising channels due to unlimited geographic coverage, promptness, and inclusivity ⁴. The company intends to meet its cash requirements for the next 12 months from the issuance date of this report through a combination of credit terms, bank loans, and the recently completed transfer of a partnership interest for RMB15,000,000 (approximately US$2,179,408.94) ⁵⁶ in April 2026, with full receipt expected before June 30, 2026 ³⁷. Despite reporting net losses of $12.0 million ²⁸ in 2025 and $26.9 million ³¹ in 2024, and cash outflows from operating activities, management continues to prepare financial statements on a going concern basis, assessing current working capital as sufficient for the next 12 months ³⁷. Key strategic priorities include maintaining and expanding relationships with both advertisers and media, adapting to rapidly changing online trends and technologies, and improving services to meet evolving demands ¹.