Company: KNRX
Filing Date: 2025-09-22
Form Type: F-1/A
Source: 0001493152-25-014499
Chunk: 88

Company: KNOREX LTD.
Filing Date: 2025-09-22
Form: F-1/A
Chunk 88
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 and 2024, respectively. This initiative has enabled us to better utilize our resources while bolstering our interaction with customers. We have also expanded our range of customers across diversified industry sectors, including automotive, healthcare, e-commerce, business-to-business, retail, consumer packaged goods, travel, and hospitality.

Subsequent to December 31, 2024, we experienced a material reduction in
revenue beginning in February 2025 in connection with our largest customer. The loss of volume was due to the impact of new U.S. import
tariffs on one of this customer’s clients rather than customer dissatisfaction. This led to that client to cut its marketing spend,
thereby reducing the business our largest customer conducted with us. As a result, our revenue for the six-month period in 2025 has declined
by approximately 50% compared to the same period in 2024. We are working closely with our largest customer to expand engagement across
their other clients and actively pursuing new ICP-matching customers and revenue sources. Concentrating on ICP-matching customers reduces
costs and improves operational efficiency through better forecasting and planning. However, there can be no assurance that these efforts
will offset the loss of business in the near term.

Cost of revenue.Our cost of revenue increased by 14.6% from US$5.5 million for the year ended December 31, 2023 to US$6.3 million for the year ended December 31, 2024, primarily due to the increase in purchase and usage of advertisement media sources, advertisement data sources and advertisement related technology features. The increase is consistent with the revenue increase of our platform services.

Gross profit. As a result of the foregoing, we recorded a gross profit of US$4.5 million for the year ended December 31, 2024, as compared to US$3.2 million for the year ended December 31, 2023.

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Operating expenses.Our total operating expenses decreased by 10.3% from US$11.2 million for the year ended December 31, 2023 to US$10.0 million for the year ended December 31, 2024, primarily due to the decrease of US$0.8 million in platform operations expenses, the decrease of US$0.3 million in sales and marketing expenses and the decrease of approximately US$0.5 million in general and administrative expenses, offset by the increase of approximately US$0.6 million in technology