# EDGAR Filing Document

**Accession Number:** 0001641398
**File Stem:** 0001213900-25-074991
**Filing Date:** 2025-8
**Character Count:** 133230
**Document Hash:** 1169f6028664f1ebc9d4563f67c1bee6
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-074991.hdr.sgml**: 20250812

**ACCESSION NUMBER**: 0001213900-25-074991

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 76

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250812

**DATE AS OF CHANGE**: 20250812

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** GD Culture Group Ltd
- **CENTRAL INDEX KEY:** 0001641398
- **STANDARD INDUSTRIAL CLASSIFICATION:** WHOLESALE-METALS, MINERALS (NO PETROLEUM) [5050]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 473709051
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-37513
- **FILM NUMBER:** 251207241

**BUSINESS ADDRESS:**
- **STREET 1:** 22F-810 SEVENTH AVENUE
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10019
- **BUSINESS PHONE:** 1-347-259-0292

**MAIL ADDRESS:**
- **STREET 1:** 22F-810 SEVENTH AVENUE
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10019

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Code Chain New Continent Ltd
- **DATE OF NAME CHANGE:** 20200518

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** TMSR HOLDING Co Ltd
- **DATE OF NAME CHANGE:** 20180207

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** JM Global Holding Co
- **DATE OF NAME CHANGE:** 20150505

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the quarterly period ended June 30, 2025

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from __________ to __________

Commission File Number: 001-37513

**GD CULTURE GROUP LIMITED**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Nevada** | **47-3709051** |
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification Number) |

---

---

| | |
|:---|:---|
| **22F - 810 Seventh Avenue,**<br>**New York, NY 10019** | **10019** |
| (Address of principal executive offices) | (Zip Code) |

---

Registrant's telephone number, including area code: **+1-347- 2590292**

**Not applicable**

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

---

| | |
|:---|:---|
| **Title of each class** | **Name of each exchange on which registered** |
| Common Stock, par value $0.0001 GDC | Nasdaq Capital Market |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 12, 2025, there were 16,795,433 shares of the Company's common stock issued and outstanding.

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| PART I. | [FINANCIAL INFORMATION](#a_001) | 1 |
| ITEM 1. | [FINANCIAL STATEMENTS (UNAUDITED)](#a_002) | 1 |
| ITEM 2. | [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#a_003) | 2 |
| ITEM 3. | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#a_004) | 9 |
| ITEM 4. | [CONTROLS AND PROCEDURES](#a_005) | 9 |
| PART II. | [OTHER INFORMATION](#a_005) | 10 |
| ITEM 1. | [LEGAL PROCEEDINGS](#a_007) | 10 |
| ITEM 1A. | [RISK FACTORS](#a_008) | 10 |
| ITEM 2. | [UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](#a_009) | 10 |
| ITEM 3. | [DEFAULTS UPON SENIOR SECURITIES](#a_010) | 11 |
| ITEM 4. | [MINE SAFETY DISCLOSURES](#a_011) | 11 |
| ITEM 5. | [OTHER INFORMATION](#a_012) | 11 |
| ITEM 6. | [EXHIBITS](#a_013) | 11 |

---

i

**CAUTIONARY NOTE REGARDING**

**FORWARD-LOOKING STATEMENTS**

This Quarterly Report on Form 10-Q contains statements that may be deemed to be "forward-looking statements" within the meaning of the federal securities laws. These statements relate to anticipated future events, future results of operations and or future financial performance. In some cases, you can identify forward-looking statements by their use of terminology such as "anticipate," "believe," "could," "estimate," "expect," "future," "intend," "may," "ought to," "plan," "possible," "potentially," "predicts," "project," "should," "will," "would," negatives of such terms or other similar terms. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, statements relating to:

● our goals and strategies;

● our future business development, results of operations and financial condition;

● our estimates regarding expenses, future revenues, capital requirements and our need for additional financing;

● our estimates regarding the market opportunity for our services;

● the impact of government laws and regulations;

● our ability to recruit and retain qualified personnel;

● our failure to comply with regulatory guidelines;

● uncertainty in industry demand;

● general economic conditions and market conditions in the financial services industry;

● future sales of large blocks or our securities, which may adversely impact our share price; and

● depth of the trading market in our securities.

The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties, including those described in Item 1A "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and elsewhere in this Quarterly Report on Form 10-Q.

You should not unduly rely on any forward-looking statements. Although we believe that the expectations reflected in the forward- looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q, to conform these statements to actual results or to changes in our expectations.

ii

**PART I — FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)**

**UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

**Index to unaudited interim condensed consolidated financial statements**

---

| | |
|:---|:---|
|  | **Page** |
| Consolidated Financial Statements: |  |
| [Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024](#f_001) | F-1 |
| [Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2025 and 2024](#f_002) | F-2 |
| [Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders' Equity for the Six Months Ended June 30, 2025 and 2024](#f_003) | F-3 – F-4 |
| [Unaudited Interim Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024](#f_004) | F-5 |
| [Notes to Unaudited Interim Condensed Consolidated Financial Statements](#f_005) | F-6 |

---

**GD CULTURE GROUP LIMITED AND ITS SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2025** | **December 31,**<br>**2024** |
|  | **(unaudited)** | |
| ASSETS |  |  |
| CURRENT ASSETS |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $1117760 | $22538 |
| &nbsp;&nbsp;&nbsp;Other receivables, net | 9195 | 9195 |
| &nbsp;&nbsp;&nbsp;Prepaid and other current assets | 1389522 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 2516477 | 31733 |
| EQUIPMENT, NET | 5629 | 7781 |
| RIGHT-OF-USE ASSETS, NET | 1135509 | 1342333 |
| OTHER ASSETS |  |  |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 6666696 | 1102400 |
| &nbsp;&nbsp;&nbsp;Other assets | 250740 | 250740 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other assets | 6917436 | 1353140 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $10575051 | $2734987 |
| <u>LIABILITIES AND SHAREHOLDERS' EQUITY</u> |  |  |
| CURRENT LIABILITIES |  |  |
| &nbsp;&nbsp;&nbsp;Other payables and accrued liabilities | $260629 | $401821 |
| &nbsp;&nbsp;&nbsp;Other payables - related parties | 204339 | 502266 |
| &nbsp;&nbsp;&nbsp;Lease liabilities - current | 314646 | 427984 |
| &nbsp;&nbsp;&nbsp;Income tax payable | 282642 | 141810 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 1062256 | 1473881 |
| OTHER LIABILITIES |  |  |
| &nbsp;&nbsp;&nbsp;Lease liabilities – non-current | 949283 | 1104552 |
| &nbsp;&nbsp;&nbsp;Deferred tax liabilities | - | 153911 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other liabilities | 949283 | 1258463 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 2011539 | 2732344 |
| &nbsp;&nbsp;&nbsp;COMMITMENTS AND CONTINGENCIES |  |  |
| SHAREHOLDERS' EQUITY |  |  |
| &nbsp;&nbsp;&nbsp;Preferred stock, $0.0001 par value, 20,000,000 shares authorized, no shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | - | - |
| &nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value, 200,000,000 shares authorized, 16,795,433 and 11,167,294 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | 1680 | 1117 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 93813211 | 82758975 |
| &nbsp;&nbsp;&nbsp;Subscription receivable | (17390) | - |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (85670950) | (83194386) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income | 152602 | 152585 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total GD Culture Group Limited shareholders' equity (deficits) | 8279153 | (281709) |
| &nbsp;&nbsp;&nbsp;Noncontrolling interest | 284359 | 284352 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total shareholders' equity | 8563512 | 2643 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and shareholders' equity | $10575051 | $2734987 |

---

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

**GD CULTURE GROUP LIMITED AND ITS SUBSIDIARIES**

**UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the three months ended** | **For the three months ended** | **For the six months ended** | **For the six months ended** |
|  | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| OPERATING EXPENSES |  |  |  |  |
| Selling and Marketing expenses | $(300000) | $(208333) | $(300000) | $(2400000) |
| General and administrative expenses | (1022730) | (1703091) | (1960607) | (3472371) |
| Research and development expenses | (233333) | (217500) | (233333) | (435000) |
| Other-than-temporary impairment losses | - | (1500000) | - | (1500000) |
| TOTAL OPERATING EXPENSES | (1556063) | (3628924) | (2493940) | (7807371) |
| LOSS FROM OPERATIONS | (1556063) | (3628924) | (2493940) | (7807371) |
| OTHER INCOME |  |  |  |  |
| Interest income | 2179 | 13056 | 4297 | 35002 |
| TOTAL OTHER INCOME | 2179 | 13056 | 4297 | 35002 |
| LOSS BEFORE INCOME TAX BENEFITS | (1553884) | (3615868) | (2489643) | (7772369) |
| INCOME TAX BENEFITS | 54830 | 22956 | 13079 | 21918 |
| NET LOSS | $(1499054) | $(3592912) | $(2476564) | $(7750451) |
| Net loss attributable to noncontrolling interest | - | (7731) | - | (186642) |
| Net loss attributable to shareholders of common stock | (1499054) | (3585181) | (2476564) | (7563809) |
| OTHER COMPREHENSIVE INCOME (LOSS) |  |  |  |  |
| - Foreign currency translation adjustment | 18 | (4802) | 24 | (19911) |
| - Fair value changes of convertible note receivables | - | (93912) | - | (39063) |
| OTHER COMPREHENSIVE GAIN (LOSS), net of tax | 18 | (98714) | 24 | (58974) |
| COMPREHENSIVE LOSS, net of tax | $(1499036) | $(3691626) | $(2476540) | $(7809425) |
| Comprehensive income (loss) attributable to noncontrolling interest | 5 | (9012) | 7 | (281923) |
| Comprehensive loss attributable to shareholders of common stock | (1499041) | (3682614) | (2476547) | (7527502) |
| WEIGHTED AVERAGE NUMBER OF COMMON STOCKS |  |  |  |  |
| Basic and diluted | 15337536 | 9291904 | 13436514 | 8363487 |
| Loss per share available to common shareholders |  |  |  |  |
| Basic and diluted | $(0.10) | $(0.39) | $(0.18) | $(0.93) |

---

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

**GD CULTURE GROUP LIMITED AND ITS SUBSIDIARIES**

**UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY**

**For the three and six months ended June 30, 2025**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | | |
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** |<br>**Additional**<br>**Paid-in**<br>**Capital** |<br><br>**Subscription**<br>**Receivable** |<br><br>**Accumulated**<br>**Deficit** |<br>**Accumulated**<br>**Other**<br>**Comprehensive**<br>**Income** | **Total**<br>**GD Culture<br> Group**<br> **Limited**<br>**Shareholders'**<br>**Deficits** |<br><br>**Non**<br>**controlling**<br>**Interest** |<br><br>**Total**<br>**Shareholders'**<br>**Equity (Deficit)** |
| **Balance, January 1, 2025** |  | $**-**  | **11167294** | $**1117** | $**82758975** | $**-**  | $**(83194386)** | $**152585** | $**(281709)** | $**284352** | $**2643** |
| Net loss |  | - |  | - | - | - | (977510) | - | (977510) | - | (977510) |
| Issuance of common stock for cash |  | - | 1115600 | 111 | 909889 | - | - | - | 910000 | - | 910000 |
| Foreign currency translation |  | - | - | - | - | - | - | 4 | 4 | 2 | 6 |
| **Balance, March 31, 2025 (unaudited)** |  | $**-**  | **12282894** | $**1228** | $**83668864** | $**-**  | $**(84171896)** | $**152589** | $**(349215)** | $**284354** | $**(64861)** |
| Net loss |  | - |  | - | - | - | (1499054) | - | (1499054) | - | (1499054) |
| Issuance of common stock for cash |  | - | 1115600 | 112 | 540938 | - | - | - | 541050 | - | 541050 |
| Issuance of prefunded warrants for cash |  | - |  | - | 3615226 | (17390) | - | - | 3597836 | - | 3597836 |
| Exercise of November 2023 Registered Warrants |  | - | 952644 | 95 | (95) | - | - | - | - | - | - |
| Issuance of common stock for acquisition of certain software |  | - | 2444295 | 245 | 5988278 | - | - | - | 5988523 | - | 5988523 |
| Foreign currency translation |  | - | - | - | - | - | - | 13 | 13 | 5 | 18 |
| **Balance, June 30, 2025 (unaudited)** |  | $**-**  | **16795433** | $**1680** | $**93813211** | $**(17390)** | $**(85670950)** | $**152602** | $**8279153** | $**284359** | $**8563512** |

---

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

**GD CULTURE GROUP LIMITED AND ITS SUBSIDIARIES**

**UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY**

**For the three and six months ended June 30, 2024**

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | **Attributable to GD Culture Group Limited Shareholders** | | |
|  | **Preferred Stock** | **Preferred Stock** | **Common Stock** | **Common Stock** | | | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid-in**<br>**Capital** |<br>**Accumulated**<br>**Deficit** | **Accumulated Other**<br>**Comprehensive**<br>**Income** | **Total <br> GD Culture Group Limited**<br>**Shareholders'**<br>**Equity** |<br>**Non**<br>**controlling**<br>**Interest** |<br>**Total**<br>**Shareholders'**<br>**Equity** |
| **Balance, January 1, 2024** |  | $**-**  | **5453416** | $**545** | $**77530221** | $**(69358225)** | $**175306** | $**8347847** | $**3813636** | $**12161483** |
| Net loss |  | - |  | - | - | (3978628) | - | (3978628) | (178911) | (4157539) |
| Issuance of common stock for Cash |  | - | 810277 | 81 | 829798 | - | - | 829879 | - | 829879 |
| Issuance of common stock for acquisition of 13.33% noncontrolling interest of Shanghai Xianzhui |  | - | 400000 | 40 | 3150753 | - | - | 3150793 | (3150793) | - |
| Exercise of pre-funded warrants |  | - | 567691 | 57 | 597 | - | - | 654 | - | 654 |
| Exercise of November 2023 Registered Warrants |  | - | 709877 | 71 | (71) | - | - | - | - | - |
| Foreign currency translation |  | - |  | - | - | - | 78891 | 78891 | (94000) | (15109) |
| Fair value changes of convertible notes receivable |  | - | - | - | - | - | 54849 | 54849 | - | 54849 |
| **Balance, March 31, 2024 (unaudited)** |  | $**-**  | **7941261** | $**794** | $**81511298** | $**(73336853)** | $**309046** | $**8484285** | $**389932** | $**8874217** |
| Net loss |  | - |  | - | - | (3585181) | - | (3585181) | (7731) | (3592912) |
| Issuance of common stock for acquisition of copyright |  | - | 1560000 | 156 | 1247844 | - | - | 1248000 | - | 1248000 |
| Foreign currency translation |  | - |  | - | - | - | (3521) | (3521) | (1281) | (4802) |
| Fair value changes of convertible notes receivable |  | - | - | - | - | - | (93912) | (93912) | - | (93912) |
| **Balance, June 30, 2024 (unaudited)** |  | $**-**  | $**9501261** | $**950** | $**82759142** | $**(76922034)** | $**211613** | $**6049671** | $**380920** | $**6430591** |

---

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

**GD CULTURE GROUP LIMITED AND ITS SUBSIDIARIES**

**UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **For the six months ended**<br> **June 30,** | **For the six months ended**<br> **June 30,** |
|  | **2025** | **2024** |
| CASH FLOWS FROM OPERATING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(2476564) | $(7750451) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation of equipment | 2152 | 2365 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of intangible assets | 424227 | 385468 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of right-of-use assets | 206824 | 204373 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other-than-temporary impairment losses from convertible note | - | 1500000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax | (153911) | (21918) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other receivables | - | (30395) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid and other current assets | (1389522) | 762650 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other payables and accrued liabilities | (245963) | 90972 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease liabilities | (268607) | (233683) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes payable | 140832 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other payables - related parties | 51558 | 40000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (3708974) | (5050619) |
| CASH FLOWS FROM INVESTING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Loan to a third party | - | (1900000) |
| &nbsp;&nbsp;&nbsp;Collection from loan to a third party | - | 1250000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | - | (650000) |
| CASH FLOWS FROM FINANCING ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock | 1451050 | 829879 |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of prefunded warrants | 3602607 | - |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of prefunded warrants | - | 654 |
| &nbsp;&nbsp;&nbsp;Proceeds from related party loan | 50000 | - |
| &nbsp;&nbsp;&nbsp;Proceeds from shareholder loan | 100000 | - |
| &nbsp;&nbsp;&nbsp;Repayments to a related party | (399485) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 4804172 | 830533 |
| EFFECT OF EXCHANGE RATE CHANGE ON CASH AND CASH EQUIVALENTS | 24 | (3595) |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1095222 | (4873681) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 22538 | 5175518 |
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $1117760 | $301837 |
| SUPPLEMENTAL CASH FLOW INFORMATION: |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for income tax | $- | $- |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $- | $- |
| NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;Issuance of common stock for acquisition right, title, and interest in and to the certain software | $5988523 | $1248000 |
| &nbsp;&nbsp;&nbsp;Initial recognition of right-of-use assets and lease liability | $- | $100002 |
| &nbsp;&nbsp;&nbsp;Issuance of common stock for 13.3333% interest in SH Xianzhui | $- | $3150793 |
| &nbsp;&nbsp;&nbsp;Exercise of November 2023 Registered Warrants | $95 | $71 |

---

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

**GD CULTURE GROUP LIMITED AND SUBSIDIARIES**

**NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**Note 1 – Nature of Business and Organization**

GD Culture Group Limited ("GDC" or the "Company"), formerly known as Code Chain New Continent Limited, is a Nevada corporation and a holding company. The Company currently conducts its operations on virtual content production (the "Virtual Content Production") through the Company and two subsidiaries, AI Catalysis corp. ("AI Catalysis") and Shanghai Xianzhui Technology Co., Ltd. ("SH Xianzhui"). The Company focuses its business mainly on: 1) AI-driven digital human creation and customization, and 2) Live streaming and e-commerce. The Company has relentlessly been focusing on serving its customers and creating value for them through the continual innovation and optimization of its products and services. Currently, the Company's subsidiaries, Citi Profit Investment Holding Limited ("Citi Profit BVI"), Highlights Culture Holding Co., Limited ("Highlight HK"), Shanghai Highlight Entertainment Co., Ltd. ("Highlight WFOE") are holding companies with no material operations.

SH Xianzhui was incorporated by Highlight WFOE and two other shareholders on August 10, 2023. SH Xianzhui is principally engaged in the provision of social media marketing agency service. Highlight WFOE initially owned 60% of the total equity interest of SH Xianzhui. On October 27, 2023, the Company entered into an equity purchase agreement with Highlight WFOE and Beijing Hehe Property Management Co., Ltd. ("Beijing Hehe"), which was amended on November 10, 2023 (such equity purchase agreement, as amended, the "Agreement" for purpose of this section "Investment in JV"), pursuant to which the Highlight WFOE agreed to purchase 13.3333% of the equity interest in SH Xianzhui from Beijing Hehe and the Company agreed to issue 400,000 shares of common stock of the Company, valued at $2.7820 per share, the average closing bid price of the common stock of GDC as of the five trading days immediately preceding the date of the Agreement, to Beijing Hehe or its assigns. On January 11, 2024, the Company issued the 400,000 shares of its common stock, at the price of $2.5 per share, to Beijing Hehe and the transaction was completed. Up to the date of these unaudited interim condensed consolidated financial statements were issued, the Company owns 73.3333% of the total equity interest of SH Xianzhui.

AI Catalysis is a Nevada corporation, incorporated on May 18, 2023. AI Catalysis is expected to bridge the realms of the internet, media, and artificial intelligence ("AI") technologies. Positioned at the crossroads of traditional and streaming media, AI Catalysis plans to elevate the experience of media with AI-based interactive and smart content, aiming to transform the whole media landscape. At present, AI Catalysis primarily focused on the application of AI digital human technology with the sectors of e-commerce and entertainment to improve the interaction experiences online. AI Catalysis strives to deliver stable interactive livestreaming products to AI Catalysis' users. AI Catalysis foresees future expansion to a variety of business sectors with AI applications in different scenarios. AI Catalysis plans to enter into the livestreaming market with a focus on e-commerce and livestreaming interactive game.

The accompanying unaudited interim condensed consolidated financial statements reflect the activities of GDC and each of the following entities:

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Background** | **Background** | **Ownership** |
| Citi Profit BVI | ● | A British Virgin Island company Incorporated in April 2019 | 100% owned by the Company |
| Highlight HK | ● | A Hong Kong company | 100% owned by Citi Profit BVI |
|  | ● | Incorporated in November 2022 |  |
| Highlight WFOE | ● | A PRC limited liability company and deemed a wholly foreign owned enterprise (WFOE) | 100% owned by Highlight HK |
|  | ● | Incorporated in January 2023 |  |
| AI Catalysis | ● | A Nevada company | 100% owned by the Company |
|  | ● | Incorporated in May 2023 |  |
| SH Xianzhui | ● | A PRC limited liability company | 73.3333% owned by Highlight WFOE |
|  | ● | Incorporated in August 2023 |  |

---

As of the date of this report, the Company's primary operations are focused on the live streaming market with focus on e-commerce in the United States. The Company is also working on the development of a mobile and web platform for interactive fiction—story experiences where readers make choices that branch the plot and lead to multiple endings.

**Liquidity and Capital Resources**

As of June 30, 2025, the Company had $1,117,760 in its operating bank accounts and working capital of approximately $1.5 million. From September 2024 to January 2025, Mr. Xiaojian Wang, the Chief Executive Officer of the Company ("CEO"), lent $399,485 to the Company through six loan agreements, for working capital purposes. Pursuant to the loan agreements, these loans are non-interest bearing and will be due from September 2025 to January 2026, respectively. From March 2025 to May 2025, the Company repaid $399,485 in full to the CEO. Up to the date of the unaudited interim condensed consolidated financial statements were issued, there was no outstanding loan from the CEO.

On January 23, 2025, Green Oasis Limited, a shareholder holding less than 5% ownership shares in the Company, provided a $100,000 loan to the Company, for working capital purposes, with maturity as of April 23, 2025. On April 25, 2025, Green Oasis Limited and the Company extended the maturity date to July 23, 2025, which was further extended to July 23, 2026 through an amendment agreement signed on July 30, 2025.

On March 4, 2025, the Company sold 1,115,600 shares of common stock at $0.896379 per share, generating gross proceeds of $1,000,000. The Company received net proceeds of $910,000 after deducting underwriter's fees of $70,000 and a $20,000 reimbursement for the underwriter's legal counsel and due diligence analysis expenses. The Company intended to use the proceeds from the offering for working capital purposes.

On May 2, 2025, the Company completed a securities offering in which it agreed to sell (i) 1,115,600 shares of its common stock at a purchase price of approximately $0.524 per share and (ii) 9,380,582 pre-funded warrants at a purchase price of approximately $0.523 per warrant. As of June 30, 2025, the Company received gross proceeds of $4,478,000 from the subscription of 1,115,600 shares of its common stock and 7,468,536 pre-funded warrants, with $17,390 still outstanding and receivable from the investor. The offering remains ongoing and has not yet been fully completed. Transaction costs incurred through June 30, 2025 included underwriter's fees of $314,343 and a $20,000 reimbursement for the underwriter's legal counsel and due diligence expenses. After deducting these expenses, net proceeds from the offering (excluding the receivable of $17,390 from the investor) amounted to $4,143,657 as of June 30, 2025. The Company intended to use the proceeds from the offering for working capital purposes.

The Company expects to continue incurring significant operating cash outflows to support its operations. Additional financing may be required to sustain the business. Management will make its best efforts to secure the necessary funding to support the Company's operations. In the event of insufficient funds, the CEO has committed to providing financial support to the Company.

The Company evaluated its ability to continue as a going concern in accordance with ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern, which requires management to assess whether there is substantial doubt about the Company's ability to continue as a going concern within one year after the date the financial statements are issued. The management assessed its liquidity position and concluded that the Company will have sufficient liquidity to meet its obligations as they become due for at least the next twelve months from the date the unaudited interim condensed consolidated financial statements are issued.

**Note 2 – Summary of Significant Accounting Policies**

***Basis of Presentation***

The accompanying unaudited interim condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are of a normal recurring nature and are necessary to fairly present the financial statements for the interim periods. The unaudited interim condensed consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and have been prepared in accordance with the regulations of the Securities and Exchange Commission ("SEC") for interim financial statements. Results for the interim periods are not necessarily indicative of results to be expected for the full year. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 18, 2025.

***Principles of Consolidation***

The unaudited interim condensed consolidated financial statements of the Company include the accounts of GDC and its wholly owned subsidiaries. All intercompany transactions and balances are eliminated upon consolidation.

***Use of Estimates and Assumptions***

The preparation of unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the unaudited interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company's unaudited interim condensed consolidated financial statements include the useful lives of intangible assets and equipment, impairment of long-lived assets, collectability of receivables, discount rate used to measure present value of lease liabilities and valuation allowance for deferred tax assets. Actual results could differ from these estimates.

***Foreign Currency Translation and Transactions***

The reporting currency of the Company is the U.S. dollar. The PRC subsidiaries of the Company conduct their businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted set forth in the H.10 statistical release of the Federal Reserve Board at the end of the period. The statements of operations accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Translation adjustments included in accumulated other comprehensive income amounted to $213,595 and $213,571 as of June 30, 2025 and December 31, 2024, respectively. The consolidated balance sheets amount, with the exception of shareholders' equity at June 30, 2025 and December 31, 2024 were translated at 7.1636 RMB and 7.2993 RMB to $1.00, respectively. The shareholders' equity accounts were stated at their historical rate. The average translation rates applied to unaudited interim condensed consolidated statements of operations accounts for the six months ended June 30, 2025 and 2024 were 7.2526 RMB and 7.2410 RMB to $1.00, respectively. The unaudited interim condensed consolidated statements of cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the unaudited interim condensed consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets.

The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions.

***Cash and Cash Equivalents***

 ****

As of June 30, 2025 and December 31, 2024, the Company did not have any cash equivalents. All cash were unrestricted as to withdrawal and use and were demand deposits placed with commercial banks.

***Prepaid and Other Current Assets***

 ****

Prepaid and other current assets are advances paid to outside vendors for services purchases. The Company has legally binding contracts with its vendors, which require any outstanding prepayments to be returned to the Company when the contract ends.

***Equipment***

 ****

Equipment was stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method after consideration of the estimated useful lives of the assets and estimated residual value. The estimated useful lives and residual value are as follows:

---

| | | |
|:---|:---|:---|
|  | **Useful Life** | **Estimated<br> Residual<br> Value** |
| Office equipment and furnishing | 5 years | 5% |

---

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the unaudited interim condensed consolidated statements of operations and comprehensive loss. Expenditure for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.

***Intangible Assets***

Intangible assets represent software copyright that are stated at cost, less accumulated amortization. Research and development costs associated with internally developed patents are expensed when incurred. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets. The software copyrights have finite useful lives and are amortized using a straight-line method that reflects the estimated pattern in which the economic benefits of the intangible asset are to be consumed. The Company amortizes the cost of software copyrights, over their useful life using the straight-line method. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances revised estimates of useful lives. The estimated useful life is as follows:

---

| | |
|:---|:---|
|  | **Useful Life** |
| Software copyrights | 5 years |

---

***Lease***

 ****

The Company determines if an arrangement is a lease at inception. Leases that transfer substantially all of the benefits and risks incidental to the ownership of assets are accounted for as finance leases as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases. The Company has no significant finance leases.

The Company recognizes lease liabilities and corresponding right-of-use assets on the balance sheet for leases. Operating lease right- of-use assets (the "ROU") are disclosed as non-current assets in the Company's consolidated balance sheets. Current maturities of operating lease liabilities are classified as operating lease liabilities - current, and operating lease liabilities that will be due in more than one year are disclosed as non-current liabilities on the consolidated balance sheets. Operating lease right-of-use assets and operating lease liabilities are initially recognized based on the present value of future lease payments at lease commencement. The operating lease right-of-use asset also includes any lease payments made prior to lease commencement and the initial direct costs incurred by the lessee and is recorded net of any lease incentives received. As the interest rates implicit in most of the leases are not readily determinable, the Company uses the incremental borrowing rates based on the information available at lease commencement to determine the present value of the future lease payments. Operating lease expenses are recognized on a straight-line basis over the term of the lease.

Most leases have initial terms ranging from 1.1 to 5.4 years. The Company's lease agreements did not include non-lease components. Lease expense for fixed lease payments is recognized on a straight-line basis over the lease term. The Company's lease agreements do not contain any significant residual value guarantees or restricted covenants.

The Company evaluates the carrying value of ROU assets if there are indicators of impairment and reviews the recoverability of the related asset group.

The Company reassesses of a contract is or contains a leasing arrangement and re-measures ROU assets and liabilities upon modification of the contract. The Company will derecognize ROU assets and liabilities, with difference recognized in the income statement on the contract termination.

***Impairment for Long-lived Assets***

 ****

The Company's determination of whether or not an indication of impairment exists at the cash generating unit level requires significant management judgment pertaining to intangible assets, including a software copyright of AI Box, which is used for online living-stream and a software copyright of Chat Box, which is used for online interactive entertainment scenarios, as well as the operating Right-of-use ("ROU") assets, including the offices of the Company. Management considers both external and internal sources of information in assessing whether there are any indications that the Company's intangible assets and ROU assets are impaired. Based on the evaluation, the Company did not recognize impairment losses in long-lived assets for the six months ended June 30, 2025 and 2024.

***Fair Value Measurement***

 ****

The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, other receivables, other payables and accrued liabilities to approximate their fair values because of their short-term nature.

The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow:

● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

As of June 30, 2025 and December 31, 2024, the carrying values of cash, other receivables and other payables approximate their fair values due to the short-term nature of the instruments.

***Selling and Marketing Expenses***

Selling and marketing expenses mainly consist of marketing related expenses.

***General and Administrative Expenses***

General and administrative expenses mainly consist of (i) staff cost, rental and depreciation related to general and administrative personnel, (ii) professional expenses.

***Research and Development Expenses***

Research and development expenses mainly consist of outsourced research and development expenses. Research and development expenses are expensed as incurred.

***Income Taxes***

 ****

The Company accounts for income taxes in accordance with U.S. GAAP. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the unaudited interim condensed consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.

An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. For the three months ended June 30, 2025, the Company recorded $7,428 penalty and interest for failed filing the tax return timely, consisting of $3,341 interest and $4,087 penalty. For the six months ended June 30, 2025, the Company recorded $64,731 penalty and interest for failed filing the tax return timely, consisting of $19,323 interest and $45,408 penalty. For the three and six months ended June 30, 2024, the Company did not record any penalty and interest for failed filing the tax return timely.

***Interest***

 ****

Interest income is mainly generated from bank deposits and other interest earning financial assets and is recognized on an accrual basis using the effective interest method.

***Net Loss per Common Stock***

 ****

Basic loss per share is computed by dividing loss available to common shareholders of the Company by the weighted average common stocks outstanding during the period. Diluted loss per share takes into account the potential dilution that could occur if securities or other contracts to issue common stocks were exercised and converted into common stocks.

In May 2023, November 2023 and May 2025, the Company issued and sold pre-funded warrants that are exercisable for shares of common stock at a nominal exercise price. In accordance with ASC 260, these prefunded warrants are considered to be common stock equivalents and are included in the calculation of basic and diluted earnings per share when the inclusion is dilutive. As the exercise price of the prefunded warrants is nominal and substantially all conditions necessary to exercise the warrants have been met, the prefunded warrants are included in the weighted average shares outstanding for both basic and diluted loss per share. As of June 30, 2025, 7,468,536 pre-funded warrants as described were outstanding.

For the six months ended June 30, 2025 and 2024, 1,260,665 and 7,309,181 of outstanding warrants (excluding the Pre-funded Warrants and Exchange Warrants) which are equivalent to convertible of 1,059,277 and 3,080,017 common stocks, respectively, were excluded from the diluted loss per share calculation due to their antidilutive effect.

***Comprehensive Loss***

 ****

Comprehensive loss is defined as the changes in equity of the Company during a year from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Accumulated other comprehensive income of the Company includes the foreign currency translation adjustments and unrealized gains or loss on available-for-sale investments.

***Reclassification***

 ****

Certain prior period amounts have been reclassified to conform to the current period presentation.

***Recently Accounting Pronouncements***

In November 2023, the FASB issued ASU 2023-07, "*Segment Reporting* (Topic 280): *Improvements to Reportable Segment Disclosures*", which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The purpose of the amendment is to enable investors to better understand an entity's overall performance and assess potential future cash flows. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. The Company adopted ASU 2023-07 for the year ended December 31, 2024. The adoption has no significant impact on the Company's financial statements and disclosure.

In December 2023, the FASB issued ASU 2023-09, *Income Taxes* (Topic 740): *Improvements to Income Tax Disclosures* (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company's management does not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.

In November 2024, the FASB issued ASU No. 2024-03, *Disaggregation of Income Statement Expenses*. This new guidance is designed to improve the disclosures about the types of expenses, including employee compensation, depreciation, and amortization, and costs incurred related to inventory and manufacturing activities. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 on a prospective basis with optional retrospective application. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company's unaudited interim condensed consolidated balance sheets, unaudited interim condensed consolidated statements of operations and comprehensive loss and unaudited interim condensed consolidated statements of cash flows.

**Note 3 – Prepaid and Other Current Assets**

Prepaid and other current assets consisted of the following as of June 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **June 30, <br> 2025** | **December 31, <br> 2024** |
|  | **(unaudited)** | |
| Prepaid offering costs | $70000 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |
| Prepayments of operating leases | 152855 | - |
| Prepaid research and development fee | 1166667 | - |
| Total prepaid and other current assets | $1389522 | $- |

---

\* On May 28, 2025, the Company made an advance payment to a contractor for service activities related to the Chat Box platform. The contracted work primarily involves system configuration, integration, testing support, and other operational assistance to facilitate the Company's ongoing research and development process, rather than the creation of new technology or software functionality. The services are expected to be completed by November 30, 2025.

**Note 4 – Equipment, net**

Equipment, net consisted of the following as of June 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31, <br> 2024** |
|  | **(unaudited)** | |
| Office equipment and furniture | $14190 | $14190 |
| Less: accumulated depreciation | (8561) | (6409) |
| Total | $5629 | $7781 |

---

Depreciation expense for the three months ended June 30, 2025 and 2024 amounted to $1,075 and $1,182, respectively. Depreciation expense for the six months ended June 30, 2025 and 2024 amounted to $2,152 and $2,365, respectively.

**Note 5 – Intangible Assets, net**

Intangible assets consisted of the following as of June 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **June 30, <br> 2025** | **December 31, <br> 2024** |
|  | **(unaudited)** | |
| Software copyrights | $4890092 | $4890092 |
| Add: purchase of software\* | 5988523 | - |
| Subtotal | 10878615 | 4890092 |
| Less: accumulated amortization | (1460745) | (1036518) |
| Accumulated impairment | (2751174) | (2751174) |
| Total | $6666696 | $1102400 |

---

\* On April 28, 2025, the Company purchased a software- Chat Box, by issuance of 2,444,295 shares of the Company's common stock. Chat Box is an immersive chatbot platform centered on Al technology, specifically designed for otaku enthusiasts and interactive entertainment scenarios. Building on the Chat Box platform, the Company is undertaking secondary development to create a product that will serve as both mobile and web platform for interactive fiction experiences, where readers can make choices that branch the storyline and lead to multiple endings.

Amortization expenses for the three months ended June 30, 2025 and 2024 were $361,827 and $203,134, respectively. Amortization expenses for the six months ended June 30, 2025 and 2024 were $424,227 and $385,468, respectively.

As of June 30, 2025, the net book value of software copyrights was $6,666,696, after deducting accumulated amortization of $1,460,745. No impairment losses were recorded for the three and six months ended June 30, 2025 and 2024.

Future amortization of intangible assets are as follows:

---

| | |
|:---|:---|
|  | **Amortization** |
| Remaining of FY2025 | 723654 |
| FY2026 | 1447308 |
| FY2027 | 1447308 |
| FY2028 | 1447308 |
| FY2029 | 1301708 |
| FY2030 | 299410 |
| Total future amortization of intangible assets | $6666696 |

---

**Note 6 – Other Payables and Accrued Liabilities**

Other payables and accrued liabilities consisted of the following as of June 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2025** | **December 31,**<br>**2024** |
|  | **(unaudited)** | |
| Professional service fee | $130641 | $375085 |
| Payroll | 25039 | 26558 |
| Loan payable - shareholder | 100000 | - |
| Advance from investor<sup>\*</sup> | 4771 | - |
| Others | 178 | 178 |
| **Total** | $**260629** | $**401821** |

---

\* Includes advance from one of the warrant shareholder for the exercise of prefunded warrants.

**Note 7 – Related Party Balances and Transactions**

Other payables – related parties:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name of related party** | **Relationship** | **Nature** | **June 30, <br> 2025** | **December 31,<br> 2024** |
|  |  |  | **(unaudited)** | |
| Xiaojian Wang | Chief Executive Officer | Accrued compensations | $75000 | $50000 |
| Xiaojian Wang | Chief Executive Officer | Interest-free loans to the Company\* | - | 349485 |
| Xiaojian Wang | Chief Executive Officer | Operating related fees paid on behalf of the Company | 49485 | 50000 |
| Zihao Zhao | Chief Finance Officer | Accrued compensations | 77869 | 50833 |
| Zihao Zhao | Chief Finance Officer | Reimbursement | 1985 | 1948 |
| Total |  |  | $204339 | $502266 |

---

\* The terms of these loans are disclosed in Note 1- Liquidity and Capital Resources.

As of June 30, 2025 and December 31, 2024, the balance of other payables - related parties were $204,339 and $502,266, respectively, mainly consisted of accrued compensation of the Company's officers, interest- free loans received from the Company's officers and operating related fees paid by the Company's officer on behalf of the Company. As of June 30, 2025, the interest-free loans received from the Company's officers were fully repaid.

For the three months ended June 30, 2025 and 2024, the Company recorded compensation expenses to its officers amounted to $32,036 and $20,000, respectively, for their services provided to the Company.

For the six months ended June 30, 2025 and 2024, the Company recorded compensation expenses to its officers amounted to $52,036 and $40,000, respectively, for their services provided to the Company.

**Note 8– Leases**

Leases are classified as operating leases or finance leases in accordance with ASC 842 *Leases*. The Company's operating leases mainly related to the rights to use building and office facilities. For leases with terms greater than 12 months, the Company records the related asset and liability at the present value of lease payments over the term. Certain leases include rental escalation clauses, renewal options and/or termination options, which are factored into the Company's determination of lease payments when appropriate.

---

| | | |
|:---|:---|:---|
|  | **June 30, <br> 2025** | **December 31,<br> 2024** |
|  | **(unaudited)** |  |
| **Weighted average remaining lease term:** |  |  |
| Operating lease | 3.31 years | 3.63 years |
| **Weighted average discount rate:** |  |  |
| Operating lease | 7.54% | 7.53% |

---

The balances for the operating leases where the Company is the lessee are presented as follows within the consolidated balance sheets:

---

| | | |
|:---|:---|:---|
|  | **June 30, <br> 2025** | **December 31,<br> 2024** |
|  | **(unaudited)** | |
| **Operating lease right-of-use assets, net** | | |
| Operating lease | $1135509 | $1342333 |
| **Lease liabilities** |  |  |
| Current portion of operating lease liabilities | 314646 | 427984 |
| Non-current portion of operating lease liabilities | 949283 | 1104552 |
|  | $1263929 | $1532536 |

---

Future lease payments under operating leases as of June 30, 2025 were as follows:

---

| | |
|:---|:---|
|  | **Operating<br> Leases** |
| Remaining of FY2025 | 202929 |
| FY2026 | 393261 |
| FY2027 | 401127 |
| FY2028 | 409149 |
| FY2029 | 34605 |
| Total lease payments | $1441071 |
| Less: imputed interest | 177142 |
| Present value of lease liabilities <sup>(1)</sup> | $1263929 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) As of June 30, 2025, present value of future operating lease payments consisted of current portion of operating lease liabilities and non-current portion of operating lease liabilities, amounting to $314,646 and $949,283, respectively.

Lease expense for all the Company's operating leases for the three months ended June 30, 2025 and 2024 were $118,524 and $146,674, respectively. Lease payments for all the Company's operating leases for the three months ended June 30, 2025 and 2024 were $155,461 and $112,418, respectively.

Lease expense for all the Company's operating leases for the six months ended June 30, 2025 and 2024 were $242,016 and $248,155, respectively. Lease payments for all the Company's operating leases for the six months ended June 30, 2025 and 2024 were $320,117 and $233,095, respectively.

For the three and six months ended June 30, 2025, the Company incurred $84,218 short-term lease expenses. For the three and six months ended June 30, 2025, the short-term lease payments were $163,740. The Company did not incur any short-term lease expenses for the three and six months ended June 30, 2024.

**Note 9 – Taxes**

***Income Tax***

 ****

*<u>United States</u>*

 

GDC and AIC are corporations organized in the state of Nevada and operate primarily in the state of New York. As a result, they are subject to U.S. federal corporate income tax as well as state and local income taxes in New York.

For the six months ended June 30, 2025 and 2024, the applicable statutory tax rates were as follows:

● Federal corporate income tax rate: 21%;

● New York State corporate income tax rate: 6.5%;

● New York City business corporation tax rate: 8.85%;

● Metropolitan Transportation Business Tax Surcharge (MTA Tax): 30% of the New York State corporate franchise tax liability;

The Company's effective tax rate may differ from the statutory rates due to various factors, including non-deductible expenses, tax credits, valuation allowances, and the impact of state and local taxes. Additionally, the Company evaluates uncertain tax positions in accordance with ASC 740, recognizing tax benefits only if it is more likely than not that the position will be sustained upon examination.

*<u>British Virgin Islands</u>*

Citi Profit BVI is incorporated in the British Virgin Islands and are not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed.

*<u>Hong Kong</u>*

 

Highlight HK is incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. Highlight HK is subject to Hong Kong profit tax at a rate of 8.25% for assessable profits on the first HK$2 million and 16.5% for any assessable profits in excess of HK$2 million for the three and six months ended June 30, 2025 and 2024. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception.

*<u>PRC</u>*

 

Highlight WFOE and SH Xianzhui are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the "EIT Laws"), qualified small and micro enterprises with annual taxable income not exceeding RMB 3 million are eligible for a preferential corporate income tax rate of 5% until December 31, 2027. This preferential rate is applied in accordance with relevant Chinese tax laws and regulations, and may be adjusted by the authorities from time to time.

The current and deferred components of income tax expenses from continuing operations appearing in the unaudited interim condensed consolidated statements of operations are as follows:

---

| | | |
|:---|:---|:---|
|  | **For the six months ended <br> June 30,** | **For the six months ended <br> June 30,** |
|  | **2025** | **2024** |
| Current tax expenses | **(unaudited)** | **(unaudited)** |
| &nbsp;&nbsp;&nbsp;Federal | $(20000) | $- |
| &nbsp;&nbsp;&nbsp;State | (120832) | - |
| Total current tax expenses | $(140832) | $- |
| Deferred tax benefits |  |  |
| &nbsp;&nbsp;&nbsp;Federal | $153911 | $21918 |
| &nbsp;&nbsp;&nbsp;State | - | - |
| Total deferred tax benefits | $153911 | $21918 |
| Total benefits for income taxes | $13079 | $21918 |

---

The Company is subject to U.S. federal income tax as well as state income tax in certain jurisdictions. The tax years 2022 to 2024 remain open to examination by the major taxing jurisdictions to which the Company is subject. The following is a reconciliation of income tax expenses at the effective rate to income tax at the calculated statutory rates:

---

| | | |
|:---|:---|:---|
|  | **For the <br> six months <br> ended <br> June 30,<br> 2025** | **For the <br> six months <br> ended <br> June 30,<br> 2024** |
| **(unaudited)** | **(unaudited)** | **(unaudited)** |
| Statutory tax rate |  |  |
| &nbsp;&nbsp;&nbsp;Federal | 21.00% | 21.00% |
| State (net of federal benefit) | 13.47% | - |
| Foreign tax | (0.00)% | (1.44)% |
| Amortization of intangible assets | (10.57)% | - |
| Change in valuation allowance | (27.92)% | (19.56)% |
| Others | 3.49% | (0.28)% |
| Effective tax rate | (0.53)% | (0.28)% |

---

As of June 30, 2025 and December 31, 2024, income tax payable to US tax authorities was $282,642 and $141,810, respectively. As of June 30, 2025 and December 31, 2024, no income tax was payable to Chinese tax authorities.

The principal components of the Company's deferred income tax assets and liabilities as of June 30, 2025 and December 31, 2024 were as follows:

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2025** | **December 31,**<br>**2024** |
|  | **(unaudited)** | |
| **Deferred tax assets** |  |  |
| &nbsp;&nbsp;&nbsp;Net operating losses carried forward | $6803230 | $6105138 |
| &nbsp;&nbsp;&nbsp;Provision of credit loss on note receivable and loan receivable | 1092011 | 1092011 |
| &nbsp;&nbsp;&nbsp;Impairment loss of intangible assets | 845008 | 845008 |
| &nbsp;&nbsp;&nbsp;Amortization of intangible assets | 263140 | - |
| &nbsp;&nbsp;&nbsp;Lease liability | 438114 | 605169 |
| **Total deferred tax assets** | $**9441503** | $**8647326** |
| &nbsp;&nbsp;&nbsp;Less: Valuation allowance | (9047896) | (8020571) |
| **Deferred tax assets, net of valuation allowance** | $**393607** | $**626755** |
| **Deferred tax liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Right - Of - Use assets | $(393607) | $(465347) |
| &nbsp;&nbsp;&nbsp;Amortization of intangible assets | - | (315319) |
| **Total deferred tax liabilities** | $**(393607)** | $**(780666)** |
| **Total deferred tax liabilities, net** | $**-**  | $**(153911)** |

---

As of June 30, 2025, the Group had tax losses carry forwards of approximately $5.3 million from the entity in the PRC. The tax loss in the PRC can be carried forward for five years to offset future taxable profit and which will expire between 2028 and 2029 if not utilized. As of June 30, 2025, the Group had tax losses carry forwards of approximately $18.9 million from the entities in the U.S. The tax loss in the U.S. can be carried forward indefinitely.

Management believes that the realization of the benefits from these losses appears uncertain due to the Company's operating history and continued losses in the United States. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero. Management reviews this valuation allowance periodically and makes changes accordingly.

**Note 10 – Concentration of Credit Risk**

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits.

Accounts at each institution are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $250,000. At June 30, 2025 and December 31, 2024, the Company had approximately $0.9 million and nil cash excess of the FDIC insured limit. As of June 30, 2025 and December 31, 2024, $3,267 and $3,267 were deposited with a financial institution located in the PRC, respectively. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.

**Note 11 – Equity**

***Statutory Reserves and Restricted Net Assets***

 ****

In accordance with the PRC Regulations on Enterprises with Foreign Investment, an enterprise established in the PRC with foreign investment is required to make appropriations to certain statutory reserves, namely a general reserve fund, an enterprise expansion fund, a staff welfare fund and a bonus fund, all of which are appropriated from net profit as reported in its PRC statutory accounts. A foreign invested enterprise is required to allocate at least 10% of its annual after-tax profits to a general reserve fund until such fund has reached 50% of its respective registered capital. Appropriations to the enterprise expansion fund and staff welfare and bonus funds are at the discretion of the board of directors for the foreign invested enterprises. For other subsidiaries incorporated in the PRC, the general reserve fund was appropriated based on 10% of net profits as reported in each subsidiary's PRC statutory accounts. General reserve and statutory surplus funds are restricted to set-off against losses, expansion of production and operation and increasing registered capital of the respective company. Staff welfare and bonus fund and statutory public welfare funds are restricted to capital expenditures for the collective welfare of employees. The reserves are not allowed to be transferred to the Company in terms of cash dividends, loans or advances, nor are they allowed for distribution except under liquidation. As of June 30, 2025 and December 31, 2024, there are no balance of the PRC statutory reserve funds.

In addition, under PRC laws and regulations, the Company's PRC subsidiaries are restricted in their ability to transfer their net assets to the Company in the form of dividend payments, loans or advances. Amounts of restricted net assets include paid up capital and statutory reserve funds of the Company's PRC subsidiaries. As of June 30, 2025 and December 31, 2024, the Company did not have any restricted net assets.

Furthermore, cash transfers from the Company's PRC subsidiaries to the Company's subsidiaries outside of the PRC are subject to the PRC government control of currency conversion. Shortages in the availability of foreign currency may restrict the ability of the Company's PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to the Company, or otherwise satisfy their foreign currency denominated obligations.

***Common Stock***

 ****

On January 11, 2024, the Company issued the 400,000 shares of its common stock to Beijing Hehe for exchange of 13.3333% of the total equity interest of SH Xianzhui (as described in Note 1).

In March 2024, the Company entered into a placement agency agreement (the "March 2024 Placement Agency Agreement"), with Univest Securities, LLC ("Univest"), pursuant to which, Univest agrees to use its reasonable best efforts to sell the Company's common stock in a registered direct offering and a concurrent private placement (the "March 2024 Offering"). Univest has no obligation to buy any of the securities from the Company or to arrange for the purchase or sale of any specific number or dollar amount of securities.

Pursuant to the March 2024 Offering, an aggregate of 810,277 shares of common stock of the Company, par value $0.0001 per share, were sold to certain purchasers (the "March 2024 Offering Purchasers"), pursuant to a securities purchase agreement, dated March 22, 2024 (the "March 2024 Securities Purchase Agreement") at a price of $1.144 per common stock, for aggregated proceeds of approximately $0.9 million. The Company paid Univest a cash fee equal to 4.0% of the aggregate gross proceeds raised in the March 2024 Offering. The Company also issued warrants to Univest to purchase up to 40,514 shares of common stock of the Company at an exercise price of $1.373 per share, (the "March 2024 Placement Agent Warrants"). The March 2024 Placement Agent Warrants and the common stock underlying the March 2024 Placement Agent Warrants were not registered under the Securities Act, pursuant to the registration statement of March 2024 Offering. The March 2024 Placement Agent Warrants were issued pursuant to an exemption from the registration requirements of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

On May 31, 2024, the Company entered into a software purchase agreement with Shanxi Gangdong Cultural Media Co., Ltd., a seller unaffiliated with the Company (the "SGCM"). Pursuant to the agreement, the Company agreed to purchase and SGCM agreed to sell all of SGCM's right, title, and interest in and to the certain software. The purchase price of the software shall be $1,248,000, payable in the form of issuance of 1,560,000 shares of common stock of the Company, valued at $0.80 per share. The Company plans to use the software to develop its AI business. On June 4, 2024, the Company issued 1,560,000 shares of common stock of the Company to the SGCM's designees and the transaction was completed.

From February 2024 to October 2024, 1,489,385 shares of the Company's common stock were issued due to the exercise of pre-funded warrants, that were sold in the fiscal year 2023.

From March 2024 to October 2024, 1,361,460 shares of the Company's common stock were issued due to the exercise of 1,695,885 registered warrants issued in November 2023 (the "November 2023 Registered Warrants").

In August 2024, 92,756 shares of the Company's common stock were issued due to the exercise of 54,646 registered warrants and 84,244 unregistered warrants that were issued in the fiscal year 2021.

On February 10, 2025, the Company entered into an At-The-Market Issuance Sales Agreement (the "ATM Agreement") with Univest as the sales agent (the "February 2025 Offering"). Pursuant to the ATM Agreement, the Company may issue and sell from time to time, shares of its common stock having an aggregate offering price of not more than $10,000,000 through the sales agent or any of its sub-agent(s) or other designees, acting as sales agent. Up to the date the unaudited interim condensed consolidated financial statements were issued, the Company has not issue or sell any shares under the ATM Agreement.

On March 4, 2025, the Company entered into a securities purchase agreement (the "March 2025 Securities Purchase Agreement") with certain investors for the sale of 1,115,600 shares of common stock at $0.896379 per share (the "March 2025 Offering"), generating net proceeds in the amount of $910,000, after deducting underwriter's fees of $70,000, equal to seven percent (7%) of the aggregate gross proceeds raised in this Offering and reimbursement of $20,000 for the underwriter's legal counsel and due diligence analysis expense. The Company plans to use the proceeds from the offering for working capital purposes.

On May 2, 2025, the Company entered into a securities purchase agreement (the "May 2025 Securities Purchase Agreement") with certain investors for the sale of 1,115,600 shares of common stock at approximately $0.524 per share and 9,380,582 pre-funded warrants (the "May 2025 Pre-Funded Warrants") at approximately $0.523 per warrant (the "May 2025 Offering"). As of June 30, 2025, the Company received gross proceeds of $4,478,000 for subscription of 1,115,600 shares of its common stock and 7,468,536 pre-funded warrants, with $17,390 still outstanding and receivable from the investor. The offering remains ongoing and has not yet been fully completed. Transaction costs incurred through June 30, 2025 included underwriter's fees of $314,343 and a $20,000 reimbursement for the underwriter's legal counsel and due diligence expenses. After deducting these expenses, net proceeds from the offering (excluding the receivable of $17,390 from the investor) amounted to $4,143,657 as of June 30, 2025. The Company intends to use the proceeds from the offering for working capital purposes.

On April 28, 2025, the Company entered into a software purchase agreement (the "Agreement") with Gongzheng Xu and Qing Wang, who are unaffiliated with the Company (the "GXQW"). Pursuant to the Agreement, the Company agreed to purchase and the GXQW agreed to sell all of GXQW's right, title, and interest in and to the certain software (the "Chat Box"). The purchase price of the software shall be payable in the form of issuance of 2,444,295 shares of the Company's common stock (the "Shares"). On April 28, 2025, the Company issued 2,444,295 shares of its common stock to GXQW and the transaction was completed. The Company plans to use the software to develop its AI business.

As of June 30, 2025 and December 31, 2024, the total outstanding shares of the Company's common stock were 16,795,433 and 11,167,294, respectively.

***Warrants***

 ****

*Placement Agent Warrants*

 ****

In March 2024, the Company entered into a placement agency agreement (the "March 2024 Placement Agency Agreement"), with Univest, pursuant to which, Univest agrees to use its reasonable best efforts to sell the Company's common stock in a registered direct offering and a concurrent private placement (the "March 2024 Offering"). Univest has no obligation to buy any of the securities from the Company or to arrange for the purchase or sale of any specific number or dollar amount of securities.

In connection with the March 2024 Offering, the Company issued 40,514 shares of unregistered warrants (the "March 2024 Placement Agent Warrants") to Univest, at an exercise price of $1.373 per share. The March 2024 Placement Agent Warrants and the common stock underlying the March 2024 Placement Agent Warrants were not registered under the Securities Act, pursuant to the registration statement of March 2024 Offering. The March 2024 Placement Agent Warrants were issued pursuant to an exemption from the registration requirements of the Securities Act provided in Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

As of June 30, 2025 and December 31, 2024, 695,535 unregistered warrants issued to Univest were outstanding.

*Prefunded Warrants*

In connection with the May 2025 Offering, the Company issued 7,468,536 shares of pre-funded warrants (the "May 2025 Prefunded Warrants"), which is exercisable immediately.

From February 2024 to October 2024, holders of 1,489,763 pre-funded warrants, issued in November 2023, exercised their options to purchase 1,489,385 shares of the Company's common stock.

As of June 30, 2025 and December 31, 2024, 7,468,536 and nil prefunded warrants were outstanding, respectively.

*Registered Warrants*

On March 26, 2024, October 16, 2024 and October 17, 2024, holders of 1,695,885 registered warrants issued in November 2023 (the "November 2023 Registered Warrants") exercised their options to purchase 1,361,460 shares of the Company's common stock. On April 30, 2025, holders of 1,051,341 registered November 2023 Registered Warrants exercised their options to purchase 952,644 shares of the Company's common stock, on a cashless basis.

As of June 30, 2025 and December 31, 2024, 565,130 and 1,616,471 shares of November 2023 Registered Warrants were outstanding, respectively.

*February 2021 Registered and Unregistered Warrants*

In August 2024, holders of 54,646 registered warrants and 84,244 unregistered warrants issued in 2021 exercised their options to purchase 92,756 shares of the Company's common stock, on a cashless basis. As of June 30, 2025 and December 31, 2024, no warrants issued in 2021 was outstanding.

The summary of warrant activities for the six months ended June 30, 2025 were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Warrants**<br>**Outstanding** | **Exercisable<br> Into<br> Number of**<br>**Shares** | **Weighted<br> Average<br> Exercise**<br>**Price** | **Average<br> Remaining<br> Contractual**<br>**Life** |
| December 31, 2024 | 2312006 | 2110618 | $29.94 | 3.46 |
| &nbsp;&nbsp;&nbsp;Granted | 7468536 | 7468536 | 0.001 | - |
| &nbsp;&nbsp;&nbsp;Exercised | 1051341 | 1051341 | - | - |
| June 30, 2025 (unaudited) | 8729201 | 8527813 | $45.79 | 2.74 |

---

The summary of warrant activities for the six months ended June 30, 2024 were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Warrants**<br>**Outstanding** | **Exercisable<br> Into<br> Number of**<br>**Shares** | **Weighted<br> Average<br> Exercise**<br>**Price** | **Average<br> Remaining<br> Contractual**<br>**Life** |
| December 31, 2023 | 9623806 | 5394642 | $19.45 | 4.54 |
| Granted | 40514 | 40514 | 1.37 | 4.74 |
| &nbsp;&nbsp;&nbsp;Exercised | 1433067 | 1433067 | 0.0001 | - |
| June 30, 2024 (unaudited) | 8231253 | 4002089 | $23.11 | 3.98 |

---

**Note 12 – Commitments and Contingencies**

***Contingencies***

 ****

From time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity.

**Note 13 – Segment Reporting**

In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which improved the reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses enabling investors to better understand an entity's overall performance and assess potential future cash flows. ASU 2023-07 requires entities with a single reportable segment to provide all the disclosures required by the amendments in ASU 2023-07 and all existing segment disclosures in Segment Reporting (Topic 280). ASU 2023-07 is effective for annual periods on January 1, 2024, and interim periods beginning on January 1, 2025. The Group adopted this standard for its 2024 annual financial statements and applied this standard retrospectively for all prior periods presented in the financial statements. ASU 2023-07 has no material impact on the Group's consolidated financial statements.

The Company operates and manages its business as a single segment and has one operating and reportable segment, the Virtual Content Production. The Company's Chief Executive Officer is the chief operating decision-maker ("CODM"). When making decisions about allocating resources and assessing the performance of the Company as a whole, the CODM review operating metrics and consolidated financial statements.

The Company concluded that consolidated net loss reported in the consolidated statements of operations and comprehensive loss is the measure of segment profitability, and consolidated total assets reported in the consolidated balance sheets is the measure of segment assets. The CODM refer to consolidated operating results and financial condition when addressing strategic and operational matters and allocating resources. Significant expense categories regularly provided to and reviewed by the CODM are those presented in the consolidated statements of operations and comprehensive loss. As substantially all of the Company's long-lived assets are located in the Unite States, and substantially all of the Company's expenses are derived from within the United States, no geographical segments are presented.

**Note 14 – Subsequent events**

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to August 12, 2025, which is the date that the unaudited interim condensed consolidated financial statements were available to be issued. Based on this review, the Company did not identify any subsequent event that would have required adjustment or disclosure in the unaudited interim condensed consolidated financial statements.

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*The following discussion and analysis of the results of our operations and financial condition should be read in conjunction with our unaudited condensed financial statements, and the notes to those unaudited condensed financial statements that are included elsewhere in this Report. All monetary figures are presented in U.S. dollars, unless otherwise indicated.*

 

*Our Management's Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the SEC.*

 

*Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.*

**Overview**

GD Culture Group Limited, formerly known as Code Chain New Continent Limited, is a Nevada corporation and a holding company. The Company currently conducts its operations on virtual content production (the "Virtual Content Production") through the Company and two subsidiaries, AI Catalysis and Shanghai Xianzhui. The Company focuses its business mainly on 1) AI-driven digital human creation and customization; and 2) Live streaming and e-commerce. The company has relentlessly been focusing on serving its customers and creating value for them through the continual innovation and optimization of its products and services. The Company's current subsidiaries, Citi Profit, Highlight HK, Highlight WFOE are holding companies with no material operations.

SyncWaveX is an AI-powered web-based video generation tool, engineered to enable users to synthesize virtual human videos with precise lip synchronization. Utilization involves text input and selection from a library of integrated character models and auditory profiles. The core technological foundation is comprised of speech synthesis, facial expression emulation, and lip-synchronization algorithms. This solution is primarily directed towards content creators, facilitating the rapid production of spoken-word videos; educational and corporate entities, for the transformation of curricular materials into illustrative video content; e-commerce vendors, for the provision of 24-hour digital broadcast capabilities; and individual users, for the creation of engaging social media content. Foundational functionalities are accessible at no cost, subject to daily generative output constraints. The principal revenue model is predicated upon personalized customization services, wherein users may upload photographic and vocal data to cultivate proprietary digital replicas. Upon depletion of complimentary allocation, a tiered fee structure, contingent on temporal duration or generative frequency, is instituted. The platform also accommodates horizontal and vertical aspect ratios, ensuring cross-platform compatibility, thereby fostering the pervasive integration of AI-driven digital human technology across creative and commercial landscapes.

The Company aims to generate revenue from customization services subscriptions.

The Company is also working on the development of a mobile and web platform for interactive fiction—story experiences where readers make choices that branch the plot and lead to multiple endings

**Recent Development**

***Offering***

On March 26, 2024, the Company issued 810,277 shares of common stock in a registered direct offering. See Note 12 of the notes to the unaudited interim condensed consolidated financial statements.

On February 10, 2025, the Company entered into an At-The-Market Issuance Sales Agreement (the "ATM Agreement") with Univest as the sales agent (the "February 2025 Offering"). Pursuant to the ATM Agreement, the Company may issue and sell from time to time, shares of its common stock having an aggregate offering price of not more than $10,000,000 through the sales agent or any of its sub-agent(s) or other designees, acting as sales agent. Up to the date the unaudited interim condensed consolidated financial statements were issued, the Company has not issued or sold any shares under the ATM Agreement.

On March 4, 2025, the Company entered into a securities purchase agreement (the "March 2025 Securities Purchase Agreement") with certain investor for the sale of 1,115,600 shares of common stock at $0.896379 per share (the "March 2025 Offering"), generating gross proceeds in the amount of $1,000,000, before deducting underwriter's fees and accountable expenses and other estimated expenses. The Company plans to use the proceeds from the offering for working capital purposes. Upon closing of the March 2025 Offering, the Company paid $90,000 cash for underwriting, which consists of a total cash fee of $70,000, equal to seven percent (7%) of the aggregate gross proceeds raised in the March 2025 Offering and reimbursement of reasonable fees and expenses of $20,000 for the underwriter's legal counsel and due diligence analysis expenses.

On May 2, 2025, the Company entered into a securities purchase agreement (the "May 2025 Securities Purchase Agreement") with certain investors for the sale of 1,115,600 shares of common stock at approximately $0.524 per share and 9,380,582 pre-funded warrants (the "May 2025 Pre-Funded Warrants") at approximately $0.523 per warrant (the "May 2025 Offering"). Up to the date of the unaudited condensed interim financial statements were issued, The Company received $4,478,000 in proceeds for subscription of 1,115,600 shares of its common stock and 7,468,536 pre-funded warrants. The offering remains ongoing and has not yet been fully completed. Transaction costs incurred through the reporting date included underwriter's fees of $313,460 and a $20,000 reimbursement for the underwriter's legal counsel and due diligence expenses. Net proceeds from the offering, after deducting these expenses, will be $5,095,000. The Company intends to use the proceeds from the offering for working capital purposes.

Pursuant to the May 2025 Securities Purchase Agreement, the Company has agreed to use commercially reasonable efforts to, within sixty (60) calendar days after the date of the May 2025 Securities Purchase Agreement, file a registration statement on the appropriate form providing for the resale by the investors of the May 2025 Offering.

On May 11, 2025, the Company entered into a Common Stock Purchase Agreement with an investor, pursuant to which the Company shall have the right to require the investor to purchase, from time to time, up to a cumulative total of $300,000,000 worth of the Company's common stock. The Company plans to use the proceeds from the offering, if any, to invest in Bitcoin and OFFICIAL TRUMP and for general corporate purposes. The common stock will be issued and sold by the Company to the investor pursuant to a registration statement effective under the Securities Act of 1933, as amended (the "Securities Act") or, if there is no effective registration statement registering, or no current prospectus available for the issuance of the common stock issuable pursuant to the Agreement, in reliance upon the exemptions from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder.

***Nasdaq Compliance***

On May 13, 2024, the Company received a written notice from the Listing Qualifications Department of the Nasdaq Stock Market, LLC ("Nasdaq") notifying the Company that, based on the closing bid price of the Company's common stock was below $1.00 for the last 30 consecutive trading days, the Company no longer complies with the minimum bid price requirement (the "Minimum Bid Price Requirement") for continued listing on the Nasdaq Capital Market as set forth in Nasdaq Listing Rule 5450(a)(1). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has an initial compliance period of 180 calendar days, or until November 11, 2024, to regain compliance with the Minimum Bid Price Requirement. Between June 11, 2025 to June 25, 2025, the Company has maintained a market value of $35 million or greater for ten (10) consecutive business days. On June 26, 2025, the Staff confirmed that the Company meets the $35 million market value standard as required by the Nasdaq Capital Market set forth in Listing Rule 5550(b)(2). Accordingly, this matter is now closed.

On June 18, 2024, the Company received a letter from Nasdaq stating that because the Company's common stock had a closing bid price at or above $1.00 per share for 10 consecutive business days, the Company had regained compliance with the Minimum Bid Price Requirement on June 18, 2024, and that the matter is now closed.

***Software Purchase Agreement***

On May 31, 2024, the Company entered into a software purchase agreement with Shanxi Gangdong Cultural Media Co., Ltd., a seller unaffiliated with the Company (the "SGCM"). Pursuant to the agreement, the Company agreed to purchase and the SGCM agreed to sell all of SGCM's right, title, and interest in and to the certain software (the "AIBox"). The purchase price of the software shall be $1,248,000, payable in the form of an issuance of 1,560,000 shares of common stock of the Company, valued at $0.80 per share. The Company plans to use the software to develop its AI business. On June 4, 2024, the Company issued 1,560,000 shares of common stock of the Company to the SGCM's designees and the transaction was completed.

On April 28, 2025, the Company entered into a software purchase agreement (the "Agreement") with Gongzheng Xu and Qing Wang (the "GXQW"), who are unaffiliated with the Company. Pursuant to the Agreement, the Company agreed to purchase and the GXQW agreed to sell all of GXQW's right, title, and interest in and to the certain software (the "Chat Box"). The purchase price of the software shall be payable in the form of an issuance of 2,444,295 shares of the Company's common stock. On April 28, 2025, the Company issued 2,444,295 shares of its common stock to GXQW and the transaction was completed. The Company plans to use the software to develop its AI business.

**Key Factors that Affect Operating Results**

***Competition***

E-commerce and live streaming are a competitive industry. Our competition varies and includes content creators on TikTok and other social media platforms. Each of these competitors competes with us based on quality of content, activeness and responsiveness on the social placement, product selection, product quality, customer service, price, store format, location, or a combination of these factors. Some of these competitors may have been in business longer, may have more experience, or may have greater financial or marketing resources than us. As competition intensifies, our results of operations may be negatively impacted through a loss of sales and decrease in market share.

***Retention of Key Management Team Members***

Our management team comprises executives with extensive experience in technology and content creation. The management team has led us to take leaps in deploying AI technology in live-steaming, e-commerce, gaming and other sectors. The loss of any of our key executive team members might affect our business and our result of operation.

***Our Ability to Grow Market Presence and Penetrate New Markets***

We are still in an early development stage. We intend to expand our presence on social media to increase the market presence. If we cannot grow our market presence and penetrate new markets in an effective and cost-efficient way, our results of operation will be negatively impacted.

**Results of Operations**

Three Months Ended June 30, 2025 vs. June 30, 2024

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For Three Months Ended<br> June 30,** | **For Three Months Ended<br> June 30,** | | |
|  | **2025** | **2024** |<br>**Change** | **Percentage**<br>**Change** |
| Selling and marketing expenses | $(300000) | $(208333) | $(91667) | 44.0% |
| General and administrative | (1022730) | (1703091) | 680361 | (39.9)% |
| Research and development expense | (233333) | (217500) | (15833) | 7.3% |
| Other-than-temporary impairment losses | - | (1500000) | 1500000 | (100.0)% |
| **Loss from operations** | **(1556063)** | **(3628924)** | **2072861** | **(57.1)%** |
| Other income |  |  |  |  |
| Interest income | 2179 | 13056 | (10877) | (83.3)% |
| Other income, net | 2179 | 13056 | (10877) | (83.3)% |
| **Loss before income tax** | **(1553884)** | **(3615868)** | **2061984** | **(57.0)%** |
| Benefit from income taxes | 54830 | 22956 | 31874 | 138.8% |
| **Net loss** | **(1499054)** | **(3592912)** | 2093858 | **(58.3)%** |
| Net loss attributable to noncontrolling interest | - | (7731) | 7731 | (100.0)% |
| **Net loss attributable to GD Culture Group Limited** | **(1499054)** | **(3585181)** | **2086127** | **(58.2)%** |

---

**Operating Expenses**

The Company's operating expenses include selling and marketing ("S&M") expenses, general and administrative ("G&A") expenses, research and development ("R&D") expenses. S&M expenses increased to $300,000 for the three months ended June 30, 2025, as compared to $208,333 for the three months ended June 30, 2024. The increase was mainly due to rise in brand marketing expenses, partially offset by the Company's decreased inputs on digital human and e-commerce live streaming marketing and advertising, driven by the uncertainty surrounding TikTok's potential exit from the U.S. G&A expenses decreased by $680,361 from $1,703,091 for the three months ended June 30, 2024 to $1,022,730 for the three months ended June 30, 2025, primarily due to a reduction in professional fees. R&D expenses increased by $15,833, from $217,500 for the three months ended June 30, 2024 to $233,333 for the three months ended June 30, 2025. The increase was mainly attributable to research and development support activities for the newly purchased software, Chat Box. This increase was partially offset by decreased inputs in research and development related to the Company's artificial intelligence-based digital human application.

***Other Income, Net***

The Company's other income decreased by $10,877 during the three months ended June 30, 2025, compared to $13,056 for the three months ended June 30, 2024. The decrease was mainly due to the absence of interest income for the three months ended June 30, 2025, which had been earned from a loan to a third party in 2024.

***Net Loss***

The Company's net loss decreased by $2,093,858, or 58.3%, to $1,499,054 for the three months ended June 30, 2025, from $3,592,912 for the three months ended June 30, 2024. The decrease was mainly driven by lower operating expenses, as discussed above.

Six Months Ended June 30, 2025 vs. June 30, 2024

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For Six Months Ended<br> June 30,** | **For Six Months Ended<br> June 30,** | | |
|  | **2025** | **2024** |<br>**Change** | **Percentage**<br>**Change** |
| Selling and marketing expenses | $(300000) | $(2400000) | $2100000 | (87.5)% |
| General and administrative | (1960607) | (3472371) | 1511764 | (43.5)% |
| Research and development expense | (233333) | (435000) | 201667 | (46.4)% |
| Other-than-temporary impairment losses | - | (1500000) | 1500000 | 100.0% |
| **Loss from operations** | **(2493940)** | **(7807371)** | **5313431** | **(68.1)%** |
| Other income (expenses) |  |  |  |  |
| Interest income | 4297 | 35002 | (30705) | (87.7)% |
| Other income, net | 4297 | 35002 | (30705) | (87.7)% |
| **Loss before income tax** | **(2489643)** | **(7772369)** | **5282726** | **(68.0)%** |
| Benefit from income taxes | 13079 | 21918 | (8839) | (40.3)% |
| **Net loss** | **(2476564)** | **(7750451)** | **5273887** | **(68.0)%** |
| Net loss attributable to noncontrolling interest | - | (186642) | 186642 | (100.0)% |
| **Net loss attributable to GD Culture Group Limited** | **(2476564)** | **(7563809)** | **5087245** | **(67.3)%** |

---

**Operating Expenses**

The Company's operating expenses include selling and marketing ("S&M") expenses, general and administrative ("G&A") expenses, research and development ("R&D") expenses. S&M expenses decreased to $300,000 for the six months ended June 30, 2025, compared to $2,400,000 for the six months ended June 30, 2024. The decrease was mainly due to the Company decreased inputs on digital human and e-commerce live streaming marketing and advertising due to the uncertainty surrounding TikTok's potential exit from the U.S. G&A expenses decreased by $1,511,764 from $3,472,371 for the six months ended June 30, 2024 to $1,960,607 for the six months ended June 30, 2025. The decrease was mainly due to the decrease in the professional service fee, partially offset by the increase in amortization of intangible assets and listing fee. R&D expenses decreased to $233,333 for the six months ended June 30, 2025, compared to $435,000 for the six months ended June 30, 2024. The decrease was mainly due to the Company decreased inputs on research and development about our artificial intelligence based digital human application. This decrease was partially offset by research and development support activities for the newly purchased software, Chat Box.

***Other Income, Net***

The Company's other income decreased by $30,705 during the six months ended June 30, 2025, compared to $35,002 for the six months ended June 30, 2024. The decrease was mainly due to the absence of interest income for the three months ended June 30, 2025, which had been earned from a loan to a third party in 2024.

***Net Loss***

The Company's net loss decreased by $5,273,887, or 68.0%, to $2,476,564 for the six months ended June 30, 2025, from $7,750,451 for the six months ended June 30, 2024. The decrease was mainly driven by lower operating expenses, as discussed above.

**Liquidity and Capital Resources**

As of June 30, 2025, the Company had $1,117,760 in its operating bank accounts and working capital of approximately $1.5 million. From September 2024 to January 2025, Mr. Xiaojian Wang, the Chief Executive Officer of the Company ("CEO"), lent $399,485 to the Company through six loan agreements, for working capital purposes. Pursuant to the loan agreements, these loans are non-interest bearing and will be due from September 2025 to January 2026, respectively. From March 2025 to May 2025, the Company repaid $399,485 in full to the CEO. Up to the date of the unaudited interim condensed consolidated financial statements were issued, there was no outstanding loan from the CEO.

On January 23, 2025, the Green Oasis Limited, a shareholder holding less than a 5% ownership shares in the Company, provided a $100,000 loan to the Company for working capital purposes. Pursuant to the loan agreement, this loan is non-interest bearing and was due on April 23, 2025. On April 25, 2025, Green Oasis Limited and the Company extended the maturity date to July 23, 2025, which was further extended to July 23, 2026 through an amendment agreement signed on July 30, 2025.

On March 4, 2025, the Company sold 1,115,600 shares of common stock at $0.896379 per share, generating gross proceeds of $1,000,000. The Company received net proceeds of $910,000 after deducting underwriter's fees of $70,000 and a $20,000 reimbursement for the underwriter's legal counsel and due diligence analysis expenses. The Company intends to use the proceeds from the offering for working capital purposes.

On May 2, 2025, the Company completed a securities offering in which it agreed to sell (i) 1,115,600 shares of its common stock at a purchase price of approximately $0.524 per share and (ii) 9,380,582 pre-funded warrants at a purchase price of approximately $0.523 per warrant. Up to the date of the unaudited condensed interim financial statements were issued, The Company received $4,478,000 in proceeds for subscription of 1,115,600 shares of its common stock and 7,468,536 pre-funded warrants, with $17,390 still outstanding and receivable from the investor. The offering remains ongoing and has not yet been fully completed. Transaction costs incurred through June 30, 2025 included underwriter's fees of $313,343 and a $20,000 reimbursement for the underwriter's legal counsel and due diligence expenses. After deducting these expenses, net proceeds from the offering (excluding the receivable of $17,390 from the investor) amounted to $4,143,657 as of June 30, 2025. The Company intends to use the proceeds from the offering for working capital purposes.

The Company evaluated its ability to continue as a going concern in accordance with ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern, which requires management to assess whether there is substantial doubt about the Company's ability to continue as a going concern within one year after the date the financial statements are issued.

Considering the impact of the financing and the Company's projected operating cash flows as described above, management concluded that the Company will have sufficient liquidity to meet its obligations as they become due for at least the next twelve months from the date the financial statements are issued.

The following summarizes the key components of the Company's cash flows for the six months ended June 30, 2025 and 2024.

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| | | |
|:---|:---|:---|
|  | **For the six Months Ended <br> June 30,** | **For the six Months Ended <br> June 30,** |
|  | **2025** | **2024** |
| Net cash used in operating activities | $(3708974) | $(5050619) |
| Net cash used in investing activities |  | (650000) |
| Net cash provided by financing activities | 4804172 | 830533 |
| Effect of exchange rate change on cash and cash equivalents | 24 | (3595) |
| Net change in cash and cash equivalents | $1095222 | $(4873681) |

---

 

*Operating activities*

Net cash used in operating activities was approximately $3.7 million for the six months ended June 30, 2025, as compared to approximately $5.1 million net cash used in operating activities for the six months ended June 30, 2024. Net loss for the six months ended June 30, 2025 was approximately $2.5 million, as compared to approximately $7.8 million for the six months ended June 30, 2024. Adjustments to reconcile net loss to net cash used in operating activities decreased by approximately $1.6 million for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, mainly due to the decreased other-than-temporary impairment losses from convertible note. Changes in operating assets and liabilities decreased approximately $2.3 million, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, which was primarily driven by the increase of approximately $2.2 million in change of prepaid and other current assets.

*Investing activities*

 

Net cash used in investing activities was nil for the six months ended June 30, 2025, as compared to approximately $0.7 million for the six months ended June 30, 2024. The decrease in net cash used in investing activities was due to the absence of the loan to a third party for the six months ended June 30, 2025, as compared to the same period of 2024.

*Financing activities*

Net cash provided by financing activities was approximately $4.8 million for the six months ended June 30, 2025, compared to approximately $0.8 million for the six months ended June 30, 2024. The increase was mainly caused by i) an increase in proceeds from issuance of common stock, which rose by approximately $0.7 million to approximately $1.5 million for the six months ended June 30, 2025, compared to approximately $0.8 million in the same period of 2024; ii) proceeds from issuance of prefunded warrants, which totaled approximately $3.6 million in the six months ended June 30, 2025, compared to none for the six months ended June 30, 2024. These increase in the cash provided by financing activities were partially offset by a repayment to a related party of $0.4 million.

**Critical Accounting Policies and Estimates**

The Company prepares its unaudited interim condensed consolidated financial statements in accordance with U.S. GAAP. The preparation of these unaudited interim condensed consolidated financial statements requires the Company to make estimates, assumptions and judgments that can significantly impact the amounts the Company reports as assets, liabilities, revenue, costs and expenses and the related disclosures. The Company bases its estimates on historical experience and other assumptions that it believes are reasonable under the circumstances. The Company's actual results could differ significantly from these estimates under different assumptions and conditions. The Company identified the following critical accounting estimates.

*<u>Impairment of long-lived assets</u>*

The Company's determination of whether or not an indication of impairment exists at the cash generating unit level requires significant management judgment pertaining to intangible assets, including a software copyright of AI Box, which is used for online living-stream and a software copyright of Chat Box, which is used for online interactive entertainment scenarios, as well as the operating Right-of-use ("ROU") assets, including the offices of the Company. Management considers both external and internal sources of information in assessing whether there are any indications that the Company's intangible assets and ROU assets are impaired. Based on the evaluation, the Company did not recognize impairment losses in long-lived assets for the six months ended June 30, 2025 and 2024.

**Recently Issued Accounting Pronouncements**

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company's management does not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures," which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The purpose of the amendment is to enable investors to better understand an entity's overall performance and assess potential future cash flows. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. The Company adopted ASU 2023-07 for the year ending December 31, 2024.

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses. This new guidance is designed to improve the disclosures about the types of expenses, including employee compensation, depreciation, and amortization, and costs incurred related to inventory and manufacturing activities. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 on a prospective basis with optional retrospective application. Early adoption is permitted. The Company is currently assessing the impact that adopting this new accounting standard will have on its consolidated financial statements.

We do not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on our consolidated balance sheets, statements of operations and comprehensive loss and statements of cash flows.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

***Credit Risk***

 ****

Credit risk is one of the most significant risks for the Company's business.

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. Cash held at major financial institutions located in the PRC are not insured by the government. While we believe that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.

***Inflation Risk***

 ****

The Company is also exposed to inflation risk. Inflationary factors, such as increases in raw material and overhead costs, could impair our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of sales revenue if the selling prices of our products do not increase with such increased costs.

***Foreign Currency Risk***

 ****

A majority of the Company's operating activities and a significant portion of the Company's assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples' Bank of China ("PBOC") or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers' invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.

**ITEM 4. CONTROLS AND PROCEDURES**

Under the supervision and with the participation of our management, including our Chief Executive Officer, President and Chief Financial Officer (the "Certifying Officers"), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officers concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Report.

Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Certifying Officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**PART II — OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

None.

**ITEM 1A. RISK FACTORS**

Investing in our common stock involves a high degree of risk. You should carefully consider the information included in this Quarterly Report on Form 10-Q and the risk factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 before making an investment in our common stock. Our business, financial condition, results of operations, or prospects could be materially and adversely affected if any of these risks occurs, and as a result, the market price of our common stock could decline and you could lose all or part of your investment. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results. There are no material changes to the risk factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. See "Cautionary Note Regarding Forward-Looking Statements." Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including those set forth below.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

On March 4, 2025, the Company issued 1,115,600 shares of common stock at $0.896379 per share pursuant to a securities purchase agreement with certain investor dated March 4, 2025. The Company received gross proceeds in the amount of $1,000,000, before deducting placement agent's fees and accountable expenses and other estimated expenses, and plans to use the proceeds from the offering for working capital purposes. The securities were issued and sold by the Company to the investor in reliance upon the exemptions from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder.

On May 31, 2024, the Company entered into a software purchase agreement with Shanxi Gangdong Cultural Media Co., Ltd., a seller unaffiliated with the Company. Pursuant to the agreement, the Company purchases and the SGCM sold all of the seller's right, title, and interest in and to the certain software (the "AIBox"). The purchase price of the software was $1,248,000, payable in the form of an issuance of 1,560,000 shares of common stock of the Company, valued at $0.80 per share. The Company plans to use the AIBox to develop its AI business. On May 31, 2024, the Company issued the 1,560,000 shares of common stock and the transaction was completed.

On April 28, 2025, the Company entered into a software purchase agreement with Gongzheng Xu and Qing Wang, who are unaffiliated with the Company. Pursuant to the agreement, the Company purchased and the seller sold all of the sellers' right, title, and interest in and to the certain software (the "Chat Box"). The purchase price of the software was $5,768,536.20, payable in the form of issuance of 2,444,295 shares of common stock of the Company, valued at $2.36 per share, the closing bid price of the Company's common stock on April 25, 2025. The Company plans to use the Chat Box to develop its AI business. On April 28, 2025, the Company issued the 2,444,295 shares of common stock and the transaction was completed. The common stock were issued and sold by the Company in reliance upon the exemptions from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act and Regulation S promulgated thereunder.

On May 6, 2025, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to sell 1,115,600 shares of common stock at $0.524 per share and 9,380,582 pre-funded warrants at $0.523 per warrant. The Company completed its first closing of the Shares and 7,468,536 pre-funded warrants on May 8, 2025, and received gross proceeds in the amount of $4,478,000 before deducting placement agent's fees and accountable expenses and other estimated expenses. The Company plans to use the proceeds from the offering for working capital purposes. The common stock and pre-funded warrants were issued and sold by the Company in reliance upon the exemptions from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 4. MINE SAFETY DISCLOSURES**

Not applicable.

**ITEM 5. OTHER INFORMATION**

None.

**ITEM 6. EXHIBITS**

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

---

| | |
|:---|:---|
| **Exhibit<br> Number** | **Description** |
| 31.1 | [Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).](ea025240901ex31-1_gdculture.htm) |
| 31.2 | [Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).](ea025240901ex31-2_gdculture.htm) |
| 32.1 | [Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.](ea025240901ex32-1_gdculture.htm) |
| 32.2 | [Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350.](ea025240901ex32-2_gdculture.htm) |
| 101.INS | Inline XBRL Instance Document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized on August 12, 2025.

---

| | | |
|:---|:---|:---|
|  | **GD CULTURE GROUP LIMITED** | **GD CULTURE GROUP LIMITED** |
| Date: August 12, 2025 | By: | */s/ Xiaojian Wang* |
|  | Name: | Xiaojian Wang |
|  | Title: | Chief Executive Officer, President and |
|  |  | Chairman of the Board |
| Date: August 12, 2025 | By: | */s/ Zihao Zhao* |
|  | Name: | Zihao Zhao |
|  | Title: | Chief Financial Officer and Secretary |
|  |  | (Principal Financial Officer and<br> Principal Accounting Officer) |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO<br> SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Xiao Jian Wang, certify that:

---

| | |
|:---|:---|
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the three months ended June 30, 2025 of GD Culture Group Limited.; |
| 2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4 | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5 The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: August 12, 2025 | By: | */s/ Xiao Jian Wang* |
|  |  | Xiao Jian Wang |
|  |  | Chief Executive Officer, President and |
|  |  | Chairman of the Board |
|  |  | (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO<br> SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Zihao Zhao, certify that:

---

| | |
|:---|:---|
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the three months ended June 30, 2025 of GD Culture Group Limited.; |
| 2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4 | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5 The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

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| | | |
|:---|:---|:---|
| Date: August 12, 2025 | By: | /s/ *Zihao Zhao* |
|  |  | Zihao Zhao |
|  |  | Chief Financial Officer |
|  |  | (Principal Financial and Chief Accounting Officer) |

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## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**SECTION 906 OF SARBANES-OXLEY ACT OF 2002**

I, Xiao Jian Wang, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Quarterly Report on Form 10-Q of GD Culture Group Limited. (the "Company") for the quarterly period ended June 30, 2025 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (U.S.C. 78m or 78o(d)); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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| | | |
|:---|:---|:---|
| Date: August 12, 2025 | By: | /s/ *Xiao Jian Wang* |
|  |  | Xiao Jian Wang |
|  |  | Chief Executive Officer, President and |
|  |  | Chairman of the Board |
|  |  | (Principal Executive Officer) |

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The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**SECTION 906 OF SARBANES-OXLEY ACT OF 2002**

I, Zihao Zhao, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Quarterly Report on Form 10-Q of GD Culture Group Limited (the "Company") for the quarterly period ended June 30, 2025 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (U.S.C. 78m or 78o(d)); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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| | | |
|:---|:---|:---|
| Date: August 12, 2025 | By: | */s/ Zihao Zhao* |
|  |  | Zihao Zhao |
|  |  | Chief Financial Officer |
|  |  | (Principal Financial and Chief Accounting Officer) |

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The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.