EPWK (EPWK) Registration Filing summary

Company overview and business model

• Operates the second largest online crowdsourcing marketplace in China, connecting businesses (buyers) and service providers (sellers) for design, software development, marketing, and other services, with over 25.66 million registered users as of June 30, 2024.

• Platform is commission-free for most transactions, with revenue from premium business solutions, online promotion, value-added services, and shared office rental.

• Business is conducted through a VIE structure due to PRC restrictions on foreign ownership in internet and telecom sectors; the Cayman Islands holding company controls the PRC operating entity via contractual agreements.

• Buyers are primarily SMEs across China, while sellers include freelancers, student artists, and small businesses; the platform offers AI-powered tools, IP registration, and business support services.

Financial performance and metrics

• Revenue for the years ended June 30, 2024 and 2023 was $20.22 million and $19.80 million, respectively.

• Net loss for the same periods was $1.20 million and $1.08 million, with negative operating cash flows of $1.62 million and $1.50 million.

• Gross profit margin declined from 25.5% in 2023 to 18.7% in 2024, mainly due to increased share of lower-margin premium business solutions.

• As of June 30, 2024, total assets were $4.51 million, total liabilities $11.71 million, and shareholders' deficit $7.20 million.

• The VIE and its subsidiaries contributed nearly 100% of consolidated revenue and assets.

Use of proceeds and capital allocation

• Net proceeds of approximately $9.6 million (assuming no over-allotment) are planned to be allocated: 30% to business development and marketing, 25% to R&D, 25% to new product/service exploration, and 20% to general corporate purposes and working capital.

• Management has significant discretion over the use of proceeds.