BAOS — FY2025 Financial Report Analysis

Ad spend rose by half, but Baosheng kept less of it and lost $12.0 million

Baosheng Media is a Beijing-based online advertising agency. It buys ad space on search engines, short-video apps and news feeds for advertisers and earns a thin cut: either a rebate from the media platform (typically 10% to 20% of the client's spend, according to the 20-F, before any share passed back to the advertiser) or a fee on top of what it pays for the ads. Because it books only that cut as revenue, its revenue is tiny next to the money that passes through it.

In fiscal 2025 (the year to December 31, 2025, reported in the Form 20-F filed April 30, 2026) the money passing through grew. Gross billing, meaning the total ad spend clients placed through Baosheng, rose 51.9% to $18.4 million. Revenue still fell 8.8% to $569,000, because Baosheng kept 3.1% of that spend against 5.2% a year earlier. The net loss narrowed from $26.9 million to $12.0 million only because 2024 carried a $23.0 million charge for unpaid client bills. Before one-off charges, the operating loss got slightly worse. The auditor again flagged substantial doubt about whether the company can keep operating (a "going concern" warning).

At a glance

• Revenue $0.57 million, down 8.8%: the business shrank even though clients spent 51.9% more through it, because it earned less on each dollar.
• Net loss $12.0 million, or $7.83 per share: about 21 times revenue. Roughly $8.5 million of it was write-downs of money the company no longer expects to collect.
• Shareholders' equity fell 78% to $3.3 million: current liabilities ($9.1 million) now exceed current assets ($6.9 million), and the auditor raised going-concern doubt.

Key figures

All figures are in US dollars as reported under US GAAP. The loss from operations was about 18 times revenue, so an operating-margin percentage says little here and is left out.

Where the revenue went

Revenue comes from two sources, and they moved in opposite directions:

• Rebates from media platforms rose 21.4% to $489,000, which the company attributes to "increased orders" from news-feed ad publishers.
• Net fees from advertisers fell 63.8% to $80,000. Management says it "engaged outsourced labors to provide services for our advertisers," which raised the media costs netted against those fees.

By ad type, the mix shifted sharply. Search-engine marketing (SEM) billing roughly halved, down 47.6% to $1.6 million. The filing says plainly why: Baosheng "cannot obtain longer credit terms from the publishers or afford to prepay gross billing amount on behalf of our advertisers as the legal proceedings incurred significant legal expenses." Non-search billing (social, short-video and in-feed ads) rose 85.9% to $16.7 million, but media costs ate 96.9% of it against 93.3% a year earlier. Revenue from that larger business fell 12.8% to $525,000. Baosheng bought volume at worse terms.

The client base is concentrated. The number of advertisers rose to 714 from 528, but the top five still placed 83.4% of gross billing, so losing one large client would matter far more than adding hundreds of small ones.

What the headline numbers hide

• The smaller loss is a comparison effect. In 2024 the company charged $23.0 million against client bills it didn't expect to collect. In 2025 that line was $3.2 million: $1.0 million on client receivables plus a $2.2 million write-off of recoverable VAT (sales tax it had prepaid and expected to offset against future taxes), which it no longer expects to use because it doesn't generate enough taxable sales. Take out the bad-debt charges and the $2.8 million deposit write-off, and the operating loss was about $4.2 million in 2025 against $3.7 million in 2024. On that basis the core business lost more, not less.
• About $8.5 million of the loss was write-downs, not cash spent this year. Besides the $3.2 million above, Baosheng wrote off a $2.8 million deposit placed in 2023 with Nanjing Yunbei for a possible acquisition, now judged unlikely to be recovered. It also cut about $2.5 million from the value of its 42.85% stake in Guangzhou Shanxingzhe, bought for $4.2 million in 2023, to match a sale agreed in April 2026 for RMB15.0 million (about $2.2 million). That is why operating cash outflow ($2.3 million) was far smaller than the net loss ($12.0 million). Most of that money was lost in earlier years and is only being recognized now.
• Overheads are about seven times revenue. General and administrative costs rose 14.2% to $4.0 million, including $0.3 million more in professional fees for a financial adviser hired to find an investor and $0.2 million more in bank charges. Revenue was $0.57 million. Litigation also weighs on the business: a minority shareholder's petition in the Cayman Islands, filed April 2024, asks the court to wind up (liquidate) the company. The company's attempt to strike it out was dismissed, and the case was in discovery when the 20-F was filed. Separately, the company still has unpaid court judgments against former clients in China, including one for about RMB35.8 million (about $5.0 million) against Beijing Kaikeba.
• Receivables grew while revenue fell. Net accounts receivable rose 24.9% to $4.6 million, and the cash-flow statement cites "delayed payments from advertisers." Baosheng also took longer to pay its own bills: accounts payable rose $1.7 million to $5.4 million. Gross receivables fell from $29.4 million to $4.7 million only because old balances were written off as uncollectable.
• Management's liquidity view and the balance sheet disagree. The 20-F says current assets are "sufficient to cover the current liabilities." On the reported balance sheet, current liabilities of $9.1 million exceed current assets of $6.9 million by $2.25 million, and the new auditor (GGF CPA, appointed 2025) cites "a net working capital deficiency." Cash and short-term investments totaled $1.6 million at year-end.

Takeaway: Baosheng's client ad spend grew 52% in 2025, but it kept a smaller share of every dollar and couldn't finance its search-ad business, so revenue still fell to $0.57 million against $4.0 million of overheads. The narrower loss reflects smaller write-offs than 2024's, not a better business, and $3.3 million of equity plus a going-concern warning leave little room to absorb another bad year.

What has happened since, and what to watch

The company gave no revenue or profit guidance. Its 2026 filings (6-K reports, the form foreign companies use for interim news) point to three things:

• Cleaning out old receivables at a steep discount. In August 2026 four subsidiaries put long-overdue receivables and one prepayment, with a book balance of RMB226.2 million (about $33.4 million), up for sale on the Beijing Equity Exchange. An independent appraiser valued them at RMB8.56 million (about $1.26 million), roughly 4 cents on the dollar. On September 14, 2026 the only qualified bidder agreed to pay that amount. This brings in a little cash, but it also confirms that most of the old receivables will never be collected.
• Raising money by issuing shares. In July 2026 Baosheng registered the sale of up to $30 million of new shares to High West Partners under a purchase agreement, letting it sell shares over time to fund operations. With only 1.53 million shares outstanding at year-end, any meaningful use of that facility would substantially dilute existing shareholders (reduce each one's ownership share).
• Listing status. On September 10, 2026 Nasdaq notified the company that its shares had closed below the $1.00 minimum bid price for 30 consecutive business days (July 27 to September 9, 2026). Between July and September 2026 the company also announced several AI-marketing cooperation agreements and memorandums of understanding, with 58.com, DirectBooking Technology and Zhongcheng Kexin among others, plus a memorandum on buying 40% of Blue Intelligence Cloud Innovation Technology. None of them has yet shown up in reported revenue.

The next real test is the first-half 2026 interim report. The 2025 equivalent came out on November 28, 2025. Watch three things: whether gross billing keeps growing without the take rate falling further; whether the RMB15.0 million Shanxingzhe sale proceeds arrived (they were due by June 30, 2026); and how far equity and cash moved after the receivables sale and any share issuance. On the 2025 numbers, the business does not cover its costs, and its survival depends on outside financing rather than on advertising revenue.