BAOS — H1 2026 Financial Report Analysis

Revenue fell 78% and a $14.7 million share payment to consultants pushed the half-year loss to $19.2 million

Baosheng Media is a Beijing-based online advertising agency. It places ads for clients on search engines, short-video apps and news feeds, and counts only its own cut as revenue: a rebate from the media platform or a fee on top of what it pays for the ads. In the six months to June 30, 2026 (unaudited figures, furnished on a Form 6-K on October 16, 2026), that cut shrank to $62,701 from $283,039 a year earlier. Clients placed $5.3 million of ad spend through the company (its "gross billing"), down from $11.5 million. The net loss rose to $19.2 million from $4.2 million. Most of the increase came from one non-cash item: 5.3 million new shares issued to outside consultants for marketing services, booked as a $14.7 million expense. In June the company also sold 25 million new shares for $12.5 million, which lifted shareholders' equity back to $11.4 million. Within weeks it lent almost all of that money, $12.4 million, to an unnamed third party.

At a glance

• Revenue $62,701, down 77.8%: client ad spend through Baosheng fell 54% to $5.3 million, and the company kept about 1.2% of it, against about 2.5% a year earlier.
• Net loss $19.2 million, or $3.90 per share: $14.7 million of it is the value of shares paid to consultants and $2.7 million is write-offs of two small investments. Neither used cash.
• Cash $0.73 million against $6.6 million of bills due within a year: the $12.5 million raised from new shareholders sits mostly in a six-month loan to an unnamed borrower, not in the bank.

Key figures

All figures are in US dollars under US GAAP and unaudited. The loss from operations was about 263 times revenue, so an operating-margin percentage says nothing useful here and is left out. Gross billing is the company's own operating measure, rounded to $0.1 million in the filing. The last two rows compare with the December 31, 2025 balance sheet, as the filing does.

Where the revenue went

Both sources of revenue fell:

• Rebates from media platforms fell 33.1% to $64,415, which the company puts down to "the decrease in orders from our customers."
• Net fees from advertisers were negative $1,714, against $186,691 a year earlier. The filing attributes this to a "reversal of net fees," meaning fees booked earlier were taken back. That turns total revenue slightly below the rebate figure.

By ad type, search-engine marketing (SEM) revenue fell 87.6% to $18,631 and other formats (news-feed, short-video and app ads) fell 66.7% to $44,070, "primarily caused by the decrease in rebates earned from news feed ads media." The number of advertisers dipped to 547 from 579, and the top five placed 86% of gross billing, up from 82%.

The cost of running the client-service team rose 44.7% to $334,760, which the company attributes to higher staff costs. Revenue no longer covers even that. The gross loss was $272,059.

What the headline numbers hide

Most of the loss is a share payment, not cash spent. Selling and marketing expenses rose from $134,898 to $14.8 million. Almost all of the increase is the 5.3 million shares issued on June 18, 2026 to consultants for "market research, designing marketing strategy, management of customer relationships, identification of strategic partnerships and collaborations and assessment of service expansion." The shares vested immediately and were valued at that day's closing price, giving $14,681,000, or about $2.77 per share. Ten days earlier the private placement had sold shares for about $0.50 each ($12.5 million of net proceeds for 25 million shares). Shareholders were therefore diluted twice in June: once to raise cash and once to pay consultants. The second issue cost them more on paper, on top of ad revenue of $62,701 for the half. Strip out that charge and the operating loss was about $1.8 million, against $4.2 million a year earlier. But the 2025 half included a $2.7 million charge for unpaid client bills. Without that charge the 2025 loss was about $1.6 million, so the underlying business did not improve.

Cash burn rose, and the bank balance is thin. Operating activities used $2.9 million of cash in the half, against $0.5 million a year earlier. Part of that was paying down old supplier bills: accounts payable fell $3.4 million, partly offset by $1.8 million collected from clients. Cash fell to $727,694. For scale, current liabilities (bills and borrowings due within a year) were $6.6 million, including $1.2 million of short-term bank loans.

The capital raised went straight out as a loan. On June 8 the company agreed to lend $12,395,169 to a third party for six months at 6% a year, with principal and interest due at maturity. It paid out the money on June 26, 2026. At $12.5 million, that loan is now the largest asset on the balance sheet, about 70% of total assets of $18.0 million. The filing does not name the borrower or say what security, if any, backs the loan. Repayment falls due around late December 2026. Whether it is repaid in full matters more to Baosheng's balance sheet than anything in its advertising business.

The going-concern doubt is still in the filing, with a new rationale. The notes say the losses and cash outflow "initially raised a substantial doubt about the Company's ability to continue as a going concern." Going concern means whether a company can keep operating and paying its bills for the next 12 months. Management concludes it can, because current assets ($17.3 million) now exceed current liabilities ($6.6 million). That is a real change from December 31, 2025, when current liabilities of $9.1 million exceeded current assets of $6.9 million. But the improvement rests almost entirely on the $12.5 million loan receivable. Without it, current assets would be about $4.8 million. The plan for the next 12 months is to rely on "a combination of application of credit terms and bank loans."

Client and supplier concentration is extreme. Two customers made up 39.6% and 33.4% of revenue, and two advertisers made up 53.0% and 33.2% of the $2.9 million of net receivables. One publisher (the media platform side) supplied 92.0% of all ad inventory purchased and accounted for 66.7% of accounts payable. Losing any one of these relationships would change the business.

Investments written off. The company wrote off its stakes in Beijing Qucheng Technology and Beijing Xinrong Fanxing Technology in full ($2.7 million). It says both "conducted limited operations" and recovery is "remote." Separately, the sale of its 42.86% stake in Shanxingzhe went through for RMB15.0 million ($2.19 million). The buyer paid RMB8.0 million in June and RMB7.0 million in July.

Ownership changed hands. The share issue diluted Anruitai Investment, the former 22.4% shareholder, to 1.08%. In July it bought 1.28 million new shares at $0.52 each ($665,600) and, according to the filing, again became the principal shareholder. Shares outstanding rose from 1,534,487 at the end of 2025 to 31,834,487 at June 30, 2026, a twentyfold increase. That is why the loss per share rose much less than the loss itself.

Legal and listing risks remain. The filing lists a US securities lawsuit (claimed losses above $13.5 million), a winding-up petition in the Cayman Islands now in discovery, a Beijing claim against a director for about $6.6 million, and a labor dispute. On September 10, 2026 Nasdaq notified the company that its shares had closed below the $1.00 minimum bid for 30 business days. It has until March 9, 2027 to regain compliance.

Did last time's read hold up?

Our FY2025 report named three things to watch in this interim report.

• Gross billing: it fell. It had grown 52% in 2025, but in this half it was down 54% year on year, and the share Baosheng kept fell further, to about 1.2%.
• The Shanxingzhe sale proceeds: they arrived, in two parts. RMB8.0 million came in June and the remaining RMB7.0 million in July, a month after the June 30 date the earlier filing gave.
• Equity and cash after any share issuance: equity recovered from $3.3 million to $11.4 million through the share issues, but cash fell to $0.73 million because the money raised was lent out.

That report concluded that survival depended on outside financing rather than advertising revenue. The first half bears this out: revenue fell 78% while the company raised $12.5 million from new shareholders.

Takeaway: Baosheng's advertising business shrank to $62,701 of revenue in six months, too little to cover even its own client-service staff. Equity was rebuilt to $11.4 million only by issuing 30.3 million new shares, and the cash raised now sits in a $12.4 million six-month loan to an unnamed third party. With $0.73 million in the bank, that loan's repayment around year-end is now the main thing holding the balance sheet up.

What comes next

Management gives no revenue or earnings guidance. Its stated plan is to pursue "AI-enabled marketing initiatives, including the proposed BAOS AI platform," which the filing describes only as planned capabilities. After the period, three events stand out. The company agreed to sell RMB226.2 million (about $33.4 million) of long-overdue receivables and one prepayment, by book balance, for RMB8.56 million (about $1.26 million), to the only qualified bidder. It signed and then, on August 12, ended a facility to sell up to $30 million of shares to High West Partners, after selling 255,328 shares under it. And it received the Nasdaq minimum-price notice. The next full figures will be the FY2026 annual report on Form 20-F, last filed on April 30. Before then, the clearest signal will be whether the $12.4 million loan is repaid at maturity in late December 2026. The second-half numbers would also need to show whether gross billing has stopped falling. On the first-half figures, Baosheng's advertising business is not funding the company. New share sales and the loan's repayment are.