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SEC filingRevenue declined amid beauty product challenges and macroeconomic pressures, offset by sharply improved profitability from cost discipline and discontinued operations disposal, achieving positive net income and cash flow generation.
Net income marked a turnaround to $820 thousand profit, a 111.1% improvement from a $7.4 million loss, with diluted EPS at $0.02 versus -$0.17. This swing was aided by the strategic disposal of Shanghai Jingyue subsidiary, which had faced ongoing cosmetics sales declines for certain brands and was expected to continue underperforming. The disposal streamlined operations, allowing focus on core to-C cross-border brand management while eyeing transitions to higher-volume to-B modes for scaled brands.
Cash flow inflected positively, with net cash from operating activities at $1.2 million versus a $2.2 million outflow prior year, yielding $1.2 million free cash flow after minimal $27 thousand capex. This supports balance sheet stability amid the pivot. Management views stable brand portfolios as ready for to-B cross-border expansion post-regulatory approvals, potentially unlocking volume growth through bulk imports, though China's approval complexities remain a risk. Broader strategy includes healthcare expansion and acquisitions, leveraging executive expertise in beauty marketing and supply chain.