EPWK Holdings Discloses Nasdaq Delisting, Going Concern Warning, and Significant Losses

summarizeSummary

EPWK Holdings Ltd. reported a substantial increase in net loss to $10.4 million for fiscal year 2025, alongside a going concern warning from its auditor and its delisting from Nasdaq to the OTC market due to multiple non-compliance issues.

check_boxKey Events

• Nasdaq Delisting and Non-Compliance

  The company was delisted from the Nasdaq Global Market on December 23, 2025, and now trades on the OTCID Basic Market under 'EPWKF'. This delisting was due to non-compliance with Nasdaq listing rules, including minimum bid price, market value of listed securities, and market value of publicly held shares, as well as the failure to file this 20-F on time.

• Going Concern Warning and Significant Financial Deterioration

  The auditor's report includes an explanatory paragraph raising substantial doubt about the company's ability to continue as a going concern. The company reported a net loss of $10.4 million for fiscal year 2025, a significant increase from $1.2 million in 2024, and had an accumulated deficit of $29.3 million and negative working capital of $0.9 million as of June 30, 2025. Net cash used in operating activities also worsened significantly to $10.7 million.

• Material Weaknesses in Internal Controls and Auditor Change

  Management identified material weaknesses in internal controls over financial reporting, specifically a lack of sufficient accounting and financial reporting personnel with U.S. GAAP and SEC experience, and inadequate financial reporting policies. The company also changed its independent registered public accounting firm from WWC, Professional Corporation to Assentsure PAC, effective November 17, 2025, shortly after WWC issued a going concern opinion.

• Recent Capital Raise Amidst Challenges

  In October 2025, the company completed an $8 million public offering of units, consisting of Class A ordinary shares and warrants, providing much-needed capital. This offering occurred shortly before the company's delisting from Nasdaq.

auto_awesomeAnalysis

The annual report highlights severe financial distress, with net losses escalating to $10.4 million and negative working capital of $0.9 million as of June 30, 2025. The auditor explicitly raised substantial doubt about the company's ability to continue as a going concern. The company was delisted from Nasdaq in December 2025 due to failing multiple listing requirements, including minimum bid price and market value, as well as a failure to file this 20-F on time. This delisting significantly impairs liquidity and investor confidence. Furthermore, the company disclosed material weaknesses in internal controls related to accounting and financial reporting personnel and policies, and changed its independent auditor. While an $8 million public offering was completed in October 2025, the subsequent delisting and current low stock price indicate that this capital raise did not prevent significant value erosion. The company's reliance on a Variable Interest Entity (VIE) structure in China also presents ongoing regulatory and enforceability risks.