F-1: EPWK Holdings Files for Resale of 221M Class A Shares

EPWK Holdings Ltd. filed an F-1 registration statement for the resale of up to 221.38 million Class A Ordinary Shares by existing selling shareholders, with no proceeds going to the company.

Summary

• The filing is a registration statement for the resale of up to 221,376,995 Class A Ordinary Shares by identified Selling Shareholders.
• The company will not receive any proceeds from the sale of these Class A Ordinary Shares by the Selling Shareholders.
• EPWK Holdings Ltd. is a Cayman Islands holding company with no material operations of its own, conducting business in China through a Variable Interest Entity (VIE) structure.
• The company's platform is one of two comprehensive crowdsourcing platforms in China, alongside Zhubajie.
• From January 2019 to June 30, 2025, the platform enabled approximately US$2.03 billion (RMB14.015 billion) in Gross Merchandise Volume (GMV) across 564 million projects.
• As of June 30, 2025, accumulated registered buyers totaled 9.04 million, and accumulated registered sellers reached 17.51 million.
• Revenue for the fiscal year ended June 30, 2025, was $27.84 million, an increase from $20.22 million in 2024 and $19.8 million in 2023.
• The net loss for the fiscal year ended June 30, 2025, was $10.44 million, significantly higher than the $1.20 million loss in 2024 and $1.08 million loss in 2023.
• The company's Class A Ordinary Shares were delisted from Nasdaq on December 23, 2025, and have since been quoted on the OTCID Basic Market under the symbol EPWKF.
• A 40-for-1 share consolidation was approved by the board on October 20, 2025, with a marketplace effective date of November 17, 2025.
• A private placement closed in March 2026, where the company sold 284,000,000 Class A Ordinary Shares at a subscription price of US$0.05 per share, generating approximately US$14.2 million in gross proceeds.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing with a highly negative sentiment due to the significant increase in net losses, the delisting from Nasdaq, and the inherent, unmitigated risks associated with its VIE structure and PRC regulatory environment, despite some revenue growth.

Positives

• Revenue increased to $27.84 million for the fiscal year ended June 30, 2025, up from $20.22 million in 2024 and $19.8 million in 2023, indicating business growth.
• The platform has facilitated substantial transaction volume, with approximately US$2.03 billion in GMV across 564 million projects from January 2019 to June 30, 2025.
• The user base continues to grow, reaching 9.04 million registered buyers and 17.51 million registered sellers as of June 30, 2025.
• A private placement in March 2026 raised approximately US$14.2 million in gross proceeds, providing additional capital.

Negatives

• Net loss significantly increased to $10.44 million for the fiscal year ended June 30, 2025, from $1.20 million in 2024 and $1.08 million in 2023.
• The company's Class A Ordinary Shares were delisted from Nasdaq on December 23, 2025, and now trade on the OTCID Basic Market, indicating a loss of major exchange listing.
• A 40-for-1 share consolidation was implemented, often a measure taken by companies with very low share prices to boost per-share value, which can be a negative market signal.
• The last reported sale price of Class A Ordinary Shares on the OTCID was $0.02 per share on March 18, 2026, reflecting a very low market valuation.
• The company has a history of net losses and anticipates increasing operating expenses in the future, raising concerns about sustained profitability.
• No cash dividends are anticipated to be paid in the foreseeable future, as the company plans to retain earnings for business expansion.
• The company's corporate structure, relying on a Variable Interest Entity (VIE) in China, involves unique risks to investors, including potential unenforceability in the PRC and regulatory uncertainties.

Risks

• **Risks Relating to Our Corporate Structure**: The VIE structure may not be enforceable in the PRC, potentially contravening PRC laws and regulations, or being disallowed by governmental authorities, which could prevent offering securities or render shares worthless.
• **PRC Regulatory Risks**: Uncertainty in the interpretation and application of PRC laws and regulations, including foreign ownership limitations in internet technology and regulatory review of overseas listings, could materially change operations or devalue shares.
• **Financial Performance Risks**: A history of net losses, anticipated increasing operating expenses, and the inability to achieve or sustain profitability, potentially requiring additional capital that may not be available on acceptable terms.
• **Liquidity and Cash Flow Risks**: Failure to manage liquidity and cash flows may materially and adversely affect financial condition and results of operations.
• **Platform and User Engagement Risks**: Dependence on attracting and retaining buyers and sellers, risk of users circumventing the platform, and failure to maintain or improve platform quality could adversely impact business.
• **Technology and Product Development Risks**: Reliance on the reliability, security, and performance of software, and the inability to develop and release new products, services, or enhancements, could harm the business.
• **Legal and Compliance Risks**: Exposure to lawsuits from content, disputes between users, non-compliance with anti-corruption/anti-bribery laws, and cybersecurity and data protection regulations.
• **Competition Risks**: Intense competition in a rapidly evolving market with changing technologies and customer needs could lead to loss of market share.
• **Market and Trading Risks**: Delisting from Nasdaq, potential future dilution from equity offerings, FINRA sales practice requirements, speculative nature of investment, and price volatility of Class A Ordinary Shares.
• **Corporate Governance Risks**: Certain existing shareholders, particularly Mr. Guohua Huang, have control over the company (95.1% voting power), and their interests may not align with other shareholders.
• **PRC Government Intervention**: The Chinese government exerts substantial influence and may intervene or influence operations at any time, potentially limiting the ability to offer securities or causing shares to decline in value.
• **Foreign Exchange and Dividend Restrictions**: PRC government controls on currency conversion and restrictions on dividend payments from PRC subsidiaries may limit the ability to transfer cash out of China or pay dividends to offshore shareholders.
• **Auditor Inspection Risks**: Uncertainties related to the Holding Foreign Companies Accountable Act and PCAOB inspections for non-U.S. auditors could add uncertainties to future offerings.
• **Penny Stock Status**: Class A Ordinary Shares are currently considered penny stocks, which could negatively affect their price and liquidity.

Future Outlook

The company intends to retain any future earnings to reinvest in and finance the expansion of its business, and does not anticipate paying any cash dividends or transferring assets in the foreseeable future. There are no present plans to distribute earnings or settle amounts owed under the VIE agreements, with a focus on retaining earnings to grow the business.

Management Comments

• We intend to keep any future earnings to re-invest in and finance the expansion of our business, and we do not anticipate that any cash dividends will be paid or any assets will be transferred in the foreseeable future.
• We, our subsidiaries, and the VIE have no present plans to distribute earnings or settle amounts owed under the VIE agreements and plan to retain EPWK's retained earnings to continue to grow EPWK's business.

Industry Context

StockSavvy.ai notes that EPWK Holdings operates in the Chinese crowdsourcing market, identified as one of only two comprehensive platforms, with Zhubajie being the other main competitor. The industry faces significant regulatory scrutiny from the PRC government, particularly concerning foreign ownership and overseas listings, which introduces unique operational and legal challenges for companies utilizing VIE structures. The company's delisting from Nasdaq and subsequent trading on the OTCID may impact its ability to attract international talent and capital compared to more globally integrated platforms.

Comparison to Industry Standards

• The filing identifies Zhubajie as the only other comprehensive crowdsourcing platform in China, positioning EPWK Holdings as a key player in a duopoly within its domestic market.
• No specific financial or operational benchmarks are provided for direct comparison against Zhubajie or global industry leaders like Upwork or Fiverr, making a detailed assessment of performance relative to industry standards challenging based solely on this filing.

Corporate Governance

Legal Proceedings

• The company may be subject to sanctions imposed by PRC regulatory agencies, including the Chinese Securities Regulatory Commission (CSRC), if it fails to comply with their rules and regulations.
• There is uncertainty regarding the enforceability of judgments from United States courts in the Cayman Islands and the PRC, particularly concerning civil liability provisions of U.S. securities laws.

Related Party Transactions

• The filing refers to Item 7. Major Shareholders And Related Party Transactions in the 2025 Annual Report for details on related party transactions during the year ended June 30, 2025, but does not provide new specific details in this document.

Stakeholder Impact

• **Shareholders**: Face significant risks including potential loss of investment due to the VIE structure, PRC regulatory uncertainties, delisting from Nasdaq, and a substantial increase in net losses. Future equity offerings could lead to dilution, and no dividends are expected. The concentration of voting power in a single individual limits the influence of other shareholders.
• **Employees**: The business faces risks related to the ability to hire, retain, and train qualified employees, as well as potential non-compliance with PRC regulations regarding employee benefit plans.
• **Customers (Buyers and Sellers)**: The platform's ability to attract and retain users, maintain service quality, and ensure software reliability and security directly impacts their experience and continued engagement.
• **Creditors**: The company's history of net losses and potential need for additional capital could affect its financial stability and ability to meet obligations.

Next Steps

• Proposed sale to the public promptly after the effective date of this registration statement.
• Selling Shareholders may sell all or a portion of the Class A Ordinary Shares from time to time.
• The company intends to keep future earnings to reinvest in and finance business expansion.
• EPWK HK intends to apply for a tax resident certificate when EPWK WFOE plans to declare and pay dividends to EPWK HK.
• The company will be required to file with the CSRC within three business days after the closing of any subsequent offerings of its securities.

Key Dates

Recommendation

The company faces severe headwinds, including a substantial increase in net losses, delisting from a major exchange (Nasdaq), and inherent, unmitigated risks from its complex VIE structure and the unpredictable PRC regulatory environment. While revenue shows growth, the escalating losses and market demotion to OTCID, coupled with a 40-for-1 reverse stock split and a recent private placement at a deeply discounted price, signal significant financial distress and a highly speculative investment profile. The concentration of voting power in one individual further adds to governance concerns, making it a high-risk investment with limited upside potential in the foreseeable future.

Keywords

EPWK Holdings, F-1, SEC filing, resale, Class A Ordinary Shares, VIE structure, China, crowdsourcing, financial results, net loss, Nasdaq delisting, OTCID, PRC regulations, foreign ownership, cybersecurity, capital raise, private placement, market volatility, corporate governance, emerging growth company, share consolidation