20-F: Guardforce AI Expands into AI Solutions, Navigates Market Challenges in 2024

Sentiment:

Annual Report 28 April 2025 4:00 PM

Guardforce AI Co., Limited reports its 2024 financial results, highlighting a strategic shift towards AI and robotics solutions amidst ongoing economic uncertainties and competitive pressures.

Capital raiseOn July 2, 2024, the Company entered into an At the Market Offering Agreement (the ATM Agreement) with H.C. Wainwright & Co., LLC (the Sales Agent), pursuant to which the Company may offer and sell, from time to time, its ordinary shares, par value $0.12 per share (the Ordinary Shares), through the Sales Agent in an at the market offering (the ATM Offering), as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, for an aggregate offering price of up to $10,862,168.For the period from July 2, 2024 to December 31, 2024, the Company issued 7,502,220 Ordinary Shares pursuant to the 2024 ATM offering for gross proceeds of $10,861,671.On March 3, 2025, we increased the maximum aggregate offering price of the ordinary shares of the Company, par value $0.12 per share issuable under the ATM Agreement with H.C. Wainwright & Co. LLC, dated July 2, 2024, to up to an aggregate of $5,503,634, which does not include the approximately $13,643,191 of Ordinary Shares that were sold to date pursuant to the Sales Agreement, and filed a prospectus supplement.

Better than expectedThe net loss significantly improved from $29.59 million in 2023 to $5.84 million in 2024.

Summary

Guardforce AI's 2024 financial results reveal a company in transition, focusing on AI and robotics while managing challenges in its traditional secured logistics business.
The company reported revenue of $36.35 million, a slight increase from $36.28 million in 2023.
A net loss of $5.84 million was recorded, a significant improvement from the $29.59 million loss in the previous year.
The company is actively developing web-based AI solutions for personalized travel planning and expanding its AIoT robot advertising business.
The company is facing challenges including competition, regulatory changes in Thailand and China, and the decreasing use of cash.
The company is also addressing risks related to cybersecurity, transfer pricing, and geopolitical instability.
The company is planning to strengthen its foundation business, drive AI innovation, and expand internationally in 2025.
The company has secured a 5-year contract to operate the Consolidated Cash Center in Chiang Mai on behalf of Bank of Thailand.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While the company shows improvement in net loss and strategic focus, it also faces significant challenges and risks.

Positives

Significant improvement in net loss, decreasing from $29.59 million in 2023 to $5.84 million in 2024.
Strategic focus on AI and robotics solutions, positioning the company for future growth.
Expansion of smart retail solutions to Thailand, creating new revenue opportunities.
Secured a 5-year contract to operate the Consolidated Cash Center in Chiang Mai on behalf of Bank of Thailand.
Effective cost control and savings measures have improved the cost of sales ratio.

Negatives

The company is still operating at a net loss.
The company is facing challenges including competition, regulatory changes in Thailand and China, and the decreasing use of cash.
The company is facing risks related to cybersecurity, transfer pricing, and geopolitical instability.
The company is facing potential impairments on robot assets due to fast-changing technologies.

Risks

The company's negative operating profits may raise substantial doubt regarding its ability to continue as a going concern.
The company operates in highly competitive industries.
Changes to legislation in Thailand and China may negatively affect the company's business.
The company may be subject to service quality or liability claims.
Decreasing use of cash could have a negative impact on the company's business.
The AI industry is confronting a multitude of challenges across different dimensions, including laws & regulations, regulatory compliance, ethical and societal considerations.
Any compromise of information security of the company's platform could materially and adversely affect its business, operations, and reputation.
The company is currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability.

Future Outlook

The company plans to strengthen its foundation business, drive AI innovation, expand internationally, and enhance its technology foundation in 2025.

Industry Context

The company is operating in a competitive landscape with increasing demand for AI and robotics solutions. The company is facing challenges including competition, regulatory changes in Thailand and China, and the decreasing use of cash.

Comparison to Industry Standards

The document does not provide enough information to compare Guardforce AI's results to specific industry standards or competitors.
To perform a detailed comparison, we would need to know the specific metrics and results of comparable companies in the secured logistics, AI, and robotics industries.
Comparable companies in the secured logistics industry include Brinks and Armaguard.
In the AI and robotics industries, there are many competitors, but no clear market leader.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Chief Financial Officer	Yuheng (Brian) Ma	Yuting (Catherine) Zuo	2024-01-17	Resignation
Chief Operating Officer	Kee Yun Kwan	NA	2024-09-30	Resignation

Legal Proceedings

The company is a defendant in three labor-related lawsuits in Thailand with claims of approximately $0.007 million, $0.002 million and $0.017 million, respectively.
On the plaintiff side, the company is pursuing a civil lawsuit in the PRC with claims of approximately $0.802 million.
In Thailand, the company is plaintiffs in two civil lawsuits seeking to recover outstanding service fees with interest from two clients, amounting to approximately $0.015 million and $0.092 million, respectively.

Related Party Transactions

The company had various transactions with related parties, including purchases of robots, service agreements, and borrowings.
A settlement agreement with Mr. Tu Jingyi resulted in the offsetting of certain receivable and payable balances and the full payment of certain borrowings.

Stakeholder Impact

The company's strategic shift towards AI and robotics solutions may impact employees, customers, and suppliers.
The company's financial performance and ability to execute its growth strategy may impact shareholders.
The company's ability to comply with regulations and maintain information security may impact customers and other stakeholders.

Next Steps

Strengthen Foundation Business: continue to provide best-in-class solutions to maintain our leading position in Thailand, including secure contract renewals, accelerate in growing retail customers, enhance GDM solution with expanded service offering, and form an ecosystem of secure logistics
AI Innovation & Development: continue to build the R&D team, expand partnerships in AI industry that lead to enhance AI agent development to extend AI solutions for travel and retail industries
International Expansion: continue to drive the growth of smart retail solutions by localizing the solutions in Thailand and strategically deploy AI solutions for travel to regions beyond Asia Pacific.

Key Dates

Date	Description
1982	GF Cash (CIT) was incorporated in Thailand.
2018-04-20	Guardforce AI Co., Limited was incorporated in the Cayman Islands.
2020-03-10	VCAB merged with and into Guardforce AI Co., Limited.
2021-03-25	Guardforce AI acquired 51% of Handshake Networking Limited.
2021-09-29	Guardforce AI's ordinary shares and warrants commenced trading on the Nasdaq Capital Market.
2022-03-22	Guardforce AI acquired 100% of Shenzhen GFAI and Guangzhou GFAI.
2022-06-22	Guardforce AI acquired 100% of Beijing Wanjia Security System Co., Ltd.
2023-01-31	Guardforce AI effected a 1-for-40 consolidation of its ordinary shares.
2024-02-06	Guardforce AI completed the separation with Handshake Networking Limited.
2024-05-13	Guardforce AI entered into a Share Transfer Agreement to acquire 100% of the equity interests in InnoAI.
2025-03-28	Marketing Services Agreement between Guardforce AI Co., Limited and Outside The Box Capital Inc.

Keywords

Guardforce AI, AI, Robotics, Financial Results, Secured Logistics, Thailand, China, Revenue, Net Loss, Business Strategy

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