10-Q: Jingbo Technology Reports Reduced Quarterly Loss Amid Revenue Growth and Persistent Going Concern Doubts

Sentiment:

Quarterly Report 15 July 2025 6:11 AM

Jingbo Technology, Inc. reported a significant reduction in net loss and a return to gross profit for the quarter ended May 31, 2025, driven by increased parking fee and new winery sales revenue, despite ongoing concerns about its ability to continue as a going concern and identified material weaknesses in internal controls.

Capital raiseThe company's continuation as a going concern is dependent upon obtaining additional equity or alternative financing from banks and other financial institutions.Management is trying to alleviate the going concern risk through equity financing to support working capital and other available sources of financing (including debt).

Worse than expectedDespite improvements in revenue and gross profit, the company continues to report a net loss and an increasing accumulated deficit.Net cash provided by operating activities significantly declined from $471,911 in Q1 2024 to $6,186 in Q1 2025, indicating a weakening in core operational cash generation.The company explicitly states 'substantial doubt about its ability to continue as a going concern' due to its financial condition, which is a critical negative indicator.Material weaknesses in internal controls over financial reporting persist, highlighting fundamental operational and governance deficiencies.

Summary

Net revenues increased to $461,630 for the three months ended May 31, 2025, up from $308,534 in the same period of 2024.
The company achieved a gross profit of $127,653 for the quarter, a substantial improvement from a gross loss of $203,771 in the prior year period.
Net loss significantly decreased to $408,871 for the three months ended May 31, 2025, compared to a net loss of $1,204,624 for the three months ended May 31, 2024.
Loss per common share improved to $0.001 for the current quarter, down from $0.23 in the prior year period.
Total assets increased slightly to $12,363,418 as of May 31, 2025, from $12,222,816 as of February 28, 2025.
Total liabilities rose to $36,033,811 as of May 31, 2025, from $35,231,324 as of February 28, 2025.
The accumulated deficit increased to $35,732,174 as of May 31, 2025, from $35,326,578 as of February 28, 2025.
Net cash provided by operating activities was $6,186 for the three months ended May 31, 2025, a significant decrease from $471,911 in the prior year period.
The company introduced winery sales as a new income stream, generating $64,653 in revenue for the quarter.
The company's ability to continue as a going concern remains in substantial doubt due to accumulated deficit and working capital deficit, relying on long-term loans and additional financing.
Material weaknesses in internal controls over financial reporting persist, including lack of a functioning audit committee, inadequate segregation of duties, and insufficient accounting policies.

Sentiment

Score: 3

Explanation: While there are improvements in revenue growth and a reduction in net loss, the company faces severe fundamental challenges including substantial doubt about its going concern ability, a large and increasing accumulated deficit, declining operational cash flow, and persistent material weaknesses in internal controls. These significant risks outweigh the positive financial trends, indicating a highly precarious financial position.

Positives

Net revenues increased by approximately 49.6% to $461,630 for the three months ended May 31, 2025, compared to $308,534 in the prior year period.
The company transitioned from a gross loss of $203,771 in Q1 2024 to a gross profit of $127,653 in Q1 2025.
Net loss significantly reduced by approximately 66% to $408,871 in Q1 2025 from $1,204,624 in Q1 2024.
Operating expenses decreased by approximately 47% to $515,071 in Q1 2025 from $970,894 in Q1 2024, primarily due to reductions in selling, marketing, general, administrative, and R&D expenses.
The acquisition of Xinghe Technology Limited and its subsidiaries, including Shaoxing Keqiao, eliminated a prior $22,032,891 debt owed to Shaoxing Keqiao, improving the balance sheet structure.
A new income stream from winery sales was established, contributing $64,653 in revenue for the quarter.

Negatives

The company incurred a net loss of $408,871 for the three months ended May 31, 2025, and has an accumulated deficit of $35,732,174 as of May 31, 2025.
Net cash provided by operating activities significantly decreased to $6,186 in Q1 2025 from $471,911 in Q1 2024, indicating reduced operational cash generation.
Total liabilities increased to $36,033,811 as of May 31, 2025, from $35,231,324 as of February 28, 2025.
The company's management has determined there is substantial doubt about its ability to continue as a going concern.
Impairment losses of $68,919 were recognized in Q1 2025, compared to none in the prior year period.
Disclosure controls and procedures were deemed not effective as of May 31, 2025, with material weaknesses identified in internal control over financial reporting.

Risks

The company's ability to continue as a going concern is dependent upon securing long-term loans and obtaining additional equity or alternative financing to fund operations until sufficient recurring revenues are generated.
The company's operations in the PRC are subject to significant political, economic, and legal risks, including changes in governmental policies, anti-inflationary measures, currency conversion, and taxation.
Uncertainty exists regarding whether the company's Variable Interest Entity (VIE) corporate structure will be deemed to violate the Foreign Investment Law of the PRC, potentially leading to severe limitations on business operations, revocation of licenses, fines, or required restructuring.
There is a risk that nominee shareholders of VIEs may have conflicts of interest with the company or fail to perform their contractual obligations, which could significantly impact the company's ability to direct VIE activities and receive economic benefits.
The enforceability of contractual agreements with VIEs is subject to the discretion of competent PRC authorities and the evolving PRC legal system, which may limit legal protections.
The company is exposed to interest rate risk when long-term loans become due and require refinancing.
The company's deposits are held with banks in the PRC and are not federally insured, exposing them to loss if the banks become insolvent.
Accounts receivable are typically unsecured, posing credit risk, although mitigated by credit control policies.
The company's internal controls over financial reporting are not effective, with material weaknesses including a lack of a functioning audit committee, inadequate segregation of duties, insufficient written policies for US GAAP and SEC disclosure, and ineffective period-end financial reporting processes, which could adversely affect the ability to record, process, summarize, and report financial information accurately.

Future Outlook

The company's continuation as a going concern is dependent on securing long-term loans and obtaining additional equity or alternative financing to fund operations until sufficient recurring revenues can be generated. Management plans to implement strategies to grow the business and generate substantial revenue, alongside measures to control operating costs. There is no assurance that these plans will be successful or that additional financing will be available on acceptable terms.

Management Comments

Management believes that the likelihood for the Group to lose the ability to control VIEs and receive economic benefits is remote based on current facts and circumstances, despite the evolving PRC legal system.
Management has determined there is substantial doubt about the company's ability to continue as a going concern due to the net loss, total deficit, and working capital deficit.
Management will implement strategies and plans to grow the company's business and generate substantial revenue, and take further measures to control operating costs.
Management is of the opinion that the company will probably not have sufficient funds to meet its working capital requirements if it is unable to obtain additional financing.

Industry Context

Jingbo Technology operates primarily in the smart parking and digital solutions sector in China, a market undergoing significant digital transformation with increasing adoption of IoT, big data, cloud computing, and mobile payment technologies for urban management. The company's focus on smart parking projects, mobile applications, and cloud platforms aligns with broader industry trends towards intelligent city infrastructure. The introduction of winery sales as a new income stream suggests a diversification strategy, potentially leveraging existing distribution channels or exploring new market opportunities outside its core technology business. The company's reliance on Variable Interest Entities (VIEs) is a common structure for foreign-listed Chinese companies operating in restricted sectors, but it carries inherent regulatory risks within China's evolving legal framework.

Comparison to Industry Standards

The document does not provide specific comparable companies, projects, or results to assess performance against global benchmarks or industry standards.
The gross margin for parking fee revenue (22.74%) and winery sales (9.15%) are reported, but without industry averages or competitor data, a direct comparison to industry standards is not feasible from the document.
The company's significant accumulated deficit and ongoing going concern issues suggest performance well below established industry leaders in the smart parking or technology sectors, which typically demonstrate strong profitability and positive cash flows from operations.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Bylaws Amendment	The Amended and Restated Bylaws were approved and adopted, revising the principal business location of the Company and lowering the minimum votes required for actions taken by written consent of stockholders to the majority of the issued and outstanding shares.	2024-09-03	This change streamlines stockholder actions by written consent but does not address the identified material weaknesses in internal controls related to the lack of a functioning audit committee or majority of outside directors.
Internal Control Weaknesses	Identified material weaknesses in internal control over financial reporting include: (1) lack of a functioning audit committee and lack of a majority of outside directors on the Company's board of director; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes.	2025-05-31	These weaknesses indicate significant deficiencies in the company's financial reporting environment, raising concerns about the reliability of financial statements and compliance with regulatory requirements. They are expected to continue until remediated.

Legal Proceedings

In September 2024, a corporate plaintiff filed a claim against Hangzhou Zhuyi (a subsidiary) for a contract dispute. The trial court ruled against Hangzhou Zhuyi for an amount of RMB 706,257 (USD $98,104), upon which the company has filed an appeal.

Related Party Transactions

Amounts due from related parties increased slightly to $70,734 as of May 31, 2025, from $70,104 as of February 28, 2025, including amounts from Intellegence Triumph Holdings Limited, Virtue Victory Holdings Limited, Strength Union Holdings Limited, Hongwei Li, and Sichuan Zhicheng Qifeng Technology Co., Ltd.
Amounts owed to related parties increased to $2,285,859 as of May 31, 2025, from $2,245,834 as of February 28, 2025, primarily to Guowei Zhang (President), Xiujuan Chen (Shareholder), and Chuchu Zhang (Shareholder).
Advances from Guowei Zhang are unsecured, non-interest bearing, and due on demand.
Long-term payables of $21,745,384 as of May 31, 2025, are largely comprised of loans originally from Beijing Zhibo Innovation Technology Co., Ltd. (Zhibo) that were transferred to various partnerships/companies and subsequently consolidated by Shaoxing Keqiao Zhuyi Technology Co., Ltd., whose sole shareholder is Xiujuan Chen (also a company shareholder).
New five-year loan agreements were entered into on September 30, 2024, by Shaoxing Keqiao, Jingbo, and Hangzhou Zhuyi with Hangzhou Jizhong Ecological Technology Co., Ltd., Hangzhou Ruiqi Enterprise Management Partnership, Hangzhou Chiyi Enterprise Management Partnership, and Shaoxing Keqiao itself, totaling over $43 million, with interest waived until October 1, 2028, and principal due September 30, 2029.

Stakeholder Impact

Shareholders face significant risk due to the substantial doubt about the company's ability to continue as a going concern, the increasing accumulated deficit, and the material weaknesses in internal controls, which could lead to further share price volatility or dilution if additional equity financing is pursued.
Creditors, particularly those holding the substantial long-term payables, face repayment risk given the company's going concern issues and reliance on future financing.
Employees may face uncertainty regarding job security and operational stability given the company's financial challenges and the need for cost control measures.
Customers and suppliers may experience disruptions or changes in service/payment terms if the company's financial condition deteriorates further or if restructuring occurs.
Regulatory bodies (SEC) are impacted by the identified material weaknesses in internal controls, which could lead to increased scrutiny or enforcement actions if not remediated.

Next Steps

Management plans to implement strategies to grow the company's business and generate substantial revenue.
Management intends to take further measures to control operating costs.
The company is seeking equity financing to support its working capital.
The company is exploring other available sources of financing, including debt from banks and other financial institutions.
The company has filed an appeal against a trial court ruling in a contract dispute for RMB 706,257 (USD $98,104).

Key Dates

Date	Description
2015-03-06	SavMobi Technology Inc. (the Company) was incorporated in the State of Nevada.
2017-05-18	Lakwinder Singh Sidhu, former Director and CEO, completed a transaction with New Reap Global Ltd., which acquired 68.4% ownership of the Company.
2017-11-13	Hangzhou Zhuyi Technology Co. (Hangzhou Zhuyi) was incorporated under the laws of the PRC.
2018-03-19	New Reap Global transferred 250,000 restricted shares to Eng Wah Kung.
2018-05-10	16,959,684 shares were transferred to Arden Wealth and Trust, HongLing Shang, New Reap Global, LTD, Xuedong Zhang, Jingmei Jiang, Qianxian, Yulan Qi, Baoxin Song, and Jianlong Wu.
2018-05-30	Further share transfers to Arden Wealth and Trust, HongLing Shang, New Reap Global, LTD, Xuedong Zhang, Jingmei Jiang, Qianxian, Yulan Qi, Baoxin Song, and Jianlong Wu.
2018-06-15	New Reap Global transferred 690,316 restricted shares to EMRD Global Holdings.
2018-06-26	New Reap Global transferred 3,000,000 restricted shares to FORTRESS ADVISORS, LLC and 3,000,000 to Baywall Inc.
2018-11-17	Zhejiang Linglingyi Network Technology Co. (Linglingyi) was incorporated.
2018-11-13	Liangshan Tongfu Technology Co. (Liangshan) was incorporated.
2019-07-04	Yibin Huibo Technology Co. (Yibin) was incorporated.
2019-10-01	The company entered into a three-year loan agreement with Beijing Zhibo Innovation Technology Co., Ltd (Zhibo).
2019-12-18	Zhejiang Jingbo Ecological Technology Co. was formed in PRC.
2020-09-01	The company entered into a two-year interest-free agreement with Zhibo.
2020-11-04	Hubei Tongpo Parking Management Co. (Tongpo) was incorporated.
2020-11-10	Ten shareholders entered into stock purchase agreements to sell 42,440,316 shares of common stock to nineteen non-U.S. accredited investors.
2021-05-18	Zhuyi Technology (Taining) Co. (Taining) was incorporated.
2021-10-14	Xide Zhuyi Technology Co. (Xide) was incorporated.
2022-04-29	Hangzhou Zhuyi acquired 100% of Linglingyi.
2022-05-09	Haikou Zhuyi Technology Co. (Haikou) was incorporated.
2022-05-12	Zhuyi Technology (Anping) Co. (Anping) was incorporated.
2022-06-08	Three shareholders entered into stock purchase agreements to sell 25,095,788 shares of common stock to five non-U.S. accredited investors.
2022-06-29	Intellegence Parking Group Limited was formed in Cayman Island.
2022-07-20	Intellegence Parking (Hong Kong) Limited (Intellegence HK) was incorporated.
2022-09-29	Hangzhou Zhuyi entered into a share agreement to purchase 26% of Liangshan's shares, resulting in Hangzhou Zhuyi holding 67% of Liangshan.
2022-10-24	Huixin Zhiying (Hangzhou) Technology Co. (Huixin WFOE) was incorporated in PRC.
2022-12-15	The company entered into a share exchange agreement with Intellegence Parking Group Limited.
2023-01-05	The share exchange agreement with Intellegence Parking Group Limited closed.
2023-01-15	Zhibo transferred its debts to a number of companies/partnerships.
2023-02-28	The outstanding balance of the two Zhibo loans combined was RMB 215,280,227.44 (USD$ 31,053,765).
2023-03-08	The company changed its name from Savmobi Technology, Inc. to Jingbo Technology, Inc.
2023-03-16	Loan transfer agreements were executed for Shaoxin Keqiao Zhuyi Technology Co. to take over debts from various businesses.
2023-03-17	Loan transfer agreements were executed for Shaoxin Keqiao Zhuyi Technology Co. to take over debts from various businesses.
2023-06-27	Anping was deregistered.
2023-07-24	Hangzhou Jizhong Ecological Technology Co., Ltd. received transferred loans totaling $21,966,818 from deregistered partnerships.
2023-08-14	Zhongxiang Huji Town Zhuyi Technology Co. (Huji) was incorporated.
2024-02-05	The company conducted a 1-for-200 reverse stock split.
2024-02-08	FINRA announced the company's name change.
2024-02-28	The company changed its fiscal year end from May 31 to the last day of February.
2024-03-14	Leshan Zhuyi Qifeng Intelligent Technology Development Co. (Leshan) was incorporated.
2024-08-22	Guangzhou Keqiao Enterprise Management Consulting Co., Ltd. (Keqiao WFOE) was incorporated under the laws of the PRC.
2024-08-27	Hangzhou Zhuyi transferred 90% of Haikou's equity interest to Qiaofei Li and 10% to Lili Xu for $0 consideration. Hangzhou Zhuyi transferred all equity interest in Yibin to Lili Xu for $0 consideration. Hangzhou Zhuyi transferred all equity interest in Liangshan to Changsen Chi for $0 consideration.
2024-09-03	The board of directors approved and adopted the Amended and Restated Bylaws, revising the principal business location and lowering minimum votes for written consent of stockholders.
2024-09-09	Xinghe Technology Limited was incorporated in BVI.
2024-09-18	The company's subsidiary, Hangzhou Zhuyi, entered into a loan agreement of $1,389,063 (RMB 10,000,000) with Zhejiang Chouzhou Commercial Bank, maturing September 17, 2025.
2024-09-22	Keqiao WFOE was incorporated under the laws of the PRC.
2024-09-30	Shaoxing Keqiao entered into five-year loan agreements with Hangzhou Jizhong Ecological Technology Co., Ltd. ($14,916,723), Hangzhou Ruiqi Enterprise Management Partnership ($2,661,473), Hangzhou Chiyi Enterprise Management Partnership ($4,167,188), Jingbo ($1,300,157), and Hangzhou Zhuyi ($20,388,366), all maturing September 30, 2029, with interest waived until October 1, 2028.
2024-10-12	Linglingyi was deregistered.
2024-10-17	The Authorized Capital Change took effect, increasing authorized common stock to 50,000,000,000 shares.
2024-10-30	The company filed a Certificate of Amendment to increase authorized common stock.
2024-11-18	The company entered into a Shares Exchange Agreement with Xinghe Technology Limited and Hangdu.
2024-12-09	The acquisition of Xinghe Technology Limited was completed, with the company issuing 550,000,000 shares of common stock to Hangdu.
2025-05-31	End of the current quarterly reporting period.
2025-07-15	Date of issuance of the consolidated financial statements and the date through which subsequent events were evaluated.
2025-09-17	Maturity date of the short-term loan with Zhejiang Chouzhou Commercial Bank.
2025-09-30	Maturity date for extended Zhibo loan contracts and new five-year loan agreements with various entities.
2026-02-28	End of the current fiscal year.
2028-10-01	Interest payments begin monthly for several long-term loans.
2029-09-30	Maturity date for several long-term loan agreements.

Recommendation

strong sell

Keywords

Smart parking, Technology, China, SEC filing, Quarterly report, Financial performance, Going concern, VIE structure, Internal controls, Revenue growth, Net loss reduction, Winery sales, PRC regulations, Corporate governance, Related party transactions

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