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ORGANIZATION, PRINCIPAL ACTIVITIES AND MANAGEMENT’S PLANS

12 Months Ended

Dec. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION, PRINCIPAL ACTIVITIES AND MANAGEMENT’S PLANS

1. ORGANIZATION, PRINCIPAL ACTIVITIES AND MANAGEMENT’S PLANS

Taoping Inc. (f/k/a China Information Technology, Inc.), together with its subsidiaries (the “Company”), is a provider of cloud-based technologies for Smart City IoT platforms, digital advertising delivery, and other internet-based information distribution systems in China. Its Internet ecosystem enables all participants of the new media community to efficiently promote branding, disseminate information, and exchange resources. In addition, the Company provides a broad portfolio of software and hardware with fully integrated solutions, including information technology infrastructure, Internet-enabled display technologies, and IoT platforms to customers in government, education, residential community management, media, transportation, and other private sectors.

In May 2018, we changed our corporate name from “China Information Technology Inc.” to “Taoping Inc.”, to reflect our current business operations in the new media and IoT industries. In 2021, Information Security Tech International Co. Ltd. (“IST HK”), one of the Company’s Hong Kong subsidiaries then, changed its corporate name to Taoping Group (China) Ltd. to reflect the Company’s current corporate structure to be in line with the new business strategies. As listed in the table below, these services are provided through the Company’s operating subsidiaries, primarily in Hong Kong and mainland China.

In June 2021, the Company consummated an acquisition of 100% of the equity interest of Taoping New Media Co., Ltd (“TNM”), a leading media operator in China’s out-of-home digital advertising industry. Mr. Jianghuai Lin, the Chairman and CEO of the Company, who then owned approximately 24.6% of total shares outstanding of the Company, owned approximately 51% of TNM. TNM focuses on digital life scenes and mainly engaged in selling out-of-home advertising time slots on its networked smart digital advertising display terminals with artificial intelligence and big data technologies. The acquisition of TNM is expected to enhance the Company’s presence in the new media and advertising sectors.

In 2021, the Company launched blockchain related new business in cryptocurrency mining operations and newly established subsidiaries in Hong Kong to supplement its diminished Traditional Information Technology (TIT) business segment as a part of new business transformation. However, due to the decreased output and the highly volatile cryptocurrency market, the Company had ceased the operation of cryptocurrency mining business by December 2022, and continues to focus the efforts on its digital adverting, smart display and the newly added smart community and related businesses.

As the cessation of the operation of cryptocurrency mining business represent a strategic shift in the Company’s strategy that will have a major effect on the Company’s operations and financial results, the operations of cryptocurrency mining business have been presented as “discontinued operations” in the Company’s consolidated financial statements. See Note 10.

In September 2021, the Company and the Company’s wholly owned subsidiary, Information Security Technology (China) Co., Ltd. (“IST”) entered into an equity transfer agreement with Mr. Jianghuai Lin, the sole shareholder of iASPEC Technology Group Co., Ltd. (“iASPEC”). Upon closing of the equity transfer, the Company’s variable interest entity structure was dissolved and iASPEC became a wholly owned indirect subsidiary of the Company.

TAOPING INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

In January 2022, the Company completed the acquisition of 100% equity interest of ZJIOT, aiming to accelerate the Company’s smart charging pile and digital new media businesses in East China.

As a result of the Company’s business transformation and its exit from the TIT business, the Company disposed of 100% equity interests of iASPEC (excluding iASPEC’s subsidiaries) which mainly conducted the Company’s TIT business to an unrelated third party for nil consideration on June 7, 2022. The disposition resulted in a total recorded income of approximately $3.0 million for the Company for the year ended December 31, 2022.

The Company disposed of 100% equity interests of TDL to an unrelated third party for nil consideration on September 6, 2023, and disposed of 100% equity interests of TDAL and TCL (including their respective subsidiary) to an unrelated third party for nil consideration on October 27, 2023. The disposition resulted in a total recorded loss of $16,184 for the Company for the year ended December 31, 2023.

In May 2023, the Company established a subsidiary Taoping EP Holdings (Shenzhen) Co., Ltd. with a majority stake of 51%, to explore the new off-grid wastewater treatment business line.

In September 2023, the Company acquired 80% equity from other shareholders of Fujian Taoping Investment Co., Ltd. with nil consideration, to expand its digital advertising and other businesses in Fujian Province. As a result of the acquisition, the Company currently owns 100% of Fujian Taoping Investment Co, Ltd.

In November 2023, the Company established a subsidiary Taoping (Guangxi) EP Tech Co., Ltd. to expand its wastewater treatment business in Guangxi Province.

In April 2024, the Company established a subsidiary Taoping Industrial (Yunnan) Co., Ltd. to explore smart agricultural related businesses in Yunnan Province.

In June 2024, ZJIOT was dissolved as a result of the Company’s business realignment.

In January 2025, TDTJS was dissolved as a result of the Company’s business realignment.

				December 31, 2024				December 31, 2023				December 31, 2022
Entities		Subsidiaries		% owned				% owned				% owned				Location
Taoping Inc.																British Virgin Islands
Taoping Holdings Limited (THL)		Subsidiary			100	%			100	%			100	%		British Virgin Islands
Taoping Group (China) Ltd. (IST HK)		Subsidiary			100	%			100	%			100	%		Hong Kong, China
Taoping Digital Assets (Asia) Limited (TDAL)		Subsidiary			-				-				100	%		Hong Kong, China
Taoping Digital Assets (Hong Kong) Limited (TDL)		Subsidiary			-				-				100	%		Hong Kong, China
Taoping Capital Limited (TCL)		Subsidiary			-				-				100	%		Hong Kong, China
Kazakh Taoping Operation Management Co. Ltd. (KTO)		Subsidiary			-				-				100	%		Kazakhstan
Kazakh Taoping Data Center Co. Ltd. (KTD)		Subsidiary			-				-				100	%		Kazakhstan
Information Security Tech. (China) Co., Ltd. (IST)		Subsidiary			100	%			100	%			100	%		Shenzhen, China
TopCloud Software (China) Co., Ltd. (TopCloud)		Subsidiary			100	%			100	%			100	%		Shenzhen, China
Information Security IoT Tech. Co., Ltd. (ISIOT)		Subsidiary			100	%			100	%			100	%		Shenzhen, China
Biznest Internet Tech. Co., Ltd. (Biznest)		Subsidiary			100	%			100	%			100	%		Shenzhen, China
iASPEC Bocom IoT Tech. Co., Ltd. (Bocom)		Subsidiary			100	%			100	%			100	%		Shenzhen, China
Taoping New Media Co., Ltd. (TNM)		Subsidiary			100	%			100	%			100	%		Shenzhen, China
TopCloud Tech. (Chenzhou) Co., Ltd. (TCTCZ)		Subsidiary			-				-				100	%		Chenzhou, China
Taoping Digital Tech. (Jiangsu) Co., Ltd. (TDTJS)		Subsidiary			100	%			100	%			100	%		Jiangsu, China
Zhenjiang Taoping IoT Tech. Co., Ltd (ZJIOT)		Subsidiary			-				100	%			100	%		Zhenjiang, China
Taoping EP Holdings (Shenzhen) Co., Ltd. (TEPH)		Subsidiary			51	%			51	%			-			Shenzhen, China
Fujian Taoping Investment Co., Ltd. (FJTI)		Subsidiary			100	%			100	%			-			Fujian, China
Taoping (Guangxi) EP Tech. Co., Ltd. (TPGXT)		Subsidiary			100	%			100	%			-			Guangxi, China
Taoping Industrial (Yunnan) Co., Ltd. (TIYN)		Subsidiary			100	%			-				-			Yunnan, China

TAOPING INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Going Concern and Management’s Plans

As a result of business realignment, the Company’s revenue for the year ended December 31, 2024 was slightly decreased as compared to the year 2023. The Company incurred a net loss of $1.8 million for year ended December 31, 2024, compared to a net loss of $0.7 million for 2023. Cash and cash equivalents at December 31, 2024 was $1.6 million, compared to cash and cash equivalents of $1.3 million a year ago. As of December 31, 2024, the Company had a working capital surplus of approximately $16.0 million, significantly improved from a working capital surplus of $5.2 million as of December 31, 2023.

The Company will continue to put efforts on the digital advertising and other cloud-based and AI-related products and applications. Furthermore, its two core competencies, the Taoping national sales network and the highly scalable and compatible cloud platform, and its strong software development capability, make it a valued partner by many other smart-community customers and solution providers. Having considered that the existing businesses of the Company suffered from losses and negative operating cashflows in the previous years and expected to be more competitive in the future, in 2025 the Company started to explore business opportunity in the smart agriculture field. In February 2025, the Company entered into a strategic cooperation agreement with the Government of Mengla County, Yunnan Province. The agreement outlines plans for extensive collaboration in the modern agricultural industry, under which the Company aims to invest in developing a smart agricultural planting base in Mengla County, to establish a model for the growth of the modern agricultural sector. The Company expects to generate additional cash-flow from this new business starting from 2025.

The Company considers the competitive market in China and potential financial consequences from the tariffs war may raise significant uncertainty to the Company’s businesses. If the Company’s execution of the above business strategies is not successful to achieve positive operating cashflow, additional capital raise from issuing equity security or debt instrument or additional loan facility may occur to support required cash flows. The Company’s existing $7.9 million bank loan, which was guaranteed and/or collateralized with the Company’s office property, provides important capital support for its operation. In addition, on July 17, 2023, the Company entered into both a public standby equity purchase agreement and a private standby equity purchase agreement with an investor. Pursuant to the agreements, the Company has the right, but not the obligation, to sell to the investor up to $1,000,000 and $10,000,000, respectively, of its ordinary shares, within 24 months and 36 months, respectively, from the date of the agreements. As of April 2025, the Company had received a total of approximately $6.3 million in gross proceeds under these two equity line financings.

On January 13, 2025, the Company entered into a Securities Purchase Agreement with Streeterville Capital, LLC, a Utah limited liability company (the “Investor”), pursuant to which the Company issued an unsecured convertible promissory note with a 12-month maturity (the “Convertible Note”) to Investor. The Convertible Note has the original principal amount of $1,311,000 including the original issue discount of $96,000 and Investor’s legal and other transaction costs of $15,000. $1,200,000 had been received by the Company subsequent to year end.

On February 26, 2025, the Company entered into a securities purchase agreement with certain investors (the “Investors”), pursuant to which the Company agreed to issue an aggregate of 10,000,000 ordinary shares of no par value of the Company, at an offering price of $0.20 per share, to the Investors for a total purchase price of $2,000,000. $1,600,000 had been received by the Company subsequent to year end.

From above, the Company believes that it has the ability to raise needed capital to maintain its operations, repay short term loans and fund business growth, and is able to operate as a going concern.

However, the Company considered the recent fluctuation in Nasdaq market and can make no assurances that financing will be always available for the amounts we need, or on terms commercially acceptable to us, if at all. If one or all of these businesses and/or strategies do not go well or subsequent capital raise was insufficient to bridge financial and liquidity shortfall, substantial doubt exists about the Company’s ability to continue as a going concern. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.