v3.25.2
Organization and Principal Activities
 6 Months Ended
Jun. 30, 2025
Organization and Principal Activities [Abstract]  
ORGANIZATION AND PRINCIPAL ACTIVITIES
1.ORGANIZATION AND PRINCIPAL ACTIVITIES

 

Introduction of the Group

 

AirNet Technology Inc. (“AirNet” or the “Company”) was incorporated in the Cayman Islands on April 12, 2007.

 

The Company conducted the cryptocurrencies mining business operations by its Hong Kong subsidiary Blockchain Dynamics Limited. On March 19, 2024, the Group has resolved to dispose Blockchain Dynamics Limited together with its subsidiary. On August 31, 2024, the Group has resolved to dispose One World Global Travel Inc. and Global International Travel Limited together with its subsidiaries. On January 1, 2025, the Company resumed its cryptocurrencies mining business, and the business was later conducted by its newly established Hong Kong subsidiary, Robust Achievement Limited.

 

The company, its subsidiaries, through its variable interest entities (“VIEs”) and VIEs’ subsidiaries (collectively the “Group”) operate its out-of-home advertising network, primarily air travel advertising network, in the People’s Republic of China (the “PRC”). The Group provided advertising time slots in the form of digital TV screens on airplanes, and media contents display in air travel. Collaborating with the Group’s partners, AirNet served airline travelers with interactive entertainment and a coverage of breaking news, and furnished corporate clients with advertisements tailored to the perceptions of the travelers. On June 11, 2025, the Group entered into certain purchase agreement with a third party, pursuant to which the third party agreed to purchase the legacy air travel media network business operations (the “Legacy Business”) in exchange for nominal cash consideration of US$1 (the “Disposition”), which was being conducted through the Company’s wholly owned subsidiaries. The Disposition was completed on September 3, 2025.

As of issuance date of this report, details of the Company’s subsidiaries, VIEs and VIEs’ subsidiaries are as follows:

 

   Date of     Percentage 
   incorporation/  Place of  of legal 
Name  acquisition  incorporation  ownership 
           
Intermediate Holding Company:           
Broad Cosmos Enterprises Ltd. (“Broad Cosmos”) (4)  June 26, 2006  British Virgin Islands (“BVI”)   100 
AirNet International Limited (“AirNet International”) (4)  July 14, 2007  BVI   100 
AirNet (China) Limited (“AN China”) (4)  August 5, 2005  Hong Kong   100 
One World Global Travel Inc. (“One World”) (3)  February 29, 2024  the U.S.   100 
Global International Travel Limited (“Global Travel”) (3)  March 1, 2024  BVI   100 
IGlobal Travel Limited (“IGlobal Travel”) (3)  March 15, 2024  Hong Kong   100 
AirNet Technology Ohio Inc. (“AirNet Ohio”)  February 6, 2025  United States   100 
Robust Achievement Limited (“Robust Achievement”)  March 5, 2025  Hong Kong   100 
Subsidiaries:           
Blockchain Dynamics Limited(1)  January 11, 2021  Hong Kong   100 
Energy Bytes Inc.(1)  January 21, 2022  United States   100 
Yuehang Chuangyi Technology (Beijing) Co., Ltd. (“Chuangyi Technology”) (4)  September 19, 2005  the PRC   100 
Shenzhen Yuehang Information Technology Co., Ltd. (“Shenzhen Yuehang”) (4)  June 6, 2006  the PRC   100 
Xi’an Shengshi Dinghong Information Technology Co., Ltd. (“Xi’an Shengshi”) (4)  December 31, 2007  the PRC   100 
Beijing Youxing Technology Co., Ltd. (“Beijing Youxing”) (3)  April 10, 2024  the PRC   100 
Beijing Labaku Information Technology Co., Ltd. (“Beijing Labaku”) (3)  May 14, 2024  the PRC   100 
Beijing Suida Real Estate Development Co., Ltd. (“Beijing Suida”) (3)  November 30, 2004  the PRC   100 
VIEs:           
Beijing Linghang Shengshi Advertising Co., Ltd. (“Linghang Shengshi”) (4)  August 7, 2005  the PRC   N/A 
Wangfan Tianxia Network Technology Co., Ltd.(“Iwanfan”) (4)  May 6, 2016  the PRC   N/A 
Yuehang Sunshine Network Technology Group Co., Ltd. (“AirNet Online”) (4)  April 30, 2015  the PRC   N/A 
VIEs’ subsidiaries:           
Beijing Yuehang Digital Media Advertising Co., Ltd. (“Beijing Yuehang”) (4)  January 16, 2008  the PRC   N/A 
Beijing AirNet Pictures Co., Ltd. (“AirNet Pictures”) (4)  September 13, 2007  the PRC   N/A 
Wenzhou Yuehang Advertising Co., Ltd. (“Wenzhou Yuehang”) (4)  October 17, 2008  the PRC   N/A 
Beijing Dongding Gongyi Advertising Co., Ltd. (“Dongding”) (4)  February 1, 2010  the PRC   N/A 
Guangzhou Meizheng Online Network Technology Co., Ltd. (“Guangzhou Meizheng”) (4)  May 17, 2013  the PRC   N/A 
Air Esurfing Information Technology Co., Ltd. (“Air Esurfing”) (4)  September 25, 2013  the PRC   N/A 
Wangfan Linghang Mobile Network Technology Co., Ltd. (“Linghang”) (4)  April 23, 2015  the PRC   N/A 
Beijing Wangfan Jiaming Pictures Co., Ltd. (“Wangfan Jiaming”) (4)  December 31, 2015  the PRC   N/A 
Meizheng Network Information Technology Co., Ltd. (“Meizheng Network”) (4)  August 8, 2016  the PRC   N/A 
Beijing Wangfan Jiaming Advertising Co., Ltd. (“Jiaming Advertising”) (4)  January 1, 2007  the PRC   N/A 
Shandong Airmedia Cheweishi Network Technology Co., Ltd. (“Shangdong Cheweishi”) (2)  July 21, 2016  the PRC   N/A 
Dingsheng Ruizhi (Beijing) Investment Consulting Co., Ltd. (“Dingsheng Ruizhi”) (4)  May 25, 2016  the PRC   N/A 
Yuehang Zhongying E-commerce Co., Ltd. (“Zhongying”) (4)  May 17, 2018  the PRC   N/A 
Beijing Airport United Culture Media Co., Ltd. (“Airport United”) (4)  June 19, 2018  the PRC   N/A 
Yuehang Sunshine (Beijing) Asset Management Co., Ltd. (“Yuehang Asset”) (4)  January 18, 2019  the PRC   N/A 
Air Joy Media Private Limited (“Air Joy”) (4)  November 15, 2019  Singapore   N/A 
(1)The two subsidiaries were disposed in March 2024.
(2)The subsidiary discontinued operations in January 2024.
(3)The subsidiaries were disposed in August 2024.
(4)The subsidiaries were disposed in September 2025.

The VIE arrangements

 

Chinese regulations currently limit foreign ownership of companies that provide advertising services, including out-of-home television advertising services. Since December 30, 2005, foreign investors have been permitted to own directly 100% interest in PRC advertising companies if the foreign investor has at least three years of direct operations of advertising business outside of the PRC.

 

One of the Company’s subsidiaries, AN China, the 100% shareholder of Chuangyi Technology, Shenzhen Yuehang, and Xi’an Shengshi, has been engaged in the advertising business in Hong Kong since September 2008.

 

The Group conducts substantially all of its activities through VIEs, i.e. Linghang Shengshi, Iwanfan and AirNet Online, and the VIEs’ subsidiaries. The VIEs have entered into the following series of agreements with Chuangyi Technology:

 

●Technology support and service agreement: Chuangyi Technology provides exclusive technology support and consulting services to the VIEs and in return, the VIEs are required to pay Chuangyi Technology service fees. The VIEs pay to Chuangyi Technology annual service fees in the amount that guarantee that the VIEs can achieve, after deducting such service fees payable to Chuangyi Technology, a net cost-plus rate of no less than 0.5% in the case of Linghang Shengshi, and Jiaming Advertising, or 1.0% in the case of Beijing Yuehang, which final rate should be determined by Chuangyi Technology. The “net cost-plus rate” refers to the operating profit as a percentage of total costs and expenses of a certain entity. The technology support and service fees for each given year payable by AirNet Online to Chuangyi Technology under AirNet Online’s technology support and service agreement shall be determined by AirNet Online and Chuangyi Technology at the first month of such year taking into account several factors. Those factors include the credential of the team of Chuangyi Technology that provides services to AirNet Online, the number of service hours, the nature and value of the services provided by Chuangyi Technology, the extent to which Chuangyi Technology provides patent or other license to AirNet Online in its provision of technology support and service and the correlation between AirNet Online’s results of operations and the technology support and service provided by Chuangyi Technology. In the event Chuangyi Technology finds it necessary to make subsequent adjustment to the amount of fees, AirNet Online shall negotiate in good faith with Chuangyi Technology to determine the new fee. The technology support and service agreements are effective for ten years and such term is automatically renewed upon its expiry unless either party informs the other party of its intention of no extension at least twenty days prior to the expiration of the agreements.

 

●Technology development agreement: VIEs exclusively engaged Chuangyi Technology to provide technology development services. Chuangyi Technology owns the intellectual property rights developed in the performance of these agreements. Except for AirNet Online, the VIEs pay to Chuangyi Technology annual service fees in the amount that guarantee that the VIEs can achieve, after deducting such service fees payable to Chuangyi Technology, a net cost-plus rate of no less than 0.5% in the case of Linghang Shengshi, and Jiaming Advertising, which final rate should be determined by Chuangyi Technology. It is at Chuangyi Technology’s sole discretion that the rate and amount of fees ultimately charged the VIEs under these agreements are determined. The “net cost-plus rate” refers to the operating profit as a percentage of total costs and expenses of a certain entity. The technology development fees for each given year payable by AirNet Online to Chuangyi Technology under AirNet Online’s technology development agreement shall be determined by AirNet Online and Chuangyi Technology at the first month of such year taking into account several factors. Those factors include the credential of the team of Chuangyi Technology that provides services to AirNet Online, the number of service hours, the nature and value of the services provided by Chuangyi Technology, the extent to which Chuangyi Technology provides patent or other license to AirNet Online in its provision of technology development service and the correlation between AirNet Online’s results of operations and the technology development service provided by Chuangyi Technology. In the event Chuangyi Technology finds it necessary to make subsequent adjustment to the amount of fees, AirNet Online shall negotiate in good faith with Chuangyi Technology to determine the new fee. The technology development agreements are effective for ten years and such terms is automatically renewed upon its expiry unless either party informs the other party of its intention of no extension at least twenty days prior to the expiration of the agreements.

 

●Exclusive Technology Consultation and Service Agreement: AirNet Online exclusively engages Chuangyi Technology to provide consultation services in relation to management, training, marketing and promotion. AirNet Online agrees to pay to Chuangyi Technology the amount of annual service fees as determined by Chuangyi Technology. In the event Chuangyi Technology finds it necessary to make subsequent adjustment to the amount of fees, AirNet Online shall negotiate in good faith with Chuangyi Technology to determine the new fees. The exclusive technology consultation and service agreement remains effective for ten years and such term may be reviewed by Chuangyi Technology’s written confirmation prior to the expiration of the agreement term.
●Call option agreement: Under the call option agreements between Chuangyi Technology and the shareholders of Linghang Shengshi, Beijing Yuehang and Jiaming Advertising, the shareholders of those VIEs irrevocably granted Chuangyi Technology or its designated third party an exclusive option to purchase from the VIEs’ shareholders, to the extent permitted under PRC law, all the equity interests in the VIEs, as the case may be, for the minimum amount of consideration permitted by the applicable law without any other conditions. Under the call option agreements between Chuangyi Technology and the shareholders of AirNet Online, the shareholders of AirNet Online irrevocably granted Chuangyi Technology or its designated third party an exclusive option to purchase from the shareholders of AirNet Online, to the extent permitted under PRC law, all the equity interests in AirNet Online, as the case may be. To the extent the applicable PRC law does price for such equity interests, such purchase price shall equal the amount of actual payment made by the respective shareholders of AirNet Online with respect to the equity interests whether in the form or share capital injection or secondary purchase price. If and where the applicable PRC law requires the valuation of the subject equity interests or otherwise has restrictions on the purchase price for such equity interests, such purchase price shall equal the minimum amount of consideration permitted by the applicable law. In addition, under these agreements (except for the call option agreements between Chuangyi Technology and the shareholders of AirNet Online), Chuangyi Technology has undertaken to act as guarantor of VIEs in all operations-related contracts, agreements and transactions and commit to provide loans to support the business development needs of VIEs or if the VIEs suffer operating difficulties, provided that the relevant VIE’s shareholders satisfy the terms and conditions in the call option agreements. Under PRC laws, to provide an effective guarantee, a guarantor needs to execute a specific written agreement with the beneficiary of the guarantee. As Chuangyi Technology has not entered into any written guarantee agreements with any third-party beneficiaries to guarantee the VIEs’ performance obligations to these third parties, none of these third parties can demand performance from Chuangyi Technology as a guarantor of the VIEs’ performance obligations. The absence of a written guarantee agreement, however, does not affect the conclusion that the Group is the primary beneficiary of the VIEs and in turn should consolidate the financials of the VIEs. The term of each call option agreement is ten years and such terms can be renewed upon expiration at Chuangyi Technology’s sole discretion.

 

●Equity pledge agreement: Under the equity pledge agreements between Chuangyi Technology and the shareholders of the Group’s VIEs other than AirNet Online, the shareholders of those VIEs pledged all of their equity interests, including the right to receive declared dividends, in those VIEs to Chuangyi Technology to guarantee those VIEs’ performance of their obligations under the technology support and service agreement and the technology development agreement. Under the equity pledge agreements between Chuangyi Technology and the shareholders of AirNet Online, the shareholders of AirNet Online pledged all of their equity interests, including the right to receive declared dividends, in AirNet Online to Chuangyi Technology to guarantee the performance by AirNet Online of its obligations under its call option agreement and its exclusive technology consultation and service agreement. If the VIEs fail to perform their obligations set forth in the applicable agreements, Chuangyi Technology shall be entitled to exercise all the remedies and powers set forth in the provisions of the applicable equity pledge agreements. Those agreements remain effective for as long as the technology support and service agreements and technology development agreement are effective, or, in the case of AirNet Online, until two years after the term of the obligations under the call option agreement and exclusive technology consultation and service agreement.

 

●Authorization letter: Each shareholder of the VIEs has executed an authorization letter to authorize Chuangyi Technology to exercise certain of its rights, including voting rights, the rights to enter into legal documents and the rights to transfer any or all of its equity interest in the VIEs. The authorization letters by the shareholders of the Group’s VIEs other than AirNet Online will remain effective during the operating periods of the respective VIEs. Such authorization is effective for ten years and such term is renewed upon its expiry at Chuangyi Technology’s sole discretion. The authorization letters by the shareholders of AirNet Online will remain effective for as long as the respective parties remain shareholders of AirNet Online unless terminated earlier by Chuangyi Technology or the call option agreement with respect to AirNet Online is terminated prior to its expiration.

Through the above contractual arrangements, Chuangyi Technology has obtained 100% of shareholders’ voting interest in the VIEs, has the right to receive all dividends declared and paid by the VIEs and may receive substantially all of the net income of the VIEs through the technical support and service fees as determined by Chuangyi Technology at its sole discretion. Accordingly, the Group has consolidated the VIEs because the Group believes, through the contractual arrangements, (1) Chuangyi Technology could direct the activities of the VIEs that most significantly affect its economic performance and (2) Chuangyi Technology could receive substantially all of the benefits that could be potentially significant to the VIEs. Other than the contractual arrangements described above, because the management and certain employees of Chuangyi Technology also serve in the VIEs as management or employees, certain operating costs paid by Chuangyi Technology, such as payroll costs and office rental, were re-charged to the VIEs.

 

Chuangyi Technology also entered into loan agreements with each shareholder of AirNet Online, pursuant to which Chuangyi Technology permits to make loans in an aggregate amount of RMB 50,000 to the shareholders of AirNet Online solely for the incorporation and capitalization of AirNet Online. The loan is interest free and the term of the loan is ten years and shall be automatically renewed on an annual basis unless Chuangyi Technology objects. Chuangyi Technology can require the shareholders to repay all or a portion of the loan before the maturity date with a 15 days prior written notice. Under such circumstances, Chuangyi Technology is entitled to, or designate a third party to, buy all or a portion of the shareholders’ equity interests in AirNet Online on a pro rata basis based on the amount of the repaid principal of the loan.

 

Risks in relation to the VIE structure

 

The Group believes that the VIE arrangements are in compliance with PRC law and are legally enforceable. The shareholders of the VIEs are also shareholders of the Group and therefore have no current interest in seeking to act contrary to the contractual arrangements. However, uncertainties in the PRC legal system could limit the Group’s ability to enforce these contractual arrangements and if the shareholders of the VIEs were to reduce their interest in the Group, their interests may diverge from that of the Group and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so.

 

The Group’s ability to control the VIEs also depends on the authorization letters that Chuangyi Technology has to vote on all matters requiring shareholder approval in the VIEs. As noted above, the Group believes the rights granted by the authorization letters is legally enforceable but may not be as effective as direct equity ownership.

 

In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the PRC government could:

 

●revoke the business and operating licenses of the Group’s PRC subsidiaries and affiliates;

 

●discontinue or restricting the Group’s PRC subsidiaries’ and affiliates’ operations;

 

●impose conditions or requirements with which the Group or its PRC subsidiaries and affiliates may not be able to comply; or

 

●require the Group or its PRC subsidiaries and affiliates to restructure the relevant ownership structure or operations;

 

The imposition of any of these penalties may result in a material and adverse effect on the Group’s ability to conduct the Group’s business. In addition, if the imposition of any of these penalties causes the Group to lose the rights to direct the activities of the VIEs and its subsidiaries or the right to receive their economic benefits, the Group would no longer be able to consolidate the VIEs. The Group does not believe that any penalties imposed or actions taken by the PRC Government would result in the liquidation of the Group, Chuangyi Technology, or the VIEs.

 

Certain shareholders of VIEs are also beneficial owners or directors of the Company. In addition, certain beneficial owners and directors of the Company are also directors or officers of VIEs. Their interests as beneficial owners of VIEs may differ from the interests of the Company as a whole. The Company cannot be certain that if conflicts of interest arise, these parties will act in the best interests of the Company or that conflicts of interests will be resolved in the Company’s favor. Currently, the Company does not have existing arrangements to address potential conflicts of interest these parties may encounter in their capacity as beneficial owners of VIEs, on the one hand, and as beneficial owners of the Company, on the other hand. The Company believes the shareholders of VIEs will not act contrary to any of the contractual arrangements and the exclusive purchase right contract provides the Company with a mechanism to remove them as shareholders of VIEs should they act to the detriment of the Company. If any conflict of interest or dispute between the Company and the shareholders of VIEs arises and the Company is unable to resolve it, the Company would have to rely on legal proceedings in the PRC. Such legal proceedings could result in disruption of its business; moreover, there is substantial uncertainty as to the ultimate outcome of any such legal proceedings.

The following financial statement information for AirNet’s VIEs were included in the accompanying unaudited condensed consolidated financial statements, presented net of intercompany eliminations:

 

   As of
December 31,		   As of
June 30,		 
   2024   2025 
       (unaudited) 
Total current assets of discontinued operations  $21,842   $22,100 
Total non-current assets of discontinued operations   9,987    9,726 
           
Total assets   31,829    31,826 
           
Total current liabilities of discontinued operations   78,245    79,101 
Total non-current liabilities of discontinued operations   3,631    3,729 
           
Total liabilities  $81,876   $82,830 

 

   For the six months ended
June 30,		 
   2024   2025 
   (unaudited)   (unaudited) 
Net income (loss) from discontinued operations, net of income taxes  $21,683   $(39)
Net cash provided by discontinued operating activities   6,575    622 
Net cash (used in) provided by discontinued investing activities   (205)   261 
Net cash provided by discontinued financing activities   228    — 

 

There are no consolidated VIEs’ assets that are collateral for the VIEs’ obligations and can only be used to settle the VIEs’ obligations. There are no creditors (or beneficial interest holders) of the VIEs that have recourse to the general credit of the Company or any of its consolidated subsidiaries. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests, which require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholder of the VIEs or entrustment loans to the VIEs.