NEW YORK, Nov. 13, 2017 /PRNewswire/ -- Seven Stars Cloud
Group, Inc. (NASDAQ: SSC) ("SSC" or the "Company"), announced today
its Q3 2017 operating results for the period ended September 30, 2017 (a full copy of the Company's
quarterly report on Form 10-Q will also be posted at www.sec.gov).
Conference Call: SSC's management, including Bruno Wu (Executive Chairman & CEO),
Robert G. Benya (President, Director
& Chief Revenue Officer), Simon
Wang (CFO) and Jason Wu
(Finance Director), will host an earnings conference call at
8:00 a.m. on Monday, November 13, 2017, U.S. Eastern Time
(9:00 p.m. on Monday, Beijing/Hong Kong Time).
To join the webcast, please visit the 'Events &
Presentations' section of the SSC corporate website
(http://www.sevenstarscloud.com/events), or
call the toll-free dial-in number: 877-407-3107; International
callers should dial: 201-493-6796.
SSC Q3 2017 OPERATING RESULTS
Revenue for Q3 2017 was $30.2
million as compared to $1.6
million for the same period in 2016, an increase of
approximately $28.6 million, or
17.6x. The increase was mainly due to our new business line
acquired in January 2017. All revenues from January to the
end of September of this year consisted primarily of our supply
chain management business, in the consumer electronic / information
& communications technology vertical.
This increase was partially offset by a decrease of our legacy
YOD business in the amount of $1.6
million, as the legacy YOD business shifts to a new
exclusive distribution agreement with Zhejiang Yanhua Culture Media
Co., Ltd. ("Yanhua ") which was announced in Q4 2016. As
revenue generated by Yanhua did not exceed the revenue sharing
threshold, no additional revenue was recorded in Q3 2017.
Year-to-Date revenue for the nine months ended September 30, 2017 was approximately $106.7 million, as compared to $4.4 million for the same period in 2016, an
increase of 2338%.
Cost of revenues was approximately $28.3
million Q3 2017 as compared to $0.9
million for the same period in 2016. Our cost of
revenues increased by $27.4 million,
which is in line with our increase in revenues. Our cost of
revenues is primarily comprised of cost to purchase consumer
electronics products from suppliers.
Gross profit ratio for Q3 2017 decreased from 45.06% to 6.45%,
as the Wecast Services business, which currently is engaged mostly
in lower margin consumer electronics, is still in its relative
infancy and the business service offerings as well as profit
sharing arrangements with a growing range of suppliers, are in
transition.
Selling, general and administrative expense for Q3 2017 was
$3.6 million as compared to
$2.3 million for the same period in
2016, an increase of approximately $1.3
million or 56%. The majority of the increase was due to 1)
the increase of our sales and marketing expense to introduce and
promote our business models to various potential investors and
business partners, as well as to promote Wecast Services, which was
acquired in January 2017; and 2)
financial advisory expenses that were paid to independent
professional companies to assist the Company in contacting and
negotiating with new business partners. The Company is also
continuing to focus on more cost-saving activities to reduce daily
operating expenses.
Professional fees for Q3 2017 were $0.8
million as compared to $0.3
million for the same period in 2016, an increase of
approximately $0.5 million. The
increase in professional fees was mainly caused by legal, valuation
and auditing service fees incurred in Q3 2017 in relation to the
acquisitions in January 2017. Specific to auditing, the
Company incurred increased service fees charged by our external
auditor for the opening audit due to our auditor change in
2017.
Loss per share for Q3 was $0.05 as
compared to loss per share of $0.05
for the same period in 2016. 2017 YTD loss per share was
$0.08 as compared to YTD loss per
share of $0.18 in the same period in
2016.
OCASIA
On August 14, 2017, Seven Stars
Cloud announced a Joint Venture Partnership ("JV Partnership) with
Ocasia Group Holdings ("Ocasia"), which is engaged in a broad range
of energy related activities including the trading of physical
crude oil, fuel oil and refined oil products as well as the storage
of oil. Ocasia is a purchasing agent for major energy
companies, including Petro China and China Petroleum
& Chemical Corporation (Sinopec).
Seven Stars Cloud today announced that:
- Ocasia is guaranteeing a minimum of $500
million USD worth of sales volume to the JV Partnership from
December 1, 2017 until December 31, 2018.
- Ocasia has committed to use Seven Stars Cloud's Digital
Financial Derivatives Trading Platform, for the issuance and
exchange of digital asset securities, energy index futures and
other financial derivatives.
Chairman Bruno Wu stated, "Our
transformation has steadily continued in Q3 as we have remained
focused on business fundamentals; that is, operational integrity,
controlling costs, disciplined investment, and a steady stream of
strategic partnerships, all with the objective of increasing
revenues and growing value. With that in mind, YTD revenue
for Seven Stars Cloud, a company aiming to become a global leader
in providing next-generation Artificial-Intelligent & Fintech
Powered, Supply Chain and Digital Finance Solutions, was
approximately $107 million USD.
That is up 23x over the same period YTD period in 2016.
Additionally, revenues for the year thus far only reflect our
supply chain management business line and do not yet reflect the
other parts of our growing ecosystem such as supply chain finance,
our digital financial derivatives trading platform (BBD Finance
Group JV) and asset-backed securitization and tokenization (ABST).
With all that being said, I am pleased to say we are still on track
to reach our top line revenue guidance of $300 million USD as projected by the Company in
early 2017."
President & Chief Revenue Officer Robert Benya stated, "Today we announced more
detail and financial commitments for the JV Partnership we formed
with Ocasia Group Holdings back in August 2017. This
agreement, along with other already formed and future partnerships,
will be the drivers that propel this Company moving forward.
The year 2017 was both a transitional and transformational
year: a transition away from the legacy business and a
transformation towards being a global leader in providing
next-generation Artificial-Intelligent & Fintech Powered,
Supply Chain + Digital Finance Solutions. Remarkably, through
this transitional and transformational build-out year, the Company
did something quite remarkable. It produced, and will
continue to produce, exponential growth on the revenue side.
From my experience, that is almost unheard of for a company to do
while simultaneously going through such a complete and thorough
change. With the deep pipeline of partnership activity and
business commitments that are forthcoming, I am enthusiastic to
lead and be a part of such a promising and exciting endeavor."
About Seven Stars Cloud Group, Inc.
(http://corporate.sevenstarscloud.com/)
Seven Stars Cloud Group, Inc. (NASDAQ: SSC) is aiming to
become a global leader in providing next-generation
Artificial-Intelligent (AI) & Fintech Powered, Supply Chain +
Digital Finance Solutions. SSC's innovative model helps
businesses enhance and unlock operational and capital value from
both the supply chain and real assets. In addition, SSC
offers a closed trade ecosystem for buyers and sellers designed to
eliminate transactional middlemen and create a more direct and
margin-expanding path for principals. There are three engines
that drive our business platform to date: 1. Intelligent Supply
Chain Management; 2. Asset-Backed Securitization and Tokenization,
Issuance & Trading Platform 3. Digital Index & Financial
Derivatives Issuance and Trading Platform. All three
engines are supported by "ABCD" Technology & Infrastructure (A:
Artificial Intelligence, B:
Blockchain, C: Cloud Computing, D: Data).
Safe Harbor Statement
This press release contains certain statements that may
include "forward looking statements." All statements other than
statements of historical fact included herein are "forward-looking
statements." These forward looking statements are often identified
by the use of forward-looking terminology such as "believes,"
"expects" or similar expressions, involve known and unknown risks
and uncertainties. Although the Company believes that the
expectations reflected in such forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. You should not
place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. The Company's
actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of
factors, including those discussed in the Company's periodic
reports that are filed with the Securities and Exchange Commission
and available on its website (http://www.sec.gov). All
forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by
these factors. Other than as required under the securities laws,
the Company does not assume a duty to update these forward-looking
statements.
CONTACT:
Jason Finkelstein
VP, Investor
Relations
Seven Stars Cloud Group,
Inc.
212-206-1216
Twitter:
@sevenstarscloud
Seven Stars Cloud
Group, Inc., Its Subsidiaries and Variable Interest
Entities
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
30,223,638
|
|
$
|
1,626,844
|
|
$
|
106,712,428
|
|
$
|
4,377,034
|
|
Cost of
revenue
|
|
28,273,862
|
|
|
893,796
|
|
|
100,888,964
|
|
|
2,609,975
|
|
Gross
profit
|
|
1,949,776
|
|
|
733,048
|
|
|
5,823,464
|
|
|
1,767,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense
|
|
3,630,949
|
|
|
2,320,247
|
|
|
7,771,561
|
|
|
6,294,206
|
|
Research and development expense
|
|
400,040
|
|
|
-
|
|
|
400,040
|
|
|
-
|
|
Professional fees
|
|
831,039
|
|
|
326,353
|
|
|
1,845,590
|
|
|
964,290
|
|
Depreciation and amortization
|
|
36,508
|
|
|
123,502
|
|
|
293,661
|
|
|
344,308
|
|
Impairment of
other intangible assets
|
|
152,847
|
|
|
172,064
|
|
|
216,468
|
|
|
172,064
|
|
Total operating
expense
|
|
5,051,383
|
|
|
2,942,166
|
|
|
10,527,320
|
|
|
7,774,868
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(3,101,607)
|
|
|
(2,209,118)
|
|
|
(4,703,856)
|
|
|
(6,007,809)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
(27,186)
|
|
|
(24,971)
|
|
|
(72,439)
|
|
|
(225,154)
|
|
Change in fair value of warrant liabilities
|
|
131,357
|
|
|
58,220
|
|
|
(112,642)
|
|
|
201,826
|
|
Equity in loss of equity method investees
|
|
(23,632)
|
|
|
17,487
|
|
|
(100,468)
|
|
|
(19,862)
|
|
Other
|
|
(806)
|
|
|
(3,313)
|
|
|
(111,448)
|
|
|
(8,409)
|
|
Loss before income
taxes
|
|
(3,021,874)
|
|
|
(2,161,695)
|
|
|
(5,100,853)
|
|
|
(6,059,408)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
-
|
|
|
8,612
|
|
|
-
|
|
|
25,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(3,021,874)
|
|
|
(2,153,083)
|
|
|
(5,100,853)
|
|
|
(6,033,572)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss (income)
attributable to non-controlling interest
|
|
(22,723)
|
|
|
105,879
|
|
|
608,910
|
|
|
261,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to Seven Stars Cloud
shareholders
|
$
|
(3,044,597)
|
|
$
|
(2,047,204)
|
|
$
|
(4,491,943)
|
|
$
|
(5,771,763)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per
share
|
$
|
(0.05)
|
|
$
|
(0.05)
|
|
$
|
(0.08)
|
|
$
|
(0.18)
|
|
Diluted loss per
share
|
$
|
(0.05)
|
|
$
|
(0.05)
|
|
$
|
(0.08)
|
|
$
|
(0.18)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
62,146,168
|
|
|
41,184,037
|
|
|
59,594,289
|
|
|
31,640,230
|
|
Diluted
|
|
62,146,168
|
|
|
41,184,037
|
|
|
59,594,289
|
|
|
31,640,230
|
|
View original
content:http://www.prnewswire.com/news-releases/seven-stars-cloud-reports-q3-2017-results-300554475.html
SOURCE Seven Stars Cloud Group, Inc.