HONG KONG, Dec. 1, 2017 /PRNewswire/ -- SGOCO Group, Ltd.
(Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on
product design, distribution and brand development in the Chinese
display, computer and virtual reality ("VR") product markets, as
well as energy saving products and services, today announced
its unaudited operating results for the six months ended
June 30, 2017.
2017 Interim Results Overview
Interim revenues decreased 99.6% to $0.02
million for the first six months of this year (the "1H
2017"), as compared to $4.7 million
for the first six months of 2016.
Gross profit decreased by 98.9% to $0.01
million in the 1H 2017, from $0.2
million for the same period in 2016.
Net loss for the 1H 2017 was $2.4
million, compared to net loss of $2.7
million during the same period in 2016.
Basic and diluted loss per share was $0.24 for the 1H 2017, as compared to
$0.42 loss per share in the same
period in 2016.
Revenue
Our total revenues decreased by 99.6% to $0.02 million for the 1H 2017, as compared to
$4.7 million for the first six months
of 2016.
Cost of Goods Sold
Cost of goods sold decreased by 99.7% to $0.02 million in the 1H of 2017 from $4.5 million in the same period of 2016. The
decrease was consistent with the decrease in revenue.
Gross margin
In 1H 2017, the gross profit of the Company decreased by 98.9%
to $0.01 million from $0.2 million in the same period of 2016. The
overall gross margin for the 1H 2017 was 11.8%, as compared with
4.0% during the same period of 2016.
Operating loss and expenses
The Company recorded a $2.9
million operating loss in the 1H 2017, as compared to an
operating loss of $1.3 million in the
first six months of 2016. Operating expenses in the 1H 2017
increased by 99.5% to $2.9 million,
compared to operating expenses of $1.5
million in the first six months of 2016. The increase in
general and administrative expenses was mainly due to an increase
in employee share-based compensation and amortization of intangible
assets of our recently acquired subsidiaries.
Net loss and loss per share
Net loss for the 1H 2017 was $2.4
million, compared to a net loss of $2.7 million for the same period in 2016. Basic
and diluted loss per share was $0.24
in the 1H 2017 based on a weighted average number of outstanding
ordinary shares of 10,312,893, as compared to basic and diluted
loss per share of $0.42 based on a
weighted average number of outstanding ordinary shares of 6,476,467
for the first half of 2016.
Cash and working capital
SGOCO held $0.1 million cash and
cash equivalents as of June 30, 2017,
compared to $0.03 million as of
December 31, 2016. Working capital
decreased to a negative of $0.8
million as of June 30, 2017
from a negative of $0.7 million as of
December 31, 2016.
About SGOCO Group, Ltd.
SGOCO Group, Ltd. is focused on product design, brand
development and distribution in the Chinese display, computer and
visual reality ("VR") product markets as well as energy saving
products and services. SGOCO sells its products and services in the
Chinese market and abroad. For more information about SGOCO, please
visit our investor relations website:
http://www.sgocogroup.com
For investor and media inquiries, please contact:
SGOCO Group, Ltd.
Tony Zhong
Vice President of Finance
Tel: +852 2386 3328
Email: ir@sgoco.com
Safe Harbor and Informational Statement
This announcement contains "forward-looking" statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. All statements,
other than statements of historical fact, including, without
limitation, those with respect to the objectives, plans and
strategies of the Company set forth herein and those preceded by or
that include the words "believe," "expect," "anticipate," "future,"
"will," "intend," "plan," "estimate" or similar expressions, are
"forward-looking statements". Forward-looking statements in this
release include, without limitation, the effectiveness of the
Company's multiple-brand, multiple channel strategy and the
transitioning of its product development and sales focus and to a
"light-asset" model, Although the Company's management believes
that such forward-looking statements are reasonable, it cannot
guarantee that such expectations are, or will be, correct. These
forward looking statements involve a number of risks and
uncertainties, which could cause the Company's future results to
differ materially from those anticipated. These forward-looking
statements can change as a result of many possible events or
factors not all of which are known to the Company, which may
include, without limitation, our ability to have effective internal
control over financial reporting; our success in designing and
distributing products under brands licensed from others; management
of sales trend and client mix; possibility of securing loans and
other financing without efficient fixed assets as collaterals;
changes in government policy in China; China's overall economic conditions and local
market economic conditions; our ability to expand through strategic
acquisitions and establishment of new locations; compliance with
government regulations; legislation or regulatory environments;
geopolitical events, and other events and/or risks outlined in
SGOCO's filings with the U.S. Securities and Exchange Commission,
including its annual report on Form 20-F and other filings. All
information provided in this press release and in the attachments
is as of the date of the issuance, and SGOCO does not undertake any
obligation to update any forward-looking statement, except as
required under applicable law.
SGOCO GROUP, LTD.
AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS
ENDED JUNE 30, 2017 AND 2016
(Unaudited)
(In thousands of U.S.
dollars except share and per share data)
|
|
|
2017
|
|
|
2016
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
17
|
|
|
|
4,678
|
|
|
|
|
|
|
|
|
|
|
COST OF GOODS
SOLD:
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
15
|
|
|
|
4,489
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
2
|
|
|
|
189
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
1
|
|
|
|
39
|
|
General and
administrative expenses
|
|
|
2,935
|
|
|
|
1,433
|
|
Total operating
expenses
|
|
|
2,936
|
|
|
|
1,472
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM
OPERATIONS
|
|
|
(2,934)
|
|
|
|
(1,283)
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSES):
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
132
|
|
|
|
-
|
|
Interest
expense
|
|
|
-
|
|
|
|
(9)
|
|
Other expense,
net
|
|
|
18
|
|
|
|
(16)
|
|
Change in fair value
of warrant derivative liability
|
|
|
81
|
|
|
|
-
|
|
Loss on change in
fair value of convertible notes
|
|
|
-
|
|
|
|
(1,500)
|
|
Total other income
(expenses), net
|
|
|
231
|
|
|
|
(1,525)
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE PROVISION
FOR INCOME TAXES
|
|
|
(2,703)
|
|
|
|
(2,808)
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX
CREDIT
|
|
|
269
|
|
|
|
105
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
|
(2,434)
|
|
|
|
(2,703)
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
LOSS:
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
381
|
|
|
|
(668)
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
LOSS
|
|
|
(2,053)
|
|
|
|
(3,371)
|
|
|
|
|
|
|
|
|
|
|
LOSS PER
SHARE:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
(0.24)
|
|
|
|
(0.42)
|
|
Diluted
|
|
|
(0.24)
|
|
|
|
(0.42)
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
NUMBER OF COMMON SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
10,312,893
|
|
|
|
6,476,467
|
|
Diluted
|
|
|
10,312,893
|
|
|
|
6,476,467
|
|
|
The accompanying
notes are an integral part of these unaudited interim
condensed consolidated financial statements.
|
SGOCO GROUP, LTD.
AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30,
2017 AND DECEMBER 31, 2016
(Unaudited)
(In thousands of U.S.
dollars except share and per share data)
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
Cash
|
|
|
101
|
|
|
|
29
|
|
Accounts receivable,
trade
|
|
|
9
|
|
|
|
119
|
|
Other receivables and
prepayments
|
|
|
27
|
|
|
|
6,459
|
|
Advances to
suppliers
|
|
|
23
|
|
|
|
-
|
|
Total current
assets
|
|
|
160
|
|
|
|
6,607
|
|
|
|
|
|
|
|
|
|
|
DEPOSITS FOR
ACQUISITION OF SUBSIDIARIES
|
|
|
-
|
|
|
|
31,866
|
|
PLANT AND
EQUIPMENT, NET
|
|
|
3
|
|
|
|
5
|
|
INTANGIBLE ASSETS,
NET
|
|
|
43,897
|
|
|
|
25,290
|
|
GOODWILL
|
|
|
56,734
|
|
|
|
36,504
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
100,794
|
|
|
|
100,272
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Accounts payable,
trade
|
|
|
227
|
|
|
|
222
|
|
Other loan -
secured
|
|
|
348
|
|
|
|
342
|
|
Other payables and
accrued liabilities
|
|
|
345
|
|
|
|
465
|
|
Customer
deposits
|
|
|
50
|
|
|
|
-
|
|
Taxes
payable
|
|
|
-
|
|
|
|
6,241
|
|
Total current
liabilities
|
|
|
970
|
|
|
|
7,270
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
|
|
|
Warrant derivative
liability
|
|
|
449
|
|
|
|
-
|
|
Non-current Deferred
tax liability
|
|
|
10,974
|
|
|
|
6,323
|
|
Total
liabilities
|
|
|
12,393
|
|
|
|
13,593
|
|
|
|
|
|
|
|
|
|
|
COMMITMENT AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Preferred stock,
$0.001 par value, 1,000,000 shares authorized,
|
|
|
|
|
|
|
|
|
nil issued and
outstanding as of June 30, 2017 and December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
Common stock, $0.004
par value, 50,000,000 shares authorized,
|
|
|
|
|
|
|
|
|
11,630,072 and
9,387,928 issued and outstanding as of
|
|
|
|
|
|
|
|
|
June 30, 2017 and
December 31, 2016, respectively
|
|
|
47
|
|
|
|
38
|
|
Additional
paid-in-capital
|
|
|
45,971
|
|
|
|
42,205
|
|
Statutory
reserves
|
|
|
-
|
|
|
|
-
|
|
Retained
earnings
|
|
|
49,702
|
|
|
|
52,136
|
|
Accumulated other
comprehensive income
|
|
|
(7,319)
|
|
|
|
(7,700)
|
|
Total shareholders'
equity
|
|
|
88,401
|
|
|
|
86,679
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' equity
|
|
|
100,794
|
|
|
|
100,272
|
|
|
|
|
|
|
|
|
|
|
The accompanying
notes are an integral part of these unaudited interim
condensed consolidated financial statements.
|
|
SGOCO GROUP, LTD.
AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS
ENDED JUNE 30, 2017 AND 2016
(Unaudited)
(In thousands of U.S.
dollars)
|
|
|
|
2017
|
|
|
2016
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(2,434)
|
|
|
|
(2,703)
|
|
Adjustments to
reconcile net loss to cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
792
|
|
|
|
423
|
|
Transaction cost from
issue of convertible notes
|
|
|
-
|
|
|
|
44
|
|
Deferred income
taxes
|
|
|
(269)
|
|
|
|
(105)
|
|
Change in fair value
of warrant derivative liability
|
|
|
-
|
|
|
|
-
|
|
Share-based
compensation expenses
|
|
|
741
|
|
|
|
469
|
|
Change in fair value
of warrant derivative liability
|
|
|
(81)
|
|
|
|
-
|
|
Loss on change in
fair value of convertible notes
|
|
|
-
|
|
|
|
1,500
|
|
Change in operating
assets
|
|
|
|
|
|
|
|
|
Accounts receivable,
trade
|
|
|
111
|
|
|
|
(4,352)
|
|
Other receivables and
prepayments
|
|
|
136
|
|
|
|
2
|
|
Inventories
|
|
|
-
|
|
|
|
17
|
|
Advances to
suppliers
|
|
|
(23)
|
|
|
|
86
|
|
Change in operating
liabilities
|
|
|
|
|
|
|
|
|
Accounts payables,
trade
|
|
|
-
|
|
|
|
4,283
|
|
Other payables and
accrued liabilities
|
|
|
(190)
|
|
|
|
63
|
|
Customer
deposits
|
|
|
49
|
|
|
|
(217)
|
|
Taxes
payable
|
|
|
-
|
|
|
|
130
|
|
Net cash used in
operating activities
|
|
|
(1,168)
|
|
|
|
(360)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from acquisition of a
subsidiary, net of cash acquired of $1
|
|
|
1
|
|
|
|
1
|
|
Net cash provided
by investing activities
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from
shareholder loan
|
|
|
-
|
|
|
|
7
|
|
Payments on
shareholder loan
|
|
|
-
|
|
|
|
(75)
|
|
Proceeds from shares
issuance
|
|
|
1239
|
|
|
|
(75)
|
|
Proceeds from
convertible debt
|
|
|
-
|
|
|
|
298
|
|
Net cash provided
by financing activities
|
|
|
1239
|
|
|
|
230
|
|
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE ON CASH
|
|
|
-
|
|
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
(DECREASE)
INCREASE IN CASH
|
|
|
72
|
|
|
|
(130)
|
|
|
|
|
|
|
|
|
|
|
CASH, beginning of
period
|
|
|
29
|
|
|
|
345
|
|
|
|
|
|
|
|
|
|
|
CASH, end of
period
|
|
|
101
|
|
|
|
215
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
INFORMATION
|
|
|
|
|
|
|
|
|
Receivable from
convertible note holders under promissory notes
|
|
|
-
|
|
|
|
-
|
|
Common stock issued
on conversion of convertible notes
|
|
|
-
|
|
|
|
3,674
|
|
Common stock issued
for acquisition of a subsidiary
|
|
|
2,325
|
|
|
|
4,080
|
|
View original
content:http://www.prnewswire.com/news-releases/sgoco-group-ltd-announces-2017-unaudited-interim-financial-results-300565046.html
SOURCE SGOCO Group, Ltd.