UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT
TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of December 2020
Commission File Number 001-34837
Luokung Technology Corp.
(Translation of registrant’s name
into English)
B9-8, Block B, SOHO Phase II, No. 9, Guanghua
Road, Chaoyang District,
Beijing People’s Republic of China 100020
(Address of principal executive office)
Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F.
Form
20-F þ Form 40-F
☐
Indicate by check mark if the registrant
is submitting the Form 6’-K in paper as permitted by Regulation S-T Rule 101(b)(1): ___
Note: Regulation S-T Rule 101(6)(1) only
permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is
submitting the Form 6-K in paper as permitted by Regulation S-T Rule l01(b)(7): ____
Note: Regulation S-T Rule 101(6)(7)
only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign
private issuer must furnish and make public’ under the laws of the jurisdiction in which the registrant is incorporated,
domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange
on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not
required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has
already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Luokung Technology Corp.
Luokung Technology Corp. Reports
The First Six Months of Fiscal Year 2020
Unaudited Financial Results
Luokung Technology Corp. (Nasdaq: LKCO) (“Luokung”,
“we” or the “Company”), today announced the financial results for the six months ended June 30, 2020. The
financial statements and other financial information included in this Form 6-K are prepared in conformity with accounting principles
generally accepted in the United States of America (“U.S. GAAP”).
Financial Highlights for the Six Months Ended
June 30, 2020:
Revenues for the six months ended
June 30, 2020 increased 27.7% to $7.32 million from $5.73 million for the six months ended June 30, 2019;
Net loss of $18.90 million for
the six months ended June 30, 2020 as compared to net loss of $10.57 million for the six months ended June 30, 2019.
Basic and diluted loss per share
was $0.09 for the six months ended June 30, 2020 compared to basic and diluted loss per share of $0.05 for the six months ended
June 30, 2019. Weighted average shares outstanding for the six months ended June 30, 2020 and 2019 were 211,365,515 and 200,223,114,
respectively.
“For the first half of the fiscal
year, our revenue increased to $7.32 million, or by 27.7%, from $5.73 million in comparison to the same period of the year 2019.
Most of our revenue derived from Luokung location-based services (“LBS”) Data Marketing Platform(“LLDMP”),
that combines our LBS strength with existing advertising tools. The increase was less than the revenue we expected due to the lock
down as a result of Covid-19, the demand for LBS has decreased compared to the demand prior to the pandemic. In addition, the implementation
of smart projects also has been delayed,” said Mr. Song Xuesong, Chief Executive Officer, “However, China’s National
New Infrastructure Initiative provides opportunity for growth, for our business to participate in this next phase of China’s
development with investment opportunities blossomed in key segments like Internet of Things (“IoT”), Neighborhood Electric
Vehicles (“NEVs”), and artificial intelligence. Our Luokung Digital Base with SuperEngine Indexing technology, integrated
with HD Map, Remote Sensing Imaginary, Beidou and GPS high precision positioning, IoT sensors, extensible to support spatial temporal
related scenarios, is ideally positioned and built as big data infrastructure to support real time data processing and complex
queries across different data sources. It enables broader adoption of HD Map in highway management and smart transportation project
with Beijing Sinotrans Transportation Co., Ltd. Project like Smart Campus also has been already started in the second half of fiscal
year.”
Recent Developments
Securities Purchase Agreement
Financing
As previously disclosed by Luokung on December
3, 2019 in a Form 6-k filed with the Securities and Exchange Commission, the Company entered into a Securities Purchase Agreement,
dated November 13, 2019 (the “Purchase Agreement”) with Acuitas Capital, LLC (the “Purchaser”) and a Warrant
(the “Warrant”) to purchase the Company’s ordinary shares. Pursuant to the Purchase Agreement the Purchaser subscribed
to purchase up to $100,000,000 of units (the “Units”) with up to a $10,000,000 subscription at each closing. Each Unit
consists of one ordinary share and one warrant, and each whole warrant entitles the holder to purchase one ordinary share.
On July 16, 2020, the Company held the
first closing pursuant to the Purchase Agreement and received $10,000,000. The Purchaser had previously received 7,763,975 ordinary
shares on November 13, 2019 in consideration for such $10,000,000. The Purchaser also exercised the Warrant and received 15,897,663
ordinary shares upon the exercise of the Warrant.
As of the date of this 6-K submission, the Purchase Agreement
has been terminated.
Preferred Stock Financing
As previously disclosed in the Company’s Form 20-F filed with
the Securities and Exchange Commission on June 29, 2020, on June 17, 2020, the Company entered into a preferred stock subscription
agreement (“Preferred Financing Agreement”) with Daci Haojin Foundation Limited (“Daci Haojin”) pursuant
to which the Company would issue 15,000,000 preferred shares in exchange for $45,000,000. Pursuant to the Preferred Financing Agreement,
the first closing was scheduled to occur in July 2020 in the amount of $13,500,000. Subsequent closings of $13,500,000 and $18,000,000
were scheduled to occur on August 31 and September 30, 2020, respectively. However, due to the impact of the travel restriction
as a result of Covid-19 between Hong Kong and Mainland China, Daci Haojin has not fulfilled their US dollars subscription obligations
under the Preferred Financing Agreement and no such closings have occurred. As of September 30, 2020, Daci Haojin has wired RMB
18.4 million (USD 2.8 million) to the Company and has represented to the Company that they are working to be able to comply with
their contractual obligations to fund the $45,000,000 to the Company. The Company cannot give any assurances as to whether it will
receive any monies from Daci Haojin pursuant to the Preferred Financing Agreement.
Resignation and Appointment of Directors
Effective July 30, 2020, Mr. Kegang Peng
resigned from the Company’s board of directors.
Effective November 13, 2020, Mr. Dennis
Galgano resigned from the Company’s board of directors.
Effective July 31, 2020, Mr. Dongpu Zhang,
the Company’s President, has been appointed to the Company’s board of directors.
Mr. Dongpu Zhang was appointed as the President
of the Company effective on August 25, 2018. Mr. Dongpu Zhang has served as the General Manager of Superengine Graphics Software
Technology Development (Suzhou) Co., Ltd. (“Superengine Suzhou”) and the Chief Executive Officer of Superengine Holding
Limited since September 2016. From February, 2014 to August, 2016, Mr. Zhang served as vice president of Industrial Development
Group under China Fortune Land Development Co., Ltd. From March, 2009 to February, 2014, Mr. Zhang served as the vice president
of Aerospace Science and Technology Holding Group Co., Ltd. Mr. Zhang receive his Master Degree of Computer Science from Harbin
Institute of Technology in 1994 and his Bachelor Degree of information system from Changsha Institute of technology in 1991.
Bid Second Notification
On December 28, 2020, the Company received a notification letter
from the Listing Qualifications Staff of The Nasdaq Stock Market LLC indicating that the Company is eligible for an additional
180 calendar day period, or until June 22, 2021, to regain compliance with the minimum $1 bid price per share requirement.
Results of Operations - For the Six
Months Ended June 30, 2020 Compared to the Six Months Ended June 30, 2019
Revenue
We derive our revenue from the provision of
user acquisition services to our advertisers on the strength of the LBS services we offer; the customers pay us based on performance,
as measured by CPI (Cost Per Install), CPM (Cost Per Mile), and CPC (Cost Per Click). The Company recognizes revenue over time
because the customer receives and consumes the benefit of our advertising services throughout the contract period.
The Company generates revenues primarily in
the form of sale of a software license and provision of technology solution services. License fees include perpetual license fees,
term license fees and royalties. Technology services primarily consist of fees for providing technology solution services that
enable customers to gain real-time operational intelligence by harnessing the value of their data.
Revenue for the sale of software licenses
is recognized at the point in time when the control of the provided goods is provided to our customers.
Technology solution revenue is recognized
over time, as the services are performed because the customer receives and consumes the benefit of our performance throughout the
contract period. Milestones with corresponding payments are stated in the contracts with customers. We bill for the services we
have performed when the milestones reached are accepted by the customer in accordance with the terms of the contract. We recognize
the revenues associated with these professional services as we deliver each agreed portion of the services.
For the six months ended June 30, 2020, we
had revenue of $7,315,577, as compared to revenue of $5,728,268 for the six months ended June 30, 2019, an increase of $1,587,309,
or 27.7%, which was primarily due to revenue generated through our Luokung Location-based services Data Marketing Platform. The
implementation of smart city projects have been delayed as a result of the impact of the COVID-19 pandemic.
Operating costs and expenses
Our operating costs and expenses consist of
cost of revenues, selling, general and administrative expenses, and research and development expenses.
Cost of Revenues
Cost of revenues increased by 38.1% to
$6,676,517 for the six months ended June 30, 2020 from $4,835,758 for the six months ended June 30, 2019. The cost of revenues
primarily consists of traffic acquisition costs. Our traffic acquisition costs may vary due to a number of factors, the scale,
targeted audience and the geography of traffic.
Selling and marketing expense
Our selling and marketing expense mainly include
promotional and marketing expenses and compensation for our sales and marketing personnel.
Selling expense totaled $617,839 for the six
months ended June 30, 2020, as compared to $770,092 for the six months ended June 30, 2019, a decrease of $152,253 or 19.8%. The
decrease was primarily attributable to the decrease in the salaries of approximately $231,000 due to the decrease in number of
staff of Marketing department, netted off by increase in copyright fee of approximately $81,000.
General and administrative expense
Our general and administrative expenses consist
primarily of salaries and benefits for our general and administrative personnel, rent, fees and expenses for legal, accounting
and other professional services.
General and administrative expense totaled
$12,561,785 for the six months ended June 30, 2020, as compared to $6,777,839 for the six months ended June 30, 2019, an increase
of $5,783,946 or 85.3%. The increase was primarily attributable to the increase in the allowance for doubtful receivables of approximately
$5,991,000 and impairment for goodwill of approximately $3,620,000.
Research and development expenses
Research and development expenses primarily
consist of salaries and benefits for research and development personnel.
Research and development expenses totaled
$4,343,682 for the six months ended June 30, 2020, as compared to $3,880,812 for the six months ended June 30, 2019, an increase
of $462,870 or 11.9%. The increase was primarily attributable to the increase in the salaries of approximately $471,000 due to
the increase in number of staff of the R&D department.
Loss from operations
As a result of the factors described above,
for the six months ended June 30, 2020, loss from operations amounted to $16,884,246 as compared to loss from operations of $10,536,233
for the six months ended June 30, 2019, an increase of $6,348,013, or 60.2%.
Other income/expense
Other income/expense primarily includes interest
expenses from other loans and foreign currency gains/losses.
For the six months ended June 30, 2020, other
expense, net, amounted to $2,017,919 as compared to other expense, net, of $31,494 for the six months ended June 30, 2019, an increase
of $1,986,425, or 6,307.3%, which was primarily attributable to an increase in interest expenses of approximately $1,605,000, an
increase in foreign currency transaction loss of approximately $187,000 and a decrease in other income of approximately $194,000.
Net loss
As a result of the factors described above,
our net loss was $18,902,165 for the six months ended June 30, 2020, compared to net loss of $10,567,727 for the six months ended
June 30, 2019, an increase of $8,334,438 or 78.9%.
Foreign currency translation adjustment
Our reporting currency is the U.S. dollar.
The functional currency of our parent company and subsidiaries of LK Technology, MMB and Mobile Media is the U.S. dollar and the
functional currency of the Company’s subsidiaries incorporated in China is the Chinese Renminbi (“RMB”). The
financial statements of our subsidiaries incorporated in China are translated to U.S. dollars using period end rates of exchange
for assets and liabilities, and average rates of exchange (for the period) for revenue, costs, and expenses. Net gains and losses
resulting from foreign exchange transactions are included in the consolidated statements of operations and comprehensive loss.
As a result of foreign currency translations, which are a non-cash adjustment, we reported a foreign currency translation gain
of $462,022 for the six months ended June 30, 2020, as compared to a foreign currency translation gain of $95,792 for the six months
ended June 30, 2019. This non-cash gain had the effect of decreasing our reported comprehensive loss.
Comprehensive loss
As a result of our foreign currency translation
adjustment, we had comprehensive loss for the six months ended June 30, 2020 of $18,440,143, compared to comprehensive loss of
$10,471,935 for the six months ended June 30, 2019.
Liquidity and Capital Resources
Liquidity is the ability of a company to
generate funds to support its current and future operations, satisfy its obligations and otherwise operate on an ongoing basis.
We historically relied on cash flow provided by operations and financing to provide our working capital. At June 30, 2020 and
December 31, 2019, we had cash balances of approximately $212,368 and $3,695,687, respectively. The significant portion of these
funds are located in financial institutions located in the PRC and will continue to be indefinitely reinvested in our operations
in the PRC.
The following table sets forth a summary of
changes in our working capital from December 31, 2019 to June 30, 2020:
|
|
|
|
|
|
|
|
December 31,
2019
to June 30,
2020
|
|
|
|
June 30,
2020
|
|
|
December 31,
2019
|
|
|
Change
|
|
|
Percentage
Change
|
|
Working capital (deficit) surplus:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
$
|
10,940,245
|
|
|
$
|
40,972,561
|
|
|
$
|
(30,032,316
|
)
|
|
|
(73.3
|
)%
|
Total current liabilities
|
|
|
29,042,501
|
|
|
|
30,687,759
|
|
|
|
(1,645,258
|
)
|
|
|
(5.4
|
)%
|
Working capital (deficit) surplus:
|
|
$
|
(18,102,256
|
)
|
|
$
|
10,284,802
|
|
|
$
|
(28,387,058
|
)
|
|
|
(276.0
|
)%
|
Our working capital deficit increased by
$28,387,058 to a working capital deficit of $18,102,256 at June 30, 2020 from a working capital surplus of $10,284,802 at December
31, 2019. This increase in working capital deficit is primarily attributable to a decrease in accounts receivable of $7,234,000,
a decrease in other receivables of approximately $19,621,000, which was mainly due to the payment of $21,502,000 to the Company
from Geely Technology for the subscription of preferred shares, offset by a decrease in accounts payable of approximately $1,408,000,
a decrease in accrued liabilities and other payables of approximately $173,000, a decrease in deferred revenue of approximately
$65,000 and a decrease in amounts due to related party of approximately $62,000.
We had incurred negative cash flows from operating activities
and net losses for the six months ended June 30, 2020, these matters raise substantial doubt about the Company’s ability
to continue as a going concern. In order to continue as a going concern and mitigate our liquidity risk, the Company will need,
among other things, additional capital resources. Management’s plans to obtain such resources for the Company include (1)
obtaining more sales contracts, (2) proceeds from loans from both unrelated and related parties to provide the resources necessary
to fund the development of our business plan and operations, and (3) proceeds from loans from financial institutions and/or existing
investors to increase working capital in order to meet capital demands. However, management cannot provide any assurance that the
Company will be successful in accomplishing any of these plans.
Cash flows for the six months ended
June 30, 2020 compared to the six months ended June 30, 2019
The following summarizes the key components
of our cash flows for the six months ended June 30, 2020 and 2019:
|
|
Six Months Ended
June 30,
|
|
|
|
2020
|
|
|
2019
|
|
Net cash used in operating activities
|
|
$
|
(3,559,914
|
)
|
|
$
|
(4,669,189
|
)
|
Net cash used in investing activities
|
|
|
(18,404,241
|
)
|
|
|
(10,839
|
)
|
Net cash provided by financing activities
|
|
|
18,533,819
|
|
|
|
4,037,543
|
|
Effect of foreign exchange rate changes
|
|
|
(52,983
|
)
|
|
|
(59,182
|
)
|
Net decrease in cash
|
|
$
|
(3,483,319
|
)
|
|
$
|
(701,667
|
)
|
Net cash flow used in operating activities
was $3,559,914 for the six months ended June 30, 2020 as compared to net cash flow used in operating activities of $4,669,189 for
the six months ended June 30, 2019, a decrease of $1,109,275.
Net cash flow used in operating activities
for the six months ended June 30, 2020 primarily reflected our net loss of approximately $18,902,000, and the add-back of non-cash
items, primarily consisting of depreciation and amortization expense of approximately $3,024,000, impairment for goodwill of approximately
$3,620,000, allowance for doubtful receivables of approximately $7,224,000, foreign currency exchange difference of approximately
$434,000, loss on disposal of subsidiary of approximately $126,000, gain on derecognition of lease of approximately $41,000, common
stock issuance for professional fees of approximately $37,000 and changes in operating assets and liabilities primarily consisting
of a decrease in accounts payable of approximately $1,662,000, a decrease in lease liability of approximately $157,000, an increase
in accrued liabilities and other payables of approximately $938,000 and a decrease in deferred revenue of approximately $2,795,000,
offset by a decrease in accounts receivable of approximately $1,636,000 and a decrease in other receivables and prepayment of approximately
$2,957,000.
Net cash flow used in operating activities
for the six months ended June 30, 2019 primarily reflected our net loss of approximately $10,568,000, and the add-back of non-cash
items, primarily consisting of depreciation and amortization of approximately $3,004,000, allowance for doubtful receivables of
approximately $5,214,000, foreign currency exchange difference of approximately $241,000, and changes in operating assets and liabilities
primarily consisting of an increase in accounts receivable of approximately $546,000, an increase in other receivable and prepayment
of approximately $4,083,000 and a decrease in deferred revenue of approximately $412,000, offset by an increase in accounts payable
of approximately $1,806,000 and an increase in accrued liabilities and other payables of approximately $674,000.
Net cash flow used in investing activities
was $18,404,241 for the six months ended June 30, 2020 as compared to net cash flow provided by investing activities $10,839 for
the six months ended June 30, 2019. During the six months ended June 30, 2020, we made payments for the purchase of property, plant
and equipment of approximately $15,000, we made partial payment for the acquisition of Saleya Holdings Limited (“Saleya”)
as disclosed in the Form 6K filed on September 13, 2019 of approximately $18,262,000 and the disposal of subsidiary of approximately
$126,000. During the six months ended June 30, 2019, we made payments for the purchase of property, plant and equipment of approximately
$11,000.
Net cash flow provided by financing activities
was $18,533,819 for the six months ended June 30, 2020 as compared to net cash flow provided by financing activities of $4,037,543
for the six months ended June 30, 2019. During the six months ended June 30, 2020, we received loan from Hangzhou Maijie Investment
Co., Ltd., a subsidiary of Geely Technology of approximately $21,180,000, offset by repayment to related parties of approximately
$2,647,000. During the six months ended June 30, 2019, we received proceeds from investor of approximately $6,000,000, offset
by repayment to related parties of approximately $1,962,000.
About Luokung Technology Corp.
Luokung Technology Corp. is one of the leading
spatial-temporal big-data processing technology companies and a leading interactive location-based services company in China. It
provides integrated DaaS, SaaS, and PaaS services for Internet and Internet of Things of Spatial-Temporal big data based on its
patented technology. Based on geographic information systems and intelligent Spatial-Temporal big data, it establishes city-level
and industry-level digital twin holographic data models to actively serve smart cities, intelligent transportation, smart industry,
LBS. http://www.luokung.com
Safe Harbor Statements
This press release contains “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including certain plans, expectations,
goals, and projections, which are subject to numerous assumptions, risks, and uncertainties. These forward-looking statements may
include, but are not limited to, statements containing words such as “may,” “could,” “would,”
“plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,”
“expects,” “intends”, “future” and “guidance” or similar expressions. These forward-looking
statements speak only as of the date of this press release and are subject to change at any time. These forward-looking statements
are based upon management’s current expectations and are subject to a number of risks, uncertainties and contingencies, many
of which are beyond the Company’s control that may cause actual results, levels of activity, performance or achievements
to differ materially from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking
statements. The Company’s actual results could differ materially from those contained in the forward-looking statements due
to a number of factors, including those described under the heading “Risk Factors” in the Company’s Annual Report
for the fiscal year ended September 30, 2017 filed with the Securities and Exchange Commission. The Company undertakes no obligation
to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except
as required under applicable law.
For investor and media inquiries, please
contact:
Mr. Jay Yu
Tel: (+86) 10-6506 5217
Email: yujie@luokung.com
LUOKUNG TECHNOLOGY CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(IN U.S. DOLLARS)
|
|
As of
June 30,
|
|
|
As of
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash
|
|
$
|
212,368
|
|
|
$
|
3,695,687
|
|
Accounts receivable, net of allowance for doubtful accounts
|
|
|
2,770,827
|
|
|
|
10,004,951
|
|
Other receivables and prepayment
|
|
|
7,449,817
|
|
|
|
27,071,241
|
|
Amounts due from related parties
|
|
|
507,233
|
|
|
|
200,682
|
|
Total current assets
|
|
|
10,940,245
|
|
|
|
40,972,561
|
|
Non-current assets:
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
520,990
|
|
|
|
588,881
|
|
Intangible assets, net
|
|
|
44,564,841
|
|
|
|
47,299,120
|
|
Goodwill
|
|
|
8,108,632
|
|
|
|
11,728,600
|
|
Right-of-use assets
|
|
|
548,201
|
|
|
|
670,604
|
|
Other receivables, net (long term)
|
|
|
53,295,445
|
|
|
|
16,636,403
|
|
Total non-current assets
|
|
|
107,038,109
|
|
|
|
76,923,608
|
|
TOTAL ASSETS
|
|
|
117,978,354
|
|
|
|
117,896,169
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
2,906,516
|
|
|
|
4,314,162
|
|
Accrued liabilities and other payables
|
|
|
23,524,212
|
|
|
|
23,697,143
|
|
Deferred revenue
|
|
|
2,002,100
|
|
|
|
2,067,357
|
|
Lease liabilities – current portion
|
|
|
494,797
|
|
|
|
431,995
|
|
Amounts due to related parties
|
|
|
114,876
|
|
|
|
177,102
|
|
Total current liabilities
|
|
|
29,042,501
|
|
|
|
30,687,759
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
|
Lease liabilities – non-current portion
|
|
|
133,683
|
|
|
|
296,481
|
|
Accrued liabilities and other payables (long term)
|
|
|
34,089,075
|
|
|
|
32,938,926
|
|
Total non- current liabilities
|
|
|
34,222,758
|
|
|
|
33,235,407
|
|
TOTAL LIABILITIES
|
|
|
63,265,259
|
|
|
|
63,923,166
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value; 22,794,872 shares authorized, issued and outstanding at June 30, 2020 and December 31, 2019
|
|
|
227,949
|
|
|
|
227,949
|
|
Common stock, $0.01 par value; 500,000,000 shares authorized; 212,280,126 shares issued and outstanding at June 30, 2020; Common stock, $0.01 par value; 209,081,533 shares issued and outstanding at December 31, 2019
|
|
|
2,122,802
|
|
|
|
2,090,816
|
|
Additional paid-in capital
|
|
|
143,240,440
|
|
|
|
124,092,191
|
|
Accumulated deficit
|
|
|
(92,208,785
|
)
|
|
|
(73,376,872
|
)
|
Accumulated other comprehensive income
|
|
|
1,827,962
|
|
|
|
1,372,074
|
|
Total equity attributable to owners of the company
|
|
|
55,210,368
|
|
|
|
54,406,158
|
|
Non-controlling interest
|
|
|
(497,273
|
)
|
|
|
(433,155
|
)
|
|
|
|
|
|
|
|
|
|
Total Shareholders’ Equity
|
|
|
54,713,095
|
|
|
|
53,973,003
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
$
|
117,978,354
|
|
|
$
|
117,896,169
|
|
LUOKUNG TECHNOLOGY CORP. AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE LOSS
(IN U.S. DOLLARS)
|
|
For the Six Months Ended
|
|
|
|
June 30,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
7,315,577
|
|
|
$
|
5,728,268
|
|
Less: Operating costs and expenses:
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
6,676,517
|
|
|
|
4,835,758
|
|
Selling and marketing
|
|
|
617,839
|
|
|
|
770,092
|
|
General and administrative
|
|
|
12,561,785
|
|
|
|
6,777,839
|
|
Research and development
|
|
|
4,343,682
|
|
|
|
3,880,812
|
|
Total Operating costs and expenses
|
|
|
24,199,823
|
|
|
|
16,264,501
|
|
Loss from operations
|
|
|
(16,884,246
|
)
|
|
|
(10,536,233
|
)
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(1,625,821
|
)
|
|
|
(20,488
|
)
|
Foreign exchange losses, net
|
|
|
(439,326
|
)
|
|
|
(252,477
|
)
|
Other income, net
|
|
|
47,228
|
|
|
|
241,471
|
|
Total other expense, net
|
|
|
(2,017,919
|
)
|
|
|
(31,494
|
)
|
Loss before income taxes
|
|
|
(18,902,165
|
)
|
|
|
(10,567,727
|
)
|
Income taxes
|
|
|
-
|
|
|
|
-
|
|
Net loss
|
|
$
|
(18,902,165
|
)
|
|
$
|
(10,567,727
|
)
|
Less: Net loss attributable to the non-controlling interest
|
|
|
70,252
|
|
|
|
40,489
|
|
Net loss attributable to owners of the Company
|
|
$
|
(18,831,913
|
)
|
|
$
|
(10,527,238
|
)
|
Comprehensive loss:
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(18,902,165
|
)
|
|
|
(10,567,727
|
)
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment
|
|
|
462,022
|
|
|
|
95,792
|
|
Comprehensive loss
|
|
$
|
(18,440,143
|
)
|
|
$
|
(10,471,935
|
)
|
Less: Comprehensive loss attributable to the non-controlling interest
|
|
|
(6,134
|
)
|
|
|
39,936
|
|
Comprehensive loss attributable to owner of the company
|
|
$
|
(18,446,277
|
)
|
|
$
|
(10,431,999
|
)
|
Net loss per ordinary share:
|
|
|
|
|
|
|
|
|
Basic and Diluted
|
|
$
|
(0.09
|
)
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares outstanding Basic and Diluted
|
|
|
211,365,515
|
|
|
|
200,223,114
|
|
LUOKUNG TECHNOLOGY CORP. AND SUBSIDIARIES
UNAUDITED INTERIM CONSOLIDATED STATEMENTS
OF CASH FLOWS
(IN U.S. DOLLARS)
|
|
For the Six Months Ended
|
|
|
|
June 30,
|
|
|
|
2020
|
|
|
2019
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(18,902,165
|
)
|
|
$
|
(10,567,727
|
)
|
Depreciation and amortization
|
|
|
3,023,748
|
|
|
|
3,004,225
|
|
Foreign currency exchange difference
|
|
|
433,870
|
|
|
|
241,269
|
|
Increase in allowance for doubtful accounts
|
|
|
7,223,875
|
|
|
|
5,213,811
|
|
Impairment for goodwill
|
|
|
3,619,968
|
|
|
|
-
|
|
Loss on disposal of Subsidiary
|
|
|
126,373
|
|
|
|
-
|
|
Gain on derecognition of lease
|
|
|
(40,933
|
)
|
|
|
-
|
|
Common stock issuance for professional fee
|
|
|
37,417
|
|
|
|
-
|
|
Impairment of PPE
|
|
|
-
|
|
|
|
553
|
|
Changes in assets and liabilities
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
1,636,010
|
|
|
|
(546,313
|
)
|
Other receivables and prepayment
|
|
|
2,957,066
|
|
|
|
(4,082,861
|
)
|
Deferred revenue
|
|
|
(2,795,260
|
)
|
|
|
(412,161
|
)
|
Accounts payable
|
|
|
(1,661,641
|
)
|
|
|
1,806,174
|
|
Change in lease liability
|
|
|
(156,647
|
)
|
|
|
-
|
|
Accrued liabilities and other payables
|
|
|
938,405
|
|
|
|
673,841
|
|
Net cash used in operating activities
|
|
|
(3,559,914
|
)
|
|
|
(4,669,189
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(15,488
|
)
|
|
|
(10,839
|
)
|
Partial payment made for acquisition of a subsidiary
|
|
|
(18,262,379
|
)
|
|
|
|
|
Disposal of subsidiary
|
|
|
(126,374
|
)
|
|
|
|
|
Net cash used in investing activities
|
|
|
(18,404,241
|
)
|
|
|
(10,839
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Repayment to related parties
|
|
|
(2,646,638
|
)
|
|
|
(1,962,457
|
)
|
Proceeds from issuance of debt
|
|
|
21,180,457
|
|
|
|
6,000,000
|
|
Net cash provided by financing activities
|
|
|
18,533,819
|
|
|
|
4,037,543
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign exchange rate changes
|
|
|
(52,983
|
)
|
|
|
(59,182
|
)
|
|
|
|
|
|
|
|
|
|
Net decrease in cash
|
|
|
(3,483,319
|
)
|
|
|
(701,667
|
)
|
Cash at beginning of year
|
|
|
3,695,687
|
|
|
|
1,192,218
|
|
|
|
|
|
|
|
|
|
|
Cash at end of period
|
|
$
|
212,368
|
|
|
$
|
490,551
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow disclosures:
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
1,625,821
|
|
|
|
20,488
|
|
Income taxes paid
|
|
|
-
|
|
|
|
-
|
|
Non- cash transaction:
|
|
|
|
|
|
|
|
|
Share based compensation
|
|
|
37,417
|
|
|
|
-
|
|
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
Luokung Technology Corp.
|
|
|
Date December 31, 2020
|
By
|
/s/ Xuesong Song
|
|
|
Xuesong Song
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer) and
|
|
|
Duly Authorized Officer
|
12
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