UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 6-K/A

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of February 2020

 

Commission File Number 001-37593

 

  BORQS TECHNOLOGIES, INC.  
  (Translation of registrant’s name into English)  

 

 

Building B23-A,

Universal Business Park

No. 10 Jiuxianqiao Road

Chaoyang District, Beijing, China

 
  (Address of principal executive offices)  

 

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 ☒       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(b)(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 101(b)(7): ☐.

 

Note: Regulation S-T Rule 101(b)(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.

 

 

 

 

 

 

As required by Nasdaq Rule 5250(c)(2), on December 30, 2019, Borqs Technologies, Inc. (the “Company”) submitted its unaudited interim balance sheet and income statement for the six months ended on June 30, 2019 (the “Interim Submission”). The consolidated financial statements contained in the Interim Submission were unaudited and non-reviewed and prepared by management of the Company.

 

On February 4, 2020, the Company filed with the Securities and Exchange Commission (the “SEC”) its Annual Report on Form 20-F (the “2018 Annual Report”) with its audited financial results for the fiscal year ended December 31, 2018. In the 2018 Annual Report, the Company certain write-offs and provisions for doubtful receivables and also impairments on certain assets during the fiscal year ended December 31, 2018, as discussed in “Results of Operations” in “Item 5 – Operating and Financial Review and Prospects” of the 2018 Annual Report and in Note 9 (Long-Term Investments) to the consolidated financial statements contained in the 2018 Annual Report. This report on Form 6-K/A is filed for the purpose of amending the Interim Submission to reflect corresponding write-offs, provisions and impairments, as well as other adjustments to certain expenses, to the interim balance sheet and income statement for the period ended June 30, 2019.

 

1

 

 

BORQS TECHNOLOGIES, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands of US dollar (“$”), unless otherwise stated)

 

    As of June 30,  
    2018     2019  
    $     $  
ASSETS            
Current assets:            
Cash and cash equivalents     747       8,153  
Accounts receivable, net     32,699       6,501  
Inventories, net     13,901       5,060  
Deferred cost of revenues     730       1,784  
Prepaid expenses and other current assets, net     33,439       28,614  
Amounts due from discontinued operations     13,800       3,428  
Current assets held for sale     7,281       8,678  
Total current assets     102,597       62,218  
Non-current assets:                
Property and equipment, net     414       229  
Intangible assets, net     12,565       11,235  
Long-term investments     11,662       -  
Deferred tax assets     273       373  
Deferred cost of revenues     3,889       3,806  
Other non-current assets     3,555       555  
Non-current assets held for sale     12,472       11,790  
Total non-current assets     44,830       27,988  
Total assets     147,427       90,206  
LIABILITIES AND SHAREHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable     8,672       13,479  
Accrued expenses and other payables     13,921       18,908  
Advances from customers     6,307       3,557  
Amount due to related parties-current     -       1,071  
Deferred revenues     2,708       3,364  
Income tax payable     677       700  
Short-term bank and other borrowings     11,615       6,343  
Long-term bank borrowings - current portion     6,532       2,000  
Current liabilities held for sale     25,603       25,244  
Total current liabilities     76,035       74,666  
Non-current liabilities:                
Unrecognized tax benefits     2,780       2,072  
Deferred tax liabilities     2,635       2,348  
Deferred revenues     4,277       4,462  
Other non-current liabilities     -       11,765  
Long-term payables     5,563       6,663  
Deferred government grants     1,933       1,860  
Non-current liabilities held for sale     1,415       1,951  
Total non-current liabilities     18,603       31,121  
Total liabilities     94,638       105,787  
Commitments and contingencies                
Shareholders’ equity:                
Ordinary shares     -       -  
Additional paid-in capital     124,058       134,462  
Statutory reserve     2,156       2,143  
Accumulated deficit     (71,482 )     (149,808 )
Accumulated other comprehensive loss     (1,494 )     (2,223 )
Total Borqs Technologies, Inc. shareholders’ equity     53,238       (15,426 )
Noncontrolling interest     (449 )     (155 )
Total shareholders’ equity     52,789       (15,581 )
Total liabilities, noncontrolling interest and shareholders’ equity     147,427       90,206  

 

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BORQS TECHNOLOGIES, INC.

UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS

(Amounts in thousands of US$, unless otherwise stated)

 

    For the six months ended
June 30,
 
    2018     2019  
    US$     US$  
Net Revenues:            
Software     3,880       6,692  
Hardware     95,136       20,497  
                 
Total net revenues     99,017       27,189  
                 
Software     (1,437 )     (4,983 )
Hardware     (85,934 )     (11,800 )
                 
Total cost of revenues     (87,371 )     (16,783 )
                 
Total gross profit (loss)     11,646       10,406  
                 
Operating expenses:                
Sales and marketing expenses     (1,198 )     (510 )
General and administrative expenses     (5,036 )     (6,061 )
Research and development expenses     (1,709 )     (2,648 )
Changes in the fair value of warrant liabilities             -  
                 
Total operating expenses     (7,943 )     (9,219 )
                 
Other operating income     -       -  
                 
Operating income (loss)     3,703       1,187  
                 
Interest income     1       1  
Interest expense     (1,361 )     (1,231 )
Other income     12       8  
Other expense     (4 )     (804 )
Foreign exchange gain (loss)     259       38  
                 
Income (loss) from continuing operations, before income taxes     2,610       (801 )
                 
Income tax expense     (1,106 )     (407 )
                 
Net income (loss) from continuing operations     1,504       (1,208 )
Discontinued operations                
(Loss) income from operations of discontinued entities     1,822       (2,329 )
Income tax benefit (expense)     69       (178 )
                 
Net (loss) income on discontinued operations     1,891       (2,507 )
                 
Net income (loss)     3,395       (3,715 )
                 
Less: net income (loss) attributable to noncontrolling interest     366       (99 )
                 
Net income (loss) attributable to Borqs Technologies, Inc.     3,029       (3,616 )

 

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Amended Summary Discussions on the Results of the Six Months Ended June 30, 2019

 

Due to the pending sale of the Company’s MVNO Business Unit (the “MVNO BU”), intended to be completed approximately by October 20, 2020, the historical unaudited interim financial statements presented above for the six months ended June 30, 2019 and 2018, are prepared with the assets and liabilities of the MVNO BU classified as assets and liabilities held for sale and the activities of the MVNO BU as discontinued operations.

 

For the six months ended June 30, 2019, the Company’s revenues included $6.8 million of sales activities that were not recognized in 2018, while its corresponding costs of goods were recorded in the fourth quarter of 2018; and as such, the gross margin in the six months ended June 30, 2019 was significantly higher than that in the same period in 2018. General and administrative expenses in the six months ended June 30, 2019 included $2.0 million of provision for doubtful receivables. Other expenses of $0.8 million incurred in the six months ended June 30, 2019 were expenses the Company paid due to our arbitration loss to Samsung (as disclosed on our Current Report on Form 8-K filed with the SEC on December 6, 2018).

 

The Company’s revenues for the six months ended June 30, 2019 were $27.2 million as compared to $99.0 million for the same period of 2018. However, the Company captured significantly more sales in the third quarter of 2019 recording $100.2 million in revenues for the nine months ended September 30, 2019 and recorded $83.6 million in costs of goods. For the same nine months ended September 30, 2018, the Company recorded $121.3 million in revenues and $108.4 million in costs of goods.

 

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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.

 

  BORQS TECHNOLOGIES INC.
  (registrant)
   
Dated: February 7, 2020 By: /s/ Anthony K. Chan
    Anthony K. Chan
    Chief Financial Officer

 

 

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