ZW Data Action Technologies Inc. (Nasdaq: CNET) (the "Company"), an
integrated online advertising, precision marketing, data analytics
and other value-added services provider serving enterprise clients,
today announced its audited financial results for the year ended
December 31, 2021.
Financial Highlights
- Revenues in the full year of 2021
increased to $47.33 million, representing an increase of 23.2%
YOY;
- Working capital of $11.10 million
as of December 31, 2021, compared to $4.86 million as of December
31, 2020;
- Cash and cash equivalents of $7.17
million as of December 31, 2021, compared to $4.30 million as of
December 31, 2020.
Full Year 2021 Financial
Results
Revenues
For the full year of 2021, revenues increased by
$8.92 million, or 23.2%, to $47.33 million from $38.41 million for
the same period of last year. The increase in revenues was
primarily attributable to the increase in revenues from our
distribution of the right to use search engine marketing service
business category.
Cost of revenues
Total cost of revenues increased by $9.45
million, or 25.0%, to $47.23 million for the full year of 2021 from
$37.78 million for the same period of last year. The increase in
cost of revenues was primary attributable to the increase in costs
associated with the distribution of the right to use search engine
marketing service we purchased from key search engines, which was
in line with the increase in related revenues.
Gross profit (loss) and gross profit (loss)
margin
Gross profit was $0.10 million for the full year
of 2021, compared to $0.63 million for the same period of last
year, which was primarily attributable to the decrease in gross
margin from our internet advertising and related data and ecommerce
O2O advertising and marketing services business categories, and was
partially offset by the increase in gross margin from the
distribution of the right to use search engine marketing services
business category. Overall gross profit margin rate was 0.2% for
the full year of 2021, compared to 1.6% for the same period of last
year.
Operating expenses
Sales and marketing expenses increased by $0.37
million, or 102.2%, to $0.73 million for the full year of 2021 from
$0.36 million for the same period of last year. The increase in
sales and marketing expenses was mainly attributable to the
increase in brand building and promotion expenses.
General and administrative expenses increased by
$7.20 million, or 132.5%, to $12.63 million for the full year of
2021 from $5.43 million for the same period of last year. The
increase in general and administrative expenses was mainly
attributable to an increase in share-based compensation expenses of
$5.14 million and an increase in general departmental expenses of
$1.93 million which was primarily related to the increase in office
lease and other administrative costs of our new office in
Guangzhou.
Research and development expenses decreased by
$0.21 million, or 39.5%, to $0.33 million for the full year of 2021
from $0.54 million for the same period of last year. The decrease
in research and development expenses was mainly attributable to the
decrease in share-based compensation expenses.
Operating loss
Loss from operations was $13.59 million for the
full year of 2021, compared to $5.70 million for the same period of
last year. Operating loss margin was 28.7% for the full year of
2021, compared to 14.8% for the same period of last year.
Other income (expense), net
Total other income increased to $11.08 million
for the full year of 2021, compared to total $0.62 million for the
same period of last year, which was primarily attributable to the
increase in gain from change in fair value of warrant liabilities.
Net income (loss) attributable to CNET and earnings (loss) per
share
Net loss attributable to CNET was $2.75 million,
or loss per share of $0.08, for the full year of 2021. This
compared to net loss attributable to CNET of $5.22 million, or loss
per share of $0.24, for the same period of last year.
Financial Condition
As of December 31, 2021, the Company had cash
and cash equivalents of $7.17 million, compared to $4.30 million as
of December 31, 2020. Accounts receivable, net was $3.44 million as
of December 31, 2021, compared to $2.41 million as of December 31,
2020. Working capital was $11.10 million as of December 31, 2021,
compared to $4.86 million as of December 31, 2020.
Net cash used in operating activities was $8.84
million for the full year of 2021, compared to net cash provided by
operating activities of $0.33 million for the same period of last
year. Net cash used in investing activities was $5.47 million for
the full year of 2021, compared to $3.47 million for the same
period of last year. Net cash provided by financing activities was
$17.11 million for the full year of 2021, compared to $5.82 million
for the same period of last year.
Recent Developments
During the fourth quarter of 2021, the Company
initialized a partnership with Shanghai Weiyou Information
Technology Co., Ltd. to contribute to the insurance ecosystem with
a blockchain technology upgrade through jointly developing a
“Blockchain + Insurance” services platform for small and
medium-sized enterprises.
Meanwhile, the Company cooperated with Guangzhou
Digital Gold Information Technology Co., Ltd. (“Digital Gold
Information”) to explore the development of Intellectual Property
(“IP”) + Non-Fungible Token (“NFT”) + Metaverse business model,
providing the peripheral products and digital merchandise services
for authorized IPs through leveraging the resources of Digital Gold
Information’s IP and the Company’s BIF platform.
About ZW Data Action Technologies
Inc.
Established in 2003 and headquartered in
Beijing, China, ZW Data Action Technologies Inc. (the “Company”)
offers online advertising, precision marketing, data analytics and
other value-added services for enterprise clients. Leveraging its
fully integrated services platform, proprietary database, and
cutting-edge algorithms, ZW Data Action Technologies delivers
customized, result-driven business solutions for small and
medium-sized enterprise clients in China. The Company also develops
blockchain and artificial intelligence enabled web/mobile
applications and software solutions for clients. More information
about the Company can be found at: http://www.zdat.com/.
Safe Harbor Statement
This release contains certain "forward-looking statements"
relating to the business of ZW Data Action Technologies Inc., which
can be identified by the use of forward-looking terminology such as
"believes," "expects," "anticipates," "estimates" or similar
expressions. Such forward-looking statements involve known and
unknown risks and uncertainties, including business uncertainties
relating to government regulation of our industry, market demand,
reliance on key personnel, future capital requirements, competition
in general and other factors that may cause actual results to be
materially different from those described herein as anticipated,
believed, estimated or expected. Certain of these risks and
uncertainties are or will be described in greater detail in our
filings with the Securities and Exchange Commission. These
forward-looking statements are based on ZW Data Action Technologies
Inc.’s current expectations and beliefs concerning future
developments and their potential effects on the Company. There can
be no assurance that future developments affecting ZW Data Action
Technologies Inc. will be those anticipated by ZW Data Action
Technologies Inc. These forward-looking statements involve a number
of risks, uncertainties (some of which are beyond the control of
the Company) or other assumptions that may cause actual results or
performance to be materially different from those expressed or
implied by such forward-looking statements. ZW Data Action
Technologies Inc. undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
under applicable securities laws.
For more information, please contact:
Sherry ZhengWeitian Group LLCEmail:
shunyu.zheng@weitian-ir.comPhone: +1 718-213-7386
ZW DATA ACTION TECHNOLOGIES
INC.CONSOLIDATED BALANCE SHEETS(In
thousands, except for number of shares and per share data)
|
|
As of December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
(US $) |
|
|
(US $) |
|
Assets |
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents * |
|
$ |
7,173 |
|
|
$ |
4,297 |
|
Accounts receivable, net of allowance for doubtful accounts of
$2,236 and $4,247, respectively * |
|
|
3,439 |
|
|
|
2,407 |
|
Prepayment and deposit to suppliers * |
|
|
7,559 |
|
|
|
4,657 |
|
Due from related parties * |
|
|
90 |
|
|
|
61 |
|
Other current assets * |
|
|
1,657 |
|
|
|
1,462 |
|
Total current assets |
|
|
19,918 |
|
|
|
12,884 |
|
|
|
|
|
|
|
|
|
|
Long-term investments * |
|
|
2,280 |
|
|
|
67 |
|
Operating lease right-of-use
assets * |
|
|
2,019 |
|
|
|
48 |
|
Property and equipment, net
* |
|
|
375 |
|
|
|
60 |
|
Intangible assets, net * |
|
|
7,523 |
|
|
|
2,557 |
|
Blockchain platform
applications development costs |
|
|
- |
|
|
|
4,406 |
|
Long-term deposits and
prepayments |
|
|
75 |
|
|
|
39 |
|
Deferred tax assets, net
* |
|
|
441 |
|
|
|
606 |
|
Total
Assets |
|
$ |
32,631 |
|
|
$ |
20,667 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts payable * |
|
$ |
1,119 |
|
|
$ |
608 |
|
Advances from customers * |
|
|
1,245 |
|
|
|
1,436 |
|
Accrued payroll and other accruals * |
|
|
389 |
|
|
|
489 |
|
Taxes payable * |
|
|
3,534 |
|
|
|
3,430 |
|
Operating lease liabilities * |
|
|
202 |
|
|
|
18 |
|
Lease payment liabilities related to short-term leases * |
|
|
152 |
|
|
|
203 |
|
Other current liabilities * |
|
|
141 |
|
|
|
333 |
|
Warrant liabilities |
|
|
2,039 |
|
|
|
1,505 |
|
Total current liabilities |
|
|
8,821 |
|
|
|
8,022 |
|
Long-term liabilities: |
|
|
|
|
|
|
|
|
Operating lease liabilities-Non current * |
|
|
1,907 |
|
|
|
32 |
|
Long-term borrowing from a related party |
|
|
137 |
|
|
|
134 |
|
Total
Liabilities |
|
|
10,865 |
|
|
|
8,188 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
ZW Data Action Technologies Inc.’s stockholders’ equity |
|
|
|
|
|
|
|
|
Common stock (US$0.001 par value; authorized 100,000,000 and
50,000,000 shares at December 31, 2021 and 2020; issued and
outstanding 35,332,677 shares and 26,062,915 shares at
December 31, 2021 and 2020, respectively) |
|
|
35 |
|
|
|
26 |
|
Additional paid-in capital |
|
|
61,785 |
|
|
|
49,772 |
|
Statutory reserves |
|
|
2,598 |
|
|
|
2,598 |
|
Accumulated deficit |
|
|
(43,734 |
) |
|
|
(40,980 |
) |
Accumulated other comprehensive income |
|
|
1,082 |
|
|
|
1,129 |
|
Total ZW Data Action Technologies Inc.’s stockholders’ equity |
|
|
21,766 |
|
|
|
12,545 |
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests |
|
|
- |
|
|
|
(66 |
) |
Total
equity |
|
|
21,766 |
|
|
|
12,479 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Equity |
|
$ |
32,631 |
|
|
$ |
20,667 |
|
*All of the VIEs' assets can be used to settle
obligations of their primary beneficiary. Liabilities recognized as
a result of consolidating these VIEs do not represent additional
claims on the Company’s general assets.
ZW DATA ACTION TECHNOLOGIES
INC.CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS(In thousands, except for number of
shares and per share data)
|
|
Year Ended December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
(US $) |
|
|
(US $) |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
From unrelated parties |
|
$ |
47,324 |
|
|
$ |
38,390 |
|
From related parties |
|
|
4 |
|
|
|
18 |
|
Total revenues |
|
|
47,328 |
|
|
|
38,408 |
|
Cost of
revenues |
|
|
47,230 |
|
|
|
37,776 |
|
Gross
profit |
|
|
98 |
|
|
|
632 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
Sales and marketing expenses |
|
|
730 |
|
|
|
361 |
|
General and administrative expenses |
|
|
12,632 |
|
|
|
5,433 |
|
Research and development expenses |
|
|
326 |
|
|
|
539 |
|
Total operating expenses |
|
|
13,688 |
|
|
|
6,333 |
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(13,590 |
) |
|
|
(5,701 |
) |
|
|
|
|
|
|
|
|
|
Other
income/(expenses) |
|
|
|
|
|
|
|
|
Change in fair value of warrant liabilities |
|
|
11,329 |
|
|
|
653 |
|
Interest income, net |
|
|
4 |
|
|
|
1 |
|
Loss on disposal of long-term investments |
|
|
(38 |
) |
|
|
- |
|
Other expense, net |
|
|
(216 |
) |
|
|
(31 |
) |
Total other income |
|
|
11,079 |
|
|
|
623 |
|
|
|
|
|
|
|
|
|
|
Loss before income tax
expense and noncontrolling interests |
|
|
(2,511 |
) |
|
|
(5,078 |
) |
Income tax expense |
|
|
(177 |
) |
|
|
(143 |
) |
Net loss |
|
|
(2,688 |
) |
|
|
(5,221 |
) |
Net (income)/loss attributable to noncontrolling interests |
|
|
(66 |
) |
|
|
5 |
|
Net loss attributable
to ZW Data Action Technologies Inc. |
|
$ |
(2,754 |
) |
|
$ |
(5,216 |
) |
Net loss |
|
$ |
(2,688 |
) |
|
$ |
(5,221 |
) |
Foreign currency translation
loss |
|
|
(47 |
) |
|
|
(380 |
) |
Comprehensive
loss |
|
$ |
(2,735 |
) |
|
$ |
(5,601 |
) |
Comprehensive (income)/loss attributable to noncontrolling
interests |
|
|
(66 |
) |
|
|
9 |
|
Comprehensive loss
attributable to ZW Data Action Technologies Inc. |
|
$ |
(2,801 |
) |
|
$ |
(5,592 |
) |
|
|
|
|
|
|
|
|
|
Loss per
share |
|
|
|
|
|
|
|
|
Loss per common share |
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.08 |
) |
|
$ |
(0.24 |
) |
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
33,048,921 |
|
|
|
21,602,107 |
|
ZW DATA ACTION TECHNOLOGIES
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands)
|
|
Year Ended December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
(US $) |
|
|
(US $) |
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,688 |
) |
|
$ |
(5,221 |
) |
Adjustments to
reconcile net loss to net cash (used in)/provided by operating
activities |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
632 |
|
|
|
856 |
|
Amortization of operating lease right-of-use assets |
|
|
207 |
|
|
|
13 |
|
Share-based compensation expenses |
|
|
7,028 |
|
|
|
2,152 |
|
Loss on disposal of long-term investment |
|
|
38 |
|
|
|
- |
|
Provision of allowances for doubtful accounts |
|
|
- |
|
|
|
833 |
|
Change in fair value of warrant liabilities |
|
|
(11,329 |
) |
|
|
(653 |
) |
Deferred taxes |
|
|
177 |
|
|
|
143 |
|
Other non-operating losses |
|
|
524 |
|
|
|
11 |
|
Changes in operating
assets and liabilities |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(986 |
) |
|
|
116 |
|
Prepayment and deposit to suppliers |
|
|
(2,061 |
) |
|
|
2,804 |
|
Due from related parties |
|
|
- |
|
|
|
24 |
|
Other current assets |
|
|
6 |
|
|
|
(6 |
) |
Long-term deposits and prepayments |
|
|
(74 |
) |
|
|
- |
|
Accounts payable |
|
|
495 |
|
|
|
180 |
|
Advances from customers |
|
|
(221 |
) |
|
|
(671 |
) |
Accrued payroll and other accruals |
|
|
(90 |
) |
|
|
(16 |
) |
Other current liabilities |
|
|
(355 |
) |
|
|
(299 |
) |
Taxes payable |
|
|
29 |
|
|
|
14 |
|
Operating lease liabilities |
|
|
(116 |
) |
|
|
(8 |
) |
Lease payment liability related to short-term leases |
|
|
(54 |
) |
|
|
54 |
|
Net cash (used
in)/provided by operating activities |
|
|
(8,838 |
) |
|
|
326 |
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
|
Payment for leasehold improvements and purchase of vehicles,
furniture and office equipment |
|
|
(334 |
) |
|
|
- |
|
Cash effect of deconsolidation of VIE’s subsidiaries |
|
|
(8 |
) |
|
|
- |
|
Proceeds from disposal of fixed assets |
|
|
- |
|
|
|
3 |
|
Investment and advances to ownership investee entities |
|
|
(2,263 |
) |
|
|
(28 |
) |
Short-term loan to unrelated parties |
|
|
(202 |
) |
|
|
(1,444 |
) |
Deposit and prepayment paid for contracts of other investing
activities |
|
|
(1,500 |
) |
|
|
- |
|
Payment for blockchain platform applications development costs |
|
|
- |
|
|
|
(503 |
) |
Payment for purchase of software technology and other intangible
assets |
|
|
(1,160 |
) |
|
|
(1,500 |
) |
Net cash used in
investing activities |
|
|
(5,467 |
) |
|
|
(3,472 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock and warrants (net of cash
offering cost of $1,600 and $750 respectively) |
|
|
17,111 |
|
|
|
6,250 |
|
Repayment of short-term bank loan |
|
|
- |
|
|
|
(435 |
) |
Net cash provided by
financing activities |
|
|
17,111 |
|
|
|
5,815 |
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
fluctuation on cash and cash equivalents |
|
|
70 |
|
|
|
25 |
|
|
|
|
|
|
|
|
|
|
Net increase in cash
and cash equivalents |
|
|
2,876 |
|
|
|
2,694 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, at beginning of the year |
|
|
4,297 |
|
|
|
1,603 |
|
Cash and cash equivalents, at end of the year |
|
$ |
7,173 |
|
|
$ |
4,297 |
|
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