Company to Host Conference Call on Tuesday, November 2, 2021, at 8:00
a.m. ET
BEIJING, Nov. 1, 2021
/PRNewswire/ -- Luokung Technology Corp. (NASDAQ: LKCO)
("Luokung" or the "Company"), a leading spatial-temporal
intelligent big data services company and provider of interactive
location-based services ("LBS") and high-definition maps ("HD
Maps") in China, today announced
results for the six months ended June 30,
2021 ("First Half 2021"). The full financial statements are
available on the Form 6-K filed with the U.S. Securities and
Exchange Commission on the same date.
First Half 2021 Financial Highlights:
- Revenues of $37.8 million,
compared to $7.3 million for the six
months ended June 30, 2020
- Net loss of $26.7 million,
compared to net loss of $18.9 million
for the six months ended June 30,
2020
- Basic and diluted loss per share of $0.09, which is unchanged from the six months
ended June 30, 2020
Management Commentary
Mr. Xuesong Song, Chairman and
CEO, stated, "In the first half of 2021, we were pleased to
complete the transformative acquisition of the control over eMapgo
Technology (Beijing) Co., Ltd.
('EMG'), a leading provider of navigation and electronic map
services in China, which we
anticipate will be an increasingly important growth driver for
Luokung in the long term. EMG provides Luokung with a strong
foothold in the areas of smart transportation (autonomous driving,
smart highway and vehicle-road collaboration), natural resource
asset management (carbon neutrality and environmental protection
remote sensing data service) and LBS smart industry application
spatial-temporal data commercialization. We achieved record revenue
of $37.8 million for the First Half
2021, primarily as a result of solid growth in our LBS business.
During the period, Luokung expanded its partnership base and began
providing our premier portfolio of products and services for
leading businesses across various industries, and worked to
successfully overcome the challenges of being designated a Chinese
Communist Military Company by the U.S. Department of Defense ('DoD
Designation Matter'). With these concerns behind us, we placed our
focus over the past few months entirely on improving and growing
our business. This includes continued investment in R&D, which
we believe is critical to building a series of products backed by
cutting-edge technologies and establishing competitive advantages
in our areas of core competency."
Recent Operational Developments
- In June 2021, Luokung announced
that its operating affiliate, EMG, signed an agreement with Geely
Automobile Research Institute (Ningbo) Co., Ltd. ("Geely") whereby EMG
provided autonomous driving simulation testing services for Geely.
EMG provided the services under this agreement for approximately
$2.5 million during the third quarter
of 2021.
- In September 2021, Luokung
announced that its operating affiliate, EMG, signed a cooperation
agreement with Microsoft to launch autonomous driving services for
automakers. Under the terms of the agreement, EMG will work with
Microsoft to provide auto manufacturers with services including the
collection, storage, analysis, management and simulation testing of
autonomous driving data. EMG has already signed service contracts
with a European car manufacturer and a U.S. car manufacturer.
Implementation of these contracts has begun and is expected to
continue over the next several months.
- In September 2021, Luokung
announced that its operating affiliate, EMG, signed an agreement to
be the technical service provider for the management of market and
service information for China Mobile Group Heilongjiang Co., Ltd.
("Heilongjiang Mobile"), the Heilongjiang division for China Mobile, the
leading telecommunications provider in mainland China. Heilongjiang Mobile is Luokung's first
new client win in the telecommunication industry since it launched
its Internet LBS B2B business.
- In September 2021, Luokung
announced that its operating affiliate EMG signed an agreement to
provide autonomous driving data services for Zenseact, a wholly
owned subsidiary of Volvo Cars, the automotive division of the
Swedish multinational manufacturing company, focusing on the
development of autonomous driving and active safety software
together with its lead customer Volvo Cars.
First Half 2021 Financial Review – GAAP Results
Revenue
For the First Half 2021, revenues increased to $37.8 million, compared to $7.3 million for the six months ended
June 30, 2020. The increase was
primarily a result of $24.5 million
in increased revenue contributions from the LBS business, as well
as growth in the software and services business and EMG
business.
Operating costs and expenses
Total operating costs and expenses increased to $62.9 million, compared to $24.2 million for the six months ended
June 30, 2020. The increase was
primarily driven by:
- a $27.6 million increase in cost
of revenues, which primarily consists of mobile traffic acquisition
costs and salary and benefit expenses for employees directly
involved in data collection and processing, direct production costs
and depreciation of facilities and equipment used in data
collection and processing;
- a $1.7 million increase in
selling and marketing expenses;
- a $2.3 million increase in
general and administrative expense; and
- a $7.0 million increase in
research and development.
Approximately $1.3 million in
legal and consulting fees were directly related to services
rendered to defend the Company against the DoD Designation Matter
during the six months ended June 30,
2021.
Loss from operations
For the First Half 2021, loss from operations was $25.1 million, compared to loss from operations
of $16.9 million in the prior-year
period, as a result of the increased operating expenses described
above.
Net loss
Net loss was $26.7 million, or
$0.09 per share, for the First Half
2021, compared to net loss of $18.9
million, or $0.09 per share,
for the six months ended June 30,
2020. Weighted average shares outstanding for the six months
ended June 30, 2021 and 2020 were
307,146,263 and 211,365,515, respectively.
Balance Sheet Highlights
As of June 30, 2021, Luokung's
cash balance was $14.5 million,
working capital deficit was $51.2
million and total shareholders' equity was $136.7 million, compared to cash balance of
$0.07 million, working capital
deficit of $61.6 million and total
shareholders' equity of $52.7
million, respectively, as of December
31, 2020.
Subsequent to the end of First Half 2021, on September 22, 2021, Luokung closed a registered
direct offering of an aggregate of 27,333,300 ordinary shares and
warrants to purchase 13,666,650 ordinary shares to certain
institutional investors at a purchase price of $1.20 per share for aggregate gross proceeds of
approximately $32.8 million before
deducting placement agent fees and other estimated offering
expenses. The warrants have an exercise price of $1.60 per share and expire three years from the
date of issuance.
Conference Call and Webcast Information
Luokung will host a conference call at
8:00 a.m. Eastern Time on Tuesday,
November 2, 2021, during which management will discuss the
First Half 2021 results. Investors and analysts are welcomed to
participate or send questions in advance.
To participate in the conference call, please use the following
dial-in numbers:
U.S. &
Canada (Toll-Free):
|
|
+1 (877)
445-9755
|
International
(Toll):
|
|
+1 (201)
493-6744
|
A live webcast of the conference call can be accessed at:
https://78449.themediaframe.com/dataconf/productusers/lkco/mediaframe/47072/indexl.html.
A replay will be available shortly after the call and will remain
available for 90 days.
ABOUT LUOKUNG TECHNOLOGY CORP.
Luokung Technology Corp. is a leading spatial-temporal
intelligent big data services company, as well as a leading
provider of LBS and HD Maps for various industries in China. Backed by its proprietary technologies
and expertise in HD Maps and related intelligent spatial-temporal
big data, Luokung establishes city-level and industry-level
holographic spatial-temporal digital twin systems and actively
serves industries including autonomous driving, vehicle-road
collaboration (V2X), smart transportation, smart travel, local
business LBS, new infrastructure, smart cities, and smart
industries (emergency, natural resources, environmental protection,
water conservancy, energy, smart training, among others). The
Company routinely provides important updates on its website:
www.luokung.com/en.
ABOUT eMapgo Technology (Beijing) Co., Ltd.
eMapgo Technology (Beijing)
Co., Ltd. ("EMG"), a variable interest entity of Luokung, is a
leading provider of navigation and electronic map services in
China, as well as a leading
provider in Internet map services, geographic information system
engineering and other A-level mapping qualifications. EMG possesses
the National Class-A qualification certificates of navigable
Surveying and Mapping and actively develops autonomous driving and
HD Map services. For more information, please visit its website:
www.emapgo.com.cn.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
Information regarding the Company's future growth prospects and
the preliminary unaudited financial results contained in this press
release may constitute forward-looking-information within the
meaning of securities laws. By their nature, forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause our actual results, performance or
achievements, or other future events, to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. The financial estimates
provided in this press release are to provide early guidance on the
semi-annual financial performance of the Company and readers are
cautioned that this information may not be appropriate for any
other purpose. When relying on the Company's forward-looking
statements and information to make decisions, investors and others
should carefully consider the foregoing factors and other
uncertainties and potential events including that the Company has
not finished its review of the full financial positions and the
Company may continue to incur net losses. The Company has assumed
that the material factors referred to herein will not cause such
forward-looking statements and information to differ materially
from actual results or events. However, there can be no assurance
that such assumptions will reflect the actual outcome of such items
or factors.
Other than as required under securities laws, we do not
undertake to update this information at any particular time.
Forward-looking information contained in this press release,
including with respect to any future growth, is based on our
current estimates, expectations and projections, which we believe
are reasonable as of the current date. The reader should not place
undue importance on forward-looking information and should not rely
upon this information as of any other date. All forward-looking
information contained in this press release is expressly qualified
in its entirety by this cautionary statement.
CAUTION REGARDING FINANCIAL ESTIMATES
The financial estimates set forth above are based on an initial
review of the Company's operations for the six months ended
June 30, 2021 and are subject to
change. The Company's independent registered public accounting firm
has not audited, reviewed or performed any procedures with respect
to the accompanying financial estimates and other data, and
accordingly does not express an opinion or any other form of
assurance with respect thereto. They should not be viewed as a
substitute for audited financial statements prepared in accordance
with generally accepted accounting principles and are not
necessarily indicative of the Company's results for any future
period.
CONTACT:
The Company:
Mr. Jay Yu
Chief Financial Officer
Tel: +86-10-5327-4727
Email: ir@luokung.com
Investor Relations:
Ms. Carolyne Sohn
Vice President
The Equity Group Inc.
Tel: 415-568-2255
Email: csohn@equityny.com
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SOURCE Luokung Technology Corp.