Baosheng Media Group Holdings Limited Reports Financial Results for the First Half of 2021
Ms.
Financial Highlights for the First Half of 2021
For the Six Months Ended |
||||||||||||
2021 | 2020 | % Change | ||||||||||
Revenues | $ | 2,415,352 | $ | 9,801,216 | -75.4 | % | ||||||
Gross profit | $ | 1,444,334 | $ | 9,172,553 | -84.3 | % | ||||||
Gross margin | 59.8 | % | 93.6 | % | -33.8 | % | ||||||
Income (Loss) from Operations | $ | (2,242,820 | ) | $ | 5,795,583 | -138.7 | % | |||||
Net Income (Loss) | $ | (271,671 | ) | $ | 6,172,112 | -104.4 | % | |||||
Earnings (Loss) per share | $ | (0.01 | ) | $ | 0.30 | -103.3 | % |
● | Revenue decreased by 75.4% to |
● | Gross profit decreased by 84.3% to |
● | Gross margin was 59.8% in the first half of 2021, compared to 93.6% in the first half of 2020. |
● | Income from operations decreased by 138.7% from |
● | Net income decreased by 104.4% from |
● | Earnings per share decreased by 103.3% from |
Financial Results for the First half of 2021 and 2020
The following table summarizes the results of our operations during the first half of 2021 and 2020, respectively.
For the Six Months Ended |
Changes | |||||||||||||||
2021 | 2020 | Amount | % | |||||||||||||
Revenues | $ | 2,415,352 | $ | 9,801,216 | $ | (7,385,864 | ) | -75.4 | % | |||||||
Cost of revenues | (971,018 | ) | (628,663 | ) | (342,355 | ) | 54.5 | % | ||||||||
Gross profit | 1,444,334 | 9,172,553 | (7,728,219 | ) | -84.3 | % | ||||||||||
Operating Expenses | ||||||||||||||||
Selling and marketing expenses | (541,953 | ) | (256,362 | ) | (285,591 | ) | 111.4 | % | ||||||||
General and administrative expenses | (3,145,201 | ) | (3,120,608 | ) | (24,593 | ) | 0.8 | % | ||||||||
Total Operating Expenses | (3,687,154 | ) | (3,376,970 | ) | (310,184 | ) | 9.2 | % | ||||||||
Income (Loss) from Operations | (2,242,820 | ) | 5,795,583 | (8,038,403 | ) | -138.7 | % | |||||||||
Interest expense, net | (64,203 | ) | (105,497 | ) | 41,294 | -39.1 | % | |||||||||
Changes in fair value of warrant liabilities | 1,902,153 | - | 1,902,153 | >100.0 | % | |||||||||||
Subsidy income | 249,102 | 589,820 | (340,718 | ) | -57.8 | % | ||||||||||
Other expenses, net | (115,903 | ) | (1,159 | ) | (114,744 | ) | 9,900.3 | % | ||||||||
Income (Loss) Before Income Taxes | (271,671 | ) | 6,278,747 | (6,550,418 | ) | -104.3 | % | |||||||||
Income tax expense | - | (106,635 | ) | 106,635 | -100.0 | % | ||||||||||
Net Income (Loss) | $ | (271,671 | ) | $ | 6,172,112 | $ | (6,443,783 | ) | -104.4 | % |
Revenues
The Company recognizes all revenues on a net basis, which are comprised of (i) rebates and incentives offered by publishers for procuring advertisers to place ads with them, which are typically calculated with reference to the advertising expenses of the Company’s advertisers and are closely correlated to the Company’s gross billing from advertisers; and (ii) net fees from advertisers, which are essentially the fees the Company charges its advertisers (i.e. gross billing), net of the media costs the Company incurred on their behalf.
Revenue decreased by 75.4% to
For the Six Months Ended |
||||||||||||
2021 | 2020 | % Change | ||||||||||
Rebates and incentives offered by publishers | $ | 2,355,036 | $ | 8,629,572 | -72.7 | % | ||||||
Net fees from advertisers | 60,316 | 1,171,644 | -94.9 | % | ||||||||
Revenues | $ | 2,415,352 | $ | 9,801,216 | -75.4 | % |
The rebates and incentives offered by publishers decreased by
The net fees from advertisers decreased by
The Company has advertising agency revenues from Search Engine Marketing (“SEM”) services and non-SEM services.
For the Six Months Ended |
||||||||||||
2021 | 2020 | % Change | ||||||||||
Revenue from SEM services | $ | 2,356,200 | $ | 8,405,169 | -72.0 | % | ||||||
Revenue from Non-SEM services | 59,152 | 1,396,047 | -95.8 | % | ||||||||
Revenues | $ | 2,415,352 | $ | 9,801,216 | -75.4 | % |
The revenues from SEM services consist of rebates and incentives offered by publishers. The revenues from SEM services decreased by
The revenues from non-SEM services consist of both rebates and incentives offered by publishers and the net fees from advertisers. The revenues from non-SEM services decreased by
Cost of revenues
The cost of revenues was primarily comprised of payroll and welfare expenses incurred by staff responsible for advertiser services and media relations, and taxes and surcharges. Total cost of revenues increased by
Gross profit
The Company’s gross profit decreased by
Selling and marketing expenses
Selling and marketing expenses increased by
General and administrative expenses
General and administrative expenses were
Subsidy income
Subsidy income in the first half of 2021 primarily consisted of subsidy income from the local tax authority of
Change in fair value of warrant liabilities
The change in fair value of warrant liability for the half year 2021 represents a net remeasurement gain of
Other expenses, net
Other expenses primarily consisted of a net nonrefundable rental deposit of
Income tax expense
Income tax expense was $nil in the first half of 2021, as compared to income tax expense of
For the first half of 2021, we did not incur income tax expenses, and instead we incurred taxable losses. For the first half 2020, the income tax expense increased, due to the reversal of the deferred tax assets recognized for Beijing Baosheng as of
Net income (loss)
Net loss was
Financial Condition
As of
Net cash used in operating activities was
Net cash used in investing activities was
Net cash provided by financing activities was
About Baosheng
Forward-Looking Statements
Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” ”anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and in its other filings with the
For more information, please contact:
Investor Relations Contact:
Ascent Investor Relations LLC
+1-917-609-0333
tina.xiao@ascent-ir.com
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of
(Expressed in
2021 |
2020 |
|||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 12,118,982 | $ | 6,576,658 | ||||
Restricted cash | 3,892,983 | 3,695,598 | ||||||
Accounts receivable, net – third parties | 56,559,692 | 65,154,845 | ||||||
Accounts receivable, net – related party | 88,863 | - | ||||||
Prepayments | 18,396,508 | 6,058,481 | ||||||
Media deposits | 1,610,774 | 6,837,879 | ||||||
Media deposits – related party | 1,407,862 | - | ||||||
Deferred offering cost | - | 425,537 | ||||||
Other current assets | 3,890,646 | 3,323,532 | ||||||
Total Current Assets | 97,966,310 | 92,072,530 | ||||||
Long-term investment | 1,548,803 | - | ||||||
Property and equipment, net | 1,216,708 | 909,236 | ||||||
Intangible assets, net | 831,209 | 5,504 | ||||||
Prepayments for intangible assets | 2,922,269 | - | ||||||
Right of use assets | 1,411,625 | 353,238 | ||||||
Total Assets | $ | 105,896,924 | $ | 93,340,508 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities | ||||||||
Bank borrowing | $ | - | $ | 1,532,567 | ||||
Accounts payable – third parties | 15,090,210 | 35,376,612 | ||||||
Accounts payable – related parties | 1,574,753 | - | ||||||
Advance from advertisers | 1,322,957 | 3,287,653 | ||||||
Advertiser deposits | 1,838,499 | 5,881,908 | ||||||
Dividends payable | 3,407,366 | 3,371,648 | ||||||
Income tax payable | 376,398 | 570,540 | ||||||
Due to related parties | 14,565 | 715,546 | ||||||
Operating lease liabilities, current | 492,316 | 351,551 | ||||||
Warrant liabilities | 468,223 | - | ||||||
Accrued expenses and other liabilities | 720,910 | 591,622 | ||||||
Total Current Liabilities | 25,306,197 | 51,679,647 | ||||||
Operating lease liabilities, noncurrent | 806,153 | - | ||||||
Total Liabilities | 26,112,350 | 51,679,647 | ||||||
Commitments and Contingencies | ||||||||
Shareholders’ Equity | ||||||||
Ordinary Share (par value |
14,630 | 10,200 | ||||||
Additional paid-in capital | 41,505,782 | 3,814,665 | ||||||
Statutory reserve | 898,133 | 898,133 | ||||||
Retained earnings | 35,472,246 | 35,743,917 | ||||||
Accumulated other comprehensive gain | 1,893,783 | 1,193,946 | ||||||
Total Shareholders’ Equity | 79,784,574 | 41,660,861 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 105,896,924 | $ | 93,340,508 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Six Months Ended
(Expressed in
For the Six Months Ended |
||||||||
2021 | 2020 | |||||||
Revenues | $ | 2,415,352 | $ | 9,801,216 | ||||
Cost of revenues | (971,018 | ) | (628,663 | ) | ||||
Gross profit | 1,444,334 | 9,172,553 | ||||||
Operating Expenses | ||||||||
Selling and marketing expenses | (541,953 | ) | (256,362 | ) | ||||
General and administrative expenses | (3,145,201 | ) | (3,120,608 | ) | ||||
Total Operating Expenses | (3,687,154 | ) | (3,376,970 | ) | ||||
Income (Loss) from Operations | (2,242,820 | ) | 5,795,583 | |||||
Interest expense, net | (64,203 | ) | (105,497 | ) | ||||
Changes in fair value of warrant liabilities | 1,902,153 | - | ||||||
Subsidy income | 249,102 | 589,820 | ||||||
Other expenses, net | (115,903 | ) | (1,159 | ) | ||||
Income (Loss) Before Income Taxes | (271,671 | ) | 6,278,747 | |||||
Income tax expense | - | (106,635 | ) | |||||
Net Income (Loss) | $ | (271,671 | ) | $ | 6,172,112 | |||
Other Comprehensive Income (Loss) | ||||||||
Foreign currency translation adjustment | 699,837 | (472,332 | ) | |||||
Comprehensive Income | $ | 428,166 | $ | 5,699,780 | ||||
Weighted average number of ordinary share outstanding | ||||||||
Basic and Diluted | 26,759,235 | 20,400,000 | ||||||
Earnings (Loss) per share | ||||||||
Basic and Diluted | $ | (0.01 | ) | $ | 0.30 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended
(Expressed in
For the Six Months Ended |
||||||||
2021 | 2020 | |||||||
$ | (27,756,592 | ) | $ | (3,092,900 | ) | |||
Cash Flows from Investing Activities: | ||||||||
Purchases of property and equipment | (422,253 | ) | - | |||||
Purchases of intangible assets | (834,78 | ) | - | |||||
Prepayments for intangible assets | (2,916,127 | ) | - | |||||
Investment in an investee | (1,545,547 | ) | - | |||||
(5,718,715 | ) | - | ||||||
Cash Flows from Financing Activities: | ||||||||
Issuance of ordinary shares pursuant to initial public offering, net of issuance costs | 25,989,264 | - | ||||||
Issuance of ordinary shares pursuant to over-allotment, net of issuance costs | 4,185,000 | - | ||||||
Issuance of units pursuant to a private placement, net of issuance costs | 9,858,000 | - | ||||||
Proceeds from borrowings from banks | - | 1,421,686 | ||||||
Repayment of bank borrowings | (1,545,547 | ) | - | |||||
Proceeds from borrowings from third parties | - | 6,489,998 | ||||||
Repayment of borrowings to third parties | - | (6,774,336 | ) | |||||
Payments of issuance costs related to initial public offering | - | (362,212 | ) | |||||
Net Cash Provided by Financing Activities | 38,486,717 | 775,136 | ||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 728,299 | (126,156 | ) | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 5,739,709 | (2,443,920 | ) | |||||
Cash, cash equivalents and restricted cash at beginning of period | 10,272,256 | 11,016,948 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 16,011,965 | $ | 8,573,028 | ||||
Supplemental Cash Flow Information | ||||||||
Cash paid for interest expense | $ | 98,514 | $ | 113,129 | ||||
Cash paid for income tax | $ | - | $ | - | ||||
Non-cash operating, investing and financing activities | ||||||||
Right of use assets obtained in exchange for operating lease obligations | $ | 1,553,829 | $ | - |
Source: Baosheng Media Group Holding Ltd