Borqs Technologies missed the filing deadline for the 2019 Annual Report on Form 20-F and announced preliminary unaudited financial results

Rhea-AI Summary

Borqs Technologies (Nasdaq: BRQS) announced delays in its financial audit for the year ended December 31, 2019, due to ongoing travel restrictions related to the COVID-19 pandemic. The company reported a net revenue of $109.7 million and a net loss of $7.7 million for that year. Despite these challenges, Borqs is recognized as a leader in IoT solutions, focusing on developing customizable products and cloud services. The company assures that it will provide updates on its audit filing once pandemic conditions improve.

Positive

• Unaudited management prepared financial results showed net revenue of $109.7 million.
• Adjusted EBITDA of $4.5 million indicates potential for profitability.

Negative

• Inability to complete financial audit and file the required annual report by June 30, 2020, leading to non-compliance with SEC and Nasdaq rules.
• Ongoing travel restrictions affecting operations in key markets, potentially impacting revenue and supply chain.

SANTA CLARA, Calif., July 01, 2020 (GLOBE NEWSWIRE) -- Borqs Technologies, Inc. (Nasdaq: BRQS), (the “Company”, or “Borqs”), a global leader in embedded software and products for the Internet of Things (IoT) industry, announced that due to travel restrictions and lockdown through June 30th related to the COVID-19 pandemic, staff of our Beijing based accounting department as well as our New York based auditor had not been able to travel freely within China and India, and from the U.S. to these two countries.  Our China office had been very much affected as Beijing saw a resurgence of the COVID-19 virus recently. The Company was not able to complete its financial audit for the year ended December 31, 2019 and file the required annual report on Form 20-F by the deadline of June 30, 2020.  As a result, the Company is not in compliance with the reporting rules of the U.S. Securities and Exchange Commission and of the Nasdaq Stock Market.  The Company will make additional disclosure on the timing of the filing of the required report as the pandemic situation changes. 

For the year ended December 31, 2019, the Company’s unaudited management prepared financial results showed that net revenue was $109.7 million with a net loss of $7.7 million. Under non-US GAAP basis, the adjusted EBITDA figure was $4.5 million which included adding back to net loss, interest expense of $5.4 million, income taxes of $0.5 million, depreciation and amortization of $6.0 million, and foreign exchange loss of $0.3 million.

Latest status of the COVID-19 lockdown:
In China, from late January to April, most of the cities had been locked down due to COVID-19. The country started to ease traveling from late April; however, certain cities such as Wuhan and Beijing were still under stringent control. Recently, Beijing underwent a resurgence of the virus and parts of the city were subject to lockdown again.
https://www.theguardian.com/world/2020/jun/15/beijing-lockdown-tightens-as-new-coronavirus-outbreak-spreads

In India, the first COVID-19 lockdown started on March 25 and extended until June 30th in containment zones. Currently India has started Unlock 2.0 from July 1 to July 31, where only limited international travel has been permitted.
https://en.wikipedia.org/wiki/COVID-19_pandemic_lockdown_in_India

About Borqs Technologies, Inc.

Borqs Technologies is a global leader in software and products for the IoT, providing customizable, differentiated and scalable Android-based smart connected devices and cloud service solutions. Borqs has achieved leadership and customer recognition as an innovative end-to-end IoT solutions provider leveraging its strategic chipset partner relationships as well as its broad software and IP portfolio.

Borqs’ unique strengths include its Android and Android Wear Licenses which enabled the Company to develop a software IP library covering chipset software, Android enhancements, domain specific usage and system performance optimization, suitable for large and low volume customized products.  The Company is also currently in development of 5G products for phones and hotspots.

Forward-Looking Statements and Additional Information

This press release includes “forward-looking statements” that involve risks and uncertainties that could cause actual results to differ materially from what is expected. Words such as “expects”, “believes”, “anticipates”, “intends”, “estimates”, “predicts”, “seeks”, “may”, “might”, “plan”, “possible”, “should” and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Such forward-looking statements relate to future events or future results, based on currently available information and reflect our management’s current beliefs. Many factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements, including the possibility that the Company’s final audited financial results will differ from the unaudited management’s announced results contained in this press release, the Company will not consummate its previously announced line of credit transaction and other investment opportunities on terms favorable to the Company or at all, the possibility that the Company may not receive actual orders in the amounts forecasted, the possibility that the Company may not be able to deliver its wearable device to satisfy the increased demand forecasted, and the negative impact of the coronavirus on the Company’s supply chain, revenues and overall results of operations, so the reader is advised to refer to the Risk Factors sections of the Company’s filings with the Securities and Exchange Commission for additional information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. Except as expressly required by applicable securities law, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Contact:

Sandra Dou
Director of Finance
Borqs Technologies, Inc.
sandra.dou@borqs.net
www.borqs.com 

FAQ

What were Borqs Technologies' financial results for 2019?

For 2019, Borqs reported net revenue of $109.7 million and a net loss of $7.7 million.

Why did Borqs Technologies delay its financial audit?

The delay was due to COVID-19 related travel restrictions affecting their accounting department and auditors.

What is Borqs Technologies' stock symbol?

Borqs Technologies is listed under the stock symbol BRQS.

What impact does COVID-19 have on Borqs Technologies?

COVID-19 has affected Borqs' ability to complete financial audits and operational activities in China and India.