Nisun International Reports Financial Results for the First Half of 2020
Nisun International Enterprise Development Group Co. reported unaudited financial results for H1 2020, highlighting significant growth in its financial services sector. Revenue reached $13.5 million, primarily from SME financing solutions at $13.3 million. The company incurred a net loss of $6.2 million, with a notable $10.3 million loss from discontinued operations. Selling, general and administrative expenses rose to $3.9 million.
Nisun completed a strategic acquisition of Nami Holding for $25.5 million and is optimistic about future growth opportunities.
- Revenue for H1 2020 was $13.5 million, driven by SME financing solutions.
- Nisun generated $13.3 million in revenue from SME financing, a substantial increase from $2.5 million in 2019.
- The company expects significant synergies from the $25.5 million acquisition of Nami Holding.
- Nisun recorded a $10.3 million loss from discontinued operations, mainly due to impairment charges.
- Net loss for H1 2020 was $6.2 million, worsening from the previous year.
SHANGHAI, Dec. 31, 2020 /PRNewswire/ -- Nisun International Enterprise Development Group Co., Ltd ("Nisun" or the "Company") (Nasdaq: NISN), a provider of innovative comprehensive solutions through the integration of technology, industry, and finance, today announced its unaudited financial results for the six months ended June 30, 2020.
Mr. Xiaoyun Huang, Chairman and Chief Executive Officer of Nisun International, commented, "In July 2019, we shifted our business model to focus on SME financing and supply chain solutions. To streamline our new businesses, we completed a disposition of our legacy equipment and engineering business in November 2020. We sold this business for a loss largely due to current market conditions; however, we believe our entry into the financial services industry represents significantly greater growth opportunities for Nisun moving forward. We have made excellent progress in our business transition and are pleased to report solid results for the first half of 2020. We are glad to see healthy growth and meaningful profits from the core businesses, despite challenges related to the COVID-19 pandemic. Under the leadership of the newly combined management team, the Company has made measurable progress in earnings growth. Our revenues from financial services generated
Financial Results for the Six Months Ended June 30, 2020
The financial results for the first half 2019 were derived from the manufacturing and installation of intelligent valves, used in the pharmaceutical, biological, food and beverage, and other clean industries, which were reported as a "net loss from discontinued operations." Because the Company commenced its SME financing and supply chain solutions business in July 2019, the comparative figures of revenues, cost, and expenses were reported as nil for the first half 2019.
Revenues
Total revenue in the first half of 2020 was
The Company commenced its supply chain solution business in January 2020. With a focus on finance industry linkages, the Company aims to serve the upstream and downstream of the supply chain industry while facilitating supply-side sub-sector reform. Revenue generated from supply chain solutions includes financing and management services to downstream suppliers. In the first half of 2020, revenue from the Company's supply chain solutions was
Selling, General and Administrative Expenses
Selling, general and administrative expenses are comprised of advertising and marketing costs, office rent and expenses, costs associated with staff and support personnel who manage the Company's business activities, and professional fees paid to third parties. The Company incurred selling, general and administrative expenses of approximately
Net loss from discontinued operations
In the first half of 2020, the Company recorded impairment charge of
Net income and Income (loss) per share
In the first half of 2020, net loss of
Net loss per share was
Financial Condition and Cash Flow
As of June 30, 2020, the Company had cash, cash equivalents and restricted cash of
Net cash provided from operating activities in the first half of 2020 was
Net cash provided from investing activities was
Net cash provided by financing activities was
Recent Development
Acquisition of Nami Holding (Cayman) Co., Ltd.
On May 12, 2020, the Company entered into a share purchase agreement (the "Agreement") to acquire Nami Holding (Cayman) Co., Ltd. ("Nami Cayman"), an exempted company organized under the law of the Cayman Islands, from Nami Holding (BVI) Co., Ltd (SPV), a British Virgin Islands limited company (the "Seller"). Pursuant to the Agreement, the Company purchased all of the issued and outstanding shares of Nami Cayman from the Seller for approximately
Nami Cayman, along with its subsidiaries, provide financial solutions to small- and mid-size enterprises in China. Nisun expects to achieve significant synergies from the acquisition, which will complement the Company's financial services business.
Appointment of New Chief Executive Officer
On September 4, 2020, the Board appointed Mr. Xiaoyun Huang as Chairman and Chief Executive Officer, effective on September 4, 2020. Mr. Huang has over 10 years of experience in the fintech industry. Prior to joining Nisun, Mr. Huang served as President and CEO of Huizhong Business Consulting, where he played an instrumental role in the formation of development plans and as a major driver of growth for the overall business. Previously, he served as Chairman and General Manager of Beijing Hengtai Puhui Information Services and as President and CEO of Hangzhou Rongdu Technology. He has participated many high-profile projects, including CSRC, NEEQ, E-Capital Transfer, Shanghai Clearing House, Beijing Financial Assets Exchange, Hundsun Technologies, and many others. Mr. Huang holds a B.S. degree in Computer Science and Technology from Shanghai University of Electric Power.
Name Change to Nisun International Enterprise Development Group Co., Ltd
On November 16, 2020, the Company announced it had changed its name from Hebron Technology Co., Ltd. to Nisun International Enterprise Development Group Co., Ltd ("Nisun International"). In addition, the Company's ticker symbol on the Nasdaq Capital Market had changed to "NISN" from "HEBT," effective on November 16, 2020. The new corporate name reflects the Company's current core business and enables different service segments to integrate various brands under one corporate identity.
Strategic Collaboration with Shanghai Petroleum and Natural Gas Exchange
On November 21, 2020, Fintech (Shanghai) Digital Technology Co., Ltd, a contractually-controlled affiliate of the Company, entered into a strategic collaboration agreement with Shanghai Petroleum and Natural Gas Exchange ("SHPGX"), a national trading platform for energy products. The two parties agreed to collaborate in the expansion of technology-supported services to members of SHPGX's trading platform through the provision of supply chain management and financial services, targeting upstream and downstream enterprises in the energy industry.
Disposition of Hong Kong Xibolun Technology Co., Ltd
On November 30, 2020, the Company completed the previously announced Equity Transfer (the "Disposition"). The Company sold all equity interests in its subsidiary, Hong Kong Xibolun Technology Co., Ltd. ("Hebron HK"), pursuant to the terms of an agreement (the "Equity Transfer Agreement"), dated November 30, 2020, to Wise Metro Development Co., Ltd. for approximately
Formation of New Subsidiary Nisun (Shandong) Industry Development Co., Ltd.
On December 15, 2020, the Company announced that it reached a preliminary agreement with the government of Tai'an, Shandong province, to form a new subsidiary, Nisun (Shandong) Industry Development Co., Ltd. As part of its strategic plan for 2021, Nisun (Shandong) Industry Development Co., Ltd. will act as a key operations platform and holding platform for all of Nisun's existing Chinese subsidiaries. The new subsidiary is expected to launch in spring of 2021.
About Nisun International Enterprise Development Group Co., Ltd
Nisun International Enterprise Development Group Co., Ltd (NASDAQ: NISN) is a technology-driven, integrated supply chain solutions provider focused on transforming the corporate finance industry. Leveraging its rich industry experience, Nisun is dedicated to providing professional supply chain solutions to Chinese and foreign enterprises and financial institutions. Through its subsidiaries, Nisun provides users with professional solutions for technology supply chain management, technology asset routing, and digital transformation of tech and finance institutions, enabling the industry to strengthen and grow. At the same time, Nisun continues to deepen the field of industry segmentation through industrial and financial integration, by cultivating/creating an ecosystem of openness and empowerment. Nisun has built a linked platform that incorporates supply chain, banking, securities, trust, insurance, funds, state-owned enterprises, among other businesses. Focusing on industry-finance linkages, Nisun aims to serve the upstream and downstream of the industrial supply chain while also assisting with supply-side sub-sector reform. For more information, please visit http://www.fintaike.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains information about Nisun's view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the successful integration of acquired companies, technologies and assets into its portfolio of products and services, marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property. Nisun encourages you to review other factors that may affect its future results in Nisun's registration statement and in its other filings with the Securities and Exchange Commission. Nisun assumes no obligation to update or revise its forward-looking statements as a result of new information, future events or otherwise, except as expressly required by applicable law.
Contacts:
Nisun International Enterprise Development Group Co., Ltd
Investor Relations
Shaokang (Ken) Lu
Tel: +86 (21) 2357-0055
Email: lushaokang@cninsun.com
ICR, LLC
Tel: +1 203 682 8233
Email: nisun@icrinc.com
NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
June 30, | December 31, | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 15,916,743 | $ | 2,756,490 | ||||
Restricted cash | 5,773 | 25,016 | ||||||
Accounts receivable, net | 5,163,159 | 1,233,038 | ||||||
Interest receivable | 103,785 | - | ||||||
Prepayments and advances to suppliers, net | 1,371,230 | 171,027 | ||||||
Other receivables, net | 4,061,751 | 101,111 | ||||||
Loan to third parties - current portion | 6,239,266 | 2,434,715 | ||||||
Due from Hebron HK | 9,199,014 | 9,201,432 | ||||||
Short-term investment | 1,427,085 | - | ||||||
Prepaid expenses and other current assets | 60,497 | 8,064 | ||||||
Assets to be divested - current | 29,593,848 | 36,985,779 | ||||||
TOTAL CURRENT ASSETS | 73,142,151 | 52,916,672 | ||||||
NON-CURRENT ASSETS | ||||||||
Property and equipment, net | 652,075 | 287,057 | ||||||
Intangible assets, net | 3,863,269 | 4,189,350 | ||||||
Operating lease right-of-use assets, net | 1,673,007 | 502,670 | ||||||
Loans to third parties - long-term portion | 3,113,898 | 2,872,820 | ||||||
Equity investments | 493,394 | 500,715 | ||||||
Goodwill | 23,283,990 | 11,074,864 | ||||||
Deferred tax assets, net | 19,748 | 20,040 | ||||||
Assets to be divested – non-current | 18,600,560 | 21,636,501 | ||||||
TOTAL NON-CURRENT ASSETS | 51,699,941 | 41,084,017 | ||||||
TOTAL ASSETS | $ | 124,842,092 | $ | 94,000,689 | ||||
LIABILITIES | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 566,832 | $ | 224,045 | ||||
Accrued expenses and other current liabilities | 2,987,286 | 674,169 | ||||||
Operating lease liabilities - current | 853,237 | 138,133 | ||||||
Advances from customer | 824,071 | 28,728 | ||||||
Taxes payable | 1,532,435 | 138,157 | ||||||
Due to related parties - current | 997,819 | 7,759,443 | ||||||
Consideration for acquisition | 25,477,346 | - | ||||||
Liabilities to be divested - current | 28,826,594 | 28,472,022 | ||||||
TOTAL CURRENT LIABILITIES | 62,065,620 | 37,434,697 | ||||||
Operating lease liabilities – non-current | 826,319 | 368,019 | ||||||
Deferred tax liabilities | 709,190 | 805,826 | ||||||
Liabilities to be divested – non-current | 1,355,689 | 1,456,634 | ||||||
TOTAL LIABILITIES | 64,956,818 | 40,065,176 | ||||||
SHAREHOLDERS' EQUITY: | ||||||||
Class A common stock, | 18,992 | 17,710 | ||||||
Additional paid-in capital | 41,143,042 | 28,369,076 | ||||||
Retained earnings | 21,326,570 | 27,472,766 | ||||||
Accumulated other comprehensive loss | (2,593,523) | (1,914,232) | ||||||
COMMON SHAREHOLDERS' EQUITY | 59,895,081 | 53,945,320 | ||||||
Non-controlling interests | (9,807) | (9,807) | ||||||
TOTAL SHAREHOLDERS' EQUITY | 59,885,274 | 53,935,513 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 124,842,092 | $ | 94,000,689 | ||||
* The amounts have been reclassified to conform with the Company's decision to classify Hebron HK as assets and liabilities to be divested.
NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES | ||||||||
For the Six Months Ended | ||||||||
2020 | 2019 | |||||||
REVENUE | ||||||||
SME financing solutions | $ | 13,259,133 | $ | - | ||||
Supply chain solutions | 193,783 | - | ||||||
Other financing solutions | 21,120 | - | ||||||
TOTAL REVENUE | 13,474,036 | - | ||||||
COST OF REVENUE AND RELATED TAX | ||||||||
Cost of revenue | (5,266,144) | - | ||||||
Business and sales related tax | (68,391) | - | ||||||
GROSS PROFIT | 8,139,501 | - | ||||||
OPERATING EXPENSES | ||||||||
Selling expenses | 450,426 | 15,281 | ||||||
General and administrative expenses | 3,357,386 | 336,387 | ||||||
Research and development expenses | 59,496 | - | ||||||
Total operating expenses | 3,867,308 | 351,668 | ||||||
INCOME (LOSS) FROM OPERATIONS | 4,272,193 | (351,668) | ||||||
OTHER INCOME (EXPENSE) | ||||||||
Interest and investment income | 180,513 | - | ||||||
Other income (expense), net | 2,941 | (657) | ||||||
Total other income (expense), net | 183,454 | (657) | ||||||
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | 4,455,647 | (352,325) | ||||||
PROVISION FOR INCOME TAXES | 307,354 | - | ||||||
NET INCOME (LOSS) FROM CONTINUING OPERATIONS | $ | 4,148,293 | $ | (352,325) | ||||
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX | (10,294,489) | (325,026) | ||||||
NET INCOME(LOSS) | $ | (6,146,196) | $ | (677,351) | ||||
OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||
Foreign currency translation adjustment | (679,291) | 53,784 | ||||||
TOTAL COMPREHENSIVE (LOSS) | $ | (6,825,487) | $ | (623,567) | ||||
Basic and diluted income (loss) per common share | ||||||||
Income per share from continuing operations | $ | 0.23 | $ | (0.02) | ||||
Loss per share from discontinued operations | (0.57) | (0.02) | ||||||
Total | $ | (0.34) | $ | (0.04) | ||||
Weighted average number of shares outstanding | ||||||||
Basic and diluted | 18,167,603 | 16,269,577 | ||||||
NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND UBSIDIARIES
| ||||||||
For the Six Months Ended | ||||||||
2020 | 2019 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income (loss) | $ | (6,146,196) | $ | (677,351) | ||||
Net loss from discontinued operations | (10,294,489) | (325,026) | ||||||
Net income (loss) from continued operations | 4,148,293 | (352,325) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 622,812 | - | ||||||
Stock-based compensation | 860,457 | - | ||||||
Loss (income) from investments | (114,930) | - | ||||||
Deferred tax expense (benefit) | (85,246) | - | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (40,711) | - | ||||||
Prepaid expenses and other current assets | (3,742,853) | - | ||||||
Accounts payable | 347,340 | - | ||||||
Advance from customers | 797,100 | - | ||||||
Taxes payable | 231,784 | - | ||||||
Operating lease liabilities | (141,625) | - | ||||||
Accrued expenses and other current liabilities | (511,492) | - | ||||||
Net Cash Provided by (Used in) Operating Activities from Continuing Operations | 2,370,929 | (352,325) | ||||||
Net Cash (Used in) Operating Activities from Discontinued Operations | (510,306) | (209,040) | ||||||
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 1,860,623 | (561,365) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Acquisition of property and equipment | (25,768) | - | ||||||
Purchase of intangible asset | (22,713) | - | ||||||
Acquisition of cash in connection with acquisition of Nami | 5,062,170 | - | ||||||
Repayments from loans to third parties | 1,706,351 | - | ||||||
Payments made for loans to third parties | (284,392) | - | ||||||
Net cash provided from investing activities from continuing operations | 6,435,648 | - | ||||||
Net cash (used in) investing activities from discontinued operations | - | (12,429) | ||||||
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | 6,435,648 | (12,429) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Repayment made to related party | (6,678,943) | - | ||||||
Proceeds from private placement | 6,503,378 | - | ||||||
Capital contribution by majority shareholder | 4,550,000 | - | ||||||
Net cash provided from investing activities from continuing operations | 4,374,435 | |||||||
Net cash (used in) investing activities from discontinued operations | - | (404,751) | ||||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 4,374,435 | (404,751) | ||||||
EFFECT OF EXCHANGE RATE CHANGE ON CASH AND CASH EQUIVALENTS | (40,002) | 27 | ||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 12,630,704 | (978,518) | ||||||
Cash and cash equivalent and restricted cash from continuing operations - Beginning | 2,781,506 | 631 | ||||||
Cash and cash equivalent and restricted cash from discontinued operations - Beginning | 696,157 | 3,071,612 | ||||||
CASH AND CASH EQUIVALENT AND RESTRICTED CASH-BEGINNING | 3,477,663 | 3,072,243 | ||||||
Cash and cash equivalent and restricted cash from continuing operations - Ending | 15,922,516 | 93 | ||||||
Cash and cash equivalent and restricted cash from discontinued operations - Ending | 185,851 | 2,093,632 | ||||||
CASH AND CASH EQUIVALENT AND RESTRICTED CASH-ENDING | $ | 16,108,367 | $ | 2,093,725 | ||||
SUPPLEMENTAL CASH FLOW DISCLOSURES: | ||||||||
Cash paid for income taxes | $ | 13,972 | $ | - | ||||
Cash paid for interest | $ | - | $ | - | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | ||||||||
Financing for acquisition of Nami | $ | 25,477,346 | $ | - | ||||
Accrued lease liabilities | $ | 1,679,556 | - | |||||
CASH AND CASH EQUIVALENTS FROM CONTINUING OPERATION ARE COMPRISED OF THE FOLLOWING: | ||||||||
Cash and cash equivalent | $ | 15,916,743 | $ | 93 | ||||
Restricted cash | 5,773 | - | ||||||
Total cash, cash equivalents and restricted cash | $ | 15,922,516 | $ | 93 | ||||
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SOURCE Nisun International Enterprise Development Group Co., Ltd
