SOS Limited Reports 2023 Interim Financial Results
- U.S. Hosting Service shows growth
- Cash balance increased
- Revenues decline
- GAAP net loss
Revenues decline due to legacy business disposal and economic slow down
GAAP net loss narrows to
Cash balance slightly increased from
Six months ended June 30, 2023 compared to June 30, 2022
Revenue
As at June 30, 2023, SOS focuses on four product and service lines including Commodity Trading, Cryptocurrency Mining, Hosting Service and Others. Commodity Trading contributes
Revenue by products and service
Revenue by products and service | Six months ended | |||||||
Product and service | $ "000" | Percentage | ||||||
Commodity Trading | 37,815 | 90.5 | % | |||||
Cryptocurrency mining | 350 | 0.8 | % | |||||
Hosting Service | 1,225 | 2.9 | % | |||||
Others | 2,416 | 5.8 | % | |||||
Total revenue -net | $ | 41,806 | 100 | % | ||||
Revenue by products and service | Six months ended | |||||||
Product and service | $ "000" | Percentage | ||||||
Commodity Trading | 84,348 | 99.5 | % | |||||
Cryptocurrency Mining | 305 | 0.4 | % | |||||
Hosting Service | 102 | 0.1 | % | |||||
Others | 25 | - | % | |||||
Total revenue -net | $ | 84,780 | 100 | % | ||||
Net revenue was
Unaudited Condensed Consolidated Statements of Comprehensive Loss | ||||||||
(US$ thousands, except share data and per share data, or otherwise notes) | ||||||||
Six months ended | ||||||||
30-Jun-22 | 30-Jun-23 | |||||||
$"000" | $"000" | |||||||
Revenue | 132,710 | 41,835 | ||||||
Business taxes and surcharges | (45) | (29) | ||||||
Net revenue | 132,665 | 41,806 | ||||||
Operating costs | (120,294) | (41,716) | ||||||
Gross profit | 12,371 | 90 | ||||||
Gross profit ratio | 9.3 | % | 0.2 | % | ||||
Revenue and service by products
Revenue by products and service | Six months ended | Six months ended | ||||||||||||||
Product and service | $ "000" | Percentage | $ "000" | Percentage | ||||||||||||
Commodity trading | 37,815 | 90.5 | % | 84,384 | 99.5 | % | ||||||||||
Cryptocurrency mining | 350 | 0.8 | % | 305 | 0.4 | % | ||||||||||
Hosting Service | 1,225 | 2.9 | % | 102 | 0.1 | % | ||||||||||
Others | 2,416 | 5.8 | % | 25 | - | % | ||||||||||
Total | 41,806 | 100 | % | 84,780 | 100 | % | ||||||||||
We began generating revenues from cyptocurrency mining at the end of February, 2021. We were allocated 132.1 units of BTC and 1,853.1 units of ETH in Q2, 2021 from our mining pools as compared to 42.2 units of BTC and 916.9 units of ETH in Q1, 2021. During the first half of 2022, we were still relocating and building our cryptocurrency mining facilities in the US. We recorded 179.32 units of ETH output and generated no BTC revenue for the period of six month ended June 30, 2022. We generated 11.48 units of BTC and NIL unit of ETH output six months ended June 30, 2023. As BTC price dropped further during the reporting period, we found that costs of per unit input exceeded output per unit, we shut down some of the miners to stop operation temporarily, then total output decreased immediately.
Operating Costs and Expenses
Operating costs were
Selling expenses
Selling expenses mainly relate to our commodity business and include freight-out expenses, custom clearing agency fee, warehouse rental expense, promotional expense, sales commission and payroll expenses to sales team. Selling expenses decreased to
General and administrative expenses
General and administrative expenses were
Operating loss
GAAP net loss was
Income tax
The Company paid
GAAP net loss attributable to ordinary shareholders was
GAAP Basic EPS was
Balance Sheet and Cash Flow
Unaudited Condensed Consolidated Statement of Cash Flow | ||||||||
(US$ thousands, except share data and per share data, or otherwise noted) | ||||||||
Six months | Six months | |||||||
30-Jun-22 | 30-Jun-23 | |||||||
Unaudited | Unaudited | |||||||
$ | $ | |||||||
Cash flows from operating activities: | ||||||||
Net loss | (14,333) | (10,697) | ||||||
Less: Net income from discontinued operation | 6,921 | - | ||||||
Net loss from continuing operation | (21,254) | (10,697) | ||||||
Adjustments: | ||||||||
Depreciation and amortization | 2,399 | 106 | ||||||
Share-based compensation | 14,472 | 2,054 | ||||||
Amortisation of right of use assets | 256 | 268 | ||||||
Accretion of finance leases | - | 19 | ||||||
Allowance for doubtful accounts-accounts receivable | 189 | - | ||||||
Allowance for doubtful accounts-other receivable | 800 | (400) | ||||||
Impairment of cryptocurrencies | - | 81 | ||||||
Operating cash flows before movements in working capital | (3,138) | (8,169) | ||||||
Changes in working capital: | ||||||||
Inventory | 9,442 | 1,224 | ||||||
Accounts receivable | 19,298 | 56 | ||||||
Other receivables | (110,435) | (11,921) | ||||||
Amount due from related parties | (10,045) | 23,916 | ||||||
Intangible assets | (837) | (350) | ||||||
Accrued liabilities | (3,225) | (3,510) | ||||||
Accounts payable | 1,274 | 1,089 | ||||||
Tax payable | (47) | 211 | ||||||
Other payables | 7,199 | (3,857) | ||||||
Amount due to related parties | 624 | (1) | ||||||
Lease liabilities | 1,184 | (269) | ||||||
Net cash used in operating activities from continuing operations | (88,706) | (1,981) | ||||||
Net cash used in in generating from discontinued operating activities | (15,611) | - | ||||||
Net cash used in operating activities | (104,317) | (1,981) | ||||||
Cash flows from investing activities: | ||||||||
Proceeds from disposal of property, equipment and software | 132 | - | ||||||
Net cash generated from investing activity from continuing operations | 132 | - | ||||||
Net cash generated from investing activity from discontinuing operations | 1,465 | - | ||||||
Net cash generated from investing activities | 1,597 | - | ||||||
Cash flows generated from/(used in) financing activities: | ||||||||
Repayment of principle portion of lease liabilities | (288) | |||||||
Proceeds from share issuance, net of issuance costs | 18,483 | - | ||||||
Net cash generated from financing activities | 18,483 | (288) | ||||||
Net decrease in cash and cash equivalents | (84,237) | (2,269) | ||||||
Cash and cash equivalents at beginning of the period | 338,026 | 259,492 | ||||||
Effect of exchange rates on cash and cash equivalents | (6,443) | (7,339) | ||||||
Less: cash and cash equivalents, from the discontinued operations | 3,602 | - | ||||||
Cash and cash equivalents at end of the period | 243,744 | 249,884 | ||||||
Supplemental cash flow information | ||||||||
Cash paid for income tax | 1,061 | 646 | ||||||
Cash flow generated from operating activities
As of June 30, 2023, the Company had cash and cash equivalents of
Cash flow used in investing activities
The Company did not have investing activities for this period. The Company disposed of some office equipment and realized proceeds of
Cash Flow Used in Financing Activities
The Company did not raise funds this period compared to
About SOS Limited
SOS is an emerging blockchain-based and big data-driven marketing solution provider. SOS is also engaged in blockchain and cryptocurrency operations, which currently include cryptocurrency mining and may expand into cryptocurrency security and insurance in the future. Since April 2021, we launched commodity trading via our subsidiary SOS International Trading Co. Ltd and Weigou International Trading Co Ltd. Major trading commodity includes mineral resin, soy bean, wheat, sesame, liquid sulfur, petrol coke and latex etc. For more information, please visit: http://www.sosyun.com/.
Forward-Looking Statements
Certain statements in this press release may constitute "forward-looking statements" within the meaning of the federal securities laws, including, but not limited to, our expectations for future financial performance, business strategies or expectations for our business. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. SOS cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Words such as "may," "can," "should," "will," "estimate," "plan," "project," "forecast," "intend," "expect," "anticipate," "believe," "seek," "target," "look" or similar expressions may identify forward-looking statements. Specifically, forward-looking statements may include statements relating to the Company's:
- ability to execute its business plan;
- changes in the market for SOS' products and services; and
- expansion plans and opportunities.
These forward-looking statements are based on information available as of the date of this press release and our management's current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.
These risks and uncertainties include, but not are limited to, the risk factors described by SOS in its filings with the Securities and Exchange Commission ("SEC"). These risk factors and those identified elsewhere in this press release, among others, could cause actual results to differ materially from historical performance and include, but are not limited to:
- US government's policies and regulatory oversight of crypto-currency mining operation and our other operations;
- SOS's cryptocurrency mining, commodity trading and marketing solutions businesses are still under development, with many uncertainties in integration of these various business segments;
- Failure to manage the newly launched commodities trading business effectively;
- Loss of key customers in the commodity trading business;
- failure to access a large quantity of power at reasonable costs could significantly increase SOS operating expenses and adversely affect our demand for SOS's mining activities;
- shortages in, or rises in the prices of mining machines may adversely affect the Company's business;
- any significant or prolonged failure in the data warehouse facilities and data mining facilities that SOS operates or services it provides, including events beyond its control, would lead to significant costs and disruptions and would reduce the attractiveness of its facilities, harm its business reputation and have a material adverse effect on its results of operation;
- security breaches or alleged security breaches of our data warehouses could disrupt SOS operations and have a material adverse effect on its business, financial condition and results of operation; and
- other risks and uncertainties indicated in SOS's SEC reports or documents filed or to be filed with the SEC by SOS.
Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and you should not place undue reliance on these forward-looking statements in deciding whether to invest in our securities. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
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SOURCE SOS Ltd.
