Revenue Jumps 612% to $357.8 million
Gross Profit Improves 62.1% to $21.1 million
Mining Operations Begin Transitioning to the
U.S.
QINGDAO,China, May 2, 2022
/PRNewswire/ -- SOS Limited ("SOS" or the "Company") (NYSE: SOS)
today reported its full year financial results for the
twelve-months ended December 31,
2021.
Revenue was $357.8 million, 612%
over the twelve-months ended December 31,
2020. Gross Profit increased to $21.1
million from $13.0 million,
over the same period.
Results from Operations
Revenue
Net revenue was $357.8 million, up
612% over the prior period. The robust growth of revenue
demonstrated the strong and effective execution of the Company's
strategy, mainly due to rapid market expansion and the addition of
crypto-mining and commodity trading operations. Growth was driven
by taking advantage of our block-chain expertise.
Audited condensed
consolidated Statements of comprehensive of loss
|
(US$ thousands, except
share data and per share data, or otherwise noted)
|
|
Twelve months
ended
|
|
31-Dec-20
|
|
31-Dec-21
|
|
$
|
|
$
|
Revenue
|
50,317
|
|
358,042
|
Business taxes
and surcharges
|
(28)
|
|
(221)
|
Net
revenue
|
50,289
|
|
357,821
|
Operating
costs
|
(37,295)
|
|
(336,752)
|
Gross
profit
|
12,994
|
|
21,070
|
Gross profit
ratio
|
25.8%
|
|
5.9%
|
As of December 31, 2021, SOS
focused on six product lines including insurance marketing, telecom
call centers, bank call center, SaaS services, cryptocurrency
mining and commodity trading.
Revenue by
products
|
FY2021
|
FY2020
|
Product
lines
|
$"000"
|
Percentage
|
$"000"
|
Percentage
|
Commodity
trading
|
275,363
|
77.0%
|
-
|
0.0%
|
Insurance
marketing
|
65,880
|
18.4%
|
49,234
|
97.9%
|
Cryptocurrency
mining
|
15,427
|
4.3%
|
-
|
0.0%
|
Telecom call
center
|
338
|
0.1%
|
920
|
1.8%
|
Bank call
center
|
-
|
0.0%
|
76
|
0.2%
|
SaaS
|
813
|
0.2%
|
58
|
0.1%
|
Total net
revenue
|
357,821
|
100.0%
|
50,289
|
100.0%
|
Our traditional business of insurance marketing increased 34% to
$65.9 million year over year, as a
result of rapid market expansion from regional to national customer
base in China. We added commodity
trading to our product mix during the year. We buy and sell
commodity products such as sesame, sulfur, asphalt and circuit
modular units. Our trading business recorded revenue of
$275.4 million, which represents
77.0% of total sales. We booked revenue of $15.4 million from our cryptocurrency mining
business from a partial year of operation. We started generating
revenue from our mining pools in February
2021 and mined 174.28 units of BTC and 2,770.09 units of ETH
by the end of the second quarter. In July
2021, due to the Chinese government's ban on certain types
of cryptocurrency mining activities, we shut down our mining
operations in China and began
transitioning our crypto mining operations to the U.S. The Company
launched its U.S. mining operations in Wisconsin this April.
Operating Costs
Operating costs increased to $336.8
million for the period ended December
31, 2021, compared to operating costs of $37.3 million for the period ended December 31, 2020. The increase in operating
costs and expenses was driven primarily from the growth in our
commodity trading inventory and data acquisition costs for our
insurance marketing businesses and a share-based compensation plan.
We also saw an increase from depreciation on cryptocurrency mining
equipment, consulting and legal fees.
General and Administrative Expenses
General and administrative expenses were $62.4 million for the period ended December 31, 2021, representing an increase of
approximately 21.5 times compared to general and administrative
expenses of $2.9 million for the
period ended December 31, 2020. The
increase in general and administrative expenses was mainly
associated with employee and management's share-based compensation
expenses of $33.5 million,
professional and consultancy fee of $17.1
million, wages & salary expenses of $5.3 million, $1.2
million of bad debt expense and significant increases in
legal expenses related to class action lawsuit against the Company
and its management.
GAAP Operating Loss and EPS
Our net loss for the period ended December 31, 2021 was $43.9 million according to GAAP, compared to
profit of $4.9 million for the period
ended December 31, 2020. The
loss resulted from increased expenses related to increased
operating expenses, legal and consulting fees and share-based
compensation expenses. Gross margin dropped to 6% in FY 2021 from
26% in the prior year driven by the significant growth in the lower
margin commodity trading business, increased operating expenses and
the interruption of crypto-mining operations.
GAAP EPS Basic was $(0.020) per
share for the period ended December 31,
2021, as compared to $0.0135
per share for the period ended December 31,
2020.
GAAP EPS Diluted was $(0.018) per
share for the period ended December 31,
2021, as compared to $0.0090
per share for the period ended December 31,
2020.
Income Tax
The company incurred $0.74 million
in corporate income tax for the current period.
Balance Sheet and Cash Flow
As of December 31, 2021, the
Company had cash and cash equivalents of $338.0 million, compared to $3.7 million for the period ended December 31, 2020. The net increase in cash
flow was mainly due to its financing activity through registered
direct offerings. The Company believes that its cash resources are
adequate to fund its current operations and short-term growth
initiatives. The Company, through its subsidiary, SOS International
Trading Co., Ltd. purchased commodity for trading inventory of
$96.1 million.
Cash Flow Used For Investment Activities
The Company, through its subsidiaries, SOS Information
Technology New York Inc. and China SOS Ltd., acquired BTC and ETH
mining equipment for an aggregate cost of approximately
$31 0 million
Financing Activities
The Company received aggregate net proceeds of US$585.8 million from registered direct offerings
during the year.
Audited condensed
consolidated statement of cash flow
|
(US$ thousands, except
share data and per share data, or otherwise noted)
|
|
|
|
31-Dec-20
|
|
31-Dec-21
|
Cash flows from
operating activities:
|
|
|
US$"000"
|
|
US$"000"
|
Net
(loss)
|
|
|
4,404
|
|
(49,251)
|
Adjustments:
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
2
|
|
5,203
|
Share-based
compensation
|
|
|
506
|
|
33,537
|
Depreciation of
ROU
|
|
|
|
|
843
|
Accretion of finance
leases
|
|
|
|
|
152
|
Allowance for doubtful
accounts-accounts receivable
|
|
|
1
|
|
963
|
Allowance for doubtful
accounts-Other receivable
|
|
|
158
|
|
269
|
Impairment of
cryptocurrencies
|
|
|
|
|
925
|
Loss on
acquisition
|
|
|
5,679
|
|
-
|
Income from disposal of
discountined operations
|
|
|
(63)
|
|
|
Inventory
|
|
|
-
|
|
(96,071)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts
receivables
|
|
|
(2,065)
|
|
(15,894)
|
Ohter
receivables
|
|
|
(36,019)
|
|
(125,861)
|
Amount due from related
parties
|
|
|
(2,871)
|
|
(4,146)
|
crptocurrencies
|
|
|
-
|
|
(14,502)
|
Accrued
liabilities
|
|
|
-
|
|
19,815
|
Accounts
payable
|
|
|
(11,940)
|
|
28,409
|
Tax
payable
|
|
|
292
|
|
(8,371)
|
Other
payables
|
|
|
1,484
|
|
5,003
|
Amount due to related
parties
|
|
|
(3,666)
|
|
868
|
|
|
|
|
|
|
Contract
liability
|
|
|
546
|
|
(454)
|
Lease
liabilities
|
|
|
|
|
|
Net cash (used
in)in generating from operating activities:
|
|
|
(43,552)
|
|
(218,563)
|
Cash flows from
investing activities:
|
|
|
|
|
|
Purchase of
property, equipment and software
|
|
|
(501)
|
|
(33,034)
|
Investment in
equity
|
|
|
-
|
|
0
|
Disposition of
assets
|
|
|
3,500
|
|
-
|
|
|
|
|
|
|
Net cash (used
in)generated from investing activities
|
|
|
2,999
|
|
(33,034)
|
Cash flows from
financing activities:
|
|
|
|
|
|
Repayment of principle
portion of lease liabilities
|
|
|
|
|
(1,764.00)
|
Proceeds from share
issuance, net of issuance costs
|
|
|
3,578
|
|
585,839
|
Proceeds from private
equity placement,net of issuance costs
|
|
|
39,973
|
|
-
|
Net cash generated
from(used in) financing activities
|
|
|
43,551
|
|
584,075
|
Effect of exchange
rates on cash
|
|
|
683
|
|
1,825
|
Net
increase/(decrease), effect of exchange rate changes on cash and
cash equivalent
|
|
|
3,680
|
|
334,303
|
Cash and cash
equivalent at beginning of the period
|
|
|
42
|
|
3,722
|
Cash and cash
equivalent at end of the period
|
|
|
3,722
|
|
338,026
|
Yandai Wang, the CEO comments that "In the past year, we have
provided technical services through artificial intelligence and
blockchain technologies by leveraging data-driven marketing,
digital based commodity trading, digital supercomputer and
emergency rescue technology.
Through this we were able to realize revenue of $357.8 million as of December 31,2021, which represents 661% growth.
over 2020.
In our data marketing business, we rely on artificial
intelligence technology & comprehensive intelligent screening
to acquire customers more effectively; we also utilize blockchain
technology to solve the information security problems to provide
customers with one-stop benchmark customer acquisition services; In
our digital-based commodity trading segmentt, we make full use of
the accurate traceability of blockchain technology, product quality
assurance, smart contracts, Intelligent trading matching technology
to provides a one-stop trust trading platform for customer trading;
in emergency rescue, we team up with some industry experts to
invest and design emergency rescue watches, Emergency rescue
amphibious rescue boat.
We believe we are well-positioned to grow our business in
all segments. Within China we are
focused on data-driven insurance marketing, and commodity trading.
In U.S. we have launched our supercomputing hosting center in
Wisconsin.
Mainland China, as one of the
world's largest markets, demands huge amount of raw material
products and food commodities to sustain its long -term growth. In
2020 we established our commodity trading business to bridge supply
and demand by providing seamless trading exchange through our
block-chain technology and plat-form. We started from green field
and are proud to report that our commodity trading business
generated revenue of $275million
during the twelve -month period ended December 31,2021.
Our aspiration is to expand beyond China especially in North America. We are in the process of
building a leading supercomputer center in North America which will provide customers
with cryptocurrency mining capacity & hosting service.
One of the tools we used to accelerate this goal is the
innovative mobile container data center. We believe it will improve
user experience and be attractive to small to medium size
customers. Our plans continue to proceed as we have secured a
renewable energy supply of 25 MW at its facility in Price County Wisconsin, which is expected to
be increased to 37MW.
We look forward to continued growth and expansion in both
China and U.S.
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 maybe expand into cryptocurrency security and insurance
in the future Since April 2021, we
launched commodity trading via our subsidiary SOS International
Trading Co. Ltd, The core infrastructure of SOS' marketing data,
technology and solutions to insurance and emergency rescue services
is built on big data, blockchain-based technology, cloud computing,
AI, satellite, and 5G network, etc. SOS has created a cloud
"software as a service (SaaS)" platform for emergency rescue
services, with three major product categories: basic cloud,
cooperative cloud, and information cloud. This system provides
innovative marketing solutions to clients such as insurance
companies, financial institutions, medical institutions, healthcare
providers, auto manufacturers, security providers, senior living
assistance providers, and other service providers in the emergency
rescue services industry. 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 Limited