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Net Revenue Soars to $185 Million
Gross Profit Increases to $17 Million
Gross Margin Improves 10 Times to 9%
QINGDAO, China, Sept. 10, 2021 /PRNewswire/ -- SOS Limited ("SOS" or the "Company") (NYSE: SOS) today reported its unaudited interim financial results for the six-months ended June 30, 2021.
Our net revenue was $184.5 million, up 17 times over the six-months ended June 30, 2020. Gross Profit improved to $17.2 million from $0.08 million and gross margin increased to 9.3% from 0.8% comparing to the period ended June 30, 2020.
Results from Operations
Net revenue was $184.5 million, up 17 times over the prior period. The robust growth of revenue demonstrated the strong and effective execution of the Company's strategy, mainly due to rapid market expansion from regional to national, and the addition of cryptomining and commodity trading operations, both of which took advantage of our blockchain expertise.
Unaudited interim condensed consolidated Statements of comprehensive of loss
(US$ thousands, except share data and per share data, or otherwise noted)
Six months ended
Business taxes and surcharges
Gross margin ratio
As of June 30, 2021, SOS focused on six product lines and services, including insurance marketing, telecom call center, bankcard call center, SaaS services, cryptocurrency mining and commodity trading. Insurance marketing represents 7.23% of our total revenue, and the remaining consists of 0.18% from our telecom call center, 0.15% from our bankcard call center, 0.14% from our SaaS services, 8.2% from our cryptocurrency mining operations and 84.11% from our commodity trading.
Telecom Call center
Bank call center
We begun generating revenue from our cryptocurrency mining operations since February 2021. We have mined an aggregate of 132.1 units of BTC and 1,853.1 units of ETH as of June 30, 2021 from our mining pools as compared to 42.2 units of BTC and 916.9 units of ETH as of March 31, 2021, which represents a 213% increase in BTC and 102% increase in ETH.
There are three major reasons which explain why production output increased: (i) The first quarter of 2021 is a short quarter for production as it took approximately the first two months of the year to set up our first batch of mining rigs, and we only began to generate revenue from the end of February 2021; (ii) We increased our hash rates as more rigs were installed; and (iii) The Chinese government's announcement on the ban of certain types of cryptocurrency mining in mainland China only came into effect at the end of June 2021, which made minimal impact on our operating results for the second quarter of 2021.
Operating Costs and Expenses
Operating costs were $167.2 million for the period ended June 30, 2021, representing an increase of approximately 17 times compared to operating costs of $9.8 million for the period ended June 30, 2020. The increase in operating costs and expenses includes data acquisition costs for our insurance marketing business, landline telephone expenses for call centers, maintenance expense and hardware depreciation for our cryptocurrency mining rigs, and costs of goods sold for commodity trading.
General and Administrative Expenses
General and administrative expenses were $37.4 million for the period ended June 30, 2021, representing an increase of approximately 14 times compared to general and administrative expenses of $2.7 million for the period ended June 30, 2020. The increase in general and administrative expenses was mainly associated with share-based compensation expenses of $17.9 million and significant increases in legal expenses related to class action lawsuit against the Company and its management.
GAAP Operating Loss
Our net loss for the period ended June 30, 2021 was $20.4 million according to GAAP, representing an increase of approximately 2.5 times compared to a net loss of $8.8 million for the period ended June 30, 2020. The loss resulted from increased expenses related to class action against the Company and its management and share-based compensation expenses.
However, overall gross margin which reflects the performance of our operating businesses and excluding the foregoing expenses increased from 0.8% to 7.9% for the periods ended June 30, 2021 and June 30, 2020, respectively, showing improvement in our earning ability.
The company paid $0.58 million in corporate income tax for the current period.
Non-GAAP adjusted loss before income tax expenses was $1.9 million for the period ended June 30, 2021, as compared to $1.3 million loss before income tax expenses for the period ended June 30, 2020. Compared to GAAP results, this loss excludes $17.9 million in share-based compensation.
GAAP net loss attributable to ordinary shareholders was $20.4 million for the period ended June 30, 2021, as compared to a net loss of $8.8 million for the period ended June 30, 2020.
GAAP EPS was $(0.04) per share for the period ended June 30, 2021, as compared to $(0.17) per share for the period ended June 30, 2020.
Balance Sheet and Cash Flow
As of June 30, 2021, the Company had cash and cash equivalents of $185.5 million, compared to $0.61 million for the period ended June 30, 2020. The net increase in cash flow was mainly due to financing through registered direct offerings. The Company believes that its cash resources are adequate to fund its current operations and short-term growth initiatives.
Unaudited condensed consolidated statement of cash flow
(US$ thousands, except share data and per share data, or otherwise noted)
Cash flows from operating activities:
Depreciation and amortization
Loss on acquisition
Receivables, prepayments and other assets
Due from RPTs
Due to RPTs
Contract liability and lease liability
Net cash used in operating activities from discontinued operation
Net cash used in operating activities
Cash flows from investing activities:
Purchase of property, equipment and software
Disposition of assets P2P
Investment in equity
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from share issuance
Proceeds from private equity placement
Net cash provided by financing activities
Net increase/(decrease), effect of exchange rate changes on cash and
Cash and cash equivalent at beginning of the period
Cash and cash equivalent at end of the period
Cash Flow Used In Investing Activities
The Company, through its subsidiaries, SOS Information Technology New York Inc. and China SOS Ltd., purchased BTC and ETH mining equipment for an aggregate cost of approximately $34.2 million.
The Company received aggregate net proceeds of US$513.1 million from registered direct offerings from December 22, 2020 to March 31, 2021.
About SOS Limited
SOS is an emerging blockchain-based and big data-driven marketing solution provider, with a nationwide membership base of approximately 20 million in China. SOS is also engaged in blockchain and cryptocurrencies 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/.
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:
expected hash rate for its mining rigs;
intention to grow and install more mining rigs;
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:
Chinese 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 the future direction and 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.
SOURCE SOS Limited