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ZW Data Action Technologies Reports Full Year 2021 Audited Financial Results

·10 minuto per la lettura
ZW Data Action Technologies Inc.
ZW Data Action Technologies Inc.

BEIJING, April 15, 2022 (GLOBE NEWSWIRE) -- ZW Data Action Technologies Inc. (Nasdaq: CNET) (the "Company"), an integrated online advertising, precision marketing, data analytics and other value-added services provider serving enterprise clients, today announced its audited financial results for the year ended December 31, 2021.

Financial Highlights

  • Revenues in the full year of 2021 increased to $47.33 million, representing an increase of 23.2% YOY;

  • Working capital of $11.10 million as of December 31, 2021, compared to $4.86 million as of December 31, 2020;

  • Cash and cash equivalents of $7.17 million as of December 31, 2021, compared to $4.30 million as of December 31, 2020.

Full Year 2021 Financial Results

Revenues

For the full year of 2021, revenues increased by $8.92 million, or 23.2%, to $47.33 million from $38.41 million for the same period of last year. The increase in revenues was primarily attributable to the increase in revenues from our distribution of the right to use search engine marketing service business category.

Cost of revenues

Total cost of revenues increased by $9.45 million, or 25.0%, to $47.23 million for the full year of 2021 from $37.78 million for the same period of last year. The increase in cost of revenues was primary attributable to the increase in costs associated with the distribution of the right to use search engine marketing service we purchased from key search engines, which was in line with the increase in related revenues.

Gross profit (loss) and gross profit (loss) margin

Gross profit was $0.10 million for the full year of 2021, compared to $0.63 million for the same period of last year, which was primarily attributable to the decrease in gross margin from our internet advertising and related data and ecommerce O2O advertising and marketing services business categories, and was partially offset by the increase in gross margin from the distribution of the right to use search engine marketing services business category. Overall gross profit margin rate was 0.2% for the full year of 2021, compared to 1.6% for the same period of last year.

Operating expenses

Sales and marketing expenses increased by $0.37 million, or 102.2%, to $0.73 million for the full year of 2021 from $0.36 million for the same period of last year. The increase in sales and marketing expenses was mainly attributable to the increase in brand building and promotion expenses.

General and administrative expenses increased by $7.20 million, or 132.5%, to $12.63 million for the full year of 2021 from $5.43 million for the same period of last year. The increase in general and administrative expenses was mainly attributable to an increase in share-based compensation expenses of $5.14 million and an increase in general departmental expenses of $1.93 million which was primarily related to the increase in office lease and other administrative costs of our new office in Guangzhou.

Research and development expenses decreased by $0.21 million, or 39.5%, to $0.33 million for the full year of 2021 from $0.54 million for the same period of last year. The decrease in research and development expenses was mainly attributable to the decrease in share-based compensation expenses.

Operating loss

Loss from operations was $13.59 million for the full year of 2021, compared to $5.70 million for the same period of last year. Operating loss margin was 28.7% for the full year of 2021, compared to 14.8% for the same period of last year.

Other income (expense), net

Total other income increased to $11.08 million for the full year of 2021, compared to total $0.62 million for the same period of last year, which was primarily attributable to the increase in gain from change in fair value of warrant liabilities.

Net income (loss) attributable to CNET and earnings (loss) per share

Net loss attributable to CNET was $2.75 million, or loss per share of $0.08, for the full year of 2021. This compared to net loss attributable to CNET of $5.22 million, or loss per share of $0.24, for the same period of last year.

Financial Condition

As of December 31, 2021, the Company had cash and cash equivalents of $7.17 million, compared to $4.30 million as of December 31, 2020. Accounts receivable, net was $3.44 million as of December 31, 2021, compared to $2.41 million as of December 31, 2020. Working capital was $11.10 million as of December 31, 2021, compared to $4.86 million as of December 31, 2020.

Net cash used in operating activities was $8.84 million for the full year of 2021, compared to net cash provided by operating activities of $0.33 million for the same period of last year. Net cash used in investing activities was $5.47 million for the full year of 2021, compared to $3.47 million for the same period of last year. Net cash provided by financing activities was $17.11 million for the full year of 2021, compared to $5.82 million for the same period of last year.

Recent Developments

During the fourth quarter of 2021, the Company initialized a partnership with Shanghai Weiyou Information Technology Co., Ltd. to contribute to the insurance ecosystem with a blockchain technology upgrade through jointly developing a “Blockchain + Insurance” services platform for small and medium-sized enterprises.

Meanwhile, the Company cooperated with Guangzhou Digital Gold Information Technology Co., Ltd. (“Digital Gold Information”) to explore the development of Intellectual Property (“IP”) + Non-Fungible Token (“NFT”) + Metaverse business model, providing the peripheral products and digital merchandise services for authorized IPs through leveraging the resources of Digital Gold Information’s IP and the Company’s BIF platform.

About ZW Data Action Technologies Inc.

Established in 2003 and headquartered in Beijing, China, ZW Data Action Technologies Inc. (the “Company”) offers online advertising, precision marketing, data analytics and other value-added services for enterprise clients. Leveraging its fully integrated services platform, proprietary database, and cutting-edge algorithms, ZW Data Action Technologies delivers customized, result-driven business solutions for small and medium-sized enterprise clients in China. The Company also develops blockchain and artificial intelligence enabled web/mobile applications and software solutions for clients. More information about the Company can be found at: http://www.zdat.com/.

Safe Harbor Statement

This release contains certain "forward-looking statements" relating to the business of ZW Data Action Technologies Inc., which can be identified by the use of forward-looking terminology such as "believes," "expects," "anticipates," "estimates" or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties, including business uncertainties relating to government regulation of our industry, market demand, reliance on key personnel, future capital requirements, competition in general and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our filings with the Securities and Exchange Commission. These forward-looking statements are based on ZW Data Action Technologies Inc.’s current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting ZW Data Action Technologies Inc. will be those anticipated by ZW Data Action Technologies Inc. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the control of the Company) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by such forward-looking statements. ZW Data Action Technologies Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

For more information, please contact:

Sherry Zheng
Weitian Group LLC
Email: shunyu.zheng@weitian-ir.com
Phone: +1 718-213-7386


ZW DATA ACTION TECHNOLOGIES INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except for number of shares and per share data)

As of December 31,

2021

2020

(US $)

(US $)

Assets

Current assets:

Cash and cash equivalents *

$

7,173

$

4,297

Accounts receivable, net of allowance for doubtful accounts of $2,236 and $4,247, respectively *

3,439

2,407

Prepayment and deposit to suppliers *

7,559

4,657

Due from related parties *

90

61

Other current assets *

1,657

1,462

Total current assets

19,918

12,884

Long-term investments *

2,280

67

Operating lease right-of-use assets *

2,019

48

Property and equipment, net *

375

60

Intangible assets, net *

7,523

2,557

Blockchain platform applications development costs

-

4,406

Long-term deposits and prepayments

75

39

Deferred tax assets, net *

441

606

Total Assets

$

32,631

$

20,667

Liabilities and Equity

Current liabilities:

Accounts payable *

$

1,119

$

608

Advances from customers *

1,245

1,436

Accrued payroll and other accruals *

389

489

Taxes payable *

3,534

3,430

Operating lease liabilities *

202

18

Lease payment liabilities related to short-term leases *

152

203

Other current liabilities *

141

333

Warrant liabilities

2,039

1,505

Total current liabilities

8,821

8,022


Long-term liabilities:

Operating lease liabilities-Non current *

1,907

32

Long-term borrowing from a related party

137

134

Total Liabilities

10,865

8,188

Commitments and contingencies

Equity:

ZW Data Action Technologies Inc.’s stockholders’ equity

Common stock (US$0.001 par value; authorized 100,000,000 and 50,000,000 shares at December 31, 2021 and 2020; issued and outstanding 35,332,677 shares and 26,062,915 shares at December 31, 2021 and 2020, respectively)

35

26

Additional paid-in capital

61,785

49,772

Statutory reserves

2,598

2,598

Accumulated deficit

(43,734

)

(40,980

)

Accumulated other comprehensive income

1,082

1,129

Total ZW Data Action Technologies Inc.’s stockholders’ equity

21,766

12,545

Noncontrolling interests

-

(66

)

Total equity

21,766

12,479

Total Liabilities and Equity

$

32,631

$

20,667

*All of the VIEs' assets can be used to settle obligations of their primary beneficiary. Liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company’s general assets.

ZW DATA ACTION TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except for number of shares and per share data)

Year Ended December 31,

2021

2020

(US $)

(US $)

Revenues

From unrelated parties

$

47,324

$

38,390

From related parties

4

18

Total revenues

47,328

38,408

Cost of revenues

47,230

37,776

Gross profit

98

632

Operating expenses

Sales and marketing expenses

730

361

General and administrative expenses

12,632

5,433

Research and development expenses

326

539

Total operating expenses

13,688

6,333

Loss from operations

(13,590

)

(5,701

)

Other income/(expenses)

Change in fair value of warrant liabilities

11,329

653

Interest income, net

4

1

Loss on disposal of long-term investments

(38

)

-

Other expense, net

(216

)

(31

)

Total other income

11,079

623

Loss before income tax expense and noncontrolling interests

(2,511

)

(5,078

)

Income tax expense

(177

)

(143

)

Net loss

(2,688

)

(5,221

)

Net (income)/loss attributable to noncontrolling interests

(66

)

5

Net loss attributable to ZW Data Action Technologies Inc.

$

(2,754

)

$

(5,216

)


Net loss

$

(2,688

)

$

(5,221

)

Foreign currency translation loss

(47

)

(380

)

Comprehensive loss

$

(2,735

)

$

(5,601

)

Comprehensive (income)/loss attributable to noncontrolling interests

(66

)

9

Comprehensive loss attributable to ZW Data Action Technologies Inc.

$

(2,801

)

$

(5,592

)

Loss per share

Loss per common share

Basic and diluted

$

(0.08

)

$

(0.24

)

Weighted average number of common shares outstanding:

Basic and diluted

33,048,921

21,602,107


ZW DATA ACTION TECHNOLOGIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Year Ended December 31,

2021

2020

(US $)

(US $)

Cash flows from operating activities

Net loss

$

(2,688

)

$

(5,221

)

Adjustments to reconcile net loss to net cash (used in)/provided by operating activities

Depreciation and amortization

632

856

Amortization of operating lease right-of-use assets

207

13

Share-based compensation expenses

7,028

2,152

Loss on disposal of long-term investment

38

-

Provision of allowances for doubtful accounts

-

833

Change in fair value of warrant liabilities

(11,329

)

(653

)

Deferred taxes

177

143

Other non-operating losses

524

11

Changes in operating assets and liabilities

Accounts receivable

(986

)

116

Prepayment and deposit to suppliers

(2,061

)

2,804

Due from related parties

-

24

Other current assets

6

(6

)

Long-term deposits and prepayments

(74

)

-

Accounts payable

495

180

Advances from customers

(221

)

(671

)

Accrued payroll and other accruals

(90

)

(16

)

Other current liabilities

(355

)

(299

)

Taxes payable

29

14

Operating lease liabilities

(116

)

(8

)

Lease payment liability related to short-term leases

(54

)

54

Net cash (used in)/provided by operating activities

(8,838

)

326

Cash flows from investing activities

Payment for leasehold improvements and purchase of vehicles, furniture and office equipment

(334

)

-

Cash effect of deconsolidation of VIE’s subsidiaries

(8

)

-

Proceeds from disposal of fixed assets

-

3

Investment and advances to ownership investee entities

(2,263

)

(28

)

Short-term loan to unrelated parties

(202

)

(1,444

)

Deposit and prepayment paid for contracts of other investing activities

(1,500

)

-

Payment for blockchain platform applications development costs

-

(503

)

Payment for purchase of software technology and other intangible assets

(1,160

)

(1,500

)

Net cash used in investing activities

(5,467

)

(3,472

)


Cash flows from financing activities

Proceeds from issuance of common stock and warrants (net of cash offering cost of $1,600 and $750 respectively)

17,111

6,250

Repayment of short-term bank loan

-

(435

)

Net cash provided by financing activities

17,111

5,815

Effect of exchange rate fluctuation on cash and cash equivalents

70

25

Net increase in cash and cash equivalents

2,876

2,694

Cash and cash equivalents, at beginning of the year

4,297

1,603

Cash and cash equivalents, at end of the year

$

7,173

$

4,297


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