TROOPS: Announces Unaudited Interim Results for 2022 – Form 6-K

TROPS, INC. announces unaudited interim results for 2022

TROOPS, Inc. (Nasdaq: TROO) (“TROOPS” or the “Company”), a conglomerate group of companies headquartered in Hong Kong. The Group is principally engaged in (a) Hong Kong money lending business providing mortgage lending to high quality target borrowers, (b) real estate investment to generate additional rental income and (c) developing, operating and managing an online financial marketplace that provides financial technology solutions from a Hand, including API services leveraging artificial intelligence, big data and blockchain, and cloud computing (SaaS). The Group’s vision is to operate as a conglomerate to build synergies within its own sustainable ecosystem, thereby creating value for its shareholders, and today announced its unaudited results of operations for the six months ended June 30, 2022.

Overview of the interim results 2022

revenue

Our revenue for the six months ended June 30, 2022 was $1.92 million, an increase of $0.64 million, or 50.0%, from $1.28 million for the same period in June 2022 For 2021, Limited, Vision Lane Limited and Suns Tower Limited generated leasing and management income of US$0.54 million compared to income of US$0.52 million in 2021. We have via Giant Credit Limited and First Asia Finance Limited Interest earned on money lending services loans of US$1.20 million for the six months ended June 30, 2022 compared to US$0.64 million for the same period in 2021. By Giant Financial Service Limited and Apiguru Pty Limited had financial technology solutions and services revenue of US$0.18 million for the six months ended June 30, 2022, compared to US$0.12 million for the same period in 2020 1.

Below is a summary showing the Company’s revenue broken down by products and services and the timing of revenue recognition:

cost of revenue

For the six months ended June 30, 2022, cost of sales increased $0.23 million, or 17.2%, to $1.57 million from $1.34 million for the six months ended June 30, 2021 The increase was in line with sales growth.

Gross Profit / (Loss)

Our gross profit for the six months ended June 30, 2022 was $0.36 million compared to a gross loss of $0.06 million for the same period in 2021.

General and administrative expenses

General and administrative expenses were approximately $1.18 million for the six months ended June 30, 2022, down $0.17 million or 12.6% from $1.35 million for the same period in June 2022 previous year. This decrease was primarily due to lower stock-based compensation paid to management of approximately $0.26 million.

General and administrative expenses include system development fees, staff salaries and benefits, legal and consulting fees, office expenses, travel expenses, entertainment expenses, IT consulting and support costs, depreciation and amortization of intangible assets.

Impairment loss of loans and interest receivable

Impairment loss on loans and interest receivable based on historical experience and an estimate of the recoverability of the loan and interest receivable. Our provision for credit losses and interest receivable was $0.61 million and $Nil for the six months ended June 30, 2022 and 2021, respectively.

Gain from change in fair value of option derivative liability

Our gain on the change in fair value of the warrant derivative liability was nil and $0.25 million for the six months ended June 30, 2022 and 2021, respectively. The gain was attributable to the exercise of warrants that we exercised in May issued to our investor and placement agent in 2017.

income tax benefit

The income benefit was $0.11 million for the six months ended June 30, 2022, a decrease of $0.04 million from the income tax benefit of $0.15 million for the same period in 2021. The income tax benefit was related to the impact of deferred taxes on intangible assets and real estate and plant.

Our PRC entities for the six months ended June 30, 2022 and 2021 were subject to the PRC statutory corporate income tax rate of 25.0%. Our Hong Kong subsidiaries are subject to Hong Kong tax on income from their activities conducted in Hong Kong at a rate of 16.5%. Our Australian subsidiary is subject to the lower Australian corporation tax rate of 25.0%.

net loss

As a result of the various factors described above, net loss for the six months ended June 30, 2022 was $1.18 million compared to $1.19 million for the same period in 2021.

About TROOPS, Inc.

TROPS, Inc. is a conglomerate group of companies headquartered in Hong Kong. The Group is principally engaged in (a) Hong Kong money lending business providing mortgage lending to high quality target borrowers, (b) real estate investment to generate additional rental income and (c) developing, operating and managing an online financial marketplace that provides financial technology solutions from a Hand, including API services leveraging artificial intelligence, big data and blockchain, and cloud computing (SaaS). The Group’s vision is to operate as a conglomerate to build synergies within its own sustainable ecosystem, thereby creating value for its shareholders. For more information about TROPS, please visit our Investor Relations website:

www.troops.co

Safe Harbor and Information Statement

This release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are made in accordance with the “safe harbor” provisions of the US Private Securities Litigation Reform Act of 1995. All Statements, other than statements of historical fact, including but not limited to those relating to the Company’s goals, plans and strategies set forth herein and those preceded by the words “believe,” “expect,” or these containing “,”,” “anticipate,” “future,” “will,” “intend,” “plan,” “estimate,” or similar expressions are “forward-looking statements.” Forward-looking statements in this press release include, without limitation, the effectiveness of the Company’s multi-brand, multi-channel strategy and the transition of its product development and sales focus to a “light-asset” model. Although the Company’s management believes that such forward-looking statements are reasonable, it cannot guarantee that such expectations are or will be correct. These forward-looking statements involve a number of risks and uncertainties that could cause the Company’s future results to differ materially from expectations. These forward-looking statements are subject to change as a result of many possible events or factors, not all of which are known to the Company, including, without limitation, our ability to have effective internal control over financial reporting; our success in designing and distributing products under brands licensed by others; management of sales trends and customer mix; Possibility of securing loans and other financing without efficient fixed assets as security; changes in government policies in China; China’s overall economic conditions and local market conditions; our ability to expand through strategic acquisitions and the establishment of new locations; compliance with government regulations; legislation or regulatory environment; geopolitical events and other events and/or risks described in TROOPS’ filings with the US Securities and Exchange Commission, including its Annual Report on Form 20-F and other filings. All information in this press release and attachments is as of the date of this release and TROOPS undertakes no obligation to update any forward-looking statement, except as required by applicable law.