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Nisun International Enterprise Development Group Co., Ltd Reports Fiscal Year 2020 Financial Results


SHANGHAI, May 3, 2021 /PRNewswire/ — Nisun International Enterprise Development Group Co., Ltd (“Nisun International” or the “Company”) (Nasdaq: NISN), a provider of innovative comprehensive solutions through the integration of technology, industry, and finance, today announced its audited financial results for the year ended December 31, 2020.

Mr. Xiaoyun Huang, Chairman and Chief Executive Officer of Nisun International, commented, “As we reflect on 2020, our business evolved both literally and figuratively. The onset of the COVID-19 pandemic presented challenges to our business and pushed us to adapt and refine our business model to focus on SME financing and supply chain solutions. Amid the mergers and acquisitions and dispositions, we are excited to see our strong financial performance in the second half of 2020, as our business generated $42.2 million in revenue in the 2020 fiscal year. Furthermore, we launched a new supply chain solutions financing business, which is likely to further drive overall business growth. Looking ahead to 2021, Nisun remains committed to providing high-quality supply chain products and services to our clients.”

Financial Results for the Full Year ended December 31, 2020

Revenues

Total revenue from continuing operations increased to approximately $42.2 million for the year ended December 31, 2020 from $2.5 million for the year ended December 31, 2019.

  • Revenues generated from the Small- and Medium-Enterprise (SME) financing solutions business were $40.8 million in 2020, compared to $2.5 million in prior year. This was primarily due to increasing demands from SMEs in China seeking standardized financing solutions as an alternative to bank financing.
  • The Company commenced its supply chain solution business in January 2020. With a focus on linkages in the finance industry, the Company aims to serve the upstream and downstream of the supply-chain industry while facilitating supply-side sub-sector reform. For fiscal 2020, revenue generated from supply chain solutions was $1.4 million. The Company achieved total supply chain transaction volume of approximately $50.6 million (RMB349.6 million) during fiscal 2020. The Company expects this growth trend will continue in 2021.
  • The Company commenced its other financing services business in July 2019. Revenues generated from other financing solution services were $0.04 million in 2020, compared to $3,381 in prior year.

Year ended December 31,


  Changes


Changes



2020


%



2019


%


($)


(%)


Small and Medium Enterprise financing solutions

$

40,779,794


97

%


$

2,522,143


100

%


38,257,651


1517

%

Supply chain financing solutions


1,369,859


3

%




%


1,369,859


100

%

Other financing solutions


40,538


0

%



3,381


%


37,157


1099

%

Total revenue

$

42,190,191


100

%


$

2,525,524


100

%


39,664,667


1571

%

Cost of Revenue

Cost of revenue from continuing operation increased to $20.0 million in 2020 from 0.02 million in 2019. The increase was primarily due to: (i) increases in direct advertising and marketing costs; (ii) increases in direct costs associated with staff who design and manage SME financing solutions, supply chain solutions, and other financing solutions business- and sales-related taxes; and (iii) increases in office rent and expenses, excluding depreciation and amortization expenses, which are separately presented.

Selling, General and Administrative Expenses  

Selling, general and administrative expenses are comprised of indirect advertising and marketing costs, office rent and expenses, costs associated with staff and support personnel who manage the Company’s business activities, and professional fees paid to third parties. In fiscal 2020, the Company incurred selling, general, and administrative expenses of appropriately $12.2 million, as compared to approximately $1.3 million in fiscal 2019. The increase was mainly due to the increase in advertising and marketing expenses to acquire customers and brand image.

  • Selling expenses increased to $3.2 million in 2020, compared to approximately $0.1 million in prior year, representing an increase of approximately $3.1 million. The increase in selling expenses was mainly attributable to the $2.6 million in advertising and marketing expenses in fiscal 2020 incurred by the Company’s newly acquired subsidiary, Nami, to promote its business.
  • General and administrative expenses increased to approximately $8.2 million in 2020 from $1.1 million in 2019, representing an increase of approximately $7.1 million. The increase in general and administrative expenses was mainly due to: (i) more labor and managerial expenses incurred in fiscal 2020 mainly because the Company started to conduct its financial services business in July 2019; (ii) more spending in professional fees related to mergers and acquisitions (M&A) in fiscal 2020; and (iii) incurring approximately $1.1 million share-based compensation expenses, compared to nil in 2019.
  • Research and development (R&D) expenses were $0.8 million in 2020, compared to $0.2 million in 2019, representing an increase of $0.6 million. The increase in R&D expenses was primary due to R&D developments in the upgrading and development in our supply chain financing and other financing service APPs and platforms in 2020.

Other income (expense), net

In fiscal 2020, the Company had a net other income of 0.8 million, as compared to an insignificant net other expense in fiscal 2019. The increase was due to investment income from a short-term investment and interest income from loans to third parties.  

Net income from continuing operations

Net income from continuing operations increased to $9.9 million in 2020, from $1.2 million in 2019. The increase was mainly because the Company began to conduct its financial services business in July 2019 through the Company’s three consolidated operating entities, Fintech, Hengpu, and Nami Shanghai, as well as their subsidiaries.  

Net loss from discontinued operations

For fiscal year 2020, the Company had a loss from discontinued operations of $23.0 million, compared to a gain of $1.5 million from the equipment and engineering business in 2019. The increase in net loss was mainly due to an impairment loss of $22.4 million from the equipment and engineering business’s assets as a result of its continuous losses.

Net income and Income (loss) per share

For fiscal 2020, the Company incurred a net loss of $13.1 million, as compared to a net income of approximately $2.7 million for fiscal 2019. The net loss in 2020 was primarily derived from $9.9 million of net income from the Company’s financial service business and net loss of $23.0 million from discontinued operations. 

Net loss per share was $0.71 in 2020, compared to a net income per share of $0.17 in the prior year. The net income per share from continuing operation was $0.53 for fiscal 2020, compared to $0.08 for fiscal 2019. The weighted average number of shares was 18,587,674 for fiscal 2020, compared to 16,269,577 for fiscal 2019.

Financial Condition and Cash Flow

As of December 31, 2020, the Company had cash, cash equivalents and restricted cash of $22.2 million, compared to $2.8 million as of December 31, 2019. This increase was primarily attributable to $2.2 million in operating activities and $19.1 million in financing activities, against $4.7 million used in investing activities.

Net cash provided by operating activities in fiscal 2020 was approximately $2.3 million, which was primarily attributable to a net income of approximately $9.9 million, adjusted for non-cash items of approximately $2.0 million and changes in working capital of approximately negative $9.8 million. The adjustments for changes in working capital mainly included: (i) an increase $10.7 million in receivable from supply chain solution of, primarily from our supply chain financing business launched in January 2020; (ii) an increase in accounts payable of $1.0 million; (iii) a decrease in other payables of $2.1 million; and (iv) an increase in tax payables of $1.6 million due to higher earnings. Net cash provided by operating activities for fiscal 2019 was approximately $0.6 million.

Net cash used in investing activities was $4.7 million for fiscal 2020, primarily attributable to: (i) the $5.0 million in cash acquired in connection with the Company’s acquisition of Nami; (ii) a $15.6 million of investment in debts securities; (iii) a $3.1 million of investment in short-term investment; and (iv) $11.0 million of repayment from loans to third parties and $1.8 million less in new loans to third parties. Net cash used in investing activities was $1.8 million for fiscal 2019.

Net cash provided by financing activities was $19.1 million in fiscal 2020, primarily attributable to: (i) the proceeds of $6.5 million from private placement transactions; (ii) a $10.5 million loan from shareholder Nisun Cayman; (iii) $3.1 million of capital contribution with non-controlling interest; (iv) $4.6 million of capital contribution from shareholder Nisun Cayman; and (v) $6.8 million of repayment made to related parties. Net cash provided in financing activities was approximately $4.1 million for fiscal 2019.

About Nisun International Enterprise Development Group Co., Ltd

Nisun International Enterprise Development Group Co., Ltd (NASDAQ: NISN) is a technology-driven, integrated supply chain solutions provider focused on transforming the corporate finance industry. Leveraging its industry experience, Nisun is dedicated to providing professional supply chain solutions to Chinese and foreign enterprises and financial institutions. Through its subsidiaries, Nisun provides users with professional solutions for technology supply chain management, technology asset routing, and digital transformation of tech and finance institutions, enabling the industry to strengthen and grow. At the same time, Nisun continues to deepen the field of industry segmentation through industrial and financial integration, by cultivating/creating an ecosystem of openness and empowerment. Nisun has built a linked platform that incorporates supply chain, banking, securities, trust, insurance, funds, state-owned enterprises, among other businesses. Focusing on industry-finance linkages, Nisun aims to serve the upstream and downstream of the industrial supply chain while also assisting with supply-side sub-sector reform. For more information, please visit http://www.fintaike.com

Cautionary Note Regarding Forward-Looking Statements

This press release contains information about Nisun’s view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the successful integration of acquired companies, technologies and assets into its portfolio of products and services, marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property. Nisun encourages you to review other factors that may affect its future results in Nisun’s registration statement and in its other filings with the Securities and Exchange Commission. Nisun assumes no obligation to update or revise its forward-looking statements as a result of new information, future events or otherwise, except as expressly required by applicable law.

Contacts:

Nisun International Enterprise Development Group Co., Ltd
Investor Relations
Shaokang (Ken) Lu
Tel: +86 (21) 2357-0055
Email: [email protected]

ICR, LLC
Tel: +1 203 682 8233
Email: [email protected]

NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2020, AND 2019

(EXPRESSED IN US DOLLARS)




December 31,

2020



December 31,

2019 *

ASSETS






CURRENT ASSETS:






Cash and cash equivalents


$

22,135,310



$

2,756,490

Restricted cash



62,947




25,016

Short-term investment



4,680,843




Accounts receivable, net



4,939,912




1,233,038

Receivables from supply chain financing



10,741,981




Prepaid expenses and other current assets



971,839




280,202

Loans to third parties – current portion



1,915,709




2,434,715

Due from discontinued operations






9,201,432

Receivable from sale of discontinued operations



14,950,730




Assets of discontinued operations – current






36,985,779

TOTAL CURRENT ASSETS



60,399,271




52,916,672









NON-CURRENT ASSETS:








Property and equipment, net



655,643




287,057

Intangible assets, net



3,726,602




4,189,350

Right-of-use assets, net



1,464,745




502,670

Loans to third parties – non-current






2,872,820

Equity investments



484,864




500,715

Investment in limited partnership



15,736,927




Goodwill



25,172,407




11,074,864

Deferred tax assets, net



456,370




20,040

Assets of discontinued operations – non-current






21,636,501

TOTAL NON-CURRENT ASSETS



47,697,558




41,084,017

TOTAL ASSETS


$

108,096,829



$

94,000,689









LIABILITIES








CURRENT LIABILITIES:








Accounts payable

$


1,312,560



$

224,045

Accrued expenses and other current liabilities



2,001,031




674,169

Operating lease liabilities – current



736,854




138,133

Advance from customers



11,624




28,728

Taxes payable



3,133,038




138,157

Loan from related party



10,528,965




Due to related parties



2,071,039




7,759,443

Purchase price payable for acquisition



7,007,905




Liabilities of discontinued operations – current






28,472,022

TOTAL CURRENT LIABILITIES



26,803,286




37,434,697









Operating lease liabilities – non-current



680,130




368,019

Deferred tax liabilities



676,015




805,826

Liabilities of discontinued operations – non-current






1,456,634

TOTAL LIABILITIES



28,159,431




40,065,176

Commitments and contingencies








EQUITY:








Class A common stock, $0.001 par value, 40,000,000 shares
  authorized, 20,555,129 and 17,710,471 shares issued and
  outstanding as of December 31, 2020 and 2019, respectively



20,555




17,710

Class B common stock, $0.001 par value, 10,000,000 shares
  authorized, nil shares issued and outstanding as of
  December 31, 2020 and 2019, respectively






Additional paid-in capital



59,472,255




28,369,076

Retained earnings



14,380,976




27,472,766

Unearned compensation



(624,455)





Accumulated other comprehensive income (loss)



3,593,188




(1,914,232)

TOTAL SHAREHOLDERS’ EQUITY



76,842,519




53,945,320

Non-controlling interests



3,094,879




(9,807)

TOTAL EQUITY



79,937,398




53,935,513

TOTAL LIABILITIES AND EQUITY


$

108,096,829



$

94,000,689

*The amounts have been reclassified to conform with the Company’s decision to classify Hebron HK as assets and liabilities of discontinued operations.

NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME 

AS OF DECEMBER 31, 2020, AND 2019 

 (EXPRESSED IN US DOLLARS)




For the Years Ended December 31,



2020



2019



2018

REVENUE:









Small and Medium Enterprise financing solutions


40,779,794



2,522,143



Supply Chain financing solutions


1,369,859





Other financing solutions 


40,538



3,381



Financial services


$

40,190,191



$

2,525,524



$













COST OF REVENUE AND RELATED TAXES:











Cost of revenue



(19,740,267)







Business and sales related taxes



(233,389)




(19,492)




GROSS PROFIT



22,216,535




2,506,032
















OPERATING EXPENSES:












Selling expenses



3,181,810




93,620




General and administrative expenses



8,188,736




1,082,631




1,170,900

Research and development expenses



817,770




155,216




923,094

Total operating expenses



12,188,316




1,331,467




2,093,994

INCOME (LOSS) FROM OPERATIONS



10,028,219




1,174,565




(2,093,994)













OTHER INCOME (EXPENSE):












Interest and investment income



585,177







Other income (expense), net



244,274




1,371




Total other income (expense), net



829,451




1,371
















INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES



10,857,670




1,175,936




(2,093,994)













PROVISION (BENEFIT) FOR INCOME TAXES



941,064




(55,731)




NET INCOME (LOSS) FROM CONTINUING OPERATIONS



9,916,606




1,231,667




(2,093,994)













DISCONTINUED OPERATIONS:












(Loss) income from discontinued operations, net of tax



(23,107,066)




1,508,323




(3,050,721)

Net gain on sale of discontinued operations, net of tax



136,050







NET (LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX



(22,971,016)




1,508,323




(3,050,721)

NET (LOSS) INCOME



(13,054,410)




2,739,990




(5,144,715)

 Net income attributable to non-controlling interests



37,380







NET (LOSS) INCOME ATTRIBUTEABLE TO SHAREHOLDERS



(13,091,790)




2,739,990




(5,144,715)













OTHER COMPREHENSIVE INCOME (LOSS)












Foreign currency translation income (loss)



5,507,420




(561,091)




(1,755,528)

COMPREHENSIVE (LOSS) INCOME



(7,584,370)



$

2,178,899




(6,900,243)

Comprehensive loss attributable to non-controlling interests



(2,172)







COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO SHAREHOLDERS


$

(7,582,198)



$

2,178,899



$

(6,900,243)













BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE:
























Income(loss) from continuing operations


$

0.53



$

0.08



$

(0.13)

Income (loss) from discontinued operations



(1.24)




0.09




(0.20)

TOTAL (LOSS) EARNINGS PER COMMON SHARE


$

(0.71)



$

0.17



$

(0.33)













Weighted average number of shares outstanding-basic and diluted



18,587,674




16,269,577




15,760,633

NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

CONDENSED STATEMENTS OF CASH FLOWS

AS OF DECEMBER 31, 2020, AND 2019 

(EXPRESSED IN US DOLLARS)



For the Years Ended December 31,




2020



2019



2018


CASH FLOWS FROM OPERATING ACTIVITIES:










Net loss


$

(13,054,410)



$

(2,739,990)



$

(5,144,715)


Net (loss) income from discontinued operations



(22,971,016)




1,508,323




(3,050,721)


Net income (loss) from continuing operations



9,916,606




1,231,667




(2,093,994)


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













Depreciation and amortization



1,686,518




242,409





Stock-based compensation



1,097,415








Bad debt expense









1,162,594


Loss on disposition of property and equipment



42,534








(Income) from investments



(169,720)








Deferred taxes



(584,760)




(55,731)





Changes in operating assets and liabilities:













    Decrease (increase) in accounts receivable



573,418




(815,534)





    Decrease (increase) in prepaid expenses and other current assets



16,009




(108,150)




931,320


(Increase) in operating lease right-of-use assets



(56,831)








(Increase) in receivable from supply chain solution



(10,741,981)








    Increase in accounts payable



1,014,227








    Increase in advance from customers



(17,977)








(Decrease) in other payable



(2,112,886)










    Increase in taxes payable



1,609,498




54,474





    (Decrease) in operating lease liabilities



(523,797)








    Increase in accrued expenses and other current liabilities



502,100




49,574





Net cash provided by (used in) operating activities from 
continuing operations



2,250,373




598,709




(80)


Net cash provided by (used in) operating activities from
discontinued operations



436,389




(263,476)




(725,000)


NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES



2,686,762




335,233




(725,080)















CASH FLOWS FROM INVESTING ACTIVITIES:













Acquisition of property and equipment



(204,904)




(237,548)





Acquisition of intangible assets



(94,400)








Proceeds from disposal of equipment



41,688








Cash acquired with business acquisitions



4,990,754




2,043,176





Investment in limited partnership



(15,589,966)








Payments made for short-term investment



(3,065,134)








Repayments from loan to third parties



11,019,545








Loans to third parties



(1,810,495)




(3,611,682)





Net cash (used in) investing activities from continuing
operations



(4,712,912)




(1,806,054)





Net cash (used in) investing activities from discontinued
operations



(6,713)




(157,440)




(115,210)


NET CASH (USED IN) FINANCING ACTIVITIES



(4,719,625)




(1,963,494)




(115,210)















CASH FLOWS FROM FINANCING ACTIVITIES:













Repayment made to related parties



(6,803,115)




566,360





Proceeds from related parties



1,303,556








Loan from related parties



10,528,965








Proceeds from private placement



6,503,378








Capital contribution from non-controlling interest



3,065,134








Capital contribution from shareholder



4,550,000




3,582,781





Net cash provided by financing activities from continuing
operations



19,147,918




4,149,141





Net cash (used in) provided by financing activities from
discontinued operations



(788,599)




(996,355)




730,669


NET CASH PROVIDED BY FINANCING ACTIVITIES



18,359,319




3,152,786




730,669















EFFECT OF EXCHANGE RATE CHANGE ON CASH
AND CASH EQUIVALENT



2,806,981




(184,449)




(94,230)


NET INCREASE (DECREASE) IN CASH AND CASH 
EQUIVALENTS



19,133,437




1,340,076




(203,860)


Less: (decrease) in cash and cash equivalents from

discontinued operations



(283,314)




(1,440,823)




(203,710)


NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS FROM CONTINUING OPERATIONS



19,416,751




2,780,899




(150)















CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH-BEGINNING



2,781,506




607




757


CASH AND CASH EQUIVALENTS AND RESTRICTED
CASH-ENDING


$

22,198,257



$

2,781,506



$

607















SUPPLEMENTAL CASH FLOW DISCLOSURES:













Cash paid for income taxes


$

552,783



$

5,158



$

42,250


Cash paid for interest


$

124,778



$

147,900



$

91,917















SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:













Payment payable to related parties for business acquisition


$

7,007,905



$

7,000,000



$


Issuance of shares for business acquisition


$

18,330,776




11,426,289





Receivable from sale of discontinued operations


$

14,950,730



$



$


Issuance of shares for shares-based compensation



1,721,870









Issuance of shares for consulting services


$



$



$

239,500


Issuance of shares for equity investment


$



$



$

2,885,556















CASH AND CASH EQUIVALENTS FROM
CONTINUING OPERATION COMPRISE OF THE
FOLLOWING:













Cash and cash equivalent


$

22,135,310



$

2,756,490



$

607


Restricted cash



62,947




25,016





Total cash, cash equivalents and restricted cash


$

22,198,257



$

2,781,506



$

607


SOURCE Nisun International Enterprise Development Group Co., Ltd



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