Financial Performance - For the six months ended June 30, 2020, CMON Limited reported total revenue of $11,915,693, a decrease of 7.05% compared to $12,820,010 for the same period in 2019[9] - Gross profit for the same period was $4,993,916, down 15% from $5,871,049 in 2019[9] - The company recorded a net loss attributable to equity holders of $589,772, an improvement from a loss of $1,147,613 in the prior year[9] - Operating cash flow for the six months ended June 30, 2020, was a net outflow of $91,595, a significant decline from a net inflow of $1,157,483 in 2019[15] - The cost of goods sold for the six months ended June 30, 2020, was $4,257,347, a slight decrease from $4,388,334 in 2019[22] - The company reported a foreign exchange gain of $111,053 for the six months ended June 30, 2020, compared to a loss of $25,132 in 2019[25] - Revenue for the six months ended June 30, 2020, was approximately $11.9 million, a decrease of about 7% from $12.8 million for the same period in 2019[44] - Kickstarter sales accounted for 82.4% of total revenue in the first half of 2020, amounting to $9,821,017, compared to only 15.1% in the same period of 2019[45] - Gross profit decreased from approximately $5.9 million in the first half of 2019 to about $5.0 million in the first half of 2020, with a gross margin decline from 45.8% to 41.9%[47] - Other income decreased from $236,533 in the first half of 2019 to $206,025 in the first half of 2020, primarily due to a decline in advertising revenue from the company’s website[48] Assets and Liabilities - Total assets as of June 30, 2020, amounted to $41,573,490, an increase from $39,796,679 as of December 31, 2019[10] - Cash and cash equivalents increased significantly to $4,082,552 from $757,743 at the end of 2019, reflecting a strong liquidity position[10] - Non-current liabilities rose to $10,682,125 from $5,962,701, primarily due to increased bank borrowings[11] - Inventory levels increased to $2,837,153 from $2,010,838, indicating potential growth in sales or production[10] - As of June 30, 2020, CMON Limited's total bank borrowings amounted to approximately $11.4 million, an increase from $10.4 million as of December 31, 2019[53] - The company's asset-liability ratio as of June 30, 2020, was approximately 45.3%, up from 44% as of December 31, 2019[64] Strategic Initiatives - The company has plans for market expansion and new product development, although specific details were not disclosed in the report[9] - The company is actively exploring strategic initiatives, including potential mergers and acquisitions, to enhance its market position[9] - The company’s strategy focuses on expanding into Asian markets and enhancing game design capabilities to drive long-term growth[41] - CMON Limited plans to use its capital for operational funding, game development activities, acquisition of intellectual property, and expansion plans[54] - The company has no major investment plans but intends to acquire quality games to increase market share[63] Shareholder Information - As of June 30, 2020, major shareholders include Mr. Huang and Mr. Jian, each holding 31,000,000 shares, representing 49.90% of the total shares[93] - Mr. Cai holds 5,580,000 shares, which accounts for 18.18% of the total shares[93] - Major shareholders include Huang Cheng'an Special Purpose Company and Jianbang Special Purpose Company, each holding 901,248,078 shares, representing 49.90% of the total shares[97] - Quantum Asset and Magic Carpet collectively hold 322,669,232 shares, accounting for 17.87% of the total shares[97] - David Preti holds 127,643,076 shares, which is 7.06% of the total shares[97] Employee and Operational Metrics - Total employee costs for the six months ended June 30, 2020, were approximately $1.1 million, a decrease from $1.6 million for the same period in 2019[60] - As of June 30, 2020, the company had 56 employees, an increase from 52 employees as of June 30, 2019[60] Corporate Governance - The audit committee reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2020, and recommended their adoption to the board[79] - The company has established a risk management framework to identify and mitigate risks to acceptable levels[87] - The audit committee consists of three independent non-executive directors, ensuring independence in oversight[78] - The company has adopted measures to allow employees and stakeholders to confidentially raise concerns about potential misconduct in financial reporting[88] - The company believes that its risk management and internal control systems are effective and sufficient, with no significant adverse issues identified[91] Stock Options - The company has a stock option plan that allows for a maximum of 180,600,000 shares to be issued, equivalent to 10% of the total issued shares as of the report date[102] - A total of 74,620,000 stock options were granted at an exercise price of HKD 0.232 per share, with the market price prior to grant being HKD 0.229[104] - An additional 17,000,000 stock options were granted at an exercise price of HKD 0.112 per share, with the market price prior to grant being HKD 0.111[104] - The share options granted on August 13, 2018, have a vesting schedule where up to 33% will vest after 12 months, another 33% after 24 months, and the remaining 34% after 36 months[109] - A total of 91,620,000 share options remain available for issuance under the share option scheme as of June 30, 2020[106]

Financial Performance - CMON Limited's revenue increased from approximately $28.2 million in 2018 to about $30.5 million in 2019, representing a growth of approximately 8.1%[9] - The company reported an EBITDA of approximately $6.7 million for 2019, remaining roughly the same as the previous year, primarily due to increased game development expenses[9] - The company experienced a shareholder loss of approximately $0.8 million in the fiscal year, compared to a profit of about $2.0 million in the previous year, largely due to non-recurring professional service fees of $2.7 million related to the transfer to the main board[12] - Revenue increased by approximately 8.0% from about $28.2 million for the year ended December 31, 2018, to about $30.5 million for the year ended December 31, 2019, primarily due to an increase in board game revenue[15] - Board game revenue rose approximately 18.6% from about $23.3 million in 2018 to about $27.6 million in 2019, driven by higher sales from wholesalers and Kickstarter[15] - Kickstarter revenue increased from approximately $15.2 million in 2018 to about $16.8 million in 2019, attributed to the sales of four Kickstarter games launched in 2019[16] - North America and Europe accounted for approximately 87.5% and 92.8% of total revenue for the years ended December 31, 2019, and 2018, respectively[16] - Gross profit decreased by approximately 1.3% from about $14.8 million in 2018 to about $14.6 million in 2019, mainly due to increased inventory costs[22] - Gross margin fell by approximately 4.5 percentage points from about 52.5% in 2018 to about 48% in 2019, primarily due to lower profit margins on older inventory sold in the U.S.[22] - The company's profit attributable to equity holders decreased from approximately $2 million for the year ended December 31, 2018, to a loss of about $0.8 million for the year ended December 31, 2019, primarily due to increased professional service fees related to the transfer of listing[29] Strategic Initiatives - CMON Limited plans to establish a comprehensive office and warehouse in China in 2020, aiming to expand its workforce and enhance market penetration in the Asian market[13] - The company aims to enhance its game design capabilities and introduce high-quality intellectual properties as part of its long-term strategy for growth[13] - CMON Limited has initiated significant licensing agreements, including the highly anticipated "Marvel United" product, marking a diversification in its product strategy[8] - The company has a total of 93 games, including 87 board games, 3 model war games, 2 mobile games, and 1 computer game as of the report date[12] - The company successfully held the CMON Expo in Thailand in November 2019, highlighting its market focus in China and Southeast Asia[8] - The transition from GEM to the main board of the Hong Kong Stock Exchange occurred on November 19, 2019, reflecting the company's growth and strategic direction[6] - The company has no specific major investment plans but intends to acquire quality games to increase market share[40] - The company is exploring new markets in the Asia-Pacific region, including Japan, South Korea, Thailand, and Indonesia[51] Operational Expenses - Total sales and distribution expenses increased from approximately $5.7 million in 2018 to about $5.9 million in 2019, mainly due to increased patent expenses[25] - General and administrative expenses rose from about $5.6 million in 2018 to approximately $6.1 million in 2019, driven by professional service fees related to the listing transfer and game development expenses[26] - Financing costs increased from $229,650 in 2018 to $483,370 in 2019, primarily due to bank borrowings and the adoption of IFRS 16[27] - Other income rose from $80,232 in 2018 to $198,226 in 2019, mainly due to increased patent income[23] Cash Flow and Debt - As of December 31, 2019, the group had cash and cash equivalents of approximately $757,743, down from $2.8 million as of December 31, 2018[30] - Short-term bank borrowings increased from approximately $3.9 million as of December 31, 2018, to about $6.6 million as of December 31, 2019, due to an increase in the short-term financing limit from $2.5 million to $4 million[30] - The total bank borrowings of the group as of December 31, 2019, amounted to approximately $10.3 million, compared to $8.3 million as of December 31, 2018[32] - The group had a debt-to-asset ratio of approximately 44% as of December 31, 2019, compared to about 40.9% as of December 31, 2018[41] Shareholder Information - The board of directors did not recommend a final dividend for the year ending December 31, 2019, compared to zero in 2018[77] - The company reported a reserve available for distribution to equity holders of approximately $10.2 million as of December 31, 2019, compared to $9.6 million as of December 31, 2018[94] - Sales to the top five customers accounted for approximately 28.3% of the total revenue for the year ended December 31, 2019[89] - The top five suppliers accounted for approximately 98.0% of the total procurement, with the largest supplier alone accounting for about 66.0%[90] Corporate Governance - The company has a diverse board of directors with expertise in finance, law, and corporate governance, ensuring effective oversight[67][65] - The board consists of three executive directors, one non-executive director, and three independent non-executive directors as of December 31, 2019[146] - The company has achieved its measurable target of having at least one-third of the board members as independent non-executive directors[149] - The company has adopted a board diversity policy to enhance effectiveness, considering factors such as age, education, professional experience, and skills[147] - The board meets quarterly to review the operations led by the chairman and co-CEO, ensuring effective management and business development[142] - The company has established three board committees: Audit Committee, Remuneration Committee, and Nomination Committee to oversee specific matters[143] - The company has confirmed compliance with the non-competition agreement by its controlling shareholders for the year ended December 31, 2019[127] Risk Management and Internal Controls - The company has established a framework for risk management and internal control systems, which is regularly evaluated for adequacy and effectiveness[164] - The audit committee has been reviewing the effectiveness of the company's risk management and internal control systems, including discussions with management and independent third-party reports[186] - The company has engaged an independent third party to conduct an internal control review to ensure the effectiveness and adequacy of its internal control systems[183] - The company has implemented all internal control recommendations proposed by Mazars following an independent investigation report[187] Employee Relations - The company has maintained good working relationships with employees, with no labor disputes reported during the year[87] - The total employee cost for the year ended December 31, 2019, was approximately $3.4 million, consistent with the previous year[38] Environmental and Social Responsibility - The company has implemented measures to reduce paper usage and energy consumption in its operations[85] - The company has taken environmental considerations into account during product design and production phases[85] Share Options and Securities - As of December 31, 2019, the total number of options granted under the share option scheme amounted to 91,620,000 shares, representing 10% of the company's issued share capital[117] - The share option scheme was adopted to reward and recognize eligible participants for their contributions to the group[114] - The maximum number of shares that may be issued under the share option scheme is capped at 180,600,000 shares, which is equivalent to 10% of the total issued shares as of the report date[116] - No options were exercised, cancelled, or lapsed during the year ended December 31, 2019, indicating a total of 180,600,000 shares available for issuance under the share option scheme[120] Audit and Compliance - The total remuneration for auditors for the year ended December 31, 2019, was approximately $459,570, comprising $420,000 for audit services and $39,570 for non-audit services[188] - The company appointed a new auditor, Zhonghui Anda CPA Limited, for the year ending December 31, 2020, following the resignation of the previous auditor[138] - The audit committee reviewed the consolidated financial performance for the year ended December 31, 2019[135]