Greenpro Capital(GRNQ) - 2020 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION Condensed Consolidated Financial Statements Unaudited Q1 2020 financials show decreased assets/liabilities, increased revenue, and reduced net loss, but negative operating cash flow and working capital deficiency raise going concern doubts Condensed Consolidated Balance Sheets As of March 31, 2020, total assets and liabilities decreased, leading to a decline in stockholders' equity and a $2.22 million working capital deficiency Condensed Consolidated Balance Sheet Highlights (in U.S. dollars) | Balance Sheet Item | March 31, 2020 (Unaudited) | December 31, 2019 | | :--- | :--- | :--- | | Total Current Assets | $1,051,315 | $1,798,245 | | Total Assets | $7,751,302 | $8,884,453 | | Total Current Liabilities | $3,269,285 | $3,876,271 | | Total Liabilities | $4,673,450 | $5,530,612 | | Total Stockholders' Equity | $3,077,852 | $3,353,841 | - $2,217,970 working capital deficiency as of March 31, 2020, raises substantial doubt about going concern[12] Condensed Consolidated Statements of Operations and Comprehensive Loss Q1 2020 saw total revenues increase by 76.7% to $816,541, significantly narrowing the loss from operations to $233,507 and reducing net loss to $243,215 Statement of Operations Summary (Three Months Ended March 31) | Metric | 2020 | 2019 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $816,541 | $462,048 | +76.7% | | Service Revenue | $793,713 | $433,059 | +83.3% | | Loss from Operations | ($233,507) | ($690,496) | -66.2% | | Net Loss | ($242,515) | ($561,889) | -56.8% | | Net Loss per Share | ($0.00) | ($0.01) | N/A | Condensed Consolidated Statements of Cash Flows Q1 2020 saw net cash used in operating activities at $572,935, with a net cash inflow from financing activities, resulting in a $577,525 decrease in total cash Cash Flow Summary (Three Months Ended March 31) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | ($572,935) | ($623,578) | | Net cash used in investing activities | ($24,887) | ($60,814) | | Net cash provided by (used in) financing activities | $22,661 | ($38,364) | | Net Change in Cash | ($577,525) | ($719,733) | | Cash, End of Period | $679,214 | $1,452,315 | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, business operations, a 'going concern' warning, COVID-19 impact, revenue disaggregation, and Yabez subsidiary deconsolidation - Financial condition, including a net loss of $242,515 and a working capital deficiency of $2,217,970 in Q1 2020, raises substantial doubt about going concern[12] - The COVID-19 pandemic has negatively impacted the global economy and could adversely affect service demand, with unpredictable full magnitude[14] - On February 29, 2020, the company sold its 60% interest in Yabez subsidiary for $1, incurring a $727 loss on disposal[70][71] Revenue by Service Line (Q1 2020 vs Q1 2019) | Service Line | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Corporate advisory – Non-listing services | $451,713 | $433,059 | | Corporate advisory – Listing services | $342,000 | $0 | | Rental of real estate properties | $22,828 | $28,989 | | Total revenue | $816,541 | $462,048 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes Q1 2020 revenue growth and reduced operating loss to business services, but weak liquidity and working capital deficiency raise going concern doubts, noting the Yabez subsidiary sale Results of Operations Q1 2020 total revenue grew to $816,541 driven by an 83.3% increase in service business revenue, while operating costs decreased, significantly reducing net loss to $242,515 Comparison of Operations (Three Months Ended March 31) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Total Revenues | $816,541 | $462,048 | | Service Business Revenue | $793,713 | $433,059 | | Total Operating Costs & Expenses | $1,050,048 | $1,152,544 | | Net Loss | ($242,515) | ($561,889) | Liquidity and Capital Resources Precarious liquidity, with cash at $679,214, net loss, negative operating cash flow, and a $2.2 million working capital deficiency, raises substantial doubt about going concern - Cash balance decreased from $1,256,739 at December 31, 2019, to $679,214 at March 31, 2020[108] - Going concern ability depends on improving profitability and securing financial support from shareholders or external financing[110] - Net cash used in operating activities was $572,935 for Q1 2020, primarily due to net loss and decreases in accounts payable and deferred revenue[112] - Total revenue increased by $354,493 in Q1 2020 compared to Q1 2019, primarily due to increased business services revenue[81] - Loss from operations decreased from $690,496 in Q1 2019 to $233,507 in Q1 2020, mainly due to increased service revenue[84] - Going concern is in doubt due to a net loss of $242,515, negative operating cash flow of $572,935, and a working capital deficiency of $2,217,970 as of March 31, 2020[109] - On February 29, 2020, the company sold its 60% interest in the Yabez subsidiaries due to continuing losses[92] Quantitative and Qualitative Disclosures About Market Risk The company is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a 'smaller reporting company' - The company is exempt from providing quantitative and qualitative disclosures about market risk as a 'smaller reporting company'[116] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2020, with no material changes in internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of March 31, 2020[117] - No material changes in internal control over financial reporting occurred during the quarter[118] PART II — OTHER INFORMATION Legal Proceedings The company is not aware of any material, active, or pending legal proceedings against it - No material, active, or pending legal proceedings are against the company[122] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities were reported during the period - None reported[123] Defaults Upon Senior Securities The company reported no defaults upon senior securities - None reported[123] Exhibits This section lists the exhibits filed with the report, including required certifications by principal executive and financial officers - The report includes certifications from the principal executive and financial officers under Rule 13(a)-14(a)/15(d)-14(a) and Section 1350[121]