Greenpro Capital(US:GRNQ)2023-03-30 16:00Company Overview - Greenpro Capital Corp. was incorporated on July 19, 2013, and changed its name from "Greenpro, Inc." on May 6, 2015[7]. - The company has multiple subsidiaries, including Greenpro Resources Limited, which serves as a holding company, and Greenpro Management Consultancy Limited, which provides corporate advisory services in China[11]. - Greenpro has established a presence in multiple regions, including Hong Kong, Belize, and Malaysia, through its various subsidiaries[12]. Acquisitions and Investments - The acquisition of Greenpro Resources Limited was completed on July 31, 2015, with 907,000 shares issued and $25,500 in cash paid[14]. - Greenpro Venture Capital Limited was acquired on September 30, 2015, with 1,326,000 shares issued and $6,000 in cash paid[14]. - The acquisition of A&G International Limited on September 30, 2015, involved issuing 184,200 shares of restricted Common Stock[15]. - The acquisition of Falcon Accounting & Secretaries Limited and related companies was valued at approximately $1,081,704 based on an average share price of $5.2[15]. - Greenpro Holding Limited acquired 100% of Greenpro Global Capital Sdn. Bhd. after initially purchasing 40% for MYR1 (approximately $0.25) and increasing ownership through subsequent transactions[16]. - The acquisition of Greenpro Credit Limited was completed for a total consideration of $105,000, with the company aiming to enhance its money lending operations in Hong Kong[16]. - Greenpro Family Office Limited was fully acquired for an undisclosed amount, with the initial 51% stake purchased from the sole shareholder, followed by the acquisition of the remaining 49%[16]. - The acquisition of Greenpro Sparkle Brokers Limited was valued at $170,322, consisting of $129,032 in cash and 860 shares of common stock valued at $41,290, aimed at expanding insurance services[16]. - The company holds various minority investments, including 15% in Ata Plus Sdn. Bhd., which provides funding access for SMEs[18]. - The acquisition of New Business Media Sdn. Bhd. was completed for an 18% equity interest, focusing on news services[18]. Financial Performance - The company generated revenues of $3,673,997 during the fiscal year ended December 31, 2022, compared to $2,949,780 in the fiscal year ended December 31, 2021, reflecting a year-over-year increase of approximately 24.5%[44]. - Total revenue for fiscal year 2022 was $3,673,997, an increase of 24.5% compared to $2,949,780 for fiscal year 2021[65]. - The company incurred a net loss of $6,262,188 for the year ended December 31, 2022, compared to a net loss of $14,363,232 for the previous year, indicating a significant reduction in losses[66]. - The company recorded a negative cash flow of $2,402,769 in operating activities for the year ended December 31, 2022[68]. - The company reported a net loss attributed to common shareholders for the year ended December 31, 2022, was $6,350,872, a reduction from a net loss of $14,349,356 in 2021, indicating improved financial performance[168]. Operational Strategy - The company focuses on providing financial consulting and corporate services, with a significant emphasis on cross-border advisory solutions[11]. - Greenpro's strategy includes market expansion through acquisitions and the establishment of new subsidiaries to enhance service offerings[14]. - The venture capital business focuses on companies in South-East Asia and East Asia, with an emphasis on supporting start-ups and high growth companies during their seed, start-up, and expansion stages[37]. - The company plans to expand its corporate finance services in China, Hong Kong, Malaysia, and Thailand, enhancing its business network in these regions[60]. - The company intends to enhance its wealth management services to cater to the increasing number of high-net-worth individuals in the Asia Pacific region[62]. Regulatory and Compliance Issues - The company complies with the Hong Kong Personal Data (Privacy) Ordinance and has not faced any lawsuits or prosecutions for breaches of local regulations[51]. - The Employment Contract Law in China mandates that employers execute written contracts with employees within one month of employment, with penalties for non-compliance[52]. - The company maintains compliance with local laws in Malaysia and has not faced legal issues related to its operations[51]. - The company is required to make MPF contributions of 5% of employees' relevant income, with minimum and maximum income levels set at $7,100 and $30,000, respectively[51]. - The company has established effective disclosure controls and procedures as of December 31, 2022[129]. Corporate Governance - Lee, Chong Kuang has served as CEO and President since July 19, 2013, and has extensive experience in corporate strategy and accounting[132]. - Loke, Che Chan Gilbert has been CFO and Treasurer since inception on July 19, 2013, and has over 35 years of accounting experience[132]. - The board of directors includes a majority of independent directors, complying with NASDAQ Listing Rules[137]. - The company has established an Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee to oversee its responsibilities[139]. - The company has established a code of ethics applicable to all directors, officers, and employees, addressing conflicts of interest and compliance with laws[145]. Market Risks - Political instabilities in Malaysia may reduce investor confidence and foreign direct investment, adversely affecting business operations[78]. - The company may face difficulties enforcing judgments in the U.S. due to most assets and operations being located outside the country[79]. - Changes in PRC laws and regulations could adversely affect business operations and profitability, particularly regarding environmental regulations and service fees[81]. - Recent Chinese government measures may increase regulatory scrutiny on U.S.-listed companies, potentially impacting operations in Hong Kong and China[82]. - The company may face delisting under the Holding Foreign Companies Accountable Act if its auditors are not inspected for three consecutive years starting in 2021[83]. Investment Performance - The company recognized an impairment loss of $4,208,029 for equity securities without readily determinable fair values in 2022, compared to $5,349,600 in 2021[197]. - The company experienced a significant impairment of goodwill amounting to $263,247 in 2022, with additional impairments on related party investments totaling $4,814,279[170]. - The company’s cash and cash equivalents decreased from $5,338,571 in 2021 to $3,911,535 in 2022, a decline of approximately 26.6%[167]. - The company’s allowance for doubtful accounts was $25,677 in 2022, compared to $133,356 in 2021, reflecting a significant reduction in expected uncollectible accounts[177]. Future Outlook - The company expects to continue incurring losses and negative cash flows for the foreseeable future, with no assurance of achieving profitability[66]. - The independent registered public accounting firm raised substantial doubt about the company's ability to continue as a going concern due to ongoing losses[68]. - The company has raised concerns about its ability to continue as a going concern due to the net loss and cash used in operations, relying on financial support from major shareholders[173].