SOS(SOS) - 2023 Q2 - Quarterly Report

Interim Condensed Consolidated Balance Sheet Assets Total assets decreased by $25.4 million, driven by reduced current assets, notably cash and related party amounts Asset Overview (US$ thousands) | Metric | 31-Dec-22 (Audited) | 30-Jun-23 (Unaudited) | Change (US$ thousands) | % Change | | :-------------------------- | :------------------ | :-------------------- | :--------------------- | :------- | | Cash and cash equivalents | 259,492 | 249,884 | (9,608) | -3.70% | | Other receivables – net | 55,004 | 67,325 | 12,321 | 22.40% | | Amount due from related parties | 69,038 | 45,122 | (23,916) | -34.64% | | Total current assets | 441,188 | 416,157 | (25,031) | -5.67% | | Total non-current assets | 13,546 | 13,167 | (379) | -2.80% | | Total assets | 454,734 | 429,324 | (25,410) | -5.59% | Liabilities Total liabilities decreased by $6.6 million, primarily due to reductions in accrued liabilities and other payables Liabilities Overview (US$ thousands) | Metric | 31-Dec-22 (Audited) | 30-Jun-23 (Unaudited) | Change (US$ thousands) | % Change | | :-------------------------- | :------------------ | :-------------------- | :--------------------- | :------- | | Accrued liabilities | 20,385 | 16,875 | (3,510) | -17.22% | | Other payables | 11,081 | 7,223 | (3,858) | -34.82% | | Total current liabilities | 45,581 | 39,301 | (6,280) | -13.78% | | Total non-current liability | 377 | 95 | (282) | -74.80% | | Total liabilities | 45,958 | 39,396 | (6,562) | -14.28% | Shareholder's Equity Total shareholders' equity decreased by $17.3 million, driven by increased accumulated deficit and other comprehensive loss Shareholder's Equity Overview (US$ thousands) | Metric | 31-Dec-22 (Audited) | 30-Jun-23 (Unaudited) | Change (US$ thousands) | % Change | | :-------------------------- | :------------------ | :-------------------- | :--------------------- | :------- | | Additional paid-in capital | 705,488 | 707,516 | 2,028 | 0.29% | | Accumulated deficit | (272,919) | (283,727) | (10,808) | 3.96% | | Other comprehensive loss | (23,400) | (32,106) | (8,706) | 37.20% | | Total Shareholders' equity | 409,602 | 392,252 | (17,350) | -4.24% | Interim Condensed Consolidated Statements of Comprehensive Loss Revenue and Gross Profit Revenue more than halved, leading to a drastic reduction in gross profit and gross profit ratio for H1 2023 Revenue and Gross Profit (US$ thousands) | Metric | 30-Jun-22 (Unaudited) | 30-Jun-23 (Unaudited) | Change (US$ thousands) | % Change | | :---------------- | :-------------------- | :-------------------- | :--------------------- | :------- | | Revenue | 84,780 | 41,835 | (42,945) | -50.66% | | Net revenue | 84,755 | 41,806 | (42,949) | -50.67% | | Operating costs | (82,164) | (41,716) | 40,448 | -49.23% | | Gross profit | 2,591 | 90 | (2,501) | -96.53% | | Gross profit ratio| 3.1% | 0.2% | -2.9% | -93.55% | Operating Expenses Total operating expenses decreased by 48%, primarily due to a substantial reduction in share-based compensation Operating Expenses (US$ thousands) | Metric | 30-Jun-22 (Unaudited) | 30-Jun-23 (Unaudited) | Change (US$ thousands) | % Change | | :------------------------------ | :-------------------- | :-------------------- | :--------------------- | :------- | | Selling expense | (3,115) | (1,142) | 1,973 | -63.34% | | General and administrative expense | (6,697) | (9,354) | (2,657) | 39.67% | | Share-based compensation | (14,471) | (2,053) | 12,418 | -85.81% | | Total operating expenses | (24,283) | (12,630) | 11,653 | -48.00% | Net Loss and Earnings Per Share Net loss attributable to SOS Ltd improved by 25%, driven by lower operating expenses and a positive foreign currency adjustment Net Loss and EPS (US$ thousands, except per share data) | Metric | 30-Jun-22 (Unaudited) | 30-Jun-23 (Unaudited) | Change (US$ thousands) | % Change | | :------------------------------------------- | :-------------------- | :-------------------- | :--------------------- | :------- | | Loss from operations | (21,692) | (12,540) | 9,152 | -42.19% | | Net loss - continuing operations | (21,823) | (12,194) | 9,629 | -44.17% | | Income from discontinued operations | 6,921 | - | (6,921) | -100.00% | | Net loss attributable to SOS Ltd | (14,333) | (10,697) | 3,636 | -25.37% | | Foreign currency translation adjustment-net of tax | (10,739) | 8,706 | 19,445 | -181.08% | | Total comprehensive loss | (25,072) | (1,991) | 23,081 | -92.06% | | Basic Loss Per Share | (0.0046) | (0.0031) | 0.0015 | -32.61% | - Share-based compensation expenses decreased significantly from $14.5 million in H1 2022 to $2.1 million in H1 2023[4] Interim Condensed Consolidated Statement of Cash Flow Operating Activities Net cash used in operating activities from continuing operations decreased by over 97%, driven by favorable working capital changes Cash Flow from Operating Activities (US$ thousands) | Metric | 30-Jun-22 (Unaudited) | 30-Jun-23 (Unaudited) | Change (US$ thousands) | % Change | | :------------------------------------------------- | :-------------------- | :-------------------- | :--------------------- | :------- | | Net loss from continuing operation | (21,254) | (10,697) | 10,557 | -49.67% | | Depreciation and amortization | 2,399 | 106 | (2,293) | -95.58% | | Share-based compensation | 14,472 | 2,054 | (12,418) | -85.81% | | Operating cash flows before movements in working capital | (3,138) | (8,169) | (5,031) | 160.33% | | Changes in working capital: Amount due from related parties | (10,045) | 23,916 | 33,961 | -338.09% | | Changes in working capital: Other receivables | (110,435) | (12,321) | 98,114 | -88.84% | | Net cash used in operating activities from continuing operations | (88,706) | (1,981) | 86,725 | -97.77% | | Net cash used in operating activities | (104,317) | (1,981) | 102,336 | -98.10% | Investing Activities Investing activities shifted from a net cash generation of $1.6 million to no cash generation in the current period Cash Flow from Investing Activities (US$ thousands) | Metric | 30-Jun-22 (Unaudited) | 30-Jun-23 (Unaudited) | Change (US$ thousands) | % Change | | :------------------------------------------------- | :-------------------- | :-------------------- | :--------------------- | :------- | | Proceeds from disposal of property, equipment and software | 132 | - | (132) | -100.00% | | Net cash generated from investing activities | 1,597 | - | (1,597) | -100.00% | Financing Activities Financing activities shifted from a net cash inflow of $18.5 million to a net outflow of $0.288 million due to lease repayments Cash Flow from Financing Activities (US$ thousands) | Metric | 30-Jun-22 (Unaudited) | 30-Jun-23 (Unaudited) | Change (US$ thousands) | % Change | | :------------------------------------------------- | :-------------------- | :-------------------- | :--------------------- | :------- | | Proceeds from share issuance, net of issuance costs | 18,483 | - | (18,483) | -100.00% | | Repayment of principle portion of lease liabilities | - | (288) | (288) | N/A |\ | Net cash generated from/(used in) financing activities | 18,483 | (288) | (18,771) | -101.56% | | Net decrease on cash and cash equivalents | (84,237) | (2,269) | 81,968 | -97.30% | | Cash and cash equivalents at end of the period | 243,744 | 249,884 | 6,140 | 2.52% |