Cheer Holding, Inc 6-K, filed Mar 14, 2024
Cheer Holding, Inc. (CHR)
About this 6-K
Cheer Holding, Inc filed this 6-K on March 14, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of March, 2024
Commission File Number: 001-38631
Cheer Holding, Inc.
22F, Block B, Xinhua Technology Building,
No. 8 Tuofangying South Road,
Jiuxianqiao, Chaoyang District, Beijing, China 100016
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Press Release - Cheer Holding Reports Full Year 2023 Financial Results – March 14, 2024 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Cheer Holding, Inc. | ||
| By: | /s/ Bing Zhang | |
| Name: | Bing Zhang | |
| Title: | Chief Executive Officer | |
Dated: March 14, 2024
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Exhibit 99.1
Cheer Holding Reports Full Year 2023 Financial Results
BEIJING, March 14, 2024 (GLOBE NEWSWIRE) -- Cheer Holding, Inc. (NASDAQ: CHR) (“Cheer Holding,” or the “Company”), a leading provider of advanced mobile internet infrastructure and platform services, today announced its financial results for the full year ended December 31, 2023.
Full Year 2023 Operating Highlights
Total Downloads of CHEERS Apps was approximately 474 million as of December 31, 2023, compared to approximately 377 million as of December 31, 2022. Specifically:
CHEERS Video
| ● | Monthly Active Users of CHEERS Video increased by 5% to approximately 50.1 million. |
| ● | Daily Time Spent on CHEERS Video was 59 minutes during the commercial year of 2023. |
CHEERS e-Mall
| ● | Monthly Active Users of CHEERS e-Mall increased by 71% to approximately 6.5 million. |
| ● | Repurchase Rate on CHEERS e-Mall was 39.6% during the commercial year of 2023. |
CheerReal
| ● | Monthly Active Users of CheerReal platform was approximately 1.3 million. |
| ● | Number of Digital Art Collections listed on CheerReal platform was 767 units. |
CHEERS Telepathy
| ● | Monthly Active Users of CHEERS Telepathy platform was approximately 300 thousand. |
CHEERS Open Data
| ● | Total Number of User Engagement was 27 million. |
| ● | Platform Daily Usage was more than 150 thousand. |
Full Year 2023 Financial Highlights
| ● | Revenues reached $152.3 million. |
| ● | Net Income reached $30.5 million. |
| ● | Net Cash Provided by Operating Activities was approximately $42.2 million. |
Full Year 2023 Selected Financial Results
Revenues
Our revenues for the year ended December 31, 2023 were approximately $152.3 million, representing a decrease of approximately $4.8 million, or 3.03% from approximately $157.1 million for the year ended December 31, 2022. The change in revenues was mainly affected by depreciation of RMB during the year ended December 31, 2023, leading to a lower USD amount in translation of revenues from RMB into USD.
Without the impact of fluctuation of foreign exchange rates, our revenues for the year ended December 31, 2023 increased by approximately RMB22.1 million (approximately $3.1 million), or 2.09% as compared with the revenues for the same period of 2022. The increase in the revenues was primarily attributable to increase in advertising revenues of approximately RMB32.4 million as a result of continuous efforts to expand our customer base through improving our content production quality.
For the years ended December 31, 2023 and 2022, 97.9% and 96.8% of our revenues derived from advertising services.
Operating expenses
Operating expenses consists of cost of revenues, selling and marketing, general and administrative and research and development expense.
| ● | Cost of revenues decreased by approximately $1.0 million, or 2.54%, from approximately $40.6 million for the year ended December 31, 2022 to approximately $39.5 million for the year ended December 31, 2023. Similar to the changes in revenues, the decrease in cost of revenues was primarily caused by depreciation of RMB during the year ended December 31, 2023. |
| ● | Sales and marketing expenses decreased by approximately $6.3 million, to approximately $76.2 million for the year ended December 31, 2023 from approximately $82.5 million for the year ended December 31, 2022. The decrease was mainly due to a decrease in promotion service charge of approximately $5.9 million because the Company reduced cost in marketing and promotion. |
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| ● | General and administrative expenses was stable at approximately $5.7 million and $5.9 million, respectively, for the year ended December 31, 2023 and 2022. |
| ● | Research and development expenses for the years ended December 31, 2023 and 2022 were approximately $1.6 million and approximately $1.3 million, respectively. Such increase was primarily due to the continued investment in the IT infrastructure, user-friendliness upgrades, and continual implementation on content driven strategies. |
Net income
We had a net income of approximately $30.5 million in the year ended December 31, 2023, as compared to a net income of approximately $26.4 million in the year ended December 31, 2022.
Cash, cash equivalents and working capital
As of December 31, 2023 and 2022, the Company’s principal sources of liquidity were cash and cash equivalents of approximately $194.2 million and $70.5 million, respectively. Working capital at December 31, 2023 was approximately $260.7 million.
About Cheer Holding, Inc.
As a preeminent provider of next-generation mobile internet infrastructure and platform services in China, Cheer Holding is dedicated to building a digital ecosystem that integrates “platforms, applications, technology, and industry” into a cohesive system, thereby creating a new, open business environment for web3.0 that leverages AI technology. The Company is developing a 5G+VR+AR+AI shared universe space that builds on cutting-edge technologies including blockchain, cloud computing, extended reality, and digital twin.
Cheer Holding’s portfolio includes a wide range of products and services, such as Polaris Intelligent Cloud, CHEERS Telepathy, CHEERS Open Data Platform, CHEERS Video, CHEERS e-Mall, CheerReal, CheerCar, CheerChat, CHEERS Fresh Group-Buying E-commerce Platform, Digital Innovation Research Institute, CHEERS Livestreaming, variety show series, IP short video matrix, and more. These offerings provide diverse application scenarios that seamlessly blend “online/offline” and “virtual/reality” elements.
With “CHEERS+” at the core of Cheer Holding’s ecosystem, the Company is committed to consolidating and strengthening its core competitiveness, and achieving long-term sustainable and scalable growth.
For more information, please visit http://ir.gsmg.co/.
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Safe Harbor Statement
Certain statements made in this release are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, are: the ability to manage growth; ability to identify and integrate other future acquisitions; ability to obtain additional financing in the future to fund capital expenditures; fluctuations in general economic and business conditions; costs or other factors adversely affecting our profitability; litigation involving patents, intellectual property, and other matters; potential changes in the legislative and regulatory environment; a pandemic or epidemic; the occurrence of any event, change or other circumstances that could affect the Company’s ability to continue successful development and launch of its metaverse experience centers; the possibility that the Company may not succeed in developing its new lines of businesses due to, among other things, changes in the business environment and technological developments, competition, changes in regulation, or other economic and policy factors; disruptions or other business interruptions that may affect the operations of our products and services, the possibility that the Company’s new lines of business may be adversely affected by other economic, business, and/or competitive factors; other factors, risks and uncertainties set forth in documents filed by the Company with the Securities and Exchange Commission from time to time, including the Company’s latest Annual Report on Form 20-F filed with the SEC on March 22, 2023, as amended. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Such information speaks only as of the date of this release.
For investor and media inquiries, please contact:
Wealth Financial Services LLC
Connie Kang, Partner
Email: ckang@wealthfsllc.com
Tel: +86 1381 185 7742 (CN)
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CHEER HOLDING,
INC.
(Formerly known as “Glory Star New Media Group Holdings Limited”)
CONSOLIDATED BALANCE SHEETS
(In U.S. dollars in thousands, except share and per share data)
| December 31, 2023 | December 31, 2022 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 194,227 | $ | 70,482 | ||||
| Restricted cash | 298 | - | ||||||
| Accounts receivable, net | 81,170 | 98,034 | ||||||
| Prepayment and other current assets | 31,179 | 15,329 | ||||||
| Total current assets | 306,874 | 183,845 | ||||||
| Property, plant and equipment, net | 85 | 160 | ||||||
| Intangible assets, net | 20,255 | 20,297 | ||||||
| Deferred tax assets | 41 | 103 | ||||||
| Unamortized produced content, net | - | 807 | ||||||
| Right-of-use assets | 377 | 750 | ||||||
| Prepayment and other non-current assets, net | - | 1 | ||||||
| Total non-current assets | 20,758 | 22,118 | ||||||
| TOTAL ASSETS | $ | 327,632 | $ | 205,963 | ||||
| Liabilities and Equity | ||||||||
| Current liabilities: | ||||||||
| Short-term bank loans | $ | 4,216 | $ | 4,421 | ||||
| Accounts payable | 9,599 | 6,405 | ||||||
| Contract liabilities | 130 | 147 | ||||||
| Accrued liabilities and other payables | 3,764 | 2,632 | ||||||
| Other taxes payable | 28,178 | 19,090 | ||||||
| Lease liabilities current | 330 | 208 | ||||||
| Total current liabilities | 46,217 | 32,903 | ||||||
| Long-term bank loan | 1,408 | - | ||||||
| Lease liabilities non-current | - | 471 | ||||||
| Warrant liability | - | 86 | ||||||
| Total non-current liabilities | 1,408 | 557 | ||||||
| TOTAL LIABILITIES | $ | 47,625 | $ | 33,460 | ||||
| Equity | ||||||||
| Ordinary shares (par value of $0.001 per share; 200,000,000 shares authorized as of December 31, 2023 and 2022; 10,070,012 and 6,812,440 shares issued and outstanding as of December 31, 2023 and 2022, respectively)* | $ | 10 | $ | 7 | ||||
| Additional paid-in capital | 106,215 | 27,009 | ||||||
| Statutory reserve | 1,411 | 1,411 | ||||||
| Retained earnings | 181,162 | 150,685 | ||||||
| Accumulated other comprehensive loss | (8,869 | ) | (6,684 | ) | ||||
| TOTAL CHEER HOLDING, INC SHAREHOLDERS’ EQUITY | 279,929 | 172,428 | ||||||
| Non-controlling interest | 78 | 75 | ||||||
| TOTAL EQUITY | 280,007 | 172,503 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 327,632 | $ | 205,963 | ||||
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CHEER HOLDING, INC.
(Formerly known as “Glory Star New Media Group Holdings Limited”)
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In U.S. dollars in thousands, except share and per share data)
| For the Years Ended December 31, | ||||||||||||
| 2023 | 2022 | 2021 | ||||||||||
| Revenues | $ | 152,327 | $ | 157,079 | $ | 153,012 | ||||||
| Operating expenses: | ||||||||||||
| Cost of revenues | (39,549 | ) | (40,580 | ) | (34,944 | ) | ||||||
| Selling and marketing | (76,200 | ) | (82,534 | ) | (77,520 | ) | ||||||
| General and administrative | (5,658 | ) | (5,908 | ) | (3,341 | ) | ||||||
| Research and development | (1,635 | ) | (1,331 | ) | (920 | ) | ||||||
| Total operating expenses | (123,042 | ) | (130,353 | ) | (116,725 | ) | ||||||
| Income from operations | 29,285 | 26,726 | 36,287 | |||||||||
| Other income (expenses): | ||||||||||||
| Interest income (expense), net | 3 | (93 | ) | (513 | ) | |||||||
| Change in fair value of warrant liability | 86 | (62 | ) | 809 | ||||||||
| Other income (expense), net | 1,215 | 282 | (255 | ) | ||||||||
| Total other income | 1,304 | 127 | 41 | |||||||||
| Income before income tax | 30,589 | 26,853 | 36,328 | |||||||||
| Income tax expense | (61 | ) | (413 | ) | (976 | ) | ||||||
| Net income | 30,528 | 26,440 | 35,352 | |||||||||
| Less: net gain (loss) attributable to non-controlling interest | 51 | (450 | ) | 65 | ||||||||
| Net income attributable to Cheer Holding, Inc.’s shareholders | $ | 30,477 | $ | 26,890 | $ | 35,287 | ||||||
| Other comprehensive income (loss) | ||||||||||||
| Unrealized foreign currency translation (loss) gain | (2,233 | ) | (13,357 | ) | 2,945 | |||||||
| Comprehensive income | 28,295 | 13,083 | 38,297 | |||||||||
| Less: comprehensive gain (loss) attributable to non-controlling interests | 3 | (478 | ) | 119 | ||||||||
| Comprehensive income attributable to Cheer Holding, Inc.’s shareholders | $ | 28,292 | $ | 13,561 | $ | 38,178 | ||||||
| Earnings per ordinary share | ||||||||||||
| Basic and dilutive* | $ | 3.53 | $ | 3.95 | $ | 5.40 | ||||||
| Weighted average shares used in calculating earnings per ordinary share | ||||||||||||
| Basic and dilutive* | 8,637,504 | 6,812,387 | 6,538,118 | |||||||||
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CHEER HOLDING,
INC.
(Formerly known as “Glory Star New Media Group Holdings Limited”)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. dollars in thousands)
| For the Years Ended December 31, | ||||||||||||
| 2023 | 2022 | 2021 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
| Net income | $ | 30,528 | $ | 26,440 | $ | 35,352 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Provision (reversal of provision) for doubtful accounts | 2,096 | 440 | (268 | ) | ||||||||
| Provision for unamortized produced content | 112 | 770 | - | |||||||||
| Depreciation and amortization | 3,385 | 2,884 | 2,090 | |||||||||
| Amortization of right-of-use assets | 394 | 454 | 426 | |||||||||
| Deferred income tax expense (benefits) | 63 | (53 | ) | 713 | ||||||||
| Share based compensation for employees | - | - | 4 | |||||||||
| Share based compensation for non-employees | - | 391 | 181 | |||||||||
| Loss on disposal of property and equipment | 2 | - | - | |||||||||
| Gains on disposal of a subsidiary | - | - | (26 | ) | ||||||||
| Amortization of loan origination fees | 16 | 76 | 104 | |||||||||
| Change in fair value of warrant liability | (86 | ) | 62 | (809 | ) | |||||||
| Changes in assets and liabilities | ||||||||||||
| Accounts receivable | 15,205 | (42,105 | ) | 19,904 | ||||||||
| Prepayment and other current assets | (22,270 | ) | 16,872 | (10,681 | ) | |||||||
| Unamortized produced content | 682 | 170 | (537 | ) | ||||||||
| Accounts payable | 3,325 | (5,576 | ) | 4,750 | ||||||||
| Contract liabilities | (14 | ) | (356 | ) | (87 | ) | ||||||
| Accrued liabilities and other payables | (370 | ) | 565 | (9,236 | ) | |||||||
| Other taxes payable | 9,477 | 7,346 | 4,964 | |||||||||
| Lease liabilities | (371 | ) | (641 | ) | (389 | ) | ||||||
| Net cash provided by operating activities | 42,174 | 7,739 | 46,455 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
| Purchase of property, plant and equipment | (3 | ) | (25 | ) | (72 | ) | ||||||
| Prepayments for acquisition of intangible assets | - | (7,964 | ) | (2,718 | ) | |||||||
| Cash disposed for sales of subsidiaries | - | - | (12 | ) | ||||||||
| Return for short term investment | - | - | 1,751 | |||||||||
| Net cash used in investing activities | (3 | ) | (7,989 | ) | (1,051 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
| Proceeds from short-term bank loans | 4,660 | 6,096 | 5,114 | |||||||||
| Repayments of short-term bank loans | (4,802 | ) | (6,244 | ) | (6,818 | ) | ||||||
| Proceeds from long-term bank loans | 1,412 | - | - | |||||||||
| Payment of loan origination fees | (58 | ) | (87 | ) | (68 | ) | ||||||
| Contribution from shareholders | (791 | ) | 743 | - | ||||||||
| Borrowings from related parties | 1,600 | - | - | |||||||||
| Repayments to related parties | - | - | (232 | ) | ||||||||
| Proceeds from issuance of ordinary shares in connection with a private placement | 80,000 | - | 15,290 | |||||||||
| Net cash provided by financing activities | 82,021 | 508 | 13,286 | |||||||||
| Effect of exchange rate changes | (149 | ) | (7,078 | ) | 881 | |||||||
| Net increase (decrease) in cash and cash equivalents | 124,043 | (6,820 | ) | 59,571 | ||||||||
| Cash, cash equivalents and restricted cash, at beginning of year | 70,482 | 77,302 | 17,731 | |||||||||
| Cash, cash equivalents and restricted cash, at end of year | $ | 194,525 | $ | 70,482 | $ | 77,302 | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||||||
| Interests paid | $ | 271 | $ | 247 | $ | 336 | ||||||
| Income tax paid | $ | - | $ | - | $ | - | ||||||
| NONCASH INVESTING AND FINANCING ACTIVITIES | ||||||||||||
| Acquisition of intangible assets from prepayments | $ | 4,464 | $ | - | $ | - | ||||||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS
| December 31, 2023 | December 31, 2022 | |||||||
| Cash and cash equivalents | $ | 194,227 | $ | 70,482 | ||||
| Restricted cash | 298 | - | ||||||
| $ | 194,525 | $ | 70,482 | |||||
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