Cheer Holding, Inc 6-K, filed Jul 22, 2022
Cheer Holding, Inc. (CHR)
About this 6-K
Cheer Holding, Inc filed this 6-K on July 22, 2022.
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 July 2022
Commission File Number: 001-38631
GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED
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 ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Exhibit Index
| Exhibit | Exhibit Description | |
| 99.1 | Press Release - Glory Star Reports First Half Year 2022 Unaudited Financial Results |
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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.
| Glory Star New Media Group Holdings Limited | ||
| By: | /s/ Bing Zhang | |
| Name: | Bing Zhang | |
| Title: | Chief Executive Officer | |
| Dated: July 22, 2022 | ||
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Exhibit 99.1
Glory Star Reports First Half Year 2022 Unaudited Financial Results
Beijing, July 22, 2022 (PRNewswire) — Glory Star New Media Group Holdings Limited (NASDAQ: GSMG) (“Glory Star”, the “Company” or “we”), a leading digital media platform and content-driven e-commerce company in China, today announced its unaudited financial results for the first half year of 2022 ended June 30, 2022.
First Half 2022 Operating Highlights
| ● |
Downloads of the CHEERS Video App increased to approximately 300.6 million as of June 30, 2022, compared to approximately 215.6 million as of June 30, 2021.
| |
| ● | Downloads of the CHEERS e-Mall App increased to approximately 20.4 million as of June 30, 2022, compared to approximately 3.8 million as of June 30, 2021. |
| ● |
Monthly Active Users (“MAU”) of the CHEERS Video App increased to approximately 45.8 million from 43.2 million in the same period of 2021.
| |
| ● | MAU of the CHEERS e-Mall App increased to approximately 3.0 million from 1.4 million in the same period of 2021. |
| ● | Repurchase Rate (“RPR”) for CHEERS e-Mall was approximately 42.4%. | |
| ● | Daily Time Spent (“DTS”) on CHEERS Video was approximately 56 minutes. |
First Half 2022 Key Operating Results
The Company monitors the following key metrics to evaluate the growth of its business, measure the effectiveness of its marketing efforts, identify trends affecting its business, and make strategic decisions.
Downloads. We view the number of downloads at the end of a given period as a key indicator of the attractiveness and usability of our Video platform and the increased traffic to our e-Mall platform. As of June 30, 2022, downloads of our CHEERS Video and e-Mall Apps were approximately 300.6 million and 20.4 million respectively, representing an increase of 39.4% and 436.8% respectively as compared to the same period in 2021.
MAU. MAU is defined as a user who has logged in or accessed the Company’s CHEERS Video App and CHEERS e-Mall App. We calculate MAU using internal company data based on the activity of the user account and as adjusted to remove “duplicate” accounts. MAU is a tool that our management uses to manage their operations. In particular, our management sets targets of MAU and monitors the MAU to see whether to make adjustments as to the promotional activities, advertising campaign, and/or online video contents. For the six months ended June 30, 2022, the average MAU of our CHEERS Video and e-Mall Apps were 45.8 million and 3.0 million, growing 6.0% and 114.3% respectively as compared to the same period in 2021.
RPR. We track RPR to analyze the effectiveness of our marketing as well as customers retention, which is vital to our e-Mall. RPR is calculated as the percentage of our customers who have placed more than one order within a certain period of time. For the 180 days period during the first half of 2022, our CHEERS e-Mall RPR was 42.4%.
DTS. We measure DTS as an additional metric to evaluate the attractiveness of our video content and stickiness of users. The average DTS using our CHEERS Video during first half 2022 was 56 minutes.
First Half 2022 Financial Results
Revenues in the first half year of 2022 were US$69.9 million compared to US$71.9 million in the same period of 2021, which approximately maintained at the same level.
Total operating expenses in the first half year of 2022 were US$59.4 million, compared to US$55.7 million in the same period of 2021.
| ● | Cost of revenues were US$14.6 million and US$13.2 million for the first half year of 2022 and 2021, mainly due to the update of the Company’s product portfolio to increase concentration on customized product, resulting high operating expenditure. |
| ● | Sales and marketing expenses were US$42.5 million and US$39.8 million for the first half year of 2022 and 2021, mainly due to an increase in marketing and advertising fees to enhance the Company’s brand recognition and user traffic generation. |
| ● | General and administrative expenses in the first half year of 2022 decreased by 21.6% to US$1.8 million from US$2.3 million in the same period of 2021, as a result of the uncertainty of the macro-economic environment and impact of the ongoing COVID-19 pandemic, and improvement by the Company’s management of its human capital efficiency and bringing its lean operations strategy to the next level. |
| ● | Research and development expenses were US$0.5 million and US$0.3 million for the first half year of 2022 and 2021, respectively. |
Income from operations in the first half year of 2022 was US$10.5 million, compared to US$16.2 million in the same period of 2021.
Net income attributable to ordinary shareholders were US$10.8 million and US$16.9 million for the first half year of 2022 and 2021, respectively.
Basic and diluted earnings per share in the first half year of 2022 were US$0.16 and US$0.16, respectively, compared to US$0.27 and US$0.27, respectively, in the same period of 2021.
Net cash used in operating activities in the first half year of 2022 was US$30.6 million, compared to US$11.9 million in the same period of 2021.
As of June 30, 2022, the Company had cash and cash equivalents of US$44.8 million, compared to US$77.3 million as of December 31, 2021.
About Glory Star New Media Group Holdings Limited
Since its establishment in 2016, Glory Star has been laser focused on developing an ecosystem for its users that incorporates quality content, e-commerce, social networking, and gaming. The Company continues to integrate its cutting edge blockchain technologies, massive user base from its CHEERS ecosystem, quality content offerings, and its well-established e-commerce platform, and through the right application of 5G, AR, VR and NFT technologies to develop a metaverse boasting a wide range of “online + offline” and “virtual + reality” scenarios. Glory Star’s CHEERS Video and e-Mall platforms provide a solid foundation for it to rapidly develop different entertainment and shopping applications for the metaverse. Glory Star also provides a suite of tools for its users to facilitate the development of new content by creators. The Company is remaining at the forefront of disrupting the way new media and e-commerce is operated. For more information, please visit http://ir.gsmg.co/.
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Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses non-GAAP measures, such as non-GAAP operating income/(loss) and non-GAAP net income/(loss) attributable to ordinary shareholders, as supplemental measures to review and assess operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company defines non-GAAP operating income/ (loss) as operating income/ (loss) excluding share-based compensation expenses. The Company defines non-GAAP net income/ (loss) attributable to ordinary shareholders as net income/ (loss) attributable to ordinary shareholders excluding share-based compensation expenses.
The Company presents these non-GAAP financial measures because they are used by management to evaluate operating performance and formulate business plans. The Company believes that the non-GAAP financial measures help identify underlying trends in its business by excluding the impact of share-based compensation expenses, which is a non-cash charge. The Company also believes that the non-GAAP financial measures could provide further information about the Company’s results of operations, and enhance the overall understanding of the Company’s past performance and future prospects.
The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. The Company’s non-GAAP financial measures do not reflect all items of income and expense that affect the Company’s operations and do not represent the residual cash flow available for discretionary expenditures. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating performance. The Company encourages you to review the Company’s financial information in its entirety and not rely on a single financial measure.
For more information on the non-GAAP financial measures, please see the table captioned “Glory Star New Media Group Holdings Limited Reconciliation of GAAP and Non-GAAP results” set forth at the end of this press release.
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 the Company’s 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; 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, competition, changes in regulation, or other economic and policy factors; 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 (the “SEC”) from time to time, including the Company’s Annual Report on Form 20-F filed with the SEC on March 8, 2022. 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.
Contacts
Glory Star New Media Group Holdings Limited
Yida Ye
Email: yeyida@gsmg.co
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GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In U.S. dollars in thousands, except share and per share data)
| December 31, 2021 | June 30, 2022 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 77,302 | $ | 44,777 | ||||
| Accounts receivable, net | 63,135 | 79,152 | ||||||
| Prepayment and other current assets | 13,103 | 30,508 | ||||||
| Total current assets | 153,540 | 154,437 | ||||||
| Property, plant and equipment, net | 242 | 207 | ||||||
| Intangible assets, net | 16,718 | 15,158 | ||||||
| Deferred tax assets | 56 | 390 | ||||||
| Unamortized produced content, net | 1,874 | 1,672 | ||||||
| Right-of-use assets | 1,298 | 1,031 | ||||||
| Prepayment and other current assets, net | 21,445 | 20,371 | ||||||
| Total non-current assets | 41,633 | 38,829 | ||||||
| TOTAL ASSETS | $ | 195,173 | $ | 193,266 | ||||
| Liabilities and Equity | ||||||||
| Current liabilities: | ||||||||
| Short-term bank loans | $ | 4,998 | $ | 5,601 | ||||
| Accounts payable | 12,878 | 6,570 | ||||||
| Advances from customers | 536 | 121 | ||||||
| Accrued liabilities and other payables | 2,251 | 2,110 | ||||||
| Other taxes payable | 13,104 | 15,451 | ||||||
| Operating lease liabilities -current | 291 | 429 | ||||||
| Due to related parties | 500 | - | ||||||
| Total current liabilities | 34,558 | 30,282 | ||||||
| Operating lease liabilities - non-current | 1,127 | 730 | ||||||
| Warrant liability | 24 | 22 | ||||||
| Total non-current liabilities | 1,151 | 752 | ||||||
| TOTAL LIABILITIES | $ | 35,709 | $ | 31,034 | ||||
| Equity | ||||||||
| Preferred shares (par value of $0.0001 per share; 2,000,000 authorized; none issued and outstanding) | $ | - | $ | - | ||||
| Ordinary shares (par value of $0.0001 per share; 200,000,000 shares authorized as of December 31, 2021 and June 30, 2022; 68,122,402 and 68,124,402 shares issued and outstanding as of December 31, 2021 and June 30, 2022, respectively) | $ | 7 | $ | 7 | ||||
| Additional paid-in capital | 25,629 | 26,131 | ||||||
| Statutory reserve | 1,224 | 1,396 | ||||||
| Retained earnings | 123,982 | 134,617 | ||||||
| Accumulated other comprehensive gain | 8,069 | (101 | ) | |||||
| TOTAL GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED SHAREHOLDERS’ EQUITY | 158,911 | 162,050 | ||||||
| Non-controlling interest | 553 | 182 | ||||||
| TOTAL EQUITY | 159,464 | 162,232 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 195,173 | $ | 193,266 | ||||
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GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(In U.S. dollars in thousands, except share and per share data)
(Unaudited)
| For the Six Months Ended June 30, | ||||||||
| 2021 | 2022 | |||||||
| Revenues(a) | $ | 71,896 | $ | 69,933 | ||||
| Operating expenses: | ||||||||
| Cost of revenues | (13,193 | ) | (14,580 | ) | ||||
| Selling and marketing | (39,836 | ) | (42,502 | ) | ||||
| General and administrative | (2,315 | ) | (1,814 | ) | ||||
| Research and development | (339 | ) | (532 | ) | ||||
| Total operating expenses | (55,683 | ) | (59,428 | ) | ||||
| Income from operations | 16,213 | 10,505 | ||||||
| Other (expenses) income: | ||||||||
| Interest expense, net | (240 | ) | (60 | ) | ||||
| Change in fair value of warrant liability | 155 | 2 | ||||||
| Other income, net | 820 | 144 | ||||||
| Total other income | 735 | 86 | ||||||
| Income before income tax | 16,948 | 10,591 | ||||||
| Income tax benefit (expense) | (25 | ) | 46 | |||||
| Net income | 16,923 | 10,637 | ||||||
| Less: net (loss) income attributable to non-controlling interests | 20 | (170 | ) | |||||
| Net income attributable to Glory Star New Media Group Holdings Limited’s shareholders | $ | 16,903 | $ | 10,807 | ||||
| Other comprehensive income (loss) | ||||||||
| Unrealized foreign currency translation (loss) gain | 1,228 | (7,620 | ) | |||||
| Comprehensive income | 18,151 | 3,017 | ||||||
| Less: comprehensive loss attributable to non-controlling interests | (51 | ) | (360 | ) | ||||
| Comprehensive income attributable to Glory Star New Media Group Holdings Limited’s shareholders | $ | 18,202 | $ | 3,377 | ||||
| Earnings per ordinary share | ||||||||
| Basic | $ | 0.27 | $ | 0.16 | ||||
| Weighted average shares used in calculating earnings per ordinary share | ||||||||
| Basic | 62,774,488 | 68,123,330 | ||||||
| Earnings per ordinary share | ||||||||
| Dilutive | $ | 0.27 | $ | 0.16 | ||||
| Weighted average shares used in calculating earnings per ordinary share | ||||||||
| Dilutive | 62,774,488 | 68,123,330 | ||||||
Note:
| (a) | The table below provides a summary of the Company’s operating segment results for the six months ended June 30, 2022 and 2021: |
| For the Six Months Ended June 30, | ||||||||
| 2021 | 2022 | |||||||
| Net revenues: | ||||||||
| Cheers APP Internet Business | $ | 69,128 | 60,672 | |||||
| Traditional Media Business | 2,768 | 9,261 | ||||||
| Total segment net revenues | $ | 71,896 | 69,933 | |||||
| Total consolidated net revenues | $ | 71,896 | 69,933 | |||||
| Operating income： | ||||||||
| Cheers APP Internet Business | $ | 15,555 | 9,116 | |||||
| Traditional Media Business | 847 | 1,391 | ||||||
| Total segment operating income | $ | 16,402 | $ | 10,507 | ||||
| Unallocated item* | (189 | ) | (2 | ) | ||||
| Total consolidated operating income | $ | 16,213 | 10,505 | |||||
| * | The unallocated item for the six months ended June 30, 2022 and 2021 presents the share-based compensation for employees, which is not allocated to segments. |
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GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. dollars in thousands)
(Unaudited)
| For the Six Months Ended June 30, | ||||||||
| 2021 | 2022 | |||||||
| Net cash used in operating activities | $ | (11,887 | ) | $ | (30,627 | ) | ||
| Net cash provided by (used in) investing activities | 1,684 | (383 | ) | |||||
| Net cash provided by financing activities | 12,529 | 842 | ||||||
| Effect of exchange rate changes | 254 | (2,357 | ) | |||||
| Net increase (decreased) in cash, cash equivalents and restricted cash | 2,580 | (32,525 | ) | |||||
| Cash and cash equivalents, at beginning of period | 17,731 | 77,302 | ||||||
| Cash and cash equivalents, at end of period | $ | 20,311 | $ | 44,777 | ||||
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GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED
RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(In U.S. dollars in thousands, except share and per share data)
| For the Six Months Ended June 30, | ||||||||
| 2021 | 2022 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Income from operations | $ | 16,213 | $ | 10,505 | ||||
| Adjustment: Share-based compensation | 189 | 2 | ||||||
| Non-GAAP income from operations | $ | 16,402 | $ | 10,507 | ||||
| Net income attributable to ordinary shareholders | $ | 16,903 | $ | 10,807 | ||||
| Adjustment: Share based compensation | 189 | 2 | ||||||
| Adjustment: Change in fair value of warrant liability | (155 | ) | (2 | ) | ||||
| Non-GAAP net income attributable to ordinary shareholders | $ | 16,937 | $ | 10,807 | ||||
| Weighted average shares used in calculating earnings per ordinary share-basic | 62,774,488 | 68,123,330 | ||||||
| Non-GAAP earnings per share | $ | 0.27 | $ | 0.16 | ||||
| Weighted average shares used in calculating earnings per ordinary share-diluted | 62,774,488 | 68,123,330 | ||||||
| Non-GAAP diluted earnings per share | $ | 0.27 | $ | 0.16 | ||||
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