8-K
Cheer Holding, Inc. (CHR)
UNITEDSTATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 31, 2020
GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED
(Exact name of registrant as specified in our charter)
| Cayman Islands | 001-38631 | N/A |
|---|---|---|
| (State or Other Jurisdiction<br><br>of Incorporation) | (Commission<br><br>File Number) | (IRS Employer<br><br> <br>Identification No.) |
| 22F, Block B, Xinhua Technology Building,No. 8 Tuofangying South Road, Jiuxianqiao, Chaoyang District, Beijing, China | 100016 | |
| --- | --- | |
| (Address of Principal Executive Offices) | (Zip Code) |
+86-01-87700500
(Registrant’s telephone number, including area code)
TKK Symphony Acquisition Corporation
c/o Texas Kang Kai Capital Management (HongKong) Limited
2039, 2/F United Center,
95 Queensway Admiralty, Hong Kong
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Ordinary Shares, par value $0.0001 per share | GSMG | The NASDAQ Stock Market LLC |
| Warrants, each exercisable for one-half of one Ordinary Share | GSMGW | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On March 31, 2020, Glory Star New Media Group Holdings Limited (the “Company”) issued a press release setting forth the historical financial results of its acquired company, Glory Star New Media Group Limited (“Glory Star”) for the full year ended December 31, 2019. The information provided in the release solely represents the historical financial information of Glory Star prior to the closing of the February 14, 2020 business combination between TKK Symphonic Acquisition Corp., the Company’s predecessor, and Glory Star which can be found in the Company’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on March 31, 2020.
The information contained in this Item 2.02 and Exhibit 99.1, attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended and shall not be deemed incorporated by reference in any filing with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended or the Securities Act of 1933, as amended whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
Item 9.01 Financial Statement and Exhibits
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release of Glory Star New Media Group Holdings Limited, dated March 31, 2020. |
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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 our behalf by the undersigned hereunto duly authorized.
| Glory Star New Media Group Holdings Limited | ||
|---|---|---|
| Dated: March 31, 2020 | By: | /s/<br> Bing Zhang |
| Bing Zhang<br><br> <br>Chief Executive Officer |
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Exhibit 99.1
Glory Star New Media Group Holdings Limited Reports
Glory Star New Media Group Limited
Full Year 2019 Financial Results
Beijing, March 31, 2020 (GLOBE NEWSWIRE) — Glory Star New Media Group Holdings Limited (NASDAQ: GSMG) (the “Company”), a leading mobile and online digital media and entertainment company in China, today announced the financial results of its acquired company, Glory Star New Media Group Limited (“Glory Star”) for the full year ended December 31, 2019. The information provided in this release solely represents the historical financial information of Glory Star prior to the closing of the February 14, 2020 business combination between TKK Symphonic Acquisition Corp., the Company’s predecessor, and Glory Star which can be found in the Company’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on March 31, 2020.
Full Year 2019 Operating Highlights
| ● | Downloads of the CHEERS App^1^<br>exceeded 85 million for the year ended December 31, 2019, compared to 12 million for the year ended December 31, 2018. |
|---|---|
| ● | Average<br>daily active users (“DAUs”)^2^ of the CHEERS App increased to 1.9 million from 0.4 million in the full year<br>of 2018. |
| --- | --- |
| ● | Glory Star’s e-Mall sold over 13,180<br>Stock Keeping Units (“SKUs”), recording over RMB133.76 million (US$19.36 million) in gross merchandise value (“GMV”)<br>^3^ through its CHEERS App in the same period. |
| --- | --- |
Full Year 2019 Financial Highlights
| ● | Revenues increased by 16.7% to US$65.8<br>million from US$56.4 million in the full year of 2018. |
|---|---|
| ● | Income from operations increased by 94.4%<br>to US$26.8 million from US$13.8 million in the full year of 2018. |
| --- | --- |
| ● | Operating margin expanded to 40.8% from<br>24.5% in the full year of 2018. |
| --- | --- |
| ● | Net income attributable to Glory Star’s<br>shareholders increased by 94.5% to US$26.3 million from US$13.5 million in the full year of 2018. |
| --- | --- |
| ● | Net margin expanded to 40.0% from 24.0%<br>in the full year of 2018. |
| --- | --- |
| ^1^ | Glory Star defines this metric as the total number of<br>downloads of the CHEERS App as of the end of the period. |
| --- | --- |
| ^2^ | Glory Star defines daily active users, or DAUs, as a<br>user who has logged in or access Glory Star’s online video content and/or its e-commerce platform using the CHEERS App,<br>whether on a mobile phone or tablet. Glory Star calculates DAUs using internal company data based on the activity of the user<br>account and as adjusted to remove “duplicate” accounts. |
| --- | --- |
| ^3^ | Glory Star defines gross merchandise value, or GMV, as<br>the volume of merchandise sold through its CHEERS App at the end of the period. |
| --- | --- |
“In February 2020, we successfully brought Glory Star to the international stage by completing our business combination with TKK Symphony Acquisition Corporation,” commented Mr. Bing Zhang, Chairman and Chief Executive Officer of Glory Star. “Our robust financial and operating results in 2019 were driven by our innovative business model, increasingly competitive value propositions, and ability to capitalize on the growing market opportunity. We also remained committed to bolstering our production capabilities for tailored content and increasing our collaborations with experienced producers to develop popular network dramas. Notably, by leveraging our professionally-generated content, we have attracted an increasing number of users to our CHEERS App, as evidenced by the sevenfold increase in CHEERS app downloads on a year-over-year basis and the 365.9% growth in DAUs for 2019. As a result of such improvements, we significantly increased the GMV for our CHEERS App during the full year of 2019.”
“At the beginning of 2020, the coronavirus outbreak has resulted in quarantines, travel restrictions, and the temporary closure of offline activities both in China and abroad. Moreover, as the epidemic continues to accelerate the shift of consumption habits from offline to online, we have experienced rapid growth in our active user base and mobile application downloads during the period. This trend provides further evidence in the viability and growth potential of our business model going forward. As such, we plan to continue enriching our content library, augmenting our e-commerce services, and fortifying our ecosystem through active user base expansion. We remain confident that the combination of our healthy ecosystem along with our improving profitability and operating efficiency has positioned us well to capture the immense growth potential of the new media industry in China.”
Mr. Ian Lee, Chief Financial Officer of the Company, added, “Glory Star’s steady revenue growth and continuing margin expansion highlighted its strong financial performance in 2019. Additionally, Glory Star was also able to leverage the popularity of its premium content to further enhance Glory Star’s brand influence, which helped to reduce its reliance on third-party advertising and marketing activities for brand promotion. As a result, Glory Star further reduced its total operating expenses to US$38.9 million, or 59.2% of revenue, in 2019 from US$42.6 million, or 75.5% of revenue, in 2018. Looking ahead, as Glory Stare continue to improve its operating efficiency, Glory Star will also heighten its investment into the improvement of its product offerings to further sustain its healthy growth momentum.”
Full Year 2019 Financial Results
Revenue in the full year of 2019 increased by 16.7% to US$65.8 million from US$56.4 million in the full year of 2018. As Glory Star continued to expand the active user base of CHEERS mobile, primarily as a result of its explosive growth in live shows, it drew an increasing number of active users onto its platform, which increased Glory Star’s value proposition to advertisers in turn. As a result, Glory Star’s advertising revenue in the full year of 2019 increased by 38.7% to US$48.4 million from US$34.9 million in the full year of 2018. In addition, Glory Star’s efforts to enhance its content production capabilities to provide custom content meeting user and advertiser demands as well as its work with experienced producers to develop popular network dramas contributed to the year-over-year increase in revenue.
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Total operating expenses in the full year of 2019 decreased by 8.5% to US$38.9 million from US$42.6 million in the full year of 2018.
| ● | Cost of revenues in the full year<br>of 2019 decreased by 10.8% to US$31.9 million from US$35.8 million in the full year of 2018. As a percentage of revenues, cost<br>of revenues in the full year of 2019 decreased to 48.5% from 63.5% in the full year of 2018. The reduction was mainly due to the<br>decrease of expenditure on payments to various channel owners for broadcast advertisements, as Glory Star was able to increasingly<br>rely on CHEERS App, which has established a sizable user base, for advertising services. |
|---|---|
| ● | Sales and marketing expenses in<br>the full year of 2019 decreased by 3.0% to US$3.2 million from US$3.3 million in the full year of 2018, which was primarily due<br>to the reduction in advertising fees as Glory Star was increasingly able to promote and maintain its brand influence through its<br>own platform and proprietary content, offset by in the increase in e-Mall marketing expenses. As a percentage of revenues, sales<br>and marketing expenses in the full year of 2019 decreased to 4.8% from 5.8% in the full year of 2018. |
| --- | --- |
| ● | General and administrative expenses<br>in the full year of 2019 increased by 3.6% to US$3.1 million from US$3.0 million in the full year of 2018, which was mainly attributable<br>to higher professional service fees related to Glory Star’s previous business combination and listing. As a percentage of<br>revenues, general and administrative expenses in the full year of 2019 decreased to 4.8% from 5.4% in the full year of 2018. |
| --- | --- |
| ● | Research and development expenses<br>in the full year of 2019 increased slightly to US$0.7 million from US$0.5 million in the full year of 2018, which was mainly attributable<br>to the headcount increase in Glory Star’s IT department during the year as Glory Star continued to enhance its technological<br>capabilities. As a percentage of revenues, research and development expenses in the full year of 2019 increased to 1.1% from 0.9%<br>in the full year of 2018. |
| --- | --- |
Income from operations in the full year of 2019 increased by 94.4% to US$26.8 million from US$13.8 million in the full year of 2018. Operating margin in the full year of 2019 expanded to 40.8% from 24.5% in the full year of 2018. These improvements were primarily driven by Glory Star’s ability to grow its revenues while optimizing its operating efficiency.
Net income attributable to Glory StarNew Media Group Limited’s shareholders in the full year of 2019 increased by 94.5% to US$26.3 million from US$13.5 million in the full year of 2018. Net margin expanded to 40.0% in the full year of 2019 from 24.0% in the full year of 2018.
As of December 31, 2019, Glory Star had cash and cash equivalents of US$6.9 million, compared to US$2.4 million as of December 31, 2018.
Net cash provided by operating activities in the full year of 2019 was US$26.1 million, as compared to US$10.6 million in net cash used in operating activities for the full year of 2018.
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About Glory Star New Media Group HoldingsLimited
Glory Star New Media Group Holdings Limited is a leading mobile entertainment operator in China. Glory Star’s ability to integrate premium lifestyle content, including short videos, online variety shows, online dramas, live streaming, its Cheers lifestyle video series, e-Mall, and mobile app, along with innovative e-commerce offerings on its platform enables it to pursue its mission of enriching people’s lives. The company’s large and active user base creates valuable engagement opportunities with consumers and enhances platform stickiness with thousands of domestic and international brands.
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; and other factors listed in the Company’s most recent reports on the Current Report on Form 8—K filed on February 21, 2020, which may be amended from time to time. The historical financial information contained in this release solely relates to Glory Star and should be read in conjunction with Glory Star’s audited consolidated financial statements and notes thereto included in Glory Star’s Current Report on Form 8-K/A(Amendment No. 2), dated March 31, 2020, which may be amended from time to time. Glory Star’s results of operations for the year ended December 31, 2019 are not necessarily indicative of the Company’s operating results for any future periods. 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
ICR Inc.
Jack Wang
Tel: +1 (646) 308-0546
Email: gsnm@icrinc.com
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GLORY STAR NEW MEDIA GROUP LIMITEDCONSOLIDATED STATEMENTS OF OPERATIONS(In U.S. dollars in thousands, except share and per share data)
| For the years ended <br> December 31, | ||||||
|---|---|---|---|---|---|---|
| 2018 | 2019 | |||||
| Revenues | $ | 56,356 | $ | 65,777 | ||
| Operating expenses: | ||||||
| Cost of revenues | 35,777 | 31,901 | ||||
| Selling and marketing | 3,250 | 3,154 | ||||
| General and administrative | 3,024 | 3,134 | ||||
| Research and development | 502 | 749 | ||||
| Total operating expenses | 42,553 | 38,938 | ||||
| Income from operations | 13,803 | 26,839 | ||||
| Other income (expenses): | ||||||
| Interest expense, net | (497 | ) | (295 | ) | ||
| Other income, net | 301 | 50 | ||||
| Total other expenses | (196 | ) | (245 | ) | ||
| Income before income tax | 13,607 | 26,594 | ||||
| Income tax benefit (expenses) | 83 | (191 | ) | |||
| Net income | 13,690 | 26,403 | ||||
| Less: Net gain attributable to non-controlling interests | 156 | 80 | ||||
| Net income attributable to Glory Star New Media Group Limited’s shareholders | $ | 13,534 | $ | 26,323 | ||
| Other comprehensive loss | ||||||
| Unrealized foreign currency translation loss | (1,036 | ) | (974 | ) | ||
| Comprehensive income | 12,654 | 25,429 | ||||
| Less: Comprehensive gain attributable to non-controlling interests | 132 | 74 | ||||
| Comprehensive income attributable to Glory Star New Media Group Limited’s shareholders | $ | 12,522 | $ | 25,355 | ||
| Earnings per ordinary share | ||||||
| Basic and diluted | $ | 6.77 | $ | 13.16 | ||
| Weighted average shares used in calculating earnings per ordinary share | ||||||
| Basic and diluted * | 2,000,000 | 2,000,000 |
* Theshares and per share data are presented on a retroactive basis to reflect the reorganization.
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GLORY STAR NEW MEDIA GROUP LIMITEDCONSOLIDATED BALANCE SHEETS(In U.S. dollars in thousands, except share and per share data)
| As of December 31, | ||||||
|---|---|---|---|---|---|---|
| 2018 | 2019 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 2,437 | $ | 6,919 | ||
| Accounts receivable, net | 39,196 | 51,061 | ||||
| Prepayment and other current assets | 7,114 | 2,499 | ||||
| Total current assets | 48,747 | 60,479 | ||||
| Property and equipment, net | 538 | 331 | ||||
| Intangible assets, net | 18 | 14,683 | ||||
| Deferred tax assets | 732 | 533 | ||||
| Unamortized produced content, net | 2,949 | 1,657 | ||||
| Right-of-use assets | - | 2,027 | ||||
| Total non-current assets | 4,237 | 19,231 | ||||
| TOTAL ASSETS | $ | 52,984 | $ | 79,710 | ||
| Liabilities, Mezzanine equity and Shareholders’ Equity | ||||||
| Current liabilities: | ||||||
| Short-term bank loans | $ | 10,199 | $ | 718 | ||
| Accounts payable | 661 | 4,546 | ||||
| Advances from customers | 245 | 610 | ||||
| Accrued liabilities and other payables | 5,770 | 6,134 | ||||
| Other taxes payable | 1,194 | 1,890 | ||||
| Operating lease liabilities -current | - | 313 | ||||
| Due to related parties | 1,255 | 1,525 | ||||
| Total current liabilities | 19,324 | 15,736 | ||||
| Operating lease liabilities - non-current | - | 1,718 | ||||
| Total non-current liabilities | - | 1,718 | ||||
| Total liabilities | $ | 19,324 | $ | 17,454 | ||
| Commitments and contingences | ||||||
| Mezzanine equity | $ | 9,031 | $ | - | ||
| Shareholders’ equity | ||||||
| Ordinary shares (par value of $0.01 per share; 5,000,000 shares authorized as of December 31, 2018 and 2019; 2,000,000 shares issued and outstanding as of December 31, 2018 and 2019, respectively)* | $ | 20 | $ | 20 | ||
| Subscription receivable | (20 | ) | (20 | ) | ||
| Additional paid-in capital | 578 | 13,379 | ||||
| Statutory reserve | 418 | 431 | ||||
| Retained earnings | 23,840 | 49,547 | ||||
| Accumulated other comprehensive loss | (608 | ) | (1,576 | ) | ||
| Total Glory Star New Media Group Limited shareholders’ equity | 24,228 | 61,781 | ||||
| Non-controlling interest | 401 | 475 | ||||
| Total equity | 24,629 | 62,256 | ||||
| TOTAL LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY | $ | 52,984 | $ | 79,710 |
| * | The shares and per share data are presented on a retroactivebasis to reflect the reorganization. |
|---|
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