6-K
Pop Culture Group Co., Ltd (CPOP)
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 November 2021
Commission File Number: 001-40543
Pop Culture Group Co., Ltd
Room 102, 23-1 Wanghai Road
Xiamen Software Park Phase 2
Siming District, Xiamen City, Fujian Province361008
The People’s Republic of China
(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): ☐
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.
| Pop Culture Group Co., Ltd | ||
|---|---|---|
| Date: November 10, 2021 | By: | /s/ Zhuoqin Huang |
| Name: | Zhuoqin Huang | |
| Title: | Chief Executive Officer, Director, and Chairman of the Board of Directors |
1
EXHIBIT INDEX
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release |
2
Exhibit99.1
PopCulture Group Co., Ltd Reports Fiscal Year 2021 Financial Results
Revenueup 63% Year-over-year
NetIncome Attributable to the Company’s Shareholders up 75% Year-over-year
XIAMEN, China, Nov. 10, 2021 /PRNewswire/ -- Pop Culture Group Co., Ltd (“Pop Culture” or the “Company”) (Nasdaq: CPOP), a hip-pop culture company in China, today announced its financial results for the fiscal year ended June 30, 2021.
Mr. Zhuoqin Huang, Chairman and Chief Executive Officer of Pop Culture, commented, “Despite the short-term impact to some of our businesses caused by the COVID-19 pandemic, we maintained solid upward momentum in fiscal year 2021. Our revenue recorded $25.5 million in fiscal year 2021, representing a 63% year-on-year increase from $15.7 million in fiscal year 2020. As a public company engaged in the hip-hop culture business, our intellectual property content (‘IP content’) is the key driver for our rapid financial growth. Our revenue from event hosting was $15.0 million in fiscal year 2021, an increase of 96% from $7.6 million in fiscal year 2020. At the same time, net income attributable to our shareholders was $4.3 million, an increase of 75% from $2.4 million in fiscal year 2020. Our gross margin and operating margin were 28% and 23%, respectively, in fiscal year 2021, which remained stable as compared to 29% and 20%, respectively, in fiscal year 2020.”
Mr. Huang continued, “We are very pleased to see that Pop Culture has achieved such outstanding results in fiscal year 2021, and we are very grateful to our customers and partners for their continued recognition and support. We will continue to focus on the operation and promotion of Chinese hip-hop cultural content. We have developed a new five-year strategic plan for our future development. According to the strategic plan, we will continue to put ‘IP content’ at the core of our business and strive to achieve sustained high growth in our three major businesses by utilizing the advantages of big data and capital markets, with a goal of becoming an industry leader.”
| For<br> the fiscal year ended June 30, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| ($<br> millions, except per share data and percentages) | 2021 | 2020 | %<br> Change | ||||||
| Revenue | 25.5 | 15.7 | 63 | % | |||||
| Event hosting | 15.0 | 7.6 | 96 | % | |||||
| Event planning<br> and execution | 9.2 | 5.5 | 67 | % | |||||
| Brand<br> promotion | 0.8 | 2.2 | -67 | % | |||||
| Other<br> services | 0.6 | 0.3 | 87 | % | |||||
| Gross Profit | 7.2 | 4.5 | 59 | % | |||||
| Gross Margin | 28 | % | 29 | % | -1 | pp* | |||
| Income from Operations | 5.8 | 3.2 | 84 | % | |||||
| Operating Margin | 23 | % | 20 | % | 3 | pp* | |||
| Net Income | 4.3 | 2.6 | 63 | % | |||||
| Net Income Attributable to<br> the Company’s shareholders | 4.3 | 2.4 | 75 | % | |||||
| EPS | 0.25 | 0.16 | 56 | % | |||||
| * | Notes:<br> pp represents percentage points | ||||||||
| --- | --- |
FiscalYear 2021 Financial Highlights
| ● | Revenue<br> was $25.5 million, an increase of 63% from $15.7 million in fiscal year 2020. |
|---|---|
| ● | Gross<br> profit was $7.2 million, an increase of 59% from $4.5 million in fiscal year 2020. |
| --- | --- |
| ● | Gross<br> margin was 28% compared with 29% in fiscal year 2020. |
| --- | --- |
| ● | Net<br> income attributable to the Company’s shareholders was $4.3 million, an increase of 75% from<br> $2.4 million in fiscal year 2020. |
| --- | --- |
| ● | Basic<br> and diluted earnings per share were $0.25 compared with $0.16 in fiscal year 2020. |
| --- | --- |
FiscalYear 2021 Operational Highlights
| ● | The<br> Company hosted 35 dance competition events, 29 music festivals and promotional parties, and<br> 4 online hip-hop programs during fiscal year 2021. |
|---|---|
| ● | The<br> Company executed 60 events during fiscal year 2021. |
| --- | --- |
| ● | The<br> Company’s hip-hop events attracted an aggregate of 159,200 attendance and online hip-hop<br> programs generated over 314 million views during fiscal year 2021. |
| --- | --- |
FiscalYear 2021 Financial Results
Revenue
Revenue increased by $9.8 million, or 63%, to $25.5 million in fiscal year 2021, from $15.7 million in fiscal year 2020.
Revenue from event hosting increased by $7.4 million, or 96%, to $15.0 million in fiscal year 2021, from $7.6 million in fiscal year 2020. The increase was primarily due to the increased number of the Company’s live events (dance competitions, musical festivals, and promotional parties) as well as increased average sponsorship fees, and additional revenue from its new online hip-hop business, which attracted more sponsors to promote their brands in the online hip-hop videos.
2
Revenue from the event planning and execution increased by $3.7 million, or 67%, to $9.2 million in fiscal year 2021, from $5.5 million in fiscal year 2020. The increase was primarily due to the increase in the number and size of the events the Company undertook.
Revenue from the brand promotion decreased by $1.4 million, or 67%, to $0.8 million in fiscal year 2021, from $2.2 million in fiscal year 2020. The decrease was mainly due to the sluggish demand for advertising or marketing activities.
Revenue from other services increased by $0.3 million, or 87%, to $0.6 million in fiscal year 2021, from $0.3 million in fiscal year 2020.
Costof Revenue
Cost of revenue increased by $7.1 million, or 64%, to $18.3 million in fiscal year 2021, from $11.2 million in fiscal year 2020. The increase was proportionally in line with the increase in revenue.
GrossProfit and Gross Margin
Gross profit increased by $2.7 million, or 59%, to $7.2 million in fiscal year 2021, from $4.5 million in fiscal year 2020. Gross margin slightly decreased by 1 percentage point to 28% in fiscal year 20201 from 29% in fiscal year 2020, primarily due to the decrease in brand promotion business, which has a higher gross margin.
OperatingExpenses
Operating expenses slightly increased by $25,051, or 2%, to $1,392,137 in fiscal year 2021, from $1,367,086 in fiscal year 2020.
Selling and marketing expenses increased by $23,255, or 21%, to $133,387 in fiscal year 2021, from $110,132 in fiscal year 2020. The increase was primarily due to increased advertising expenses in the amount of $20,880, expended in order to promote the Company’s business online.
General and administrative expenses increased by $1,796 to $1,258,750 in fiscal year 2021, from $1,256,954 in fiscal year 2020. The increase was primarily due to slight increases in various items, including employees’ salaries and business entertainment expenses.
3
IncomeTax Expenses
Income tax expenses were $1.4 million and $0.5 million in fiscal year 2021 and 2020, respectively. The increase mainly resulted from the increased taxable income for fiscal year 2021.
NetIncome
Net income increased by 63% to $4.3 million in fiscal year 2021, from $2.6 million in fiscal year 2020. Net income attributable to the Company’s shareholders increased by 75% to $4.3 million in fiscal year 2021, from $2.4 million in fiscal year 2020.
Basicand Diluted Earnings per Share
Basic and diluted earnings per share were $0.25 in fiscal year 2021, compared with basic and diluted earnings per share of $0.16 in fiscal year 2020.
CashFlow
Net cash used in operating activities was $4.0 million in fiscal year 2021, compared with $2.6 million in fiscal year 2020. Net cash provided by investing activities was $nil in fiscal year 2021, compared to $3,261 in fiscal year 2020. Net cash provided by financing activities was $4.0 million in fiscal year 2021, compared with $3.3 million in fiscal year 2020.
BalanceSheet
As of June 30, 2021, the Company had cash of $1.3 million, compared with $1.4 million as of June 30, 2020.
4
AboutPop Culture Group Co., Ltd
Headquartered in Xiamen, China, Pop Culture Group Co., Ltd is a hip-hop culture company. The Company aims to promote hip-hop culture and its values of love, peace, unity, respect, and having fun, and to promote cultural exchanges with respect to hip-hop between the United States and China. With the values of hip-hop culture at its core and the younger generation as its primary target audience, the Company hosts entertainment events, operates hip-hop related online programs, and provides event planning and execution services and marketing services to corporate clients. The Company has in recent years focused on developing and hosting its own hip-hop events. For more information, visit the Company’s website at http://ir.popinter.cn/.
Forward-LookingStatements
*Certain statementsmade in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties,including the further spread of the COVID-19 virus or new variants thereof, or the occurrence of another wave of cases and the impactit may have on the Company’s operations and the demand for the Company’s services, and are based on current expectations and projectionsabout future events and financial trends that the Company believes may affect its financial condition, results of operations, businessstrategy, and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,”“will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,”“plan,” “believe,” “potential,” “continue,” “is/are likely to,” or othersimilar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring eventsor circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectationsexpressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct,and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors toreview other factors that may affect its future results in the Company’s registration statement and its other filings with the SEC. *****
Formore information, please contact:
PopCulture Group Co., LtdInvestor Relations Department
Email: ir@520pop.com
AscentInvestors Relations LLC
Tina Xiao
PresidentPhone: 917-609-0333
Email: tina.xiao@ascent-ir.com
5
POPCULTURE GROUP CO., LTD
CONSOLIDATEDBALANCE SHEETS
(InU.S. dollars, except share data)
| 2021 | |||||
| ASSETS | |||||
| CURRENT ASSETS: | |||||
| Cash | 1,359,137 | $ | 1,319,977 | ||
| Accounts<br> receivable, net | 14,810,146 | 25,537,236 | |||
| Advance<br> to suppliers | 3,176,527 | 1,999,876 | |||
| Prepaid<br> expenses and other current assets | 1,177,947 | 3,553,028 | |||
| TOTAL CURRENT<br> ASSETS | 20,523,757 | 32,410,117 | |||
| Property<br> and equipment, net | 71,281 | 48,393 | |||
| Intangible<br> asset, net | 1,695,215 | 1,635,321 | |||
| Operating<br> right-of-use asset | 278,260 | 194,747 | |||
| Deferred<br> tax assets | 83,795 | 140,757 | |||
| Other<br> non-current assets | 251,464 | - | |||
| TOTAL<br> ASSETS | 22,903,772 | $ | 34,429,335 | ||
| LIABILITIES<br> AND SHAREHOLDERS’ EQUITY | |||||
| CURRENT<br> LIABILITIES: | |||||
| Short-term<br> bank loans | 1,838,833 | $ | 5,140,990 | ||
| Accounts<br> payable | 2,795,508 | 1,900,883 | |||
| Deferred<br> revenue | 1,764,608 | 1,648,847 | |||
| Taxes payable | 2,374,093 | 4,232,391 | |||
| Due to<br> a related party | - | 225,000 | |||
| Accrued<br> liabilities and other payables | 119,573 | 77,567 | |||
| Operating<br> lease liability - current | 96,357 | 98,427 | |||
| TOTAL CURRENT<br> LIABILITIES | 8,988,972 | 13,324,105 | |||
| Long-term<br> bank loans | - | 1,672,370 | |||
| Operating<br> lease liability - non-current | 189,994 | 104,755 | |||
| TOTAL<br> LIABILITIES | 9,178,966 | 15,101,230 | |||
| Commitments<br> and contingencies | |||||
| SHAREHOLDERS’<br> EQUITY | |||||
| Ordinary<br> shares (par value 0.001 per share; 44,000,000 Class A ordinary shares authorized as of June 30, 2020 and 2021; 11,021,834 and 12,086,923<br> Class A ordinary shares issued and outstanding as of June 30, 2020 and 2021, respectively; 6,000,000 Class B ordinary shares authorized,<br> 5,763,077 Class B ordinary shares issued and outstanding as of June 30 2020 and 2021, respectively) * | 16,785 | 17,850 | |||
| Subscription<br> receivable | (15,441 | ) | (15,441 | ) | |
| Additional<br> paid-in capital | 5,813,745 | 6,643,118 | |||
| Statutory<br> reserve | 779,094 | 1,241,573 | |||
| Retained<br> earnings | 6,693,120 | 10,498,183 | |||
| Accumulated<br> other comprehensive (loss) income | (367,581 | ) | 942,822 | ||
| TOTAL POP<br> CULTURE GROUP CO., LTD SHAREHOLDERS’ EQUITY | 12,919,722 | 19,328,105 | |||
| Non-controlling<br> interests | 805,084 | - | |||
| TOTAL<br> SHAREHOLDERS’ EQUITY | 13,724,806 | 19,328,105 | |||
| TOTAL<br> LIABILITIES AND SHAREHOLDERS’ EQUITY | 22,903,772 | $ | 34,429,335 |
All values are in US Dollars.
6
POPCULTURE GROUP CO., LTD
CONSOLIDATEDSTATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(InU.S. dollars, except share data)
| For<br> the years ended June 30, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2020 | 2021 | |||||||
| REVENUE,<br> NET | $ | 19,031,766 | $ | 15,688,080 | $ | 25,526,557 | |||
| Cost<br> of revenue | 13,158,537 | 11,158,847 | 18,302,494 | ||||||
| GROSS<br> PROFIT | 5,873,229 | 4,529,233 | 7,224,063 | ||||||
| Selling<br> and marketing | 133,332 | 110,132 | 133,387 | ||||||
| General<br> and administrative | 492,733 | 1,256,954 | 1,258,750 | ||||||
| Total<br> operating expenses | 626,065 | 1,367,086 | 1,392,137 | ||||||
| INCOME<br> FROM OPERATIONS | 5,247,164 | 3,162,147 | 5,831,926 | ||||||
| Other<br> (expenses) income: | |||||||||
| Interest<br> expenses, net | (123,833 | ) | (125,560 | ) | (243,458 | ) | |||
| Other<br> (expenses) income, net | (2,591 | ) | 46,235 | 95,946 | |||||
| Total<br> other expenses, net | (126,424 | ) | (79,325 | ) | (147,512 | ) | |||
| INCOME<br> BEFORE INCOME TAX PROVISION | 5,120,740 | 3,082,822 | 5,684,414 | ||||||
| PROVISION<br> FOR INCOME TAXES | 1,288,982 | 457,005 | 1,416,872 | ||||||
| NET<br> INCOME | 3,831,758 | 2,625,817 | 4,267,542 | ||||||
| Less:<br> net income attributable to non-controlling interests | 247,244 | 189,996 | - | ||||||
| NET<br> INCOME ATTRIBUTABLE TO POP CULTURE GROUP CO., LTD SHAREHOLDERS | 3,584,514 | 2,435,821 | 4,267,542 | ||||||
| Other<br> comprehensive (loss) income: | |||||||||
| Foreign<br> currency translation adjustment | (162,850 | ) | (241,839 | ) | 1,335,757 | ||||
| COMPREHENSIVE<br> INCOME | 3,668,908 | 2,383,978 | 5,603,299 | ||||||
| Less:<br> comprehensive income attributable to non-controlling interest | 236,737 | 174,392 | - | ||||||
| COMPREHENSIVE<br> INCOME ATTRIBUTABLE TO POP CULTURE GROUP CO., LTD SHAREHOLDERS | $ | 3,432,171 | $ | 2,209,586 | $ | 5,603,299 | |||
| Net income<br> per share | |||||||||
| Basic<br> and diluted | $ | 0.27 | $ | 0.16 | $ | 0.25 | |||
| Weighted<br> average shares used in calculating net income per share * | |||||||||
| Basic<br> and diluted | 13,425,911 | 14,881,478 | 17,228,698 |
7
POPCULTURE GROUP CO., LTD
CONSOLIDATEDSTATEMENTS OF CASH FLOWS
(InU.S. dollars)
| For<br> the years ended June 30, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2019 | 2020 | 2021 | |||||||
| Cash flows from operating<br> activities: | |||||||||
| Net<br> Income | $ | 3,831,758 | $ | 2,625,817 | $ | 4,267,542 | |||
| Adjustments<br> to reconcile net income to net cash provided by (used in) operating activities: | |||||||||
| Allowance<br> for doubtful accounts | 24,227 | 324,345 | 195,187 | ||||||
| Depreciation<br> and amortization | 159,352 | 233,353 | 243,905 | ||||||
| Deferred<br> tax benefit | (8,053 | ) | (84,246 | ) | (47,802 | ) | |||
| Non-cash<br> lease expense | 86,047 | 89,977 | 107,139 | ||||||
| Loss from<br> disposal of property and equipment | 21,596 | 19,300 | - | ||||||
| Changes<br> in assets and liabilities: | |||||||||
| Accounts<br> receivable | (6,123,120 | ) | (5,672,992 | ) | (9,259,862 | ) | |||
| Advance<br> to suppliers | (630,184 | ) | (2,531,334 | ) | 1,440,794 | ||||
| Amounts<br> due from related parties | (158,279 | ) | 153,586 | - | |||||
| Prepaid<br> expenses and other current assets | 395,198 | (44,002 | ) | (1,504,345 | ) | ||||
| Other non-current<br> assets | - | (252,816 | ) | 268,433 | |||||
| Accounts<br> payable | 2,166,329 | 49,588 | (1,130,593 | ) | |||||
| Deferred<br> revenue | (247,929 | ) | 1,762,730 | (275,888 | ) | ||||
| Taxes payable | 1,376,248 | 721,743 | 1,592,715 | ||||||
| Accrued<br> liabilities and other payables | 14,057 | 54,234 | (52,007 | ) | |||||
| Due to<br> a related party | - | - | 225,000 | ||||||
| Operating<br> lease liability | (86,047 | ) | (54,112 | ) | (107,550 | ) | |||
| Net<br> cash provided by (used in) operating activities | 821,200 | (2,604,829 | ) | (4,037,332 | ) | ||||
| CASH FLOWS FROM INVESTING<br> ACTIVITIES: | |||||||||
| Purchase<br> of property and equipment | (11,436 | ) | (1,716 | ) | - | ||||
| Proceed<br> from disposal of property and equipment | 20,957 | 4,977 | - | ||||||
| Purchase<br> of intangible asset | (2,086,819 | ) | - | - | |||||
| Net<br> cash (used in) provided by investing activities | (2,077,298 | ) | 3,261 | - | |||||
| CASH FLOWS FROM FINANCING<br> ACTIVITIES: | |||||||||
| Proceeds<br> from short-term bank loans | 1,905,209 | 1,838,833 | 6,341,729 | ||||||
| Repayments<br> of short-term bank loans | (316,930 | ) | (1,981,799 | ) | (3,472,851 | ) | |||
| Proceeds<br> from long-term bank loans | - | -- | 1,811,922 | ||||||
| Repayments<br> of long-term bank loans | (89,195 | ) | - | - | |||||
| Proceeds from issuance of<br> shares | - | 3,817,842 | - | ||||||
| Payment<br> for deferred offering costs | - | (409,743 | ) | (729,977 | ) | ||||
| Net<br> cash provided by financing activities | 1,499,084 | 3,265,133 | 3,950,823 | ||||||
| Effect<br> of exchange rate changes | (16,984 | ) | 40,083 | 47,349 | |||||
| Net<br> increase (decrease) in cash | 226,002 | 703,648 | (39,160 | ) | |||||
| Cash<br> at beginning of year | 429,487 | 655,489 | 1,359,137 | ||||||
| Cash<br> at end of year | $ | 655,489 | $ | 1,359,137 | $ | 1,319,977 | |||
| SUPPLEMENTAL DISCLOSURE OF<br> CASH FLOW INFORMATION: | |||||||||
| Income<br> tax paid | $ | 45,805 | $ | 17,408 | $ | 34,765 | |||
| Interest<br> expense paid | $ | 122,153 | $ | 126,095 | $ | 235,361 |
8