8-K
Snail, Inc. (SNAL)
UNITED
STATES
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
Dateof Report (Date of earliest event reported): August 14, 2023 (August 14, 2023)
Snail,Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-41556 | 88-4146991 |
|---|---|---|
| (State<br> or other jurisdiction<br><br> <br>of<br> incorporation) | (Commission<br><br> <br>File<br> Number) | (IRS<br> Employer<br><br> <br>Identification<br> Number) |
12049Jefferson BlvdCulver City, CA 90230
(Address of principal executive offices) (Zip Code)
+1(310) 988-0643
(Registrant’s telephone number, including area code)
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:
| ☐ | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> 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<br><br> <br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A Common Stock, $0.0001 par value per share | SNAL | 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. ☒
Item2.02 Results of Operations and Financial Condition
On August 14, 2023, Snail Games USA Inc. (the “Company”) issued a press release announcing its results of operations and financial condition for its most recent fiscal quarter ended June 30, 2023 (“Earnings Press Release”). A copy of the Earnings Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information set forth under this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information set forth under this Item 2.02, including Exhibit 99.1, shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, unless it is specifically incorporated by reference therein.
Item7.01 Regulation FD Disclosure
On August 14, 2023, the Company issued the Earnings Press Release announcing its financial results for the three months ended June 30, 2023. The Earnings Press Release is posted on the Company’s website.
The information set forth under this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. The information set forth under this Item 7.01, including Exhibit 99.1, shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act, or the Exchange Act, unless it is specifically incorporated by reference therein.
Item9.01 Financial Statements and Exhibits.
(d)Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Earnings Press Release dated August 14, 2023 |
| 104 | Cover<br> Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SNAIL, INC. | ||
|---|---|---|
| Date:<br> August 14, 2023 | By: | /s/ Jim S. Tsai |
| Name: | Jim<br> S. Tsai | |
| Title: | Chief<br> Executive Officer |
Exhibit 99.1
Snail,Inc. Reports Second Quarter 2023 Financial Results
CulverCity, CA – August 14, 2023 – Snail, Inc. (Nasdaq: SNAL) (“Snail” or “the Company”), a leading, global independent developer and publisher of interactive digital entertainment, today announced financial results for the three months ended June 30, 2023.
Jim Tsai, Chief Executive Officer of Snail, commented: “Earlier last month we had to make the difficult decision to delay the release of ARK: Survival Ascended. We are expected to launch the game in October 2023. The title has passed QC and beta testing and now in the last stages of development. We are excited to bring our fans a remastered ARK game with loads of new content and world to explore.”
SecondQuarter 2023 and Subsequent Financial and Business Highlights
| ● | Revenue<br> was $9.9 million for the three months ended June 30, 2023, compared to revenue of $15.5 million<br> in the prior year period, representing a decrease of $5.6 million year over year. The decrease<br> in net revenues was due to a decrease in sales of ARK, partially attributed to a decrease<br> in the number of days on sale in one of our primary platform partners and partially due to<br> the upcoming release of ARK: Survival Ascended. ARK sales and in-game purchases decreased<br> by $5.3 million. Sales of the Company’s smaller titles decreased by a collective $0.6<br> million. These decreases in the Company’s smaller titles were partially offset by an<br> increase of $0.1 million in revenue related to West Hunt. |
|---|
| ● | ARK: Survival Evolved. In the three months ended June 30, 2023, ARK: Survival Evolved averaged a total of 240,522 daily active users (“DAUs”) versus 359,077 DAUs<br> in the prior year period. |
|---|---|
| ○ | ARK units sold decreased for the second quarter 2023 compared to the same period last year;<br> approximately 0.9 million vs. 1.6 million, respectively. |
| --- | --- |
| ○ | Through<br> June 30, 2023, total playtime for the ARK franchise amounted to 3.3 billion hours<br> with an average playing time per user of more than 162 hours and with the top 21.0% of all<br> players spending over 100 hours in the game, according to data from the Steam platform. |
| --- | --- |
| ● | Net<br> loss was $4.1 million for the three months ended June 30, 2023 as compared to a net loss<br> of $1.0 million for the three months ended June 30, 2022, representing a decrease of $3.1<br> million. The decrease was primarily due to a decrease in revenue of $5.6 million, an increase<br> in research and development expense of $1.0 million, an increase in interest expense of $0.1<br> million, and an increase in internet, server, and data costs of $0.3 million, partially offset<br> by a decrease in royalties of $1.2 million, a decrease in license cost and license right<br> amortization of $1.6 million, a decrease in merchant and engine fees of $0.5 million, and<br> a decrease in the Company’s tax provision of $0.8 million. |
| --- | --- |
| ● | Bookings<br> for the three months ended June 30, 2023 decreased by $5.8 million, or 38.5%, compared to<br> the three months ended June 30, 2022, primarily as a result of a decrease in ARK revenues<br> and in game purchases which contributed to $5.3 million of the decrease during the three<br> months ended June 30, 2023. The decrease in ARK revenues during the three months ended<br> June 30, 2023 was due partially to fewer sales days in the period and the anticipated release<br> of ARK: Survival Ascended. |
| --- | --- |
| ● | Earnings<br> before interest, taxes, depreciation and amortization (“EBITDA”) for the second<br> quarter of 2023 was a loss of $4.8 million compared to a loss of $1.1 million in the prior<br> year period. |
|---|---|
| ● | As<br> of June 30, 2023, unrestricted cash was $3.0 million versus $12.9 million as of December<br> 31, 2022. |
| --- | --- |
Useof Non-GAAP Financial Measures
In addition to the financial results determined in accordance with U.S. generally accepted accounting principles, or GAAP, Snail believes Bookings and EBITDA, as non-GAAP measures, are useful in evaluating its operating performance. Bookings and EBITDA are non-GAAP financial measures that are presented as supplemental disclosures and should not be construed as alternatives to net income (loss) or revenue as indicators of operating performance, nor as alternatives to cash flow provided by operating activities as measures of liquidity, both as determined in accordance with GAAP. Snail supplementally presents Bookings and EBITDA because they are key operating measures used by management to assess financial performance. Bookings adjusts for the impact of deferrals and, Snail believes, provides a useful indicator of sales in a given period. EBITDA adjusts for items that Snail believes do not reflect the ongoing operating performance of its business, such as certain non-cash items, unusual or infrequent items or items that change from period to period without any material relevance to its operating performance. Management believes Bookings and EBITDA are useful to investors and analysts in highlighting trends in Snail’s operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which Snail operates and capital investments.
Bookings is defined as the net amount of products and services sold digitally or physically in the period. Bookings is equal to revenues excluding the impact from deferrals. Below is a reconciliation of total net revenue to Bookings, the closest GAAP financial measure.
| Three months ended June 30, | Six months ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| (in millions) | (in millions) | |||||||||||
| Total net revenue | $ | 9.9 | $ | 15.5 | $ | 23.4 | $ | 43.5 | ||||
| Change in deferred net revenue | (0.6 | ) | (0.4 | ) | (0.8 | ) | (3.0 | ) | ||||
| Bookings | $ | 9.3 | $ | 15.1 | $ | 22.6 | $ | 40.5 |
We define EBITDA as net income (loss) before (i) interest expense, (ii) interest income, (iii) income tax provision (benefit from) and (iv) depreciation and amortization expense. The following table provides a reconciliation from net income (loss) to EBITDA:
| Three months ended June 30, | Six months ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| (in millions) | (in millions) | |||||||||||
| Net (loss) income | $ | (4.1 | ) | $ | (1.0 | ) | $ | (7.1 | ) | $ | 4.8 | |
| Interest income and interest income – related parties | - | (0.1 | ) | (0.1 | ) | (0.6 | ) | |||||
| Interest expense and interest expense – related parties | 0.3 | 0.2 | 0.6 | 0.4 | ||||||||
| (Benefit from) provision for income taxes | (1.1 | ) | (0.3 | ) | (1.9 | ) | 1.2 | |||||
| Depreciation and amortization expense, property and equipment | 0.1 | 0.1 | 0.2 | 0.3 | ||||||||
| EBITDA | $ | (4.8 | ) | $ | (1.1 | ) | $ | (8.3 | ) | $ | 6.1 |
WebcastDetails
The Company will host a webcast at 5:00 PM ET today to discuss the second quarter 2023 financial results. Participants may access the live webcast and replay on the Company’s investor relations website at https://investor.snail.com/.
AboutSnail, Inc.
Snail is a leading, global independent developer and publisher of interactive digital entertainment for consumers around the world, with a premier portfolio of premium games designed for use on a variety of platforms, including consoles, PCs and mobile devices.
Contacts:
Investors:
investors@snail.com
Forward-LookingStatements
This press release contains statements that constitute forward-looking statements. Many of the forward-looking statements contained in this press release can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “may,” “predict,” “continue,” “estimate” and “potential,” or the negative of these terms or other similar expressions. Forward-looking statements appear in a number of places in this press release and include, but are not limited to, statements regarding Snail’s intent, belief or current expectations. These forward-looking statements include information about possible or assumed future results of Snail’s business, financial condition, results of operations, liquidity, plans and objectives. The statements Snail makes regarding the following matters are forward-looking by their nature: growth prospects and strategies; launching new games and additional functionality to games that are commercially successful; expectations regarding significant drivers of future growth; its ability to retain and increase its player base and develop new video games and enhance existing games; competition from companies in a number of industries, including other casual game developers and publishers and both large and small, public and private Internet companies; its ability to attract and retain a qualified management team and other team members while controlling its labor costs; its relationships with third-party platforms such as Xbox Live and Game Pass, PlayStation Network, Steam, Epic Games Store, My Nintendo Store, the Apple App Store, the Google Play Store and the Amazon Appstore; the size of addressable markets, market share and market trends; its ability to successfully enter new markets and manage international expansion; protecting and developing its brand and intellectual property portfolio; costs associated with defending intellectual property infringement and other claims; future business development, results of operations and financial condition; the ongoing conflict involving Russia and Ukraine on its business and the global economy generally; rulings by courts or other governmental authorities; the Share Repurchase Program, including expectations regarding the timing and manner of repurchases made under the program; its plans to pursue and successfully integrate strategic acquisitions; assumptions underlying any of the foregoing.
Further information on risks, uncertainties and other factors that could affect Snail’s financial results are included in its filings with the Securities and Exchange Commission (the “SEC”) from time to time, annual reports on Forms 10-K and quarterly reports on 10-Q filed, or to be filed, with the SEC. You should not rely on these forward-looking statements, as actual outcomes and results may differ materially from those expressed or implied in the forward-looking statements as a result of such risks and uncertainties. All forward-looking statements in this press release are based on management’s beliefs and assumptions and on information currently available to Snail, and Snail does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
Snail,Inc. and Subsidiaries
CondensedConsolidated Balance Sheets
(Unaudited)
| December 31, 2022 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current Assets: | |||||
| Cash and cash equivalents | 2,960,160 | $ | 12,863,817 | ||
| Restricted escrow deposit | 1,025,193 | 1,003,804 | |||
| Accounts receivable, net of allowances for credit losses of 19,929 and 31,525, respectively | 4,963,566 | 6,758,024 | |||
| Accounts receivable - related party, net | 11,733,226 | 11,344,184 | |||
| Loan and interest receivable - related party | 102,745 | 101,753 | |||
| Prepaid expenses - related party | 2,500,000 | - | |||
| Prepaid expenses and other current assets | 12,216,801 | 10,565,141 | |||
| Total current assets | 35,501,691 | 42,636,723 | |||
| Restricted cash and cash equivalents | 1,113,960 | 6,374,368 | |||
| Prepaid expenses - related party | 5,582,500 | 5,582,500 | |||
| Property, plant and equipment, net | 4,881,629 | 5,114,799 | |||
| Intangible assets, net - license - related parties | 326,087 | 1,384,058 | |||
| Intangible assets, net - other | 272,119 | 272,521 | |||
| Deferred income taxes | 9,490,241 | 7,602,536 | |||
| Other noncurrent assets | 180,778 | 198,668 | |||
| Operating lease right-of-use assets, net | 3,032,069 | 3,606,398 | |||
| Total assets | 60,381,074 | $ | 72,772,571 | ||
| LIABILITIES, NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY | |||||
| Current Liabilities: | |||||
| Accounts payable | 8,658,585 | $ | 9,452,391 | ||
| Accounts payable - related party | 19,611,207 | 19,918,259 | |||
| Accrued expenses and other liabilities | 2,678,848 | 1,474,088 | |||
| Interest payable - related parties | 527,770 | 527,770 | |||
| Revolving loan | 6,000,000 | 9,000,000 | |||
| Short term note | 2,916,667 | 5,416,666 | |||
| Current portion of promissory note | 2,845,303 | 86,524 | |||
| Current portion of deferred revenue | 4,125,505 | 4,335,404 | |||
| Current portion of operating lease liabilities | 1,437,140 | 1,371,227 | |||
| Total current liabilities | 48,801,025 | 51,582,329 | |||
| Accrued expenses | 384,150 | 457,024 | |||
| Promissory note, net of current portion | - | 3,221,963 | |||
| Deferred revenue, net of current portion | 4,660,343 | 5,216,042 | |||
| Operating lease liabilities, net of current portion | 2,191,465 | 2,930,529 | |||
| Total liabilities | 56,036,983 | 63,407,887 | |||
| Commitments and contingencies | |||||
| Stockholders’ Equity: | |||||
| Class A common stock, 0.0001 par value, 500,000,000 shares authorized, 9,251,420 shares issued, 7,901,145 and 8,053,771 shares outstanding as of June 30, 2023 and December 31, 2022, respectively | 925 | 925 | |||
| Class B common stock, 0.0001 par value, 100,000,000 shares authorized, 28,748,580 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 2,875 | 2,875 | |||
| Additional paid-in capital | 25,708,907 | 23,436,942 | |||
| Accumulated other comprehensive loss | (286,173 | ) | (307,200 | ) | |
| Accumulated deficit | (11,914,059 | ) | (4,863,250 | ) | |
| 13,512,475 | 18,270,292 | ||||
| Treasury stock at cost (1,350,275 and 1,197,649 shares, respectively) | (3,671,806 | ) | (3,414,713 | ) | |
| Total Snail, Inc. equity | 9,840,669 | 14,855,579 | |||
| Noncontrolling interests | (5,496,578 | ) | (5,490,895 | ) | |
| Total stockholders’ equity | 4,344,091 | 9,364,684 | |||
| Total liabilities, noncontrolling interests and stockholders’ equity | 60,381,074 | $ | 72,772,571 |
All values are in US Dollars.
Snail,Inc. and Subsidiaries
CondensedConsolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
| Three months ended June 30, | Six months ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | |||||||||
| Revenues, net | $ | 9,892,253 | $ | 15,463,522 | $ | 23,350,741 | $ | 43,518,113 | ||||
| Cost of revenues | 9,335,765 | 12,259,514 | 20,196,702 | 27,973,329 | ||||||||
| Gross profit | 556,488 | 3,204,008 | 3,154,039 | 15,544,784 | ||||||||
| Operating expenses: | ||||||||||||
| General and administrative | 3,937,234 | 4,250,882 | 8,462,985 | 9,046,094 | ||||||||
| Research and development | 1,200,842 | 179,050 | 2,574,639 | 363,006 | ||||||||
| Advertising and marketing | 168,292 | 212,039 | 272,841 | 370,710 | ||||||||
| Depreciation and amortization | 118,110 | 138,791 | 233,170 | 307,108 | ||||||||
| Total operating expenses | 5,424,478 | 4,780,762 | 11,543,635 | 10,086,918 | ||||||||
| (Loss) income from operations | (4,867,990 | ) | (1,576,754 | ) | (8,389,596 | ) | 5,457,866 | |||||
| Other income (expense): | ||||||||||||
| Interest income | 19,791 | 17,705 | 51,264 | 33,077 | ||||||||
| Interest income - related parties | 499 | 130,695 | 992 | 581,623 | ||||||||
| Interest expense | (296,237 | ) | (186,213 | ) | (590,820 | ) | (352,268 | ) | ||||
| Interest expense - related parties | - | (1,496 | ) | - | (3,222 | ) | ||||||
| Other income | - | 296,969 | 8,175 | 299,653 | ||||||||
| Foreign currency transaction (loss) gain | (21,845 | ) | 7,916 | (24,212 | ) | 5,510 | ||||||
| Total other (expense) income, net | (297,792 | ) | 265,576 | (554,601 | ) | 564,373 | ||||||
| (Loss) income before (benefit from) provision for income taxes | (5,165,782 | ) | (1,311,178 | ) | (8,944,197 | ) | 6,022,239 | |||||
| (Benefit from) provision for income taxes | (1,081,887 | ) | (327,347 | ) | (1,887,705 | ) | 1,202,303 | |||||
| Net (loss) income | (4,083,895 | ) | (983,831 | ) | (7,056,492 | ) | 4,819,936 | |||||
| Net (loss) income attributable to non-controlling interests | (4,464 | ) | 70,466 | (5,683 | ) | 63,176 | ||||||
| Net (loss) income attributable to Snail, Inc. and Snail Games USA Inc. | (4,079,431 | ) | (1,054,297 | ) | (7,050,809 | ) | 4,756,760 | |||||
| Comprehensive income statement: | ||||||||||||
| Other comprehensive income (loss) related to currency translation adjustments, net of tax | 18,707 | (31,199 | ) | 21,027 | (82,402 | ) | ||||||
| Total comprehensive (loss) income | $ | (4,060,724 | ) | $ | (1,085,496 | ) | $ | (7,029,782 | ) | $ | 4,674,358 | |
| Net (loss) income attributable to Class A common stockholders: | ||||||||||||
| Basic | $ | (879,665 | ) | $ | (1,054,297 | ) | $ | (1,522,005 | ) | $ | 4,756,760 | |
| Diluted | $ | (879,665 | ) | $ | (1,054,297 | ) | $ | (1,522,005 | ) | $ | 4,756,760 | |
| Net loss attributable to Class B common stockholders: | ||||||||||||
| Basic | $ | (3,199,766 | ) | $ | - | $ | (5,528,804 | ) | $ | - | ||
| Diluted | $ | (3,199,766 | ) | $ | - | $ | (5,528,804 | ) | $ | - | ||
| (Loss) income per share attributable to Class A and B common stockholders: | ||||||||||||
| Basic | $ | (0.11 | ) | $ | (0.03 | ) | $ | (0.19 | ) | $ | 0.14 | |
| Diluted | $ | (0.11 | ) | $ | (0.03 | ) | $ | (0.19 | ) | $ | 0.14 | |
| Weighted-average shares used to compute income per share attributable to Class A common stockholders: | ||||||||||||
| Basic | 7,901,145 | 35,000,000 | 7,914,096 | 35,000,000 | ||||||||
| Diluted | 7,901,145 | 35,000,000 | 7,914,096 | 35,000,000 | ||||||||
| Weighted-average shares used to compute income per share attributable to Class B common stockholders: | ||||||||||||
| Basic | 28,748,580 | - | 28,748,580 | - | ||||||||
| Diluted | 28,748,580 | - | 28,748,580 | - |
Snail,Inc. and Subsidiaries
CondensedConsolidated Statements of Cash Flows
(Unaudited)
| For the Six Month Period Ended June 30, | 2023 | 2022 | ||||
|---|---|---|---|---|---|---|
| Cash flows from operating activities: | ||||||
| Net (loss) income | $ | (7,056,492 | ) | $ | 4,819,936 | |
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||
| Amortization - intangible assets - license | - | 250,000 | ||||
| Amortization - intangible assets - license, related parties | 1,057,971 | 3,701,959 | ||||
| Amortization - intangible assets - other | 402 | 448 | ||||
| Amortization - loan origination fees | 20,726 | 12,557 | ||||
| Depreciation and amortization - property and equipment | 233,170 | 307,108 | ||||
| Stock-based compensation expense | 385,365 | - | ||||
| Gain on lease termination | - | (122,533 | ) | |||
| Gain on paycheck protection program and economic injury disaster loan forgiveness | - | (174,436 | ) | |||
| Loss on disposal of fixed assets | - | 2,433 | ||||
| Interest income from shareholder loan | - | (580,878 | ) | |||
| Interest income from restricted escrow deposit | (21,389 | ) | - | |||
| Deferred Taxes | (1,887,705 | ) | - | |||
| Changes in assets and liabilities: | ||||||
| Accounts receivable | 1,794,458 | 4,730,110 | ||||
| Accounts receivable - related party | (389,042 | ) | (2,505,580 | ) | ||
| Prepaid expenses - related party | (2,500,000 | ) | (4,375,000 | ) | ||
| Prepaid expenses and other current assets | 234,940 | (984,632 | ) | |||
| Other noncurrent assets | (2,903 | ) | (15,944 | ) | ||
| Accounts payable | (701,488 | ) | 1,323,972 | |||
| Accounts payable - related party | (307,052 | ) | (222,536 | ) | ||
| Accrued expenses | 1,131,886 | 363,240 | ||||
| Interest receivable - related parties | (992 | ) | - | |||
| Interest payable - related parties | - | 1,994 | ||||
| Lease liabilities | (98,822 | ) | (69,188 | ) | ||
| Deferred revenue | (765,599 | ) | (3,021,554 | ) | ||
| Net cash (used in) provided by operating activities | (8,872,566 | ) | 3,441,476 | |||
| Cash flows from investing activities: | ||||||
| Purchases of property and equipment | - | (5,256 | ) | |||
| Repayment on Pound Sand note | - | 1,496,063 | ||||
| Net cash provided by investing activities | - | 1,490,807 | ||||
| Cash flows from financing activities: | ||||||
| Repayments on promissory note | (46,517 | ) | (38,759 | ) | ||
| Repayments on short-term note | (2,916,666 | ) | (2,083,333 | ) | ||
| Repayments on revolving loan | (3,000,000 | ) | - | |||
| Borrowings on short-term note | - | 10,000,000 | ||||
| Payments on paycheck protection program and economic injury disaster loan | - | (90,198 | ) | |||
| Refund of payments on paycheck protection program and economic injury disaster loan | - | 48,305 | ||||
| Cash dividend declared and paid | - | (8,200,000 | ) | |||
| Purchase of treasury stock | (257,093 | ) | - | |||
| Payments of offering costs in accounts payable | (92,318 | ) | - | |||
| Net cash used in financing activities | (6,312,594 | ) | (363,985 | ) | ||
| Effect of currency translation on cash and cash equivalents | 21,095 | (63,694 | ) | |||
| Net (decrease) increase in cash and cash equivalents, and restricted cash and cash equivalents | (15,164,065 | ) | 4,504,604 | |||
| Cash and cash equivalents, and restricted cash and cash equivalents - beginning of period | 19,238,185 | 16,554,115 | ||||
| Cash and cash equivalents, and restricted cash and cash equivalents – end of period | $ | 4,074,120 | $ | 21,058,719 | ||
| Supplemental disclosures of cash flow information | ||||||
| Cash paid during the period for: | ||||||
| Interest | $ | 568,908 | $ | 339,710 | ||
| Income taxes | $ | 270,802 | $ | 828,012 | ||
| Noncash transactions during the period for: | ||||||
| Loan and interest payable - related parties | $ | - | $ | 103,890 | ||
| Loan and interest receivable - related parties | $ | - | $ | (103,890 | ) | |
| Loan and interest from shareholder | $ | - | $ | 94,934,400 | ||
| Dividend distribution | $ | - | $ | (94,934,400 | ) | |
| Noncash finance activity during the period for: | ||||||
| Refund of dividend withholding tax overpayment | $ | 1,886,600 | $ | - | ||
| Gain on paycheck protection program and economic injury disaster loan forgiveness | $ | - | $ | (174,436 | ) |