Nisun International Reports Financial Results for Fiscal Year 2022

SHANGHAI, Aug. 9, 2023 /PRNewswire/ — Nisun International Enterprise Development Group Co., Ltd (“Nisun” or the “Company”) (Nasdaq: NISN), a provider of innovative comprehensive solutions through an integration of technology, industry, and finance, today announced its financial results for the fiscal year ended December 31, 2022.

Mr. Xiaoyun Huang, Chief Executive Officer of Nisun, commented, “We are pleased to end fiscal year 2022 with solid financial performance, despite the uncertain market conditions during this period. Our total revenue reached $234.2 million in fiscal year 2022, representing an increase of 46% from fiscal year 2021, demonstrating our strong capabilities to execute strategic initiatives successfully. In fiscal year 2022, we have been committed to scaling our supply chain trading business, particularly agricultural supply chain operations. While acknowledging the challenges in our existing business, we have been actively seeking qualified partners for new business opportunities. As mentioned in our recent press releases, many of our new business partnerships established beyond their infancy, we expect to distinguish ourselves from other industry participants by prioritizing the expansion of our business, providing quality supply chain services to our clients and improving our brand awareness. In the second half of 2023 and beyond, we will continue to deepen the comprehensive coverage and dynamic cycle of the agricultural supply chain to support China’s grand strategy of rural revitalization. We will also continue to focus on enhancing our operating efficiency, aiming to sustain our long-term competitiveness in the market and creating long-term value for our shareholders.” 

Financial Results for the Fiscal Year Ended December 31, 2022

All comparisons made on a year-over-year (“yoy”) basis.

Revenue

Total revenue increased by 46% to $234.2 million from $160.2 million in fiscal year 2021, primarily with increases in revenue from supply chain trading sales. The increase in total revenues was primarily due to the Company’s ability to expand its business, attract higher quality customers, and achieve a higher customer retention. Revenue from Supply Chain Trading Business increased by 110% to $143.4 million from $68.1 million in fiscal year 2021, primarily due to the Company’s expansion of its supply chain trading business in various industries such as the agricultural industry and retail industry. Revenue from Financing Services slightly decreased by 1% to $90.8 million from $92.1 million in the prior year period. Revenues generated from the Small and Medium Enterprise (SME) financing solutions business increased modestly to $87.3 million from $87.1 million in the prior year period. Revenue generated from supply chain financing solutions decreased by 28% to $3.5 million from $4.9 million in the prior year period, primarily due to the reason that the Company shifted the focus of business development from the supply chain financing solutions to supply chain trading.

 

For the Year ended December 31,

Changes

2022

%

021

%

($)

( %)

Revenue from Supply Chain
   Trading Business

$

143,361,714

61

%

$

68,132,237

43

%

$

75,229,477

110

%

Revenue from financing
   services:

     SME financing solutions

87,269,959

37

%

87,133,963

54

%

135,996

0

%

     Supply chain financing
       solutions

3,542,592

2

%

4,930,289

3

%

(1,387,697)

(28)

%

     Other financing solutions

0

%

3,222

0

%

(3,222)

(100)

%

Total revenue from
   financing service

90,812,551

39

%

92,067,474

57

%

(1,254,923)

(1)

%

Total revenue

$

234,174,265

100

%

$

160,199,711

100

%

$

73,974,554

46

%

Cost of revenue

Cost of revenue was $197.1 million, compared to $106.2 million in the prior year period, representing an increase of 86%. The increase was primarily attributable to increases in cost of revenue from supply chain trading business.

Gross Profit

Gross profit decreased by 31% to $37.0 million, from $54.0 million in the prior year period. The decrease was primarily due to the significant increase in the costs of third-party channels for SME financing solution services, adjusted by an increase in the gross profit of the Company’s supply chain trading business by 393%, which increase was primarily a result of the Company’s ability to expand its business, attract higher quality customers, and achieve higher customer retention. Gross margin was 15.8% and 33.7% for the fiscal year ended December 31, 2022 and 2021, respectively. 

Operating Expenses 

Total operating expenses increased by 22% to $19.3 million from $15.9 million in the prior year period. The increase was primarily attributable to increases in bad debt expenses, offset by the decrease in selling expenses, general and administrative expenses and research and development (“R&D”) expenses.

Selling expenses decreased by 15% to $2.0 million from $2.3 million in the prior year period. The decrease in selling expenses was mainly due to the Company’s building up its network in supply chain trading business in various industries and cutting its marketing expenses. General and administrative expenses decreased by 3% to $11.3 million from $11.6 million in the prior year period. The decrease in general and administrative expenses was mainly because the Company paid a one-time agreement cancellation fee of $2.5 million in 2021, adjusted by the impairment loss on goodwill incurred in 2022 and increased expenses on business expansion. R&D expenses was $1.6 million, unchanged from fiscal year 2021. Bad debts expenses were $4.5 million, as compared to $0.3 million in the prior year period. The bad debts expenses incurred in 2022 were primarily because certain suppliers were not be able to fulfill their contractual obligations due to the COVID outbreaks in 2022.

Other Income (Expense), net

The Company had a net other income of $4.8 million, compared to $2.6 million in the prior year period. The increase was due to an increase in investment income from the short-term investments and investment in limited partnership.  

Net Income

In fiscal year 2022, the Company achieved a net income of $17.8 million, compared to $30.5 million in the prior year. The decrease was primarily due to the significant increase in the costs of third-party channels.

Net Income per Share

Net income per share was $4.42 in fiscal year 2022, compared to $14.13 in the prior year period. The weighted average number of shares was 3,986,359 and 2,150,683 in the fiscal year ended December 31, 2022 and 2021, respectively.

Financial Condition and Cash Flow

As of December 31, 2022, the Company had cash, cash equivalents and restricted cash of $67.3 million, compared to $91.6 million as of December 31, 2021.

In the fiscal year ended December 31, 2022, net cash used in operating activities was approximately $29.0 million, net cash provided by investing activities was $17.8 million, and net cash used in financing activities was $8.3 million.

In the fiscal year ended December 31, 2021, net cash provided by operating activities was approximately $23.9 million, net cash used in investing activities was $25.3 million, and net cash provided by financing activities was $70.5 million.

About Nisun International Enterprise Development Group Co., Ltd

Nisun International Enterprise Development Group Co., Ltd (NASDAQ: NISN) is a technology-driven, integrated supply chain solutions provider focused on transforming the corporate finance industry. Leveraging its rich industry experience, Nisun is dedicated to providing professional supply chain solutions to Chinese and foreign enterprises and financial institutions. Through its subsidiaries, Nisun provides users with professional solutions for technology supply chain management, technology asset routing, and digital transformation of tech and finance institutions, enabling the industry to strengthen and grow. At the same time, Nisun continues to deepen the field of industry segmentation through industrial and financial integration, by cultivating/creating an ecosystem of openness and empowerment. Nisun has built a linked platform that incorporates supply chain, banking, securities, trust, insurance, funds, state-owned enterprises, among other businesses. Focusing on industry-finance linkages, Nisun aims to serve the upstream and downstream of the industrial supply chain while also assisting with supply-side sub-sector reform. For more information, please visit http://ir.nisun-international.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains information about Nisun’s view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the successful integration of acquired companies, technologies and assets into its portfolio of products and services, marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property. Nisun encourages you to review other factors that may affect its future results in Nisun’s registration statement and in its other filings with the Securities and Exchange Commission. Nisun assumes no obligation to update or revise its forward-looking statements as a result of new information, future events or otherwise, except as expressly required by applicable law.

Contacts:

Nisun International Enterprise Development Group Co., Ltd
Investor Relations
Tel: +86 (21) 2357-0055
Email: [email protected]

Ascent Investor Relations LLC
Tina Xiao
Email: [email protected]
Tel: +1 (917) 609-0333

 

 

 

NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN US DOLLARS)

December 31,
2022

December 31,
2021

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

63,901,329

$

91,447,620

Restricted cash

3,417,244

179,421

Short-term investments

11,700,400

40,666,617

Accounts receivable, net

18,931,346

18,516,150

Advance to suppliers, net

46,968,549

9,213,279

Receivables from supply chain solutions

43,475,981

59,792,613

Inventories

31,609,877

3,979,653

Prepaid expenses and other current assets

10,890,083

4,002,675

TOTAL CURRENT ASSETS

230,894,809

227,798,028

NON-CURRENT ASSETS:

Property and equipment, net

719,574

464,156

Intangible assets, net

1,795,234

2,850,853

Right-of-use assets, net

3,349,432

479,473

Equity investments

373,292

404,022

Investment in limited partnership

14,913,539

16,207,152

Goodwill

23,814,005

25,774,402

Deferred tax assets, net

310,577

Long term investment

7,249,319

TOTAL NON-CURRENT ASSETS

52,524,972

46,180,058

TOTAL ASSETS

$

283,419,781

$

273,978,086

LIABILITIES

CURRENT LIABILITIES:

Accounts payable

$

40,925,155

$

34,997,401

Short-term bank loans

434,959

784,609

Accrued expenses and other current liabilities

6,090,582

3,575,836

Operating lease liabilities – current

1,008,766

337,698

Payables to supply chain solutions

9,122,978

25,922,931

Advances from customers

21,827,387

3,429,103

Taxes payable

2,748,474

8,851,898

Loan from related party

8,028,965

10,528,965

Due to related parties – current

282,724

295,336

TOTAL CURRENT LIABILITIES

90,469,990

88,723,777

Operating lease liabilities – non-current

2,425,597

148,988

Deferred tax liabilities

727,326

504,033

TOTAL LIABILITIES

93,622,913

89,376,798

SHAREHOLDERS’ EQUITY*:

Class A common stock, $0.01 par value, 30,000,000 and 4,000,000 shares
   authorized, 4,006,263 and 3,981,263 shares issued, and 3,944,075 and
   3,981,263 shares outstanding as of December 31, 2022 and 2021, respectively

40,063

39,813

Class B common stock, $0.01 par value, 1,000,000 shares authorized, no shares
   issued and outstanding as of December 31, 2022 and 2021

Treasury shares

(355,844)

Additional paid-in capital

130,503,387

130,318,637

Retained earnings

53,214,304

37,819,226

Statutory reserves

9,167,845

6,942,111

Unearned compensation

(125,630)

Accumulated other comprehensive income

(6,937,950)

5,632,199

COMMON SHAREHOLDERS’ EQUITY

185,631,805

180,626,356

Non-controlling interests

4,165,063

3,974,932

TOTAL SHAREHOLDERS’ EQUITY

189,796,868

184,601,288

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

283,419,781

$

273,978,086

*

The financial statements give retroactive effect to the May 18, 2023 one-for-ten reverse share split.

 

 

NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(EXPRESSED IN US DOLLARS)

For the Year Ended December 31,

2022

2021

2020

REVENUES:

Revenue generated from services:

    Small and Medium Enterprise financing solutions

$

87,269,959

$

87,133,963

$

40,779,794

    Supply Chain financing solutions

3,542,592

4,930,289

1,369,859

    Other financing solutions

3,222

40,538

Total revenue generated from services

90,812,551

92,067,474

42,190,191

Revenue generated from sales:

    Supply chain trading business

143,361,714

68,132,237

Total revenues

234,174,265

160,199,711

42,190,191

COST OF REVENUE:

Cost of revenue – services

(55,472,076)

(37,989,001)

(19,740,267)

Cost of revenue – sales

(140,880,063)

(67,628,806)

Business and sales related taxes

(772,830)

(533,760)

(233,389)

GROSS PROFIT

37,049,296

54,048,144

22,216,535

OPERATING EXPENSES:

Selling expenses

1,977,617

2,323,403

3,181,810

General and administrative expenses

11,288,871

11,641,567

8,188,736

Research and development expenses

1,563,718

1,599,728

817,770

Bad debt expense

4,509,634

294,536

      Total operating expenses

19,339,840

15,859,234

12,188,316

INCOME FROM OPERATIONS

17,709,456

38,188,910

10,028,219

OTHER INCOME (EXPENSE):

Interest and investment income

2,790,768

2,122,903

585,177

Other income (expense), net

2,021,688

464,210

244,274

      Total other income, net

4,812,456

2,587,113

829,451

INCOME BEFORE PROVISION FOR INCOME TAXES

22,521,912

40,776,023

10,857,670

PROVISION FOR INCOME TAXES

4,741,854

10,269,501

941,064

NET INCOME FROM CONTINUING OPERATIONS

17,780,058

30,506,522

9,916,606

DISCONTINUED OPERATIONS:

(Loss) from discontinued operations, net of tax

(23,107,066)

Net gain on sale of discontinued operations, net of tax

136,050

NET (LOSS) FROM DISCONTINUED OPERATIONS, NET OF
TAX

(22,971,016)

NET INCOME (LOSS)

17,780,058

30,506,522

(13,054,410)

Net (income) attributable to non-controlling interests

(159,246)

(126,161)

(37,380)

NET INCOME (LOSS) – Nisun International’s shareholders

$

17,620,812

$

30,380,361

$

(13,091,790)

OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation (loss) income

(12,576,380)

2,039,011

5,507,420

COMPREHENSIVE INCOME (LOSS)

5,044,432

32,419,372

(7,584,370)

Comprehensive loss attributable to non-controlling interests

6,231

2,051

2,172

COMPREHENSIVE INCOME (LOSS)

$

5,050,663

$

32,421,423

$

(7,582,198)

BASIC AND DILUTED EARNINGS (LOSS) PER COMMON
SHARE:

Income from continuing operations

$

4.42

$

14.13

$

5.32

Income (loss) from discontinued operations

(12.36)

NET EARNINGS (LOSS) PER COMMON SHARE

$

4.42

$

14.13

$

(7.04)

Weighted average number of shares outstanding-basic and diluted*

3,986,359

2,150,683

1,858,767

*

The financial statements give retroactive effect to the May 18, 2023 one-for-ten reverse share split.

 

 

 

NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2022, 2021 AND 2020

(EXPRESSED IN US DOLLARS)

2022

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$

17,780,058

$

30,506,522

$

(13,054,410)

Net (loss) from discontinued operations

(22,971,016)

Net income from continuing operations

17,780,058

30,506,522

9,916,606

      Adjustments to reconcile net income to net cash provided by (used
      in) operating activities:

      Depreciation and amortization

2,113,732

2,180,038

1,686,518

      Stock-based compensation

125,630

498,825

1,097,415

      Shares issued for compensation

185,000

71,175

      Bad debt expense

4,509,634

294,536

      Impairment of goodwill

777,329

      Loss on disposition of property and equipment

1,385

190,301

42,534

      (Income) from investments

(541,578)

(808,464)

(169,720)

      Deferred tax (benefit) expense

271,907

275,749

(584,760)

      Changes in operating assets and liabilities:

Accounts receivable

(2,075,274)

(13,294,924)

573,418

Advance to suppliers, net

(39,859,386)

(9,213,279)

Prepaid expenses and other current assets

(4,734,501)

(3,464,939)

16,009

Receivables from supply chain solutions

11,372,841

(48,202,128)

(10,741,981)

Inventories

(25,530,993)

(3,931,400)

Accounts payable

7,693,011

33,620,611

1,014,227

Advance from customers

19,085,377

3,375,769

(17,977)

Taxes payable

(5,574,048)

5,575,502

1,609,498

Other payables

2,576,570

(2,112,886)

Payable to supply chain solutions

(15,198,883)

25,608,622

Operating lease liabilities

(855,242)

(952,495)

(580,628)

Accrued expenses and other current liabilities

1,501,078

(1,049,489)

502,100

Net cash (used in) provided by operating activities from
      continuing operations

(28,952,923)

23,857,102

2,250,373

Net cash (used in) provided by operating activities from
      discontinued operations

436,389

NET CASH (USED IN) PROVIDED BY OPERATING
ACTIVITIES

(28,952,923)

23,857,102

2,686,762

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of property and equipment

(652,585)

(186,705)

(204,904)

Purchase of intangible assets

(74,710)

(18,281)

(94,400)

Proceeds from disposal of equipment

41,688

Cash (paid) received in connection with Nami acquisition

(7,007,905)

4,990,754

Cash paid in connection with acquisition, net of cash received

(530,322)

Investment in limited partnership

(15,589,966)

Cash received on disposal of discontinued operations

14,950,730

Proceeds from sale of short-term investments

78,595,280

4,894,270

Purchase of short-term investments

(51,567,746)

(39,526,099)

(3,065,134)

Purchase of Long-term investments

(7,430,511)

Collection of loans to third parties

1,643,203

11,019,545

Loans to third parties

(501,905)

(1,810,495)

Net cash provided by (used in) investing activities from
      continuing operations

17,837,501

(25,250,787)

(4,712,912)

Net cash (used in) investing activities from discontinued operations

(6,713)

NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES

17,837,501

(25,250,787)

(4,719,625)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term bank loans

445,831

784,609

Proceeds from issuance of common shares and pre-funded warrants

70,794,465

Proceeds from private placement

6,503,378

Proceeds from third-party loans

36,770,626

Repayment of short-term bank loans

(1,239,983)

Repayment of third-party loans

(41,491,973)

Repayment to related parties

(10,097)

(1,803,374)

(6,803,115)

Advances from related parties

1,303,556

Loan from related parties

10,528,965

Repayment of loan from related parties

(2,500,000)

Purchase of treasury shares

(355,844)

Capital contribution from non-controlling interest

37,116

751,841

3,065,134

Capital contribution by shareholder

4,550,000

Net cash (used in) provided by financing activities from continuing
      operations

(8,344,324)

70,527,541

19,147,918

Net cash (used in) financing activities from discontinued operations

(788,599)

NET CASH (USED IN) PROVIDED BY FINANCING
ACTIVITIES

(8,344,324)

70,527,541

18,359,319)

      EFFECT OF EXCHANGE RATE CHANGE ON CASH AND
        CASH EQUIVALENTS

(4,848,722)

294,928

2,806,981

NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS

(24,308,468)

69,428,784

19,133,437

Less: (decrease) in cash and cash equivalents from discontinued
operations

(283,314)

      NET (DECREASE) INCREASE IN CASH AND CASH
         EQUIVALENTS FROM CONTINUING OPERATIONS

(24,308,468)

69,428,784

19,416,751

      CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
         FROM CONTINUING OPERATIONS-BEGINNING

91,627,041

22,198,257

2,781,506

      CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
         FROM CONTINUING OPERATIONS-ENDING

$

67,318,573

$

91,627,041

$

22,198,257

SUPPLEMENTAL CASH FLOW DISCLOSURES:

Cash paid for income taxes

$

10,385,495

$

5,546,082

$

552,783

Cash paid for interest

$

496,932

$

370,356

$

124,778

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:

Amount payable to related parties for business acquisition

$

$

$

7,007,905

Issuance of shares for business acquisition

$

$

$

18,330,776

Receivable from disposal of subsidiary

$

289,973

$

$

14,950,730

Issuance of shares for share-based compensation

$

$

71,175

$

1,721,870

CASH AND CASH EQUIVALENTS FROM CONTINUING
         OPERATIONS ARE COMPRISED OF THE FOLLOWING:

Cash and cash equivalents

$

63,901,329

$

91,447,620

$

22,135,310

Restricted cash

3,417,244

179,421

62,947

Total cash, cash equivalents and restricted cash

$

67,318,573

$

91,627,041

$

22,198,257