Starbox Group Holdings Ltd. Announces Financial Results for Fiscal Year 2022 – Revenue Increases By 127.2% and Net Income Increases By 148.8%

KUALA LUMPUR, Malaysia, Jan. 19, 2023 /PRNewswire/ — Starbox Group Holdings Ltd. (Nasdaq: STBX) (the “Company” or “Starbox Group”), a service provider of cash rebates, digital advertising, and payment solutions, today announced its financial results for the fiscal year ended September 30, 2022.

Mr. Lee Choon Wooi, Chief Executive Officer and Chairman of the Board of Directors of Starbox Group, commented, “We are thrilled to deliver a commendable financial growth for the fiscal year 2022. We saw growth in all three business pillars within our ecosystem, namely our cash rebates, digital advertising, and payment solutions, during the fiscal year 2022. Our revenue grew by 127.2% in the fiscal year 2022 compared to the fiscal year 2021. This financial growth was coupled with the operational metrics improvement, including the increase in the number of merchants, members, and transactions on the GETBATS website and mobile app and the number of advertisers during fiscal year 2022.” ­

Fiscal Year 2022 Financial Highlights

Total revenue was $7.2 million in fiscal year 2022, an increase of 127.2% from $3.2 million in fiscal year 2021. Income from operations was $5.0 million in fiscal year 2022, an increase of 131.3% from $2.1 million in fiscal year 2021. Net income was $3.6 million in fiscal year 2022, an increase of 148.8% from $1.4 million in fiscal year 2021.

Fiscal Year 2022 Operational Highlights

Number of advertisers was 63 as of September 30, 2022, compared to 25 as of September 30, 2021. Number of members on the GETBATS website and mobile app was 2,513,658 as of September 30, 2022, compared to 514,167 as of September 30, 2021. Number of Merchants on the GETBATS website and mobile app was 820 as of September 30, 2022, compared to 723 as of September 30, 2021. Number of transactions facilitated through GETBATS website and mobile app was 338,940 as of September 30, 2022, compared to 295,393 as of September 30, 2021.

Fiscal Year 2022 Financial Results

Revenues

Total revenue was $7.2 million in fiscal year 2022, an increase of 127.2% from $3.2 million in fiscal year 2021. The increase in the Company’s revenue was primarily due to increases in the revenue from digital advertising services and from cash rebate services.

Revenue from digital advertising service was $7.2 million in fiscal year 2022, which increased by 127.1% from $3.1 million in fiscal year 2021. The increase was primarily due to increases in the number of advertisers for the Company’s services in fiscal year 2022. Revenue from cash rebate services was $10,562 in fiscal year 2022, which increased by 70.0% from $6,214 in fiscal year 2021. The increase was primarily due to an increase in volume of transactions and average cash rebate commission rate earned by the Company for fiscal year 2022, as compared to fiscal year 2021. Revenue from payment solution services was $9,575 in fiscal year 2022, which increased by 540.9% from $1,494 in fiscal year 2021. The increase was primarily due to an increase in the number of referred merchants.

Operating Cost

Operating costs were $2.2 million in fiscal year 2022, which increased by 118.6% from $1.0 million in fiscal year 2021. The increase was primarily due to the following major reasons:

Salary and employee benefit expenses were $429,924 in fiscal year 2022, which increased by $237,943 from $191,981 in fiscal year 2021, primarily due to an increase in the number of employees from 17 in fiscal year 2021 to 21 in fiscal year 2022, in order to handle increased business activities associated with the Company’s digital advertising services and cash rebate services, and increased directors’ remuneration. Professional and consulting service fees were $767,229 in fiscal year 2022, which increased by $401,455 from $365,774 in fiscal year 2021, primarily due to increased professional expenses the Company paid to third-party professionals for business strategy and planning purposes and increased audit fees in connection with its IPO. Marketing and promotional expenses were $188,338 in fiscal year 2022, which increased by $20,535 from $167,803 in fiscal year 2021, as a result of the Company’s increased marketing efforts to develop new Merchants and advertisers for its services. License costs were $55,000 in fiscal year 2022, which increased by $5,000 from $50,000 in fiscal year 2021. Website and facility maintenance expenses were $292,579 in fiscal year 2022, which increased by $106,822 from $185,757 in fiscal year 2021, primarily because the Company incurred higher overhead costs to maintain its websites and mobile apps for stability when its business scale expanded, which required the Company to process increased merchant and member data. Utility and office expenses were $144,735 million in fiscal year 2022, which increased by $125,550 from $19,185 in fiscal year 2021, primarily due to increased office lease expenses and increased office supply expenses when the Company leased a new office in September 2021. Depreciation and amortization expenses were $161,267 in fiscal year 2022, which increased by $103,699, from $2,568 in fiscal year 2021, because of the increased amortization of intangible assets. Business travel and entertainment expenses were $67,836 in fiscal year 2022, which increased by $61,833 from $6,003 in fiscal year 2021, due to the Company’s increased efforts to expand its business operations into local and neighboring countries. Others were $164,619 in fiscal year 2022, which increased by $154,574 from $37,268 in fiscal year 2021, mainly due to (i) increased trademark expenses by $54,986, (ii) increased defined contribution plan by $24,251, and (iii) increased uniform cost by $21,656.

Provision for Income Taxes

Provision for income taxes was $1.4 million in fiscal year 2022, which increased by $103.3% from $0.7 million in fiscal year 2021, primarily due to the Company’s increased taxable income generated from its digital advertising services.

Net Income

Net income was $3.6 million in fiscal year 2022, which increased by $2.2 million from $1.4 million in fiscal year 2021.

Basic and Diluted Earnings per Share

Basic and diluted earnings per share was $0.09 in fiscal year 2022, compared to basic and diluted earnings per share of $0.04 in fiscal year 2021.

Balance Sheet

As of September 30, 2022, the Company had cash of $17.8 million, compared to $2.3 million as of September 30, 2021.

Cash Flow

Net cash used in operating activities was $1.2 million in fiscal year 2022, compared to net cash provided by operating activities of $1.9 million in fiscal year 2021.

Net cash used in investing activities was $1,135,929 in fiscal year 2022, compared to $5,203 in fiscal year 2021.

Net cash provided by financing activities was $18,039,805 in fiscal year 2022, compared to $74,125 in fiscal year 2021.

About Starbox Group Holdings Ltd.

Headquartered in Malaysia, Starbox Group Holdings Ltd. is building a cash rebate, digital advertising, and payment solution business ecosystem targeting micro, small, and medium enterprises that lack the bandwidth to develop an in-house data management system for effective marketing. The Company connects retail merchants with retail shoppers to facilitate transactions through cash rebates offered by retail merchants on its GETBATS website and mobile app. The Company provides digital advertising services to advertisers through its SEEBATS website and mobile app, GETBATS website and mobile app and social media. The Company also provides payment solution services to merchants. For more information, please visit the Company’s website: https://ir.starboxholdings.com.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “approximates,” “assesses,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may” or similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed 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 to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC.

For more information, please contact:

Starbox Group Holdings Ltd.
Investor Relations Department
Email: ir@starboxholdings.com 

Ascent Investors Relations LLC

Tina Xiao
Phone: +1 917-609-0333
Email: tina.xiao@ascent-ir.com   

 

STARBOX GROUP HOLDINGS LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of September 30,

2022

2021

ASSETS

CURRENT ASSETS

Cash

$

17,778,896

$

2,295,277

Accounts receivable, net

2,032,717

1,362,417

Due from related party

1,473

Prepaid expenses and other current assets

4,269,611

40,001

TOTAL CURRENT ASSETS

24,082,696

3,697,695

Property and equipment, net

13,380

12,176

Intangible assets, net

903,768

Right-of-use assets, net

42,574

305,264

TOTAL NONCURRENT ASSETS

959,722

317,440

TOTAL ASSETS

$

25,042,418

$

4,015,135

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES

Deferred revenue

$

$

800,492

Taxes payable

1,404,128

874,834

Due to related parties

7,361

756,478

Operating lease liabilities, current

15,833

72,362

Accrued expenses and other current liabilities

541,050

16,834

TOTAL CURRENT LIABILITIES

1,968,372

2,521,000

Operating lease liabilities, non-current

26,741

232,902

Total Liabilities

1,995,113

2,753,902

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY

Preferred shares, $0.001125 par value, 5,000,000 shares authorized, none issued and outstanding*

Ordinary common shares, $0.001125 par value, 883,000,000 shares authorized, 45,375,000 shares
and 40,000,000 shares issued and outstanding as of September 30, 2022
and 2021, respectively*

51,047

45,000

Additional paid-in capital

18,918,303

155,024

Retained earnings

4,685,007

1,082,642

Accumulated other comprehensive loss

(607,052)

(21,433)

TOTAL SHAREHOLDERS’ EQUITY

23,047,305

1,261,233

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

25,042,418

$

4,015,135

*

Retrospectively restated for the effect of a 1-for-11.25 reverse split of the preferred and ordinary shares (see Note 7).

 

STARBOX GROUP HOLDINGS LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the years ended September 30,

2022

2021

2020

OPERATING REVENUE

Revenue from digital advertising services

$

7,174,050

$

3,158,520

$

153,145

Revenue from cash rebate services

10,562

6,214

718

Revenue from payment solution services-related party

9,575

1,494

Total operating revenue

7,194,187

3,166,228

153,863

OPERATING COSTS

Cost, selling, general and administrative expenses

2,243,750

1,026,339

344,026

Total operating costs

2,243,750

1,026,339

344,026

INCOME (LOSS) FROM OPERATIONS

4,950,437

2,139,889

(190,163)

OTHER INCOME

59,377

166

INCOME (LOSS) BEFORE INCOME TAX PROVISION

5,009,814

2,140,055

(190,163)

PROVISION FOR INCOME TAXES

1,407,449

692,405

14,991

NET INCOME (LOSS)

3,602,365

1,447,650

(205,154)

OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation adjustment

(585,619)

(19,063)

(1,829)

COMPREHENSIVE INCOME (LOSS)

$

3,016,746

$

1,428,587

$

(206,983)

Earnings (loss) per ordinary common share- basic and diluted

$

0.09

$

0.04

$

(0.01)

Weighted average number of ordinary common shares- basic and diluted

40,544,863

40,000,000

40,000,000

 

 STARBOX GROUP HOLDINGS LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended September 30,

2022

2021

2020

Cash flows from operating activities

Net income (loss)

$

3,602,365

$

1,447,650

$

(205,154)

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

Depreciation and amortization

161,267

2,568

1,948

Amortization of right-of-use operating lease assets

56,690

7,274

Changes in operating assets and liabilities:

Accounts receivable

(864,099)

(1,100,053)

(277,543)

Prepaid expenses and other current assets

(4,754,970)

(39,190)

(1,387)

Deferred revenue

(778,701)

688,979

120,961

Taxes payable

661,359

870,528

17,195

Operating lease liabilities

(56,690)

(7,274)

Accrued expenses and other current liabilities

740,415

13,413

1,632

Net cash provided by (used in) used in operating activities

(1,232,364)

1,883,895

(342,348)

Cash flows from investing activities

Purchase of fixed assets

(6,669)

(5,203)

(8,198)

Purchase of intangible assets

(1,129,260)

Cash advances to a related party

(387,945)

Collection of cash advances from a related party

387,945

Net cash used in investing activities

(1,135,929)

(5,203)

(8,198)

Cash flows from financing activities

Capital contribution by shareholders

200,000

Payment for deferred initial public offering costs and underwriter
commission

(2,730,674)

Gross proceeds from issuance of Ordinary Shares in initial public
offerings

21,500,000

Proceeds from (Repayment to) related party borrowings

(729,521)

(125,875)

707,064

Net cash provided by financing activities

18,039,805

74,125

707,064

Effect of exchange rate changes on cash

(187,893)

(28,792)

5,102

Net increase in cash

15,483,619

1,924,025

361,620

Cash, beginning of year

2,295,277

371,252

9,632

Cash, end of year

$

17,778,896

$

2,295,277

$

371,252

Supplemental disclosure of cash flow information

Cash paid for income taxes

$

934,910

$

15,747

$

Cash paid for interest

$

$

$

Supplemental disclosure of non-cash investing and financing activities

Right-of-use assets obtained in exchange for operating lease liabilities

$

52,934

$

317,170

$