Takung Art Co., Ltd. (TKAT: OTCQB) | Takung Art Co. Q2 2016 Revenue Up 400% to $4.68 Million; Net Income of $1.12 Million vs. $77,176 in Q2 2015

OTC

Takung Art Co. Q2 2016 Revenue Up 400% to $4.68 Million; Net Income of $1.12 Million vs. $77,176 in Q2 2015

Aug 19, 2016

OTC Disclosure News Service

– Takung Art Co. Q2 2016 Revenue Up 400% to $4.68 Million; Net Income of $1.12 Million vs. $77,176 in Q2 2015

HONG KONG, CHINA–(Marketwired – Aug 19, 2016) – Takung Art Co., Ltd. (OTCQB: TKAT), an online platform for acquiring shared ownership in Asian fine art, jewelry and precious gems, today reported that, for the second quarter of 2016 ended June 30, revenue was $4,683,273, a 400 percent improvement on revenue of $936,101 in the same quarter of 2015. Net income for Q2 2016 was $1,116,843, or $.11 per share, 1347 percent higher than the net income of $77,176, or $.01 per share, reported for the second quarter of last year.

For the first six months of 2016 ended June 30, revenue was $8,472,043, a 283 percent improvement on revenue of $2,210,980 in the same period of 2015. Net income for the first half of 2016 was $2,212,895, or $.21 per share, 287 percent higher than the net income of $571,271, or $.06 per share, reported for the first half of 2015.

Total platform transaction value for the first six months of 2016 reached US$2.09 billion, a 308 percent increase on the total transactions of $510.95 million recorded in the first half of 2015.

Weighted average number of common shares outstanding in the second quarter and first half of 2016 was 10,632,276 compared to 9,332,267 for the corresponding periods in 2015.

The company’s strong improvement in revenue compared to the second quarter of 2015 was primarily due to an increase of $2,396,331 in listing fee revenue, produced mainly by increases in the number of pieces listed, listing values and corresponding listing fees charged compared to the second quarter of last year. The company’s Q2 2016 revenue was also boosted by quarter-over-quarter increases of $625,407 in trading commission revenue, $403,148 in management fee revenue, and $322,158 in authorized agent subscription revenue (compared to none such revenue in Q2 2015).

Takung’s improved profitability for Q2 2016 was primarily due to the aforementioned increases in listing fees, trading commissions, management fees and authorized agent subscription revenue, offset by quarter-over-quarter increases of $1,169,165 in general and administrative expenses and $655,023 in selling expenses. The rise in quarterly GA expenses resulted mainly from increases in salaries, office and rental expenses, stock based compensation, and legal and professional fees. Takung’s increase in second quarter selling expenses resulted from the expansion of the company’s sales force and marketing activities, participation in industry trade shows, and China-based and international travel and related training seminars, all of which were designed to introduce the company’s shared-art trading platform to potential customers in major Chinese and international markets.

“Our Q2 2016 results demonstrate that our unique shared art ownership business model is gaining significant traction,” said Takung chairman and CEO Mr. Di Xiao. “Once again, we achieved major increases in revenue and profitability, while growing the total dollar volume transacted on our platform.

“Significant increases in GA and selling expenses in the current year have been necessary to support the company’s rapid growth, attract and retain tens of thousands of new traders on the platform, and strengthen the Takung brand in China’s fine art market. While their impact will have a mild adverse effect on profitability in the near-term, we believe these investments will help secure even greater profitability on rising revenue in the months and years ahead.”

Mr. Xiao noted that because of the company’s strong financial position, Takung has the ability to fund the expansion of its infrastructure and sales efforts from positive cash flow and earnings.

“Not only do we expect solid continued growth in China,” he added, “but we also expect to soon see revenue contributions from customers in our four new international markets — Russia, Mongolia, Australia and New Zealand — as marketing, sales and training personnel are being deployed in these markets.

“Considering the distinct advantages we offer art investors — reduced capital investment with liquidity and protection against fraud — we are confident that our shared art ownership model will establish strong revenue footholds in each of these new markets, and, up the line, many others.”

At June 30, 2016, the company’s cash position was $4,094,609, and short-term investments totaled $9,780,466. Restricted cash, representing the cash deposited by traders into a specific Takung bank account for the purpose of buying and selling ownership units of artwork, was $25,676,516.

ABOUT TAKUNG ART CO., LTD: www.takungart.com

Based in Hong Kong, Takung Art Co., Ltd. is an online trading platform for acquiring shared ownership in Asian fine art, jewelry and precious gems. This proprietary platform allows collectors and investors — including those with modest financial resources — to buy and sell units of these assets and participate in the booming Asian art market. The company’s shared-ownership business model significantly expands the number of interactions between sellers and buyers of fine art far beyond those generated by art galleries and auction houses alone.

Takung operates its online trading platform via three wholly-owned subsidiaries, Hong Kong Takung Assets and Equity of Artworks Exchange Co. Ltd., Takung (Shanghai) Co., Ltd., and Takung Cultural Development (Tianjin) Co., Ltd.

FORWARD-LOOKING STATEMENTS

This press release may contain projections or other forward-looking statements regarding future events or our future financial performance. All statements other than present and historical facts and conditions contained in this release, including any statements regarding our future results of operations and financial positions, business strategy, plans and our objectives for future operations, are forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). These statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risk and uncertainties and subject to change at any time. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Actual events or results may differ materially from those contained in the projections or forward-looking statements.

Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

Contacts:
Takung Art Co., Ltd.
Leslie Chow
+852 31580977
leslie.chow@takungae.com

Asia IR•PR – Investor Relations
Jimmy Caplan
512-329-9505
jimmy@asia-irpr.com

Asia IR•PR – Media Relations
Rick Eisenberg
212-496-6828
rick@asia-irpr.com

 
 
TAKUNG ART CO., LTD AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
 
(Stated in US Dollars except Number of Shares)
 
 
 
 
 
June 30,
2016

 
December 31,
2015

 
 
 
(Unaudited)
 
 
 
ASSETS
 
 
 
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and cash equivalents
 
$ 4,094,609
 
$
10,769,456
 
Restricted cash
 
 
25,676,516
 
 
16,195,289
 
Short-term investments, held to maturity
 
 
9,780,466
 
 

 
Deposits
 
 
87,496
 
 
70,194
 
Accounts receivables, net
 
 
736,376
 
 
184,537
 
Prepayment and other current assets
 
 
822,734
 
 
1,172,405
 
Due from director
 
 

 
 
502
 
Total current assets
 
 
41,198,197
 
 
28,392,383
 
 
 
 
 
 
 
 
 
NON-CURRENT ASSETS
 
 
 
 
 
 
 
Property and equipment, net
 
$
1,849,163
 
$
1,213,255
 
Intangible assets, net
 
 
20,531
 
 
22,194
 
Deferred tax assets
 
 
110,185
 
 

 
Other non-current assets
 
 
196,199
 
 
121,381
 
Total non-current assets
 
 
2,176,078
 
  1,356,830
 
TOTAL ASSETS
 
$
43,374,275
 
$
29,749,213
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
 
 
Accrued expenses and other payables
 
$
1,345,310
 
$
667,622
 
Customer deposits
 
 
25,676,516
 
 
16,195,289
 
Advance from customers
 
 
260,353
 
 

 
Tax payables
 
 
1,873,906
 
 
1,564,370
 
Total current liabilities
 
 
29,156,085
 
 
18,427,281
 
 
 
 
 
 
 
 
 
NON-CURRENT LIABILITIES
 
 
 
 
 
 
 
Deferred tax liabilities
 
$
60,476
 
$
45,037
 
Total non-current liabilities
 
 
60,476
 
 
45,037
 
 
 
 
 
 
   
 
TOTAL LIABILITIES
 
 
29,216,561
 
 
18,472,318
 
 
 
 
 
 
 
 
 
COMMITMENTS AND CONTINGENCIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
Common stock, 1,000,000,000 shares authorized; $0.001 par value; 11,119,276 shares issued and outstanding as of June 30, 2016 and December 31, 2015
 
 
11,119
 
 
11,119
 
Additional paid-in capital
 
 
5,124,991
 
 
4,465,217
 
Retained earnings
 
 
9,014,872
 
 
6,801,977
 
Accumulated other comprehensive income (loss)
 
 
6,732
 
 
(1,418
)
Total stockholders’ equity
 
 
14,157,714
 
 
11,276,895
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
43,374,275
 
$
29,749,213
 
 
 
 
 
 
 
 
 
 
 
TAKUNG ART CO., LTD AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 
(Stated in US Dollars except Number of Shares)
 
 
 
 
 
For the Three Months Ended
June 30,

 
 
For the Six Months Ended
June 30,

 
 
 
2016
 
 
2015
 
 
2016
 
 
2015
 
 
 
(Unaudited)
 
 
(Unaudited)
 
 
(Unaudited)
 
 
(Unaudited)
 
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
Listing fee revenue
 
$
3,002,474
 
 
$
606,143
 
 
$
5,197,538
 
 
$
1,109,776
 
Commission revenue
 
 
926,789
 
 
 
301,382
 
 
 
2,070,260
 
 
 
1,027,990
 
Gross management fee revenue
 
 
431,584
 
 
 
28,436
 
 
 
560,075
 
 
 
71,785
 
Annual fee revenue
 
 
268
 
 
 
140
 
 
 
429
 
 
 
1,429
 
Authorized agent subscription revenue
 
 
322,158
   
 

 
 
 
643,741
 
 
 

 
Total revenue
 
 
4,683,273
 
 
 
936,101
 
 
 
8,472,043
 
 
 
2,210,980
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenue
 
 
(275,416
)
 
 
(200,120
)
 
 
(537,483
)
 
 
(377,812
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit
 
 
4,407,857
 
 
 
735,981
 
 
 
7,934,560
 
 
 
1,833,168
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
General and administrative expenses
 
 
(1,770,351
)
 
 
(601,186
)
 
 
(3,331,724
)
 
 
(1,067,679
)
Selling expenses
 
 
(703,366
)
 
 
(48,343
)
 
 
(1,341,575
)
 
 
(57,799
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from operations
 
 
1,934,140
 
 
 
86,452
 
 
 
3,261,261
 
 
 
707,690
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income
 
  99,887
 
 
 
454
 
 
 
150,530
 
 
 
454
 
Exchange gain or loss
 
 
(538,006
)
 
 

 
 
 
(418,550
)
 
 
29
 
Total other (loss) income
 
 
(438,119
)
 
 
454
 
 
 
(268,020
)
 
 
483
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before provision for income taxes
 
 
1,496,021
 
 
 
86,906
 
 
 
2,993,241
 
 
 
708,173
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for income taxes
 
 
379,178
 
 
 
9,730
 
 
 
780,346
 
 
 
136,902
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
$
1,116,843
 
 
$
77,176
 
 
$
2,212,895
 
 
$
571,271
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustment
 
 
(3,934
)
 
 
984
 
 
 
8,150
 
 
 
620
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income
 
$
1,112,909
 
 
$
78,160
 
 
$
2,221,045
 
 
$
571,891
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Earnings per common share-basic
 
$
0.11
 
 
$
0.01
 
 
$
0.21
 
 
$
0.06
 
Earnings per common share-diluted
 
 
0.10
 
 
 
0.01
 
 
 
0.20
 
 
 
0.06
 
Weighted average number of common shares outstanding-basic
 
 
10,632,276
 
 
 
9,332,267
 
 
 
10,632,276
 
 
 
9,332,267
 
Weighted average number of common shares outstanding-diluted
 
 
11,311,385
 
 
 
9,332,267
 
 
 
11,232,989
 
 
 
9,332,267
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TAKUNG ART CO., LTD AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF CASH FLOW
 
(STATED IN U.S. DOLLARS)
 
(UNAUDITED)
 
 
 
 
 
For the Six Months Ended
June 30,

 
 
 
2016
 
 
2015
 
Cash flows from operating activities:
 
 
   
 
 
 
 
 
 
 
 
 
Net income
 
$
2,212,895
 
 
$
571,271
 
Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
 
 
 
 
 
Depreciation
 
 
239,700
 
 
 
156,940
 
Amortization
 
 
1,663
 
 
 

 
Changes in exchange rate
 
 
539,986
 
 
 

 
Stock-based compensation
 
 
659,774
 
 
 

 
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
 
Deposits
 
 
104,079
 
 
 
(116,498
)
Prepayment and other current assets
 
 
349,671
 
 
 
(15,762
)
Other non-current assets
 
 
(196,199
)
 
 

 
Account receivables
 
 
(551,839
)
 
 

 
Due from director
 
 
502
 
 
 
(7,033
)
Customer deposits
 
  9,481,227
 
 
 
17,789
 
Deferred tax assets
 
 
(49,709
)
 
 

 
Deferred tax liabilities
 
 
(45,037
)
 
 
(9,310
)
Restricted cash
 
 
(9,481,227
)
 
 
(17,789
)
Tax payables
 
 
309,536
 
 
 
146,238
 
Advance from customers
 
 
260,353
 
 
 

 
Accrued expenses and other payables
 
 
259,138
 
 
 
(1,139,853
)
Net cash provided by (used in) operating activities
 
 
4,094,513
 
 
 
(414,007
)
 
 
 
 
 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
Purchase of property and equipment
 
 
(884,555
)
 
 
(236,448
)
Purchase of held-to-maturity investments
 
 
(9,780,466
)
 
 

 
 
 
 
 
 
 
 
 
 
Net cash used in investing activities
 
  (10,665,021
)
 
 
(236,448
)
 
 
 
 
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
 
 
 
 
Proceeds from subscription receivables
 
 

 
 
 
515,876
 
Net cash provided by financing activities
 
 

 
 
 
515,876
 
 
 
 
 
 
 
 
 
 
Effect of exchange rate change on cash and cash equivalents
 
 
(104,339
)
 
 
618
 
 
 
 
 
 
 
 
 
 
NET (DECREASE) IN CASH AND CASH EQUIVALENTS
 
 
(6,674,847
)
 
 
(133,961
)
 
 
 
 
 
 
 
 
 
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD
 
 
10,769,456
 
 
 
2,355,839
 
 
 
 
 
 
 
 
 
 
CASH AND CASH EQUIVALENTS – END OF PERIOD
 
$
4,094,609
 
 
$
2,221,878
 
 
 
 
 
 
 
 
 
 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITY
 
 
 
 
 
 
 
 
Cash paid during the period for income taxes
 
$
563,021
 
 
$

 
Cash paid during the period for interest expense
 
$

 
 
$

 
 
 
 
 
 
 
 
 
 

Contacts:
Takung Art Co., Ltd.
Leslie Chow
+852 31580977
leslie.chow@takungae.com

Asia IR PR – Investor Relations
Jimmy Caplan
512-329-9505
jimmy@asia-irpr.com

Asia IR PR – Media Relations
Rick Eisenberg
212-496-6828
rick@asia-irpr.com

Copyright © 2016 Marketwired. All Rights Reserved

The above news release has been provided by the above company via the OTC Disclosure and News Service. Issuers of news releases and not OTC Markets Group Inc. are solely responsible for the accuracy of such news releases.

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