PR Newswire | May 3, 2021 07:30AM EDT

2020 Financial Results

05/03 06:30 CDT

Nisun International Enterprise Development Group Co., Ltd Reports Fiscal Year 2020 Financial Results SHANGHAI, May 3, 2021

SHANGHAI, May 3, 2021 /PRNewswire/ -- Nisun International Enterprise Development Group Co., Ltd ("Nisun International" or the "Company") (Nasdaq: NISN), a provider of innovative comprehensive solutions through the integration of technology, industry, and finance, today announced its audited financial results for the year ended December 31, 2020.

Mr. Xiaoyun Huang, Chairman and Chief Executive Officer of Nisun International, commented, "As we reflect on 2020, our business evolved both literally and figuratively. The onset of the COVID-19 pandemic presented challenges to our business and pushed us to adapt and refine our business model to focus on SME financing and supply chain solutions. Amid the mergers and acquisitions and dispositions, we are excited to see our strong financial performance in the second half of 2020, as our business generated $42.2 million in revenue in the 2020 fiscal year. Furthermore, we launched a new supply chain solutions financing business, which is likely to further drive overall business growth. Looking ahead to 2021, Nisun remains committed to providing high-quality supply chain products and services to our clients."

Financial Results for the Full Year ended December 31, 2020

Revenues

Total revenue from continuing operations increased to approximately $42.2 million for the year ended December 31, 2020 from $2.5 million for the year ended December 31, 2019.

* Revenues generated from the Small- and Medium-Enterprise (SME) financing solutions business were $40.8 million in 2020, compared to $2.5 million in prior year. This was primarily due to increasing demands from SMEs in China seeking standardized financing solutions as an alternative to bank financing. * The Company commenced its supply chain solution business in January 2020. With a focus on linkages in the finance industry, the Company aims to serve the upstream and downstream of the supply-chain industry while facilitating supply-side sub-sector reform. For fiscal 2020, revenue generated from supply chain solutions was $1.4 million. The Company achieved total supply chain transaction volume of approximately $50.6 million (RMB349.6 million) during fiscal 2020. The Company expects this growth trend will continue in 2021. * The Company commenced its other financing services business in July 2019. Revenues generated from other financing solution services were $0.04 million in 2020, compared to $3,381 in prior year.

Year ended December 31, Changes Changes

2020 % 2019 % ($) (%)

Small andMediumEnterprise $ 40,779,794 97 % $ 2,522,143 100 % 38,257,651 1517 %financingsolutions

Supply chainfinancing 1,369,859 3 % - - % 1,369,859 100 %solutions

Otherfinancing 40,538 0 % 3,381 - % 37,157 1099 %solutions

Total revenue $ 42,190,191 100 % $ 2,525,524 100 % 39,664,667 1571 %

Cost of Revenue

Cost of revenue from continuing operation increased to $20.0 million in 2020 from 0.02 million in 2019. The increase was primarily due to: (i) increases in direct advertising and marketing costs; (ii) increases in direct costs associated with staff who design and manage SME financing solutions, supply chain solutions, and other financing solutions business- and sales-related taxes; and (iii) increases in office rent and expenses, excluding depreciation and amortization expenses, which are separately presented.

Selling, General and Administrative Expenses

Selling, general and administrative expenses are comprised of indirect advertising and marketing costs, office rent and expenses, costs associated with staff and support personnel who manage the Company's business activities, and professional fees paid to third parties. In fiscal 2020, the Company incurred selling, general, and administrative expenses of appropriately $12.2 million, as compared to approximately $1.3 million in fiscal 2019. The increase was mainly due to the increase in advertising and marketing expenses to acquire customers and brand image.

* Selling expenses increased to $3.2 million in 2020, compared to approximately $0.1 million in prior year, representing an increase of approximately $3.1 million. The increase in selling expenses was mainly attributable to the $2.6 million in advertising and marketing expenses in fiscal 2020 incurred by the Company's newly acquired subsidiary, Nami, to promote its business. * General and administrative expenses increased to approximately $8.2 million in 2020 from $1.1 million in 2019, representing an increase of approximately $7.1 million. The increase in general and administrative expenses was mainly due to: (i) more labor and managerial expenses incurred in fiscal 2020 mainly because the Company started to conduct its financial services business in July 2019; (ii) more spending in professional fees related to mergers and acquisitions (M&A) in fiscal 2020; and (iii) incurring approximately $1.1 million share-based compensation expenses, compared to nil in 2019. * Research and development (R&D) expenses were $0.8 million in 2020, compared to $0.2 million in 2019, representing an increase of $0.6 million. The increase in R&D expenses was primary due to R&D developments in the upgrading and development in our supply chain financing and other financing service APPs and platforms in 2020.

Other income (expense), net

In fiscal 2020, the Company had a net other income of 0.8 million, as compared to an insignificant net other expense in fiscal 2019. The increase was due to investment income from a short-term investment and interest income from loans to third parties.

Net income from continuing operations

Net income from continuing operations increased to $9.9 million in 2020, from $1.2 million in 2019. The increase was mainly because the Company began to conduct its financial services business in July 2019 through the Company's three consolidated operating entities, Fintech, Hengpu, and Nami Shanghai, as well as their subsidiaries.

Net loss from discontinued operations

For fiscal year 2020, the Company had a loss from discontinued operations of $23.0 million, compared to a gain of $1.5 million from the equipment and engineering business in 2019. The increase in net loss was mainly due to an impairment loss of $22.4 million from the equipment and engineering business's assets as a result of its continuous losses.

Net income and Income (loss) per share

For fiscal 2020, the Company incurred a net loss of $13.1 million, as compared to a net income of approximately $2.7 million for fiscal 2019. The net loss in 2020 was primarily derived from $9.9 million of net income from the Company's financial service business and net loss of $23.0 million from discontinued operations.

Net loss per share was $0.71 in 2020, compared to a net income per share of $0.17 in the prior year. The net income per share from continuing operation was $0.53 for fiscal 2020, compared to $0.08 for fiscal 2019. The weighted average number of shares was 18,587,674 for fiscal 2020, compared to 16,269,577 for fiscal 2019.

Financial Condition and Cash Flow

As of December 31, 2020, the Company had cash, cash equivalents and restricted cash of $22.2 million, compared to $2.8 million as of December 31, 2019. This increase was primarily attributable to $2.2 million in operating activities and $19.1 million in financing activities, against $4.7 million used in investing activities.

Net cash provided by operating activities in fiscal 2020 was approximately $2.3 million, which was primarily attributable to a net income of approximately $9.9 million, adjusted for non-cash items of approximately $2.0 million and changes in working capital of approximately negative $9.8 million. The adjustments for changes in working capital mainly included: (i) an increase $10.7 million in receivable from supply chain solution of, primarily from our supply chain financing business launched in January 2020; (ii) an increase in accounts payable of $1.0 million; (iii) a decrease in other payables of $2.1 million; and (iv) an increase in tax payables of $1.6 million due to higher earnings. Net cash provided by operating activities for fiscal 2019 was approximately $0.6 million.

Net cash used in investing activities was $4.7 million for fiscal 2020, primarily attributable to: (i) the $5.0 million in cash acquired in connection with the Company's acquisition of Nami; (ii) a $15.6 million of investment in debts securities; (iii) a $3.1 million of investment in short-term investment; and (iv) $11.0 million of repayment from loans to third parties and $1.8 million less in new loans to third parties. Net cash used in investing activities was $1.8 million for fiscal 2019.

Net cash provided by financing activities was $19.1 million in fiscal 2020, primarily attributable to: (i) the proceeds of $6.5 million from private placement transactions; (ii) a $10.5 million loan from shareholder Nisun Cayman; (iii) $3.1 million of capital contribution with non-controlling interest; (iv) $4.6 million of capital contribution from shareholder Nisun Cayman; and (v) $6.8 million of repayment made to related parties. Net cash provided in financing activities was approximately $4.1 million for fiscal 2019.

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 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://www.fintaike.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., LtdInvestor RelationsShaokang (Ken) LuTel: +86 (21) 2357-0055Email: lushaokang@cninsun.com

ICR, LLCTel: +1 203 682 8233Email: nisun@icrinc.com

NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2020, AND 2019

(EXPRESSED IN US DOLLARS)

December 31, December 31,

2020 2019 *

ASSETS

CURRENT ASSETS:

Cash and cash equivalents $ 22,135,310 $ 2,756,490

Restricted cash 62,947 25,016

Short-term investment 4,680,843 -

Accounts receivable, net 4,939,912 1,233,038

Receivables from supply chain financing 10,741,981 -

Prepaid expenses and other current assets 971,839 280,202

Loans to third parties - current portion 1,915,709 2,434,715

Due from discontinued operations - 9,201,432

Receivable from sale of discontinued operations 14,950,730 -

Assets of discontinued operations - current - 36,985,779

TOTAL CURRENT ASSETS 60,399,271 52,916,672

NON-CURRENT ASSETS:

Property and equipment, net 655,643 287,057

Intangible assets, net 3,726,602 4,189,350

Right-of-use assets, net 1,464,745 502,670

Loans to third parties - non-current - 2,872,820

Equity investments 484,864 500,715

Investment in limited partnership 15,736,927 -

Goodwill 25,172,407 11,074,864

Deferred tax assets, net 456,370 20,040

Assets of discontinued operations - non-current - 21,636,501

TOTAL NON-CURRENT ASSETS 47,697,558 41,084,017

TOTAL ASSETS $ 108,096,829 $ 94,000,689

LIABILITIES

CURRENT LIABILITIES:

Accounts payable $ 1,312,560 $ 224,045

Accrued expenses and other current liabilities 2,001,031 674,169

Operating lease liabilities - current 736,854 138,133

Advance from customers 11,624 28,728

Taxes payable 3,133,038 138,157

Loan from related party 10,528,965 -

Due to related parties 2,071,039 7,759,443

Purchase price payable for acquisition 7,007,905 -

Liabilities of discontinued operations - current - 28,472,022

TOTAL CURRENT LIABILITIES 26,803,286 37,434,697

Operating lease liabilities - non-current 680,130 368,019

Deferred tax liabilities 676,015 805,826

Liabilities of discontinued operations - - 1,456,634non-current

TOTAL LIABILITIES 28,159,431 40,065,176

Commitments and contingencies

EQUITY:

Class A common stock, $0.001 par value,40,000,000 shares authorized, 20,555,129 and 17,710,471 shares 20,555 17,710issued and outstanding as of December 31, 2020 and 2019,respectively

Class B common stock, $0.001 par value,10,000,000 shares authorized, nil shares issued and outstanding - -as of December 31, 2020 and 2019, respectively

Additional paid-in capital 59,472,255 28,369,076

Retained earnings 14,380,976 27,472,766

Unearned compensation (624,455)

Accumulated other comprehensive income (loss) 3,593,188 (1,914,232)

TOTAL SHAREHOLDERS' EQUITY 76,842,519 53,945,320

Non-controlling interests 3,094,879 (9,807)

TOTAL EQUITY 79,937,398 53,935,513

TOTAL LIABILITIES AND EQUITY $ 108,096,829 $ 94,000,689

*The amounts have been reclassified to conform with the Company's decision to classify Hebron HK as assets and liabilities of discontinued operations.

NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

AS OF DECEMBER 31, 2020, AND 2019

(EXPRESSED IN US DOLLARS)

For the Years Ended December 31,

2020 2019 2018

REVENUE:

Small and Medium Enterprise 40,779,794 2,522,143 -financing solutions

Supply Chain financing 1,369,859 - -solutions

Other financing solutions 40,538 3,381 -

Financial services $ 40,190,191 $ 2,525,524 $ -

COST OF REVENUE AND RELATED -TAXES:

Cost of revenue (19,740,267) - -

Business and sales related (233,389) (19,492) -taxes

GROSS PROFIT 22,216,535 2,506,032 -

OPERATING EXPENSES:

Selling expenses 3,181,810 93,620 -

General and administrative 8,188,736 1,082,631 1,170,900expenses

Research and development 817,770 155,216 923,094expenses

Total operating expenses 12,188,316 1,331,467 2,093,994

INCOME (LOSS) FROM OPERATIONS 10,028,219 1,174,565 (2,093,994)

OTHER INCOME (EXPENSE):

Interest and investment income 585,177 - -

Other income (expense), net 244,274 1,371 -

Total other income (expense), 829,451 1,371 -net

INCOME (LOSS) BEFORE PROVISION 10,857,670 1,175,936 (2,093,994)FOR INCOME TAXES

PROVISION (BENEFIT) FOR INCOME 941,064 (55,731) -TAXES

NET INCOME (LOSS) FROM 9,916,606 1,231,667 (2,093,994)CONTINUING OPERATIONS

DISCONTINUED OPERATIONS:

(Loss) income from discontinued (23,107,066) 1,508,323 (3,050,721)operations, net of tax

Net gain on sale ofdiscontinued operations, net of 136,050 - -tax

NET (LOSS) INCOME FROMDISCONTINUED OPERATIONS, NET OF (22,971,016) 1,508,323 (3,050,721)TAX

NET (LOSS) INCOME (13,054,410) 2,739,990 (5,144,715)

Net income attributable to 37,380 - -non-controlling interests

NET (LOSS) INCOME ATTRIBUTEABLE (13,091,790) 2,739,990 (5,144,715)TO SHAREHOLDERS

OTHER COMPREHENSIVE INCOME(LOSS)

Foreign currency translation 5,507,420 (561,091) (1,755,528)income (loss)

COMPREHENSIVE (LOSS) INCOME (7,584,370) $ 2,178,899 (6,900,243)

Comprehensive loss attributable (2,172) - -to non-controlling interests

COMPREHENSIVE (LOSS) INCOME $ (7,582,198) $ 2,178,899 $ (6,900,243)ATTRIBUTABLE TO SHAREHOLDERS

BASIC AND DILUTED EARNINGS(LOSS) PER COMMON SHARE:

Income(loss) from continuing $ 0.53 $ 0.08 $ (0.13)operations

Income (loss) from discontinued (1.24) 0.09 (0.20)operations

TOTAL (LOSS) EARNINGS PER $ (0.71) $ 0.17 $ (0.33)COMMON SHARE

Weighted average number ofshares outstanding-basic and 18,587,674 16,269,577 15,760,633diluted

NISUN INTERNATIONAL ENTERPRISE DEVELOPMENT GROUP CO., LTD AND SUBSIDIARIES

CONDENSED STATEMENTS OF CASH FLOWS

AS OF DECEMBER 31, 2020, AND 2019

(EXPRESSED IN US DOLLARS)

For the Years Ended December 31,

2020 2019 2018

CASH FLOWS FROM OPERATINGACTIVITIES:

Net loss $ (13,054,410) $ (2,739,990) $ (5,144,715)

Net (loss) income from (22,971,016) 1,508,323 (3,050,721)discontinued operations

Net income (loss) from 9,916,606 1,231,667 (2,093,994)continuing operations

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

Depreciation and amortization 1,686,518 242,409 -

Stock-based compensation 1,097,415 - -

Bad debt expense - - 1,162,594

Loss on disposition of 42,534 - -property and equipment

(Income) from investments (169,720) - -

Deferred taxes (584,760) (55,731) -

Changes in operating assetsand liabilities:

Decrease (increase) in 573,418 (815,534) -accounts receivable

Decrease (increase) inprepaid expenses and other 16,009 (108,150) 931,320current assets

(Increase) in operating lease (56,831) - -right-of-use assets

(Increase) in receivable from (10,741,981) - -supply chain solution

Increase in accounts 1,014,227 - -payable

Increase in advance from (17,977) - -customers

(Decrease) in other payable (2,112,886)

Increase in taxes payable 1,609,498 54,474 -

(Decrease) in operating (523,797) - -lease liabilities

Increase in accruedexpenses and other current 502,100 49,574 -liabilities

Net cash provided by (used in)operating activities from 2,250,373 598,709 (80)continuing operations

Net cash provided by (used in)operating activities from 436,389 (263,476) (725,000)discontinued operations

NET CASH PROVIDED BY (USED IN)OPERATING 2,686,762 335,233 (725,080)ACTIVITIES

CASH FLOWS FROM INVESTINGACTIVITIES:

Acquisition of property and (204,904) (237,548) -equipment

Acquisition of intangible (94,400) - -assets

Proceeds from disposal of 41,688 - -equipment

Cash acquired with business 4,990,754 2,043,176 -acquisitions

Investment in limited (15,589,966) - -partnership

Payments made for short-term (3,065,134) - -investment

Repayments from loan to third 11,019,545 - -parties

Loans to third parties (1,810,495) (3,611,682) -

Net cash (used in) investingactivities from continuing (4,712,912) (1,806,054) -operations

Net cash (used in) investingactivities from discontinued (6,713) (157,440) (115,210)operations

NET CASH (USED IN) FINANCING (4,719,625) (1,963,494) (115,210)ACTIVITIES

CASH FLOWS FROM FINANCINGACTIVITIES:

Repayment made to related (6,803,115) 566,360 -parties

Proceeds from related parties 1,303,556 - -

Loan from related parties 10,528,965 - -

Proceeds from private 6,503,378 - -placement

Capital contribution from 3,065,134 - -non-controlling interest

Capital contribution from 4,550,000 3,582,781 -shareholder

Net cash provided by financingactivities from continuing 19,147,918 4,149,141 -operations

Net cash (used in) provided byfinancing activities from (788,599) (996,355) 730,669discontinued operations

NET CASH PROVIDED BY FINANCING 18,359,319 3,152,786 730,669ACTIVITIES

EFFECT OF EXCHANGE RATE CHANGEON CASH 2,806,981 (184,449) (94,230)AND CASH EQUIVALENT

NET INCREASE (DECREASE) INCASH AND CASH 19,133,437 1,340,076 (203,860)EQUIVALENTS

Less: (decrease) in cash andcash equivalents from (283,314) (1,440,823) (203,710)

discontinued operations

NET INCREASE (DECREASE) INCASH AND CASH 19,416,751 2,780,899 (150)EQUIVALENTS FROM CONTINUINGOPERATIONS

CASH AND CASH EQUIVALENTS ANDRESTRICTED 2,781,506 607 757CASH-BEGINNING

CASH AND CASH EQUIVALENTS ANDRESTRICTED $ 22,198,257 $ 2,781,506 $ 607CASH-ENDING

SUPPLEMENTAL CASH FLOWDISCLOSURES:

Cash paid for income taxes $ 552,783 $ 5,158 $ 42,250

Cash paid for interest $ 124,778 $ 147,900 $ 91,917

SUPPLEMENTAL DISCLOSURE OFNON-CASH ACTIVITIES:

Payment payable to relatedparties for business $ 7,007,905 $ 7,000,000 $ -acquisition

Issuance of shares for $ 18,330,776 11,426,289 -business acquisition

Receivable from sale of $ 14,950,730 $ - $ -discontinued operations

Issuance of shares for 1,721,870 -shares-based compensation

Issuance of shares for $ - $ - $ 239,500consulting services

Issuance of shares for equity $ - $ - $ 2,885,556investment

CASH AND CASH EQUIVALENTS FROMCONTINUING OPERATION COMPRISEOF THEFOLLOWING:

Cash and cash equivalent $ 22,135,310 $ 2,756,490 $ 607

Restricted cash 62,947 25,016 -

Total cash, cash equivalents $ 22,198,257 $ 2,781,506 $ 607and restricted cash

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SOURCE Nisun International Enterprise Development Group Co., Ltd