TROO.NASDAQTroops, INC /CAYMAN Islands/
20-F: TROOPS, Inc. Files 20-F Annual Report for Fiscal Year 2024, Highlights Growth and Strategic Initiatives
Sentiment:
Annual Report
TROOPS, Inc. reports its 20-F filing for the fiscal year ended December 31, 2024, showcasing revenue growth and strategic business activities in money lending, property investment, and fintech services.
Worse than expectedThe net loss increased significantly from $1.72 million in 2023 to $13.41 million in 2024.
Summary
- TROOPS, Inc. has filed its 20-F annual report for the fiscal year ended December 31, 2024.
- The company operates as a conglomerate with interests in money lending, property investment, and fintech services.
- TROOPS reported a revenue increase to $10.07 million in 2024 from $3.57 million in 2023.
- The company experienced a net loss of $13.41 million in 2024, compared to a net loss of $1.72 million in 2023.
- Key business activities include money lending through Giant Credit and First Asia Finance, property investment via 11 Hau Fook Street, Suns Tower, and Vision Lane, and fintech services through Giant Financial Services.
- The company acquired Riches Holdings in May 2024 for $13.4 million, expanding its service offerings.
- As of December 31, 2024, the company had cash and cash equivalents of $5.17 million and working capital of $13.64 million.
- The company's strategy includes building synergy within its ecosystem to create value for shareholders.
Sentiment
Score: 4
Explanation: While revenue increased significantly, the substantial increase in net loss and various risk factors temper the positive aspects, resulting in a neutral to slightly negative sentiment.
Positives
- Significant revenue growth, with revenue increasing to $10.07 million in 2024.
- Expansion of service offerings through the acquisition of Riches Holdings.
- Increase in revenue from property lease and management and money lending services.
- Effective internal control over financial reporting was maintained as of December 31, 2024.
- Cash and cash equivalents of $5.17 million and working capital of $13.64 million as of December 31, 2024.
Negatives
- Net loss increased significantly to $13.41 million in 2024.
- Impairment losses on loan and interest receivables were $3.47 million in 2024.
- General and administrative expenses increased by $1.20 million in 2024.
- Loss on change in fair value of convertible notes was $7.69 million in 2024.
- Impairment loss of trade receivables was $0.24 million in 2024.
Risks
- The company is subject to regulatory risks in jurisdictions where it operates.
- Increasing regulatory scrutiny of privacy and data protection could impact the business.
- Security breaches and cyber-attacks could damage the company's reputation and financial condition.
- Downturns in the Hong Kong, China, or global economy could adversely affect the business.
- The company may fail to meet continued listing requirements on the NASDAQ Capital Market.
- The trading price of the ordinary shares is likely to be volatile, which could result in substantial losses to investors.
- Changes in PRC government policies and regulations could affect the company's ability to operate profitably.
- The company may rely on dividends and other distributions on equity paid by its subsidiaries to fund any cash and financing requirements it may have.
Future Outlook
The company intends to keep any future earnings to finance the expansion of its business and does not anticipate paying any cash dividends in the foreseeable future.
Industry Context
The company operates in the money lending, property investment, and fintech industries, which are subject to economic conditions, regulatory changes, and competition.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Director | NA | Damian Thurnheer | June 24, 2024 | Appointment |
| President and Chief Executive Officer | NA | Damian Thurnheer | June 24, 2024 | Appointment |
| Director | NA | Rui Wu | June 24, 2024 | Appointment |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Clawback Policy | The board of directors adopted a clawback policy permitting the Company to seek the recoupment of incentive compensation received by any of the Companys current and former executive officers. | November 17, 2023 | The amount to be recovered will be the excess of the incentive compensation paid to the Covered Executive based on the erroneous data over the incentive compensation that would have been paid to the Covered Executive had it been based on the restated results, as determined by the board. |
Legal Proceedings
- TROOPS, Inc. and certain subsidiaries were involved in a civil lawsuit in Hong Kong (HCA 938 of 2022) alleging unlawful means of conspiracy and other claims.
- Injunctions against the company and certain subsidiaries were discharged on September 19, 2023, with certain conditions imposed.
- The trial commenced on March 5, 2024, and ended on August 27, 2024, with the judgment still pending from the High Court as of the date of this report.
- The company believes the lawsuit is without merit and intends to defend the case vigorously.
Related Party Transactions
- The Company has trade receivables from Riches Credit Insurance Brokerage Limited, which is principally owned by the Companys director, Rui Wu.
- Ms Kwok Kai Kai Clara, the beneficiary owner of Prime Ocean Holdings Limited, loaned $1.92 million and $0.38 to Giant Credit Limited, which is unsecured, non-interest bearing and repayable on demand.
- The Company has provided insurance referral services to Riches Credit Insurance Brokerage Limited, and has charged service fee on the basis of that.
Stakeholder Impact
- Shareholders may experience volatility in the trading price of the ordinary shares.
- The company's ability to pay dividends is not anticipated in the foreseeable future.
- The company's performance is subject to economic conditions and regulatory changes in the regions where it operates.
- Employees are not represented by a labor organization or covered by a collective bargaining agreement.
Next Steps
- The company intends to integrate GFS into its existing platform to support its current business lines.
- The company intends to continue to enhance its brand reputation by providing contactless and online service platform to make business safer and more convenient.
- The company intends to continue to offer attractive and competitive rates for its tenants during the pandemic, keeping the occupancy rate in its investment properties above 90%.
Key Dates
| Date | Description |
|---|---|
| July 18, 2007 | TROOPS, Inc. was incorporated in the Cayman Islands. |
| March 12, 2008 | TROOPS, Inc. completed its initial public offering (IPO). |
| March 12, 2010 | TROOPS, Inc. acquired Honesty Group. |
| November 15, 2011 | TROOPS, Inc. sold Honesty Group to Apex Flourish Group Limited. |
| December 24, 2014 | TROOPS, Inc. sold SGOCO (Fujian) to Apex Flourish Group Limited. |
| December 28, 2015 | SGOCO International acquired Boca International Limited. |
| April 23, 2017 | SGOGO International acquired Century Skyway Limited. |
| December 22, 2017 | Giant Connection Limited acquired Giant Credit Limited. |
| March 8, 2018 | Giant Connection Limited acquired 11 Hau Fook Street Limited. |
| June 7, 2018 | Giant Connection Limited acquired Paris Sky Limited. |
| March 12, 2019 | Paris Sky Limited acquired Vision Lane Limited. |
| December 23, 2019 | TROOPS, Inc. entered into a Share Exchange Agreement with Victor Or for the purchase and sale of Giant Financial Services Limited. |
| January 31, 2020 | TROOPS, Inc. closed its acquisition of Giant Financial Services Limited. |
| September 28, 2020 | Giant Financial Services Limited closed a Share Exchange Agreement for the entire issued share capital of Apiguru Pty Ltd. |
| May 9, 2024 | TROOPS, Inc. entered into a sale and purchase agreement with LIANTENG LIMITED for the purchase of the entire issued and outstanding share capital of Riches Holdings. |
| May 31, 2024 | TROOPS, Inc. closed its acquisition of Riches Holdings. |
| December 9-10, 2024 | LIANTENG LIMITED exercised conversion rights, converting US$13.4 million into 10,912,168 ordinary shares. |
| December 11, 2024 | Conversion of 10,912,168 ordinary shares was completed. |
Keywords
financial services, money lending, property investment, fintech, revenue, net loss, acquisition, Riches Holdings, Giant Credit, GFS, Hong Kong, China
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