TROO TROOPS Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION 

Washington, D. C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 under the
Securities Exchange Act of 1934

 

For the month of November 2023

 

Commission File Number: 001-35016

 

TROOPS, Inc.

 

Unit A, 18/F, 8 Fui Yiu Kok Street,

Tsuen Wan, New Territories,

Hong Kong

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

 

Form 20-F x Form 40-F ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

 

This report is hereby incorporated by reference to the Registration Statement on Form F-3 (File No. 333-176437) of the Company.

 

 

 

Change of Office Address

 

On November 14, 2023, the Company moved its principal office to Unit A, 18/F, 8 Fui Yiu Kok Street, Tsuen Wan, New Territories, Hong Kong. The Company’s telephone remained the same at +852 2153 3957.

 

Other Information

 

Attached hereto as Exhibit 99.1 the Company’s unaudited financial and operating results for the six months ended June 30, 2023; attached hereto as Exhibit 99.2 are the unaudited condensed consolidated financial statements of the Company as of June 30, 2023 and for the six months ended June 30, 2023 and 2022.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	TROOPS, Inc.
Date: November 20, 2023	By:	/s/ Raleigh Siu Lau
	Raleigh Siu Lau
	President and Chief Executive Officer

 

 

Exhibit Index

 

Exhibit Number		Description
99.1		TROOPS, Inc.’s 2023 Unaudited Interim Financial Results
99.2		Unaudited Condensed Consolidated Financial Statements as of June 30, 2023 and for the six months ended June 30, 2023 and 2022

 

Exhibit 99.1

 

TROOPS, Inc. Announces 2023 Unaudited Interim Financial Results

 

TROOPS, Inc. (Nasdaq: TROO) ("TROOPS" or the "Company"), a conglomerate group of various businesses with its headquarters based in Hong Kong. The group is principally engaged in (a) money lending business in Hong Kong providing mortgage loans to high quality target borrowers (b) property investment to generate additional rental income and (c) the development, operation and management of an online financial marketplace that provides one-stop financial technology solutions including API services by leveraging artificial intelligence, big data and blockchain, and cloud computing (SaaS). The group’s vision is to operate as a conglomerate to build synergy within its own sustainable ecosystem thereby creating value to its shareholders, today announced its unaudited operating results for the six months ended June 30, 2023.

 

2023 Interim Results Overview

 

Revenue

 

Our sales were $1.83 million for the six months ended June 30, 2023, which decreased by $0.09 million, or 4.7% from $1.92 million for the same period of 2022.  During the six months ended June 30, 2023, we through 11 Hau Fook Street Limited, Vision Lane Limited and Suns Tower Limited earned property lease and management income of $0.57 million, compared to income of $0.54 million in 2022. We through Giant Credit Limited and First Asia Finance Limited earned interest on loans from money lending services of $1.16 million for the six months ended June 30, 2023, compared to $1.20 million for the same period of 2022. We through Giant Financial Services Limited and Apiguru Pty Limited earned financial technology solutions and services income of $0.10 million for the six months ended June 30, 2023, compared to $0.18 million for the same period of 2022.

 

Below is the summary presenting the Company’s revenues disaggregated by products and services and timing of revenue recognition:

 

		For the six months ended June 30,
Revenue by recognition over time		2023				2022
		(Unaudited)				(Unaudited)
Revenue by recognition over time		$	1,834			$	1,924
		$	1,834			$	1,924

 

		For the six months ended June 30,
Revenue by major product line		2023				2022
		(Unaudited)				(Unaudited)
Interest on loans		$	1,160			$	1,203
Property lease and management			573				544
Financial technology solutions and services			101				177
		$	1,834			$	1,924

 

 

Cost of revenues

 

For the six months ended June 30, 2023, cost of revenues decreased by $0.15 million, or 9.6%, to $1.42 million from $1.57 million for the six months ended June 30, 2022. The decrease was in line with the revenue drop.

 

Gross profit

 

Our gross profit was $0.41 million for the six months ended June 30, 2023, compared to $0.36 million for the same period of 2022.

 

General and administrative expenses

 

General and administrative expenses amounted to approximately $1.47 million for the six months ended June 30, 2023, $0.29 million or 24.6% higher than $1.18 million for the same period of previous year. This increase was mainly due to more IT-related expenses of approximately $0.16 million.

 

General and administrative expenses include system development fee, staff salary and benefits, legal and professional fees, office expenses, travel expenses, entertainment, IT consultancy and support services expenses, depreciation, amortization of intangible assets.

 

Impairment loss of loan and interest receivable

 

Impairment loss of loan and interest receivable based on historical experience and an estimate of collectability of the loans receivable and interest receivable. Our provision for loan losses and interest receivable were $nil and $0.61 million for the six months ended June 30, 2023 and 2022, respectively.

 

Income tax benefit

 

Income tax benefit was $0.05 million for the six months ended June 30, 2023, a decrease of $0.06 million, from income tax benefit of $0.11 million for the same period of 2022. Income tax benefit was related to the deferred tax impact on intangible assets and property and plant.

 

Our subsidiaries in Hong Kong are subject to Hong Kong taxation on income derived from their activities conducted in Hong Kong at a rate of 16.5%. Our subsidiary in Australia is subject to the Australian lower company tax rate of 25.0%. Our PRC entity was subject to the statutory PRC enterprise income tax rate of 25.0%.

 

Net loss

 

As a result of the various factors described above, net loss for the six months ended June 30, 2023 was $1.04 million, as compared to $1.18 million for the same period of 2022.

  

About TROOPS, Inc.

 

TROOPS, Inc. is a conglomerate group of various businesses with its headquarters based in Hong Kong. The group is principally engaged in (a) money lending business in Hong Kong providing mortgage loans to high quality target borrowers (b) property investment to generate additional rental income and (c) the development, operation and management of an online financial marketplace that provides one-stop financial technology solutions including API services by leveraging artificial intelligence, big data and blockchain, and cloud computing (SaaS). The group’s vision is to operate as a conglomerate to build synergy within its own sustainable ecosystem thereby creating value to its shareholders. For more information about TROOPS, please visit our investor relations website:

 

www.troops.co

 

 

Safe Harbor and Informational Statement

 

This announcement contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including, without limitation, those with respect to the objectives, plans and strategies of the Company set forth herein and those preceded by or that include the words "believe," "expect," "anticipate," "future," "will," "intend," "plan," "estimate" or similar expressions, are "forward-looking statements". Forward-looking statements in this release include, without limitation, the effectiveness of the Company's multiple-brand, multiple channel strategy and the transitioning of its product development and sales focus and to a "light-asset" model. Although the Company's management believes that such forward-looking statements are reasonable, it cannot guarantee that such expectations are, or will be, correct. These forward looking statements involve a number of risks and uncertainties, which could cause the Company's future results to differ materially from those anticipated. These forward-looking statements can change as a result of many possible events or factors not all of which are known to the Company, which may include, without limitation, our ability to have effective internal control over financial reporting; our success in designing and distributing products under brands licensed from others; management of sales trend and client mix; possibility of securing loans and other financing without efficient fixed assets as collaterals; changes in government policy in China; China's overall economic conditions and local market economic conditions; our ability to expand through strategic acquisitions and establishment of new locations; compliance with government regulations; legislation or regulatory environments; geopolitical events, and other events and/or risks outlined in TROOPS 's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F and other filings. All information provided in this press release and in the attachments is as of the date of the issuance, and TROOPS does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

 

Exhibit 99.2

 

TROOPS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS 

AS OF JUNE 30, 2023, AND DECEMBER 31, 2022 

(In thousands of U.S. dollars except share and per share data)

 

		As of
		June 30, 2023				December 31, 2022
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash		$	3,161			$	2,950
Loans receivable, net of provision for loan losses of $1,388 and $619, respectively			7,611				8,380
Interest receivable			167				4
Other receivables, prepayments and deposits, net of provision for credit losses of $3 and $3, respectively			288				205
Total current assets			11,227				11,539
Deposits for acquisition of a subsidiary, net of provision for credit losses of $131 and $131, respectively			4,869				4,869
Plant and equipment, net			47,806				48,655
Operating lease right-of-use assets, net			15				26
Intangible assets, net			31				42
Long-term loans receivable, net of provision for loan losses of $684 and $1,453, respectively			6,228				4,170
Goodwill			385				385
Total non-current assets			59,334				58,147
Total assets		$	70,561			$	69,686
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term loan			1,282				-
Accounts payable			1				2
Other payables and accrued liabilities			2,006				1,258
Operating lease liability, current			15				22
Customer deposits			-				88
Taxes payable			832				721
Convertible notes - current			94				94
Total current liabilities			4,230				2,185
LONG-TERM LIABILITIES
Operating lease liability, non-current			-				4
Non-current Deferred tax liabilities			5,167				5,293
Total non-current liabilities			5,167				5,297
Total liabilities			9,397				7,482
COMMITMENTS AND CONTINGENCIES			-				-
SHAREHOLDERS' EQUITY
Preferred stock, $0.001 par value, 1,000,000 shares authorized, nil issued and outstanding as of June 30, 2023 and December 31, 2022			-				-
Ordinary shares, $0.004 par value, 500,000,000 shares authorized, 101,597,998 issued and outstanding as of June 30, 2023 and December 31, 2022			406				406
Additional paid-in-capital			135,674				135,674
Retained deficit			(74,917	)			(73,879	)
Accumulated other comprehensive income			1				3
Total  shareholders' equity			61,164				62,204
Total liabilities and shareholders' equity		$	70,561			$	69,686

 

 

TROOPS, INC. AND SUBSIDIARIES 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS 

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022 

(In thousands of U.S. dollars except share and per share data)

 

		2023				2022
		(Unaudited)				(Unaudited)
REVENUES		$	1,834			$	1,924
COST OF REVENUES			1,424				1,567
GROSS PROFIT			410				357
OPERATING EXPENSES:
General and administrative expenses			1,469				1,175
Impairment loss of loan and interest receivables			-				610
Total operating expenses			1,469				1,785
OPERATING LOSS			(1,059	)			(1,428	)
OTHER (EXPENSES) INCOME:
Interest income			7				-
Interest expense			(32	)			(26	)
Other income, net			(3	)			163
Total other income, net			(28	)			137
LOSS FROM OPERATIONS BEFORE PROVISION FOR INCOME TAXES			(1,087	)			(1,291	)
INCOME TAX BENEFIT			49				114
NET LOSS		$	(1,038	)		$	(1,177	)
OTHER COMPREHENSIVE LOSS:
Foreign currency translation adjustment			(2	)			(5	)
COMPREHENSIVE LOSS		$	(1,040	)		$	(1,182	)
LOSS PER SHARE:
Basic		$	(0.01	)		$	(0.01	)
Diluted		$	(0.01	)		$	(0.01	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES:
Basic			101,597,998				101,597,998
Diluted			101,597,998				101,597,998

 

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