LIMERICK, IRELAND--(Marketwired - Nov 10, 2016) - One Horizon Group, Inc. (
Brian Collins, CEO of One Horizon Group, stated, "Today, our VoIP technology is live all over the world and, most importantly, is now available to millions throughout new emerging markets. The successful deployment and value we created for Smart Communications and their subscribers, validated our business model and confirmed the value of our technology with other leading carriers. We have closed contracts with three carriers in Latin America and Africa in the third quarter and we are currently in active discussions with other carriers in Latin America, Africa, Asia and the Middle East."
Operational Highlights to Date:
- Signed licensing agreement with Hyette Intercontinental Telecom Inc ., Brazil's leading Voice and Data services provider with over 100,000 enterprises as clients and millions of subscribers in Latin America. One Horizon's agreement with Hyette, to go live first in Brazil and Colombia, marks the Company's first entrance into Latin America and falls in line with its initiative to deploy their technology throughout the region.
- Signed licensing agreement with Zimbabwe's leading mobile network operator. The application allows Zimbabweans to make low cost, high-quality phone calls and is fully integrated with Zimbabwe's leading secure mobile payment wallet. This marks the Company's first deployment in Africa.
- Sold its second software license in the Philippines for its data roaming VoIP solution, branded Marino All Abroad, specifically targeting seafarers with a higher estimated ARPU due to the longevity of their travels. The service is offered through Smart Communications, the Philippines' leading wireless service provider targeting approximately 460,000 Filipino seafarers worldwide. One Horizon receives over $4 per seafarer subscriber.
- Released a new cashless payment service for mobile operators to allow users to purchase call credit using their debit or credit card.
- Released new software that allows app users to purchase packages of minutes and to automatically renew their package subscription when it expires.
- Aishuo teamed up with global data-roaming SIM-card providers to offer its subscribers a direct, inside-Aishuo-app purchase of a local SIM-card for their chosen destination. The SIM-card is delivered to the subscribers home in China before they leave on vacation. Aishuo's travel SIM-card is used to give the subscriber affordable cellular Internet access so they can call China using the Aishuo app for the same price as a local call. We believe this is a unique and powerful combination for Chinese travelers.
Mr. Collins continued, "Downloads of our B2C application, Aishuo, continue to increase, totaling 43 million as of last month. It is important to note that while our competitors are offering their applications for free, we are monetizing our subscribers because Aishuo offers a tremendous value for the user. It is our technological advantage on the often poor quality Chinese cellular networks that drives users to pay for Aishuo calls rather than seek a free, low quality, often dropped, call from other Chinese VoIP apps. Today, we continue to focus on increasing the number of downloads and building our brand. As the market matures and becomes educated to the benefits of our technology versus our competitors, we are confident revenue growth will follow."
Financial Highlights for the First Nine Months and Third Quarter Ended September 30, 2016: Revenue for the nine months ended September 30, 2016 was approximately $1.3 million as compared to approximately $1.2 million for the nine months ended September 30, 2015, an increase of 7.7%. Revenue for the three months ended September 30, 2016 was approximately $287,000 as compared to approximately $319,000 for the three months ended September 30, 2015, a decrease of 10.0%.
| Three months ended September 30, | Nine months ended September 30, | |||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||
| China | $ | 78,000.00 | $ | 16,000.00 | $ | 212,000.00 | $ | 23,000.00 | ||||
| Rest of Asia | $ | 172,000.00 | $ | 291,000.00 | $ | 995,000.00 | $ | 566,000.00 | ||||
| Europe, Africa and Russia | $ | 37,000.00 | $ | 1,000.00 | $ | 48,000.00 | $ | 7,000.00 | ||||
| The Americas | $ | - | $ | 11,000.00 | $ | 7,000.00 | $ | 576,000.00 | ||||
| Total | $ | 287,000.00 | $ | 319,000.00 | $ | 1,262,000.00 | $ | 1,172,000.00 | ||||
Loss before taxes for the nine months ended September 30, 2016 was approximately $4.20 million as compared to loss of approximately $4.18 million for the same period in 2015. The small increase in loss was primarily due to the increase in operating expenditure less the increase in revenue mentioned above. Loss before taxes for the three months ended September 30, 2016 was approximately $1,503,000 as compared to net loss of approximately $1,617,000 for the same period in 2015. The decrease in loss was primarily due to reduction in operating expenses mentioned above. Management believes the net loss will decrease and eventually become net income going forward with our growth in the business in Asia and also elsewhere in the world.
About One Horizon Group, Inc.
One Horizon Group, Inc. (
Safe Harbor Statement This news release may contain "forward-looking" statements. These forward-looking statements are only predictions and are subject to certain risks, uncertainties and assumptions that could cause actual results to differ from those in the forward looking-statements. Potential risks and uncertainties include such factors as uncertainty of consumer demand for the Company's products, as well as additional risks and uncertainties that are identified and described in Company's SEC reports. Actual results may differ materially from the forward-looking statements in this press release. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company does not undertake, and it specifically disclaims, any obligation to update any forward-looking statements to reflect occurrences, developments, events or circumstances after the date of such statement.
| ONE HORIZON GROUP, INC. | |||||||||
| Condensed Consolidated Balance Sheets | |||||||||
| September 30, 2016 and December 31, 2015 | |||||||||
| (in thousands, except share data) | |||||||||
| (unaudited) | |||||||||
| September 30, | December 31, | ||||||||
| 2016 | 2015 | ||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash | $ | 304 | $ | 1,772 | |||||
| Accounts receivable, net | 3,037 | 3,560 | |||||||
| Other assets | 499 | 402 | |||||||
| Total current assets | 3,840 | 5,734 | |||||||
| Property and equipment, net | 58 | 96 | |||||||
| Intangible assets, net | 8,877 | 9,823 | |||||||
| Investment | 18 | 18 | |||||||
| Total assets | $ | 12,793 | $ | 15,671 | |||||
| Liabilities and Stockholders' Equity | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 202 | $ | 223 | |||||
| Accrued expenses | 172 | 220 | |||||||
| Accrued compensation | 185 | 18 | |||||||
| Income taxes | 90 | 90 | |||||||
| Current portion of long-term debt | - | 5 | |||||||
| Total current liabilities | 649 | 556 | |||||||
| Long-term liabilities | |||||||||
| Long term debt, net of current portion | - | - | |||||||
| Amount due to related parties | 2,343 | 2,354 | |||||||
| Convertible debenture | 2,960 | 2,636 | |||||||
| Deferred income taxes | 183 | 215 | |||||||
| Mandatorily redeemable preferred shares | 72 | 73 | |||||||
| Total liabilities | 6,207 | 5,834 | |||||||
| Stockholders' Equity | |||||||||
| Preferred stock: | |||||||||
| $0.0001 par value, authorized 50,000,000; issued and outstanding 170,940 shares (December 2015 - 170,940) | 1 | 1 | |||||||
| Common stock: | |||||||||
| $0.0001 par value, authorized 200,000,000 shares issued and outstanding 35,545,696 shares (December 2015 - 35,147,283) | 3 | 3 | |||||||
| Additional paid-in capital | 36,892 | 36,070 | |||||||
| Retained Earnings (Deficit) | (30,420 | ) | (26,201 | ) | |||||
| Accumulated other comprehensive income | 110 | (36 | ) | ||||||
| Total Stockholders' Equity | 6,586 | 9,837 | |||||||
| Total liabilities and equity | $ | 12,793 | $ | 15,671 | |||||
| ONE HORIZON GROUP, INC. | |||||||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||||||
| For the three and nine months ended September 30, 2016 and 2015 | |||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Three Months ended September 30, | Nine Months ended September 30, | ||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||||
| Revenue | $ | 287 | $ | 319 | $ | 1,262 | $ | 1,172 | |||||||||
| Cost of revenue | - Hardware | 12 | - | 87 | 108 | ||||||||||||
| - Amortization of software development costs | 513 | 483 | 1,518 | 1,575 | |||||||||||||
| 525 | 483 | 1,605 | 1,683 | ||||||||||||||
| Gross margin | (238 | ) | (164 | ) | (343 | ) | (511 | ) | |||||||||
| Expenses: | |||||||||||||||||
| General and administrative | 881 | 1,182 | 2,723 | 2,674 | |||||||||||||
| Depreciation | 15 | 16 | 45 | 52 | |||||||||||||
| Research and Development | 191 | 144 | 565 | 466 | |||||||||||||
| 1,087 | 1,342 | 3,333 | 3,192 | ||||||||||||||
| Income from operations | (1,325 | ) | (1,506 | ) | (3,676 | ) | (3,703 | ) | |||||||||
| Other income and expense: | |||||||||||||||||
| Interest expense | (178 | ) | (177 | ) | (534 | ) | (551 | ) | |||||||||
| Interest expense - related parties | - | (1 | ) | - | (2 | ) | |||||||||||
| Foreign exchange | - | 67 | 9 | 76 | |||||||||||||
| Interest income | - | - | - | 1 | |||||||||||||
| (178 | ) | (111 | ) | (525 | ) | (476 | ) | ||||||||||
| Income (loss) before income taxes | (1,503 | ) | (1,617 | ) | (4,201 | ) | (4,179 | ) | |||||||||
| Income taxes (recovery) - deferred | (10 | ) | - | (32 | ) | (45 | ) | ||||||||||
| Net Income (Loss) for the period | (1,493 | ) | (1,617 | ) | (4,169 | ) | (4,134 | ) | |||||||||
| Net income (loss) attributable to the non-controlling interest | - | (14 | ) | - | (50 | ) | |||||||||||
| Net Income (Loss) for the period atrributable to One Horizon Group, Inc. | (1,493 | ) | (1,603 | ) | (4,169 | ) | (4,084 | ) | |||||||||
| Less: Preferred Dividends | - | (25 | ) | (50 | ) | (75 | ) | ||||||||||
| Net loss attributable to One Horizon Group, Inc. Common stockholders | $ | (1,493 | ) | $ | (1,628 | ) | $ | (4,219 | ) | $ | (4,159 | ) | |||||
| Earnings per share attributable to One Horizon Group, Inc. shareholders | |||||||||||||||||
| Basic net income per share | $ | (0.04 | ) | $ | (0.05 | ) | $ | (0.12 | ) | $ | (0.12 | ) | |||||
| Diluted net income per share | $ | (0.04 | ) | $ | (0.05 | ) | $ | (0.12 | ) | $ | (0.12 | ) | |||||
| Weighted average number of shares outstanding | |||||||||||||||||
| Basic and diluted | 35,185 | 34,628 | 35,166 | 33,608 | |||||||||||||
| ONE HORIZON GROUP, INC. | |||||||||||
| Condensed Consolidated Statements of Cash Flows | |||||||||||
| For the nine months ended September 30, 2016 and 2015 | |||||||||||
| (in thousands) | |||||||||||
| (unaudited) | |||||||||||
| 2016 | 2015 | ||||||||||
| Cash provided by (used in) operating activities: | |||||||||||
| Operating activities: | |||||||||||
| Net income for the period | $ | (4,169 | ) | $ | (4,084 | ) | |||||
| Adjustment to reconcile net income for the period to net cash provided by (used in) operating activities: | |||||||||||
| Depreciation of property and equipment | 45 | 52 | |||||||||
| Amortization of intangible assets | 1,518 | 1,575 | |||||||||
| Increase in allowance for doubtful accounts | 300 | 200 | |||||||||
| Amortization of debt issue costs | 99 | 99 | |||||||||
| Amortization of beneficial conversion feature | 75 | 76 | |||||||||
| Amortization of debt discount | 150 | 150 | |||||||||
| Amortization of deferred compensation | - | 161 | |||||||||
| Amortization of shares issued for services | 25 | - | |||||||||
| Options issued for services | 563 | 462 | |||||||||
| Net income (loss) attributable to non-controlling interest | - | (50 | ) | ||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | 223 | (66 | ) | ||||||||
| Other assets | 12 | 89 | |||||||||
| Accounts payable and accrued expenses | 98 | (349 | ) | ||||||||
| Income taxes | (32 | ) | (45 | ) | |||||||
| Net cash (used in) operating activities | (1,093 | ) | (1,730 | ) | |||||||
| Cash used in investing activities: | |||||||||||
| Acquisition of intangible assets | (333 | ) | (844 | ) | |||||||
| Acquisition of property and equipment | (8 | ) | (1 | ) | |||||||
| Proceeds from disposition of property and equipment | - | 32 | |||||||||
| Net cash (used in) investing activities | (341 | ) | (813 | ) | |||||||
| Cash flow from financing activities: | |||||||||||
| Increase (decrease) in long-term borrowing, net | (5 | ) | (174 | ) | |||||||
| Proceeds from issuance of common stock, net | 125 | 2,875 | |||||||||
| Advances from (repayments to) related parties, net | (11 | ) | (677 | ) | |||||||
| Dividends paid | (50 | ) | (75 | ) | |||||||
| Net cash provided by (used in) financing activities | 59 | 1,949 | |||||||||
| Increase (decrease) in cash during the period | (1,375 | ) | (594 | ) | |||||||
| Foreign exchange effect on cash | (93 | ) | 27 | ||||||||
| Cash at beginning of the period | 1,772 | 3,172 | |||||||||
| Cash at end of the period | $ | 304 | $ | 2,605 | |||||||
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