UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, DC 20549
FORM 6-K/A
AMENDMENT NO. 1
REPORT OF FOREIGN PRIVATE
ISSUER
PURSUANT TO RULE 13a-16
OR 15d-16 OF THE
SECURITIES EXCHANGE
ACT OF 1934
For the month of
March 2020
Commission File Number
001-38421
GOLDEN BULL LIMITED
(Translation of registrant’s
name into English)
136-20 38th
Ave., Suite 9A-2, Flushing, NY 11354
(Address of principal
executive offices)
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 ☒ Form 40-F ☐
Indicate by check mark
if the registrant is submitting the Form 6-K as permitted by Regulation S-T Rule 101(b) (1): _____
Indicate by check mark
if the registrant is submitting the Form 6-K as permitted by Regulation S-T Rule 101(b) (7): _____
GOLDEN BULL LIMITED
Golden Bull Limited
Reports Six Months Ended June 30, 2019 Financial Results
January
30, 2020 - Golden Bull Limited (NASDAQ: DNJR) (“Golden Bull” or the “Company”),
formerly an online finance marketplace, or “peer-to-peer” (“P2P”) lending
company in China that provided borrowers access to short-term loans today announced its financial results for the six months ended
June 30, 2019. As previously announced, as a result of a policy change by the Chinese government, the Company shut down its peer-to-peer
lending business and is commencing operations in the auto rental business and bitcoin mining business.
Six Months Ended
June 30, 2019 Financial Highlights (all comparable to the prior year period):
|
●
|
Total revenues for the six months ended June 30, 2019
decreased by 13% to approximately $4.5 million from approximately $5.2 million for the six months ended June 30, 2018.
|
|
●
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Total number of loans facilitated for the six months
ended June 30, 2019 decreased by 15.4% to 2,615 loans facilitated from 3,090 loans facilitated for the six months ended June 30,
2018.
|
|
●
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Total loan volume in dollar facilitated for the six
months ended June 30, 2019 decreased by 15.3% to approximately $66 million from $77.9 million for the six months ended June 30,
2018.
|
|
●
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Net loss for the six months ended June 30, 2019 increased
by 878.7% to approximately $7.3 million from approximately $0. 7million for the six months ended June 30, 2018.
|
Management
Commentary
From the first half
of 2019, the total loans decreased greatly. It is mainly because of the recession of the “P2P” business in China. With
the policy change from the regulatory authorities, P2P companies were suffering revenue decreasing and default loans increasing.
As one of the “P2P” companies, we were affected greatly resulting the loss for the first half of 2019. The emerging
of increasing default loans had led to the decreased lenders and more default loans on our platform. The lenders’ confidence
had been damaged. Many lenders decided to stop lending and some borrowers stopped paying on purpose given the business environment.
However, we expect our new businesses to drive the growth for the Company.
Recent Developments
Nasdaq Request for
information
On November 11, 2019,
Nasdaq Regulation requested information from Golden Bull Limited (the “Company”) in connection with a suspension of
trading in the Company’s securities. The request and suspension resulted from the Company’s filing on October 31, 2019
of a Form 6-K, in which it disclosed, among other things, that:
“On October
31, 2019, the Pudong Branch of the Shanghai Public Security Bureau (“the Bureau”) announced on its website that it
has completed its investigations against Shanghai Dianniu Internet Finance Information Service co., Ltd. (“Dianniu”),
the Company’s variable interest entity, for suspected illegal collection of public deposits. The Bureau has taken criminal
enforcement measures against 17 suspects in the case, detaining 6 suspects.”
The Company disclosed
on December 5, 2019 to Nasdaq that the reason for the shutdown of its P2P lending business in China and the ensuing investigation
by the Bureau was because of a policy change of the Chinese Government. From 2015 to 2019, the guidance for this business from
the government changed from supporting it, to limiting it, to finally shutting it down. This change has affected nearly 3,000 companies.
Management of the Company believes, that it has taken the right steps since March 2018 to position the Company, in the car rental
business and bitcoin mining business.
Key
Operating Metrics
Our management regularly
reviews a number of metrics to evaluate our business, measure our performance, identify trends, formulate financial projections
and make strategic decisions. The main metrics we consider, and are results for each quarter during the six months ended 2018 and
the six months ended June 30, 2019, are set forth in the table below.
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|
For the three
months ended
March 31,
2018
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|
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For the three
months ended
June 30,
2018
|
|
Number of loans facilitated (1)
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1,953
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1,137
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Number of borrowers (2)
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265
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|
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240
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Loan volume (in $ millions) (3)
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|
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50.2
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|
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27.6
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Reinvestment rate of existing lenders(4)
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29.6
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%
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|
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44.2
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%
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Number of new lenders that made a loan
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5,086
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1,952
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Number of lenders that made a loan
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6,651
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|
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3,398
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Re-borrowing rate of existing borrowers(5)
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98.5
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%
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86.3
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%
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Number of new borrowers
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76
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17
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(Footnotes on following
page)
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For the three
months ended
March 31,
2019
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For the three
months ended
June 30,
2019
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Number of loans facilitated (1)
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2,155
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460
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Number of borrowers (2)
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1,506
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459
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Loan volume (in $ millions) (3)
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55
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11
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Reinvestment rate of existing lenders(4)
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58.46
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%
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|
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81.62
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%
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Number of new lenders that made a loan
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|
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2,957
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|
|
|
329
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Number of lenders that made a loan
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4,622
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|
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1,344
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Re-borrowing rate of existing borrowers
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43.09
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%
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89.76
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%
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Number of new borrowers
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1,294
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47
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(1)
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Number of loans facilitated is defined as the total
number of loans initially facilitated on our marketplace during the relevant period.
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(2)
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Number of borrowers is defined as the total number
of individual or small company borrowers that borrowed at least one loan through our marketplace during the relevant period.
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(3)
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Loan volume is defined as the total principal amount
of loans facilitated through our marketplace during the relevant period.
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(4)
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Reinvestment rate is equal to the existing lenders
who have invested twice or more during the quarter, divided by the total of existing lenders and new lenders during the quarter.
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(5)
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Re-borrowing rate is equal to the borrowers who have
borrowed twice or more during the quarter, divided by total borrowers during the quarter.
|
As mentioned above,
due to the policy change of the government, the key metrics had showed the decreases of number of loans facilitated, number of
borrowers and loan volume. The Company expects to have the new businesses include car rental and bitcoin mining to drive the growth.
And the above data could not precisely estimate the future revenues due to the uncertainty of new businesses.
Results of Operations
The tables in the following
discussion summarize our consolidated statements of operations for the periods indicated. This information should be read together
with our consolidated financial statements included elsewhere in this press release. The operating results in any period are not
necessarily of the results that may be expected for any future period.
Revenue
On January 1, 2018,
the Company adopted Accounting Standards Update (ASU) 2014-09 Revenue from Contracts with Customers (ASC 606) using the modified
retrospective method for contracts that were not completed as of January 1, 2018. This did not result in an adjustment to retained
earnings upon adoption of this new guidance as the Company’s revenue was recognized based on the amount of consideration
we expect to receive in exchange for satisfying the performance obligations.
The core principle
underlying the revenue recognition ASU is that the Company will recognize revenue to represent the transfer of goods and services
to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will
require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point
in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams
are primarily recognized at a point in time.
The ASU requires the
use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify
the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price,
including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate
the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company
satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance
did not result in significant changes in the way the Company records its revenue. Upon adoption, the Company evaluated its revenue
recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under
the new guidance and confirmed that there were no differences in the pattern of revenue recognition.
All of our income from
inception to 2019 is generated in China. We facilitate loans by connecting borrowers and lenders, preparing all necessary paperwork
related to borrowers’ applications and assisting with securing collateral. Our primary sources of revenue consist of fees
received for transactions through our platform and include transaction and management fees, which are described in further detail
below.
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For the six
months ended
June 30,
2019
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For the six
months ended
June 30,
2018
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USD
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USD
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Turnover:
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Transaction Fees
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2,178,031.88
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|
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2,496,120.00
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Management Fees
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2,369,399.90
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2,726,514.00
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Cost of sales
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(19,377.56
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)
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(314,883.00
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)
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Gross profit
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4,528,054.22
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4,907,751.00
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Transaction Fees:
Transaction fees are paid by borrowers to the Company for the work the Company performs through its platform. These fees are recognized
as a component of operating revenue at the time of loan issuance. The amount of these fees is based upon the loan amount and other
terms of the loan, including credit grade, maturity and other factors. These fees are non-refundable upon the issuance of loan.
Management Fees:
Loan borrowers pay a management fee on each loan payment to compensate us for services provided in connection with facilitation
of the loan transactions, including review of a borrower’s application with required supporting documentation, evaluation
of such borrower’s credit, assessing and verification of collaterals as well as the maintenance of profiles in our system.
The Company records management fees as a component of operating revenue at the time of loan issuance. The amount of these fees
is based upon the loan amount and other terms of the loan, including credit grade, maturity and other factors. These fees are non-refundable
upon the issuance of loan.
In applying judgment,
the Company considered customers’ expectations of performance, materiality and the core principles of ASC Topic 606. The
aforementioned revenues are recognized and the Company’s performance obligations (control of services) are generally transferred
to the customers at the time of loan issuance. The Company’s contracts with borrowers generally do not include any variable
consideration.
Sales Taxes:
Transaction fee, management fee and license fee that are earned and received in the PRC are subject to a Chinese value-added tax
(“VAT”) at a rate of 6% starting in April 2017 (3% prior to March 2017) of the gross proceed or at a rate approved
by the Chinese local government. Transaction fees and management fees that are earned and received in the PRC are also subject
to various miscellaneous sales taxes at a rate of 10% of the VAT. VAT and miscellaneous sales taxes are accounted for as reduction
of revenue.
Valuation Allowance:
In May 2019, the financial regulatory authority of Shanghai issued the list of online lending companies that should exit the P2P
lending industry after full payment of outstanding balance of loans. Furthermore, in May 2019, the financial regulatory authority
of Shanghai required the Company to gradually scale down the outstanding balance of loans it facilitated, to reduce the number
of lenders and borrowers. As a result of these regulatory requirements, the Company’s operation performance was far below
expectations. The Company expected that these unfavorable regulatory changes have affected and could continue to affect our business
negatively.
Based on our evaluation
of regulatory and business environment of the P2P lending industry, the Company provided a new forecast. The forecast estimated
net losses of $1.2 million, $0.6 million, $0.5 million, $0.4 million and $0.3 million for the years ended December 31, 2019, 2020,
2021, 2022 and 2023, respectively, leading to a full valuation allowance on the deferred tax assets.
Though the full valuation
allowance of deferred tax assets was estimated as a result of increasing negative evidence after the filing of Form 20-F on April
30, 2019, the Company believes it is a result of regulatory requirements which did not exist on December 31, 2018 and March 31,
2019, the Company witnessed an increase in the number of borrowers and revenues. The Company even made net income for the quarter
ended March 31, 2019. According to the definition of subsequent events in ASC 855-10-20, the Company categorized the change as
a non-recognized subsequent event, and referring to ASC 855-10-25-3, the Company did not recognize such a subsequent event in the
financial statements.
Pursuant to ASC 250-10-45-17,
“… A change in accounting estimate shall not be accounted for by restating or retrospectively adjusting amounts reported
in financial statements of prior periods or by reporting pro forma amounts for prior periods.”, as the change in estimates
of deferred tax assets was a result of non-recognized subsequent events, the Company believes it is not necessary to restate the
Form 20-F by recognition of a full valuation allowance on deferred tax assets. Instead, the Company would present the valuation
allowance in our future filings, including Form 20-F for the fiscal year ending December 31, 2019.
Six Months Ended
June 30, 2019 Compared to Six Months Ended June 30, 2018
Transaction
Fees
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|
For the six
months ended
June 30,
2019
|
|
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For the six
months ended
June 30,
2018
|
|
|
|
USD
|
|
|
USD
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|
Transaction Fees
|
|
|
2,178,031.90
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|
|
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2,496,120.00
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Loans
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66,000,000.00
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|
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77,861,702.00
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Average Transaction fee in % (as a percentage of loan principal)
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3.3
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%
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|
|
3.2
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%
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Transaction fees decreased
$318,088.1, or 12.7% for the six months ended June 30, 2019 from the same period in 2018. For the six months ended June 30, 2019,
the average transaction fee as a percentage of the initial principal was 3.3% and the principal amount of loans facilitated through
our platform was approximately $66 million. For the same period in 2018, the average transaction fee as a percentage of the initial
principal was 3.2% and the principal amount of loans facilitated through our platform was approximately $77.9 million. Compared
with the same period in 2018, the Company slightly increased the transaction fee rate by 0.1 percentage point in the six months
up to June 30, 2019.
Management Fees
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|
For the six
months ended
June 30,
2019
|
|
|
For the six
months ended
June 30,
2018
|
|
|
|
USD
|
|
|
USD
|
|
Management Fees
|
|
|
2,369,399.90
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|
|
|
2,726,514.00
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|
Loans
|
|
|
66,000,000.00
|
|
|
|
77,861,702.00
|
|
Average Management fee in % (as a percentage of loan principal)
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|
|
3.6
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%
|
|
|
3.5
|
%
|
Management fees decreased
$357,114.1, or 13.1% for the six months ended June 30, 2019 from the same period in 2018. For the six months ended June 30, 2019,
the average management fee as a percentage of the initial principal was 3.6% and the principal amount of loans facilitated through
our platform was approximately $66 million. For the same period in 2018, the average management fee as a percentage of the initial
principal was 3.5% and the principal amount of loans facilitated through our platform was approximately $77.9 million. Compared
with the same period in 2018, the company slightly increased the transaction fee rate by 0.1 percentage point in the six months
up to June 30, 2019.
Operating Expenses
Our operating expenses
consist of selling expenses, research and development and administrative expenses.
|
|
For the six
months ended
June 30,
2019
|
|
|
For the six
months ended
June 30,
2018
|
|
|
Change
|
|
|
Change
|
|
|
|
USD
|
|
|
USD
|
|
|
USD
|
|
|
%
|
|
Selling expenses
|
|
|
5,327,187.62
|
|
|
|
2,301,394.00
|
|
|
|
3,025,793.62
|
|
|
|
131.5
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%
|
Administrative expenses
|
|
|
4,083,922.00
|
|
|
|
3,153,411.00
|
|
|
|
930,511.00
|
|
|
|
29.5
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%
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Research and development
|
|
|
351,381.00
|
|
|
|
276,946.00
|
|
|
|
74,435.00
|
|
|
|
26.9
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%
|
Total operating expenses
|
|
|
9,762,490.62
|
|
|
|
5,731,751.00
|
|
|
|
4,030,739.62
|
|
|
|
70.3
|
%
|
Selling
Expenses
Selling
expenses consist primarily of various marketing expenses, including those related to lender acquisition and retention, general
brand and awareness building and salaries and benefits expense related to our sales and marketing team.
Our total selling expenses
were $5,327,187.62 and $2,301,394 for the six months ended June 30, 2019 and 2018, respectively, an increase of $3,025,793.62 or
131.5%. Selling expenses increased for the increased expenses of the marketing promotion,
advertisement and referrals in order to build up the brand and attract more lenders. At the same time, we executed incentive plans
for lenders. Also due to the tightened environment for “P2P” platform, the Company did a series of marketing campaigns,
online advertisement, offline campaigns to build up lenders’ confidence.
Administrative
Expenses
Administrative
expenses consist primarily of salaries and benefits expenses for our accounting and finance, business development, legal, human
resources and other personnel, and outside professional services fees and facilities expenses.
Our total administrative
expenses were $4,083,922 and $3,153,411 for the six months ended June 30, 2019 and 2018, respectively, an increase of $930,511
or 29.5%. The increase comes from the increase of payroll and professional services. The Company will continue to hire more professional
teams to make constant efforts in Human Resources and Strategy. In the meantime, the Company hired professional teams in law, auditing
and accounting services. Also, the increased expense for “P2P’ compliance, risk management expense, bank escrow had
led to the increase of administrative expenses.
Research
and Development Expenses
Research
and development expenses consist primarily of salaries and benefits expenses for engineering and product management teams, and
outside contractors who work on the development and maintenance of our platform.
Our
research and development expenses were $351,381 and $276,946 for the six months ended June 30, 2019 and 2018, respectively, an
increase of $74,435 or 26.9%. The increase was primarily driven by more investment in our platform for upgrading the platform and
system based on the compliance demand from the regulatory authorities.
Net
loss
Net loss for the six
months ended June 30, 2019 was $7,274,308 as compared to net loss of $743,254 for the same period in 2018, a change of $5,719,171.38.
Such change was the result of the combination of items as discussed above.
Liquidity and Capital
Resources
To date, we have financed
our operations primarily through cash flows from operations, proceeds from private placements and initial public offering.
We incurred net losses
of approximately $6,462,000 for the six months ended June 30, 2019. We had approximately $1 million of cash, cash equivalents and
restricted cash as of June 30, 2019. The company decided to use these resources to develop our new businesses.
Cash Flows
As of June 30, 2019,
we had cash, cash equivalents and restricted cash of approximately $1 million as compared to $2.9 million as of December 31, 2018.The
table below sets forth a summary of our cash flows for the periods indicated:
|
|
For the six
months ended
June 30,
2019
|
|
|
For the six
months ended
June 30,
2018
|
|
|
|
USD
|
|
|
USD
|
|
Net cash used in operating activities
|
|
|
(1,969,400.00
|
)
|
|
|
(487,710.00
|
)
|
Net cash used in investing activities
|
|
|
0.00
|
|
|
|
(3,894.00
|
)
|
Net cash provided by financing activities
|
|
|
0.00
|
|
|
|
5,720,210.00
|
|
Operating Activities
Net
cash used in operating activities was approximately $1.97 million for the six months ended June 30, 2019, which was attributable
primarily to a net loss of approximately $6.46 million, promotional services as our service providers required for such prepayments
prior to such services being performed, and the increase of approximately $1.8 million of other payables and accrued liabilities.
and the decrease of approximately $2.58 million of Prepaid expenses, an approximate $0.8 million
paid for deferred tax benefit, an approximate $50,000 paid for Taxes payable, and the decrease of approximately $0.86 million of
employee advances, the cash outflows were offset by the non-cash amortization of Depreciation and amortization of approximately
$57,000.
Investing Activities
Net cash used in investing
activities was$0 for the six months ended June 30, 2019.
Financing Activities
Net cash provided by
financing activities for the six months ended June 30, 2019 was $0 as compared with approximately $5.7 million for the six months
ended June 30, 2018.
Statement Regarding
Unaudited Financial Information
The unaudited financial
information set forth above is subject to adjustments that may be identified when audit work is performed on the Company’s
year-end financial statements, which could result in significant differences from this unaudited financial information.
CONTROLS AND PROCEDURES
|
(a)
|
Disclosure Controls and Procedures
|
Our management, with
the participation of our chief executive officer (CEO) and chief financial officer (CFO), has performed an evaluation of the effectiveness
of our disclosure controls and procedures (as defined in Rule 13a-15(c) under the Securities Exchange Act of 1934 (the “Exchange
Act”) as of the end of the period covered by this report, as required by Rule 13a-15(b) under the Exchange Act.
Based upon that evaluation,
our management has concluded that, as of June 30, 2019, our disclosure controls and procedures were not effective in ensuring that
the information required to be disclosed by us in the reports that we file and furnish under the Exchange Act was recorded, processed,
summarized and reported, within the time periods specified in the SEC’s rules and forms, and that the information required
to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management,
including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
|
(b)
|
Management’s Report on Internal Control Over Financial
Reporting
|
Our management is responsible
for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule
13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with international financial
reporting standards (“IFRSs”). Because of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions or because the degree of compliance with policies or procedures
may deteriorate. Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an
assessment of the effectiveness of our internal control over financial reporting as of June 30, 2019. The assessment was based
on criteria established in the framework Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this assessment, management determined that, as of June 30, 2019, we did not
maintain effective internal control over financial reporting due to the existence of the following significant deficiencies and
material weaknesses:
|
●
|
Lack of sufficient full-time personnel with appropriate
levels of accounting knowledge and experience to monitor the daily recording of transactions, address complex United States Generally
Accepted Accounting Principles (“U.S. GAAP”) accounting issues, and prepare and review financial statements and related
disclosures under U.S. GAAP and, as a result, the Company may not be able to identify and monitor significant accounting issues
appropriately on a timely basis;
|
|
●
|
Lack of a functional internal audit department or personnel
that monitors the consistencies of the preventive internal control procedures and, as a result, the Company may not be able to
discover the existence of problems and prevent the problematic behavior in internal control;
|
|
●
|
Lack of adequate policies and procedures in internal
audit function to ensure that the Company’s policies and procedures have been carried out as planned;
|
|
●
|
Lack of reviewed documentation for management’s
approval on aging analysis and, as a result, the Company may not be able to accrue provision for bad debt appropriately on a timely
basis;
|
|
●
|
Lack of sufficient monitoring of the employee resignation
procedure, which may result in an inaccurate number of employees in the annual report;
|
|
●
|
Lack of well-structured IT general control policies
and procedures for documentation of program changes, periodic transaction log reviews; control quality evaluations, backup restoration
tests and centralized anti-virus detections, which may result in failure to accurately collect operational data to prepare the
financial statements;
|
|
●
|
Lack of proper segregation of duties within accounting
functions;
|
|
●
|
Significant deficiencies were also detected at Dianniu,
one of our VIEs, which in the aggregate, constitute a material weakness and create a reasonable likelihood that a material misstatement
of our annual and interim financial statements will not be prevented or detected on a timely basis. Such deficiencies include:
(i) lack of reviewed documentation for management’s approval on aging analysis and, as a result, the Company may not be
able to accrue provision for bad debt appropriately on a timely basis; and (ii) lack of sufficient monitoring of the employee
resignation procedure, which may result in an inaccurate number of employees on the annual report.
|
As a company with limited
resources, the Company does not have the resources to fund sufficient staff to ensure a complete segregation of responsibilities
within the accounting function. However, management has carried out and is planning to undertake the following actions to remediate
the material weakness described above:
|
●
|
Recruiting qualified consultants with appropriate levels of knowledge and experience in U.S. GAAP
reporting to assist in resolving accounting issues in non-routine or complex transactions;
|
|
●
|
Set up an Internal Audit department and establish formal internal control policies and procedures.
Implementation of an ongoing initiative and training in the Company to ensure the importance of internal controls and compliance
with established policies and procedures are fully understood throughout the organization. To provide continuous U.S. GAAP knowledge
trainings to relevant employees to ensure the procedures and policies are properly followed;
|
|
●
|
Make quarterly aging analyses, which will be reviewed and confirmed by the CFO, and paying attention
to the recoverable risk of long-term receivables, and accrue the bad debts provision if necessary;
|
|
●
|
To further standardize the process of resignation, the resignation report of employees above manager
level (including managers) shall be approved by the CEO with approval records/signature;
|
|
●
|
The Company will set up IT strategic plans, annual plan and budget for it to be consistent with
business development. The Company will maintain IT meeting minutes and communicate through emails with relevant departments. The
Company will set up IT Best Practice Standards and evaluate the IT department performance annually. The Company will maintain records
for IT change authorizations. The user access rights will be terminated the same day for any employees that leave the Company.
The anti-virus software will be standardized and managed by specific designated personnel. The logs will be reviewed periodically
to identify any unusual transactions. Restoration tests for backups will be performed regularly. Third-party services will be evaluated
annually and the ones with bad performance will be terminated.
|
|
(c)
|
Attestation Report of Independent Registered Public
Accounting Firm
|
Not applicable.
|
(d)
|
Changes in Internal Control over Financial Reporting
|
The
management is committed to improving the internal controls over financial reporting and will undertake consistent improvements
or enhancements on an ongoing basis. Except as described above, there were no changes in our internal controls over financial reporting
during our six months ended June 30, 2019 that have materially affected, or are reasonably likely to material affect, our internal
control over financial reporting.
Safe Harbor Statement
This
press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking
statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions
and other statements that are other than statements of historical facts. When the Company uses words such as “may, “will,
“intend,” “should,” “believe,” “expect,” “anticipate,” “project,”
“estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements.
Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual
results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements
are subject to uncertainties and risks including, but not limited to, the following: the Company’s goals and strategies;
the Company’s ability to commercially enter the auto leasing industry and bitcoin mining business; future
business development; product and service demand and acceptance; changes in technology; economic conditions; reputation and brand;
the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China
and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the
Securities and Exchange Commission. For these reasons, among others, investors are cautioned not to place undue reliance upon any
forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the U.S.
Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly
revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
GOLDEN
BULL LIMITED AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(UNAUDITED)
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
USD
|
|
|
USD
|
|
Current assets
|
|
|
|
|
|
|
Cash
|
|
|
399,153
|
|
|
|
2,334,425
|
|
Other receivables
|
|
|
1,005,632
|
|
|
|
142,255
|
|
Prepaid costs and expenses
|
|
|
80,399
|
|
|
|
3,187,052
|
|
Current assets total
|
|
|
1,485,184
|
|
|
|
5,663,732
|
|
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
Property, plant and equipment. Net
|
|
|
666,706
|
|
|
|
723,777
|
|
|
|
|
|
|
|
|
|
|
Long term prepayment
|
|
|
|
|
|
|
|
|
Deposits for rental vehicles
|
|
|
|
|
|
|
2,482,592
|
|
Restricted cash
|
|
|
600,000
|
|
|
|
600,000
|
|
Prepaid expenses
|
|
|
3,972,460
|
|
|
|
2,200,506
|
|
Deferred tax assets
|
|
|
|
|
|
|
810,863
|
|
Non-current assets total
|
|
|
5,239,166
|
|
|
|
6,093,961
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
6,724,350
|
|
|
|
12,481,470
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Tax payable
|
|
|
-913
|
|
|
|
47,785
|
|
Other payable and accrued liabilities
|
|
|
2,354,347
|
|
|
|
355,434
|
|
Provisions
|
|
|
|
|
|
|
|
|
Deferred income
|
|
|
|
|
|
|
|
|
Liabilities directly associated with non-current assets classified as held for sale
|
|
|
|
|
|
|
|
|
Current tax liability
|
|
|
|
|
|
|
|
|
Current liabilities total
|
|
|
2,353,435
|
|
|
|
403,219
|
|
Non-current liabilities total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
2,353,435
|
|
|
|
403,219
|
|
|
|
|
|
|
|
|
|
|
CAPITAL AND RESERVES
|
|
|
|
|
|
|
|
|
Common shares
|
|
|
148,992
|
|
|
|
148,992
|
|
Shares subscription receivables
|
|
|
-45,457
|
|
|
|
-45,457
|
|
Statutory reserves
|
|
|
6,189
|
|
|
|
6,189
|
|
Additional paid-in capital
|
|
|
15,855,220
|
|
|
|
15,855,220
|
|
Accumulated deficit
|
|
|
-11,594,210
|
|
|
|
-4,319,902
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY
|
|
|
4,370,915
|
|
|
|
11,611,095
|
|
Non-controlling interest
|
|
|
|
|
|
|
467,156
|
|
TOTAL Liabilities and equity
|
|
|
6,724,350
|
|
|
|
12,481,470
|
|
GOLDEN
BULL LIMITED AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
|
|
For the 6 months ended
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
USD
|
|
|
USD
|
|
Turnover
|
|
|
4,547,432
|
|
|
|
5,222,634
|
|
Cost of sales
|
|
|
19,378
|
|
|
|
314,883
|
|
Gross profit
|
|
|
4,528,054
|
|
|
|
4,907,751
|
|
|
|
|
|
|
|
|
|
|
Other revenue
|
|
|
18,974
|
|
|
|
|
|
Other net income
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
|
|
|
|
276,946
|
|
Selling expenses
|
|
|
5,768,569
|
|
|
|
2,301,394
|
|
Administrative expenses
|
|
|
4,083,922
|
|
|
|
3,153,411
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
-5,215,463
|
|
|
|
-824,000
|
|
|
|
|
|
|
|
|
|
|
Finance costs
|
|
|
1,246,963
|
|
|
|
-148,183
|
|
Loss before taxation
|
|
|
-6,462,426
|
|
|
|
-675,817
|
|
|
|
|
|
|
|
|
|
|
Income tax
|
|
|
811,882
|
|
|
|
67,437
|
|
Net loss
|
|
|
-7,274,308
|
|
|
|
-743,254
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income(loss)
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment
|
|
|
-34,128
|
|
|
|
-158,319
|
|
Comprehensive Loss
|
|
|
-7,240,180
|
|
|
|
-901,573
|
|
Less: Comprehensive loss attributable to non-controlling interest
|
|
|
|
|
|
|
-6,032
|
|
Comprehensive loss attributable to golden bull limited
|
|
|
-7,240,180
|
|
|
|
-895,541
|
|
|
|
|
|
|
|
|
|
|
Number of shares
|
|
|
14,899,185
|
|
|
|
13,982,528
|
|
Loss per share
|
|
|
-0.49
|
|
|
|
-0.05
|
|
GOLDEN
BULL LIMITED AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
For the six months ended
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
Cash flows from operating activities:
|
|
USD
|
|
|
USD
|
|
Net loss
|
|
|
-7,274,308
|
|
|
|
-743,254
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
57,071
|
|
|
|
19,728
|
|
Loss on disposal of equipment
|
|
|
|
|
|
|
|
|
Provision for deferred tax benefit
|
|
|
810,863
|
|
|
|
-20,227
|
|
Amortization of stock compensation expenses for services
|
|
|
|
|
|
|
488,334
|
|
Change in operating assets and liabilities
|
|
|
|
|
|
|
|
|
Other receivables
|
|
|
863,377
|
|
|
|
-108,461
|
|
Prepaid expenses
|
|
|
1,771,954
|
|
|
|
-50,341
|
|
Security deposits
|
|
|
|
|
|
|
|
|
Other payables and accrued liabilities
|
|
|
1,848,341
|
|
|
|
-43,283
|
|
Deferred revenues
|
|
|
|
|
|
|
|
|
Deferred rent liabilities
|
|
|
|
|
|
|
|
|
Taxes payable
|
|
|
-48,698
|
|
|
|
-30,206
|
|
Net cash used in operating activities
|
|
|
-1,969,400
|
|
|
|
-487,710
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
|
|
|
|
-3,894
|
|
Cash acquired through variable interest entity
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
|
|
|
|
-3,894
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from issuance of ordinary shares through IPO, net
|
|
|
|
|
|
|
5,720,210
|
|
Net cash used in financing activities
|
|
|
|
|
|
|
5,720,210
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate on cash
|
|
|
34,128
|
|
|
|
-89,026
|
|
|
|
|
|
|
|
|
|
|
Increase/(Decrease) in cash
|
|
|
-1,935,272
|
|
|
|
5,139,580
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, and restricted cash, beginning of period
|
|
|
2,934,425
|
|
|
|
5,456,778
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, and restricted cash, end of period
|
|
|
999,153
|
|
|
|
10,596,358
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
Cash paid for income tax
|
|
|
|
|
|
|
87,664
|
|
Non-cash transaction of investing and financing activities
|
|
|
|
|
|
|
|
|
Variable interest entity acquired and contributed by shareholders
|
|
|
|
|
|
|
|
|
Issuance of ordinary shares to service providers
|
|
|
|
|
|
|
|
|
Prepaid IPO costs to be net against IPO proceeds
|
|
|
|
|
|
|
2,397,506
|
|
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.
|
GOLDEN
BULL LIMITED
|
|
(Registrant)
|
|
|
|
Date: March 17, 2020
|
By:
|
/s/
Erke Huang
|
|
Name:
|
Erke
Huang
|
|
Title:
|
Chief
Financial Officer
|
-14-
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