Powerbridge Technologies Reports Financial Results and Business Update for the Six Months Ended June 30, 2019

Revenue Increased by 62% to $12.8 Million

ZHUHAI, CHINA / ACCESSWIRE / October 31, 2019 / Powerbridge Technologies Co., Ltd. (“Powerbridge” or the “Company”) (NASDAQ:PBTS), a global trade software applications and technology services provider, today announced its unaudited financial results for the six months ended June 30, 2019.

Key Financial Highlights for the First Half 2019 as compared to the First Half 2018

  • Revenues of the Company increased by 62% to $12.8 million for the six months ended June 30, 2019.
  • Gross profit of the Company increased by 2% to $4.5 million for the six months ended June 30, 2019.
  • The Company successfully consummated its IPO of 1,750,000 Ordinary Shares at a price of $5.00 per share, raising total gross proceeds of approximately $8.75 million.
  • The cash balance of the Company for the six months ended June 30, 2019 is $5.8 million.

Key Business Highlights for the First Half 2019

  • Application development services revenue-producing projects increased 39% from 71 projects to 99 projects.
  • Smart Big Data Platforms have been launched in new geographical markets, such as Chongqing and Guizhou.
  • Trade Processing Cloud as SaaS services have been introduced to more than 70 customers.
  • Blockchain Cross Border Compliance Solutions have been offered on a trial basis to selected customers.

Ban Lor, Co-Chairman and Co-Chief Executive Officer of Powerbridge, commented, “We are pleased with our results of the first half of 2019 as our revenue grew 62% as compared to the first half 2018. This shows our technology innovation and market expansion are taking effect. Our team is working hard to expand market share throughout the marco-economic downturn and China-U.S. trade war. Our gross margins were lower than expected due to a more aggressive strategy to capture new geographical markets with newly launched products and services. We do anticipate a rebound for gross margins in the second half of the year as we continue to improve our service efficiency. Our technology team continues to develop and launch new products and services to address the pain points and inefficiencies in global trade compliance, logistics and operations. We are confident that we will continue to grow in the second half of 2019. We look forward to increasing our awareness and communications with shareholders as we seek to build long term shareholder value.”

Financial Results for the Six Months Ended June 30, 2019:

Revenue for the six months ended June 30, 2019 was $12.8 million, an increase of $4.9 million or 62%, compared to $7.9 million for the six months ended June 30, 2018.

Revenue from application development service increased by $4.6 million, or 71.1%, to $11.0 million for the six months ended June 30, 2019, compared to $6.4 million for the six months ended June 30, 2018. The increase is mainly due to revenue brought by newly started projects after June 30, 2018. The number of revenue-producing projects was 99 and 71 for the six months ended June 30, 2019 and 2018, respectively.

Revenue from consulting and technical support services increased by $0.1 million, or 8.5%, to $1.3 million for the six months ended June 30, 2019, compared to $1.2 million for the six months ended June 30, 2018. The increase is mainly due to revenue brought by three new projects.

Revenue from subscription services increased by $0.3 million, or 78.1%, to $0.6 million for the six months ended June 30, 2019, compared to $0.3 million for the six months ended June 30, 2018. The increase is mainly due to a newly offered SaaS product and subscription service.

Gross profit for the six months ended June 30, 2019 was $4.5 million, an increase of $0.1 million, compared to $4.4 million for the six months ended June 30, 2018. The resulting gross margin percentage was 35.2% for the six months ended June 30, 2019, compared to 55.9% for the six months ended June 30, 2018. The decrease in gross margin is mainly due to an increase in costs for hardware purchases from our suppliers, lower project bidding prices to suit the more competitive markets and higher labor costs. Of note, gross margin percentage for subscription services remained strong at 92.6% for the six months ended June 30, 2019.

Operating expenses for the six months ended June 30, 2019 was $6.9 million, an increase of $3.7 million or 117%, compared to $3.2 million for the six months ended June 30, 2018. Operating expenses consist of selling and marketing, general and administrative, research and development (“R&D”) expenses, and stock based compensation. The increase in operating expense was primarily due to a $1.8 million increase in stock based compensation, $1.1 million increase in general and administrative expense, $0.5 million increase in selling and marketing expense and $0.2 million in R&D expense.

Other expense (income) for the six months ended June 30, 2019 was an expense of $0.6 million, as compared to an income of $0.2 million for the six months ended June 30, 2018. Other expense (income) primarily consists of government subsidy income, financing and interest expense, and other expenses. The increase in financing and interest expense was due to additional finders’ fee and related charges incurred in connection with the Company’s offering and financing activities and the increasing interest expense on the higher loan balance for the six months ended June 30, 2019.

Operating loss for the six months ended June 30, 2019 was $2.4 million, an increase of $3.6 million, compared to operating income of $1.2 million for the six months ended June 30, 2018.

Income tax benefit was $0.1 million for the six months ended June 30, 2019 compared to the provision for income taxes of $0.1 million for the six months ended June 30, 2018. As the gross profit stayed stable, the increased operating expenses and other expenses caused the loss and decrease of income tax expense.

Net loss for the six months ended June 30, 2019 was $3.0 million, a decrease of $4.4 million, compared to net income of $1.4 million for the six months ended June 30, 2018. The resulting EPS loss for the six months ended June 30, 2019 was ($0.37) per basic and diluted share, compared to a positive $0.20 per basic and diluted share for the six months ended June 30, 2018.

About Powerbridge Technologies Co., Ltd.

Powerbridge Technologies Co., Ltd. (NASDAQ: PBTS) is a provider of software applications and technology solutions and services to corporate and government customers primarily located in China. Founded in 1997, Powerbridge pioneered global trade software applications with a vision to make global trade operations easier for customers. Since inception, Powerbridge has continued to innovate and deliver solutions and services to address the changing needs of thousands of customers. Powerbridge’s mission is to make global trade easier by empowering all players in the ecosystem. For more information, visit www.powerbridge.com/en

Forward Looking Statements

No statement made in this press release should be interpreted as an offer to purchase or sell any security. Such an offer can only be made in accordance with the Securities Act of 1933, as amended, and applicable state securities laws. Certain statements in this press release concerning our future growth prospects are forward-looking statements regarding our future business expectations intended to qualify for the “safe harbor” under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding our ability to raise capital on any particular terms, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, our ability to realize revenue from expanded operation and acquired assets in China and the U.S., our ability to attract and retain highly skilled professionals, client concentration, industry segment concentration, reduced demand for technology in our key focus areas, our ability to successfully complete and integrate potential acquisitions, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our Form 20-F and other filings that we may make with the United States Securities and Exchange Commission in the future. These filings are available at www.sec.gov. Powerbridge may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company’s filings with the Securities and Exchange Commission and our reports to shareholders. In addition, please note that any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of the date of this press release. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL DATA

Summary of Unaudited Condensed Consolidated Balance Sheets
(In USD)

             
 
  June 30,     December 31,  
 
  2019     2018  
ASSETS
           
 
           
CURRENT ASSETS:
           
Cash
  5,750,995     4,348,635  
Restricted cash
    198,977       669,525  
Notes receivable
          309,796  
Accounts receivable, net
    22,882,712       15,479,437  
Amount due from related parties
    39,422       154,083  
Loans receivable, third parties
    1,284,800       47,997  
Prepayments, deposits and other current assets, net
    1,592,289       1,098,009  
Total Current Assets
    31,749,195       22,107,482  
 
               
Property and equipment, net
    5,467,428       4,707,112  
Restricted cash
    65,550        
Prepayments, deposits and other assets
    1,027,768       865,498  
Deferred tax assets
    180,747       87,416  
Total Assets
  38,490,688     27,767,508  
 
               
LIABILITIES AND EQUITY
               
CURRENT LIABILITIES:
               
Bank loans
  2,825,895     1,527,162  
Notes payable
          467,806  
Accounts payable
    18,962,987       16,231,682  
Customer deposits
    137,427       142,359  
Deferred revenue
    1,025,802       1,268,451  
Salaries and benefits payable
    709,485       836,558  
Due to related party
    2,800        
Taxes payable
    752,151       867,610  
Total Current Liabilities
    24,416,547       21,341,628  
COMMITMENTS AND CONTINGENCIES
               
 
               
EQUITY:
               
Ordinary Shares, 0.00166667 par value; 30,000,000 shares authorized; 8,917,748 and 6,905,248 shares issued and outstanding as of June 30, 2019 and December 31, 2018
    14,863       11,509  
Shares subscription receivable*
          (11,509 )
Additional Paid-in Capital
    16,002,766       5,519,507  
Retained earnings (accumulated deficit)
    (2,079,048 )     806,002  
Accumulated other comprehensive income
    135,560       100,371  
Total Equity
    14,074,141       6,425,880  
Total Liabilities and Equity
  38,490,688     27,767,508  
 
               

Summary of Unaudited Condensed Consolidated Statement of
Operations and Other Comprehensive Income (Loss)
(In USD)

       
 
  For the Six Months Ended  
 
  June 30,  
 
  2019     2018  
REVENUES:
           
Application development services
  10,959,922     6,405,918  
Consulting and technical support services
    1,265,239       1,166,130  
Subscription services
    574,034       322,278  
Total revenues
    12,799,195       7,894,326  
 
               
COST AND EXPENSES:
               
Cost of revenues:
               
Cost of application development services
    7,764,376       3,077,406  
Cost of consulting and technical support services
    486,379       385,525  
Cost of subscription services
    42,333       20,177  
Total cost of revenues
    8,293,088       3,483,108  
 
               
GROSS PROFIT
    4,506,107       4,411,218  
 
               
Operating expenses:
               
Sales and marketing
    1,337,346       824,036  
General and administrative
    2,409,836       1,278,663  
Research and development
    1,309,824       1,064,673  
Stock based compensation
    1,821,131        
Total operating expenses
    6,878,137       3,167,372  
 
               
OPERATING INCOME (LOSS) FROM OPERATIONS
    (2,372,030 )     1,243,846  
 
               
OTHER EXPENSE (INCOME)
               
Financing and interest expenses
    643,840       6,645  
Other income
    (41,305 )     (201,103 )
Other expense
    529        
Total other expense (income), net
    603,064       (194,458 )
 
               
INCOME (LOSS) BEFORE INCOME TAXES
    (2,975,094 )     1,438,304  
 
               
PROVISION FOR INCOME TAXES (INCOME TAX BENEFITS)
    (90,044 )     109,528  
 
               
NET INCOME (LOSS)
    (2,885,050 )     1,328,776  
 
               
Less: loss attributable to non-controlling interests
          (71,375 )
NET INCOME (LOSS) ATTRIBUTABLE TO POWERBRIDGE
    (2,885,050 )     1,400,151  
 
               
OTHER COMPREHENSIVE INCOME (LOSS)
               
Foreign currency translation adjustment
    35,189       (139,019 )
COMPREHENSIVE INCOME (LOSS)
    (2,849,861 )     1,189,757  
Less: Comprehensive loss attributable to non-controlling interest
          (68,543 )
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO POWERBRIDGE
  (2,849,861 )   1,258,300  
 
               
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES *
               
Basic and diluted
    7,825,456       6,905,248  
 
               
EARNINGS (LOSSES) PER SHARE
               
Basic and diluted
  (0.37 )   0.20  
                 

For more information, please contact:

Corporate:
Powerbridge Technologies Co., Ltd.
Stewart Lor
President and Chief Financial Officer
Email: stewartlor@powerbridge.com

Investor Relations:
Hayden IR
Phone: 917-658-7878
Email: hart@haydenir.com

SOURCE: Powerbridge Technologies Co., Ltd.

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