Hebron Technology Co., Ltd. Reports Fiscal Year 2019 Financial Results

Changes

2019

2018

($)

Revenue

$

21,103,114

$

25,290,060

(4,186,946)

(17)

%

Installation service

10,490,191

17,297,212

(6,807,021)

(39)

%

Fluid equipment sales

8,087,399

7,992,848

94,551

1

%

Financial service – underwriting related 

2,522,143

-

2,522,143

100

%

Financial service –recurring service

3,381

-

3,381

100

%

Gross profit

8,056,621

7,577,952

478,669

6

%

Income (loss) from operations

1,932,005

(5,329,410)

7,261,415

136

%

Net income

2,739,990

(5,144,715)

7,884,705

153

%

Basic and diluted EPS

$

0.17

$

(0.33)

0.50

151

%

Years ended December 31,

Changes

Changes

2019

%

2018

%

($)

(%)

Installation service

3,851,460

37

%

6,356,004

37

%

(2,504,544)

(39)

%

Fluid equipment sales

1,699,429

21

%

1,221,948

15

%

477,481

39

%

Financial services

2,506,032

99

%

-

-

%

2,506,032

100

%

Gross profit

8,056,921

38

%

7,577,952

30

%

478,969

6

%

HEBRON TECHNOLOGY CO., LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Stated In U.S. Dollars)

December 31,
2019

December 31,
2018

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

3,452,647

$

947,588

Restricted cash

959,672

2,124,655

Contracts receivable, net

30,120,533

24,669,365

Accounts receivable, net

3,024,531

2,655,845

Bank acceptance notes receivable

22,660

81,611

Inventories

635,989

365,480

Prepayments and advances to suppliers, net

2,526,056

3,568,003

Other receivables, net

516,607

767,681

Loans to third parties-current portion

2,434,715

-

Prepaid expenses and other current assets

18,348

94,539

TOTAL CURRENT ASSETS

43,711,758

35,274,767

NON-CURRENT ASSETS:

Property and equipment at cost, net

11,889,373

12,515,894

Intangible assets, net

5,124,264

969,339

Retainage receivables, net

2,408,070

3,146,986

Right of use assets

1,915,577

-

Rent and other deposits

85,999

43,633

Loans to third parties – long term portion

2,872,820

-

Long term investments

3,708,359

3,054,090

Goodwill

11,074,864

-

Deferred tax assets

2,008,173

1,648,967

TOTAL ASSETS

$

84,799,257

$

56,653,676

LIABILITIES

CURRENT LIABILITIES:

Short-term loans

$

861,846

$

1,698,058

Bank acceptance notes Payable

929,148

2,117,382

Accounts payable

2,386,061

1,361,687

Accrued expenses and other current liabilities

3,725,149

2,112,472

Operating lease liabilities

188,557

-

Loan payable - current

156,574

177,291

Advances from customers

1,311,004

3,131,338

Tax payable

10,915,483

9,085,746

Due to related party

7,759,443

-

TOTAL CURRENT LIABILITIES

28,233,265

19,683,974

Loan payable – long-term

54,726

212,351

Operating lease liabilities – long term

1,769,927

-

Deferred tax liabilities

805,826

-

TOTAL LIABILITIES

30,863,744

19,896.325

Commitments and contingencies

EQUITY:

Class A common stock, $0.001 par value, 40,000,000 shares authorized, 17,710,471 and 8,491,177 shares issued and outstanding as of December 31, 2019 and 2018 respectively.

17,710

8,491

Class B common stock, $0.001 par value, 10,000,000 shares authorized, nil and 7,778,400 shares issued and outstanding as of December 31, 2019 and 2018 respectively.

-

7,778

Additional paid-in capital

28,369,076

13,361,447

Retained earnings

27,472,766

24,732,776

Accumulated other comprehensive income (loss)

(1,914,232)

(1,353,141)

TOTAL SHAREHOLDERS' EQUITY

53,945,320

36,757,351

 Non-controlling interests

(9,807)

-

TOTAL EQUITY

53,935,513

36,757,351

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

84,799,257

$

56,653,676

HEBRON TECHNOLOGY CO., LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)

For the Years Ended December 31,

2018

2017

REVENUE:

Installation service

$

10,490,191

$

17,297,212

$

23,748,141

Fluid equipment sales

8,087,399

7,992,848

5,452,304

Financial services

2,525,524

-

-

21,103,114

25,290,060

29,200,445

COST OF REVENUE

Cost of revenue

12,882,094

17,458,252

18,080,777

Business and sales related taxes

164,399

253,856

675,507

GROSS PROFIT

8,056,621

7,577,952

10,444,161

OPERATING EXPENSES:

General and administrative

2,566,831

3,298,188

3,683,594

Selling and marketing

985,252

1,337,321

2,187,253

 Bad debt

2,079,837

7,913,442

187,715

Research and development

492,696

358,411

508,282

Total operating expenses

6,124,616

12,907,362

6,566,844

INCOME (LOSS) FROM OPERATIONS

1,932,005

(5,329,410)

3,877,317

OTHER INCOME (EXPENSE):

Other income, net

1,255,149

(426,585)

377,174

Interest expense

(158,119)

(208,306)

(56,953)

 Income from investments

153,554

168,534

-

Total other income (expense), net

1,250,584

(466,357)

320,221

INCOME (LOSS) BEFORE INCOME TAXES

3,182,589

(5,795,767)

4,197,538

PROVISION (BENEFIT) FOR INCOME TAXES

442,599

(651,052)

(2,938,849)

NET INCOME(LOSS)

2,739,990

(5,144,715)

7,136,387

 Net income (loss) attributable to non-controlling interests

-

-

-

NET INCOME (LOSS) ATTRIBUTABLE TO SHAREHOLDERS

2,739,990

(5,144,715)

7,136,387

OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation (loss) income

(561,091)

(1,755,528)

2,249,081

COMPREHENSIVE INCOME (LOSS)

2,178,899

$

(6,900,243)

9,385,468

 Total comprehensive loss attributable to non-controlling interests

-

-

-

TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SHAREHOLDERS

$

2,178,899

$

(6,900,243)

$

9,385,468

Basic and diluted earnings (loss) per common share

$

0.17

$

(0.33)

$

0.49

Weighted average number of shares outstanding-basic and diluted

16,269,577

15,760,633

14,695,347

Accumulated

Class A

Class B

Additional

Other

Common Stock

Common Stock

paid in

Retained

Comprehensive

Non-controlling

Shares

Amount

Shares

Amount

capital

Earnings

Income (Loss)

Interests

Total

Balance at January 1, 2017

6,916,947

$

6,917

7,778,400

$

7,778

$

10,237,965

$

22,741,104

$

(1,846,694)

-

$

31,147,070

Net income

-

-

-

-

7,136,687

-

-

7,136,387

Foreign currency translation gain

-

-

-

-

-

-

2,249,081

-

2,249,081

Balance at December 31, 2017

6,916,947

6,917

7,778,400

7,778

10,237,965

29,877,491

402,387

-

40,532,538

Net (loss)

-

-

-

-

-

(5,144,715)

-

-

(5,144,715)

Foreign currency translation loss

-

-

-

-

-

-

(1,755,528)

-

(1,755,528)

Issuance of class A common stock for consulting services

131,452

131

-

-

239,369

-

-

-

239,500

Issuance of common stock for equity investment

1,442,778

1,443

-

-

2,884,113

-

-

-

2,885,556

Balance at December 31, 2018

8,491,177

8,491

7,778,400

7,778

13,361,447

24,732,776

(1,353,141)

-

36,757,351

Net income

-

-

-

-

-

2,739,990

-

-

2,739,990

Foreign currency translation loss

-

-

-

-

-

-

(561,091)

-

(561,091)

Capital contribution by shareholder

-

-

-

-

3,582,781

-

-

-

3,582,781

Shares to be issued for acquisition

1,440,894

1,441

-

-

11,424,848

-

-

-

11,426,289

Non-controlling interests arising from business combination

-

-

-

-

-

-

-

(9,807)

(9,807)

Reclassification of common stock

7,778,400

7,778

(7,778,400)

(7,778)

-

-

-

-

-

Balance at December 31, 2019

17,710,471

$

17,710

-

$

-

$

28,369,076

$

27,472,766

$

(1,914,232)

(9,807)

$

53,935,513

HEBRON TECHNOLOGY CO., LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31,

2019

2018

2017

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$

2,739,990

$

(5,144,715)

$

7,136,387

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

1,225,977

1,195,161

939,995

Loss on disposition of property and equipment

-

283,487

12,179

Deferred tax (benefit) expense

(418,131)

(1,471,938)

11,526

Equity investment income

(153,554)

(168,534)

-

Bad debt expense

2,079,837

7,913,442

187,715

Changes in operating assets and liabilities:

Contracts receivable

(5,801,693)

(8,850,502)

(2,992,867)

Accounts receivable

(1,141,352)

(1,383,452)

(950,850

Bank acceptance notes receivable

58,390

593,674

(378,205)

Retainage receivables

(489,283)

(748,903)

(80,360)

Prepayment and advances to suppliers

1,392,426

93,149

(7,127,018)

Inventories

(277,176)

1,177,956

788,000

Other receivables

341,339

(598,764)

(156,074)

Accounts payable

822,461

146,546

26,450

Bank acceptance notes Payable

(1,171,013)

2,148,292

53,272

Advances from customers

(1,828,259)

429,217

(370,964)

Deferred revenue

-

-

(1,071,355)

Taxes payable

1,933,516

2,770,253

(2,365,120)

Accrued expenses and other current liabilities

1,021,758

890,551

240,505

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

335,233

(725,080)

(6,096,784)

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of property and equipment

(394,988)

(74,210)

(3,126,777)

Loans to third parties

(3,611,682)

-

-

Payments for intangible assets

-

(41,000)

-

Cash acquired from business acquisitions

2,043,176

-

-

NET CASH (USED IN) INVESTING ACTIVITIES

(1,963,494)

(115,210)

(3,126,777)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term bank loans

911,968

1,995,763

295,954

Repayment of short-term bank loans

(1,733,462)

(1,088,667)

-

Capital contribution

3,582,781

-

-

Proceeds from long-term loans

-

-

173,873

Repayment of long-term loans

-

-

(47,353)

(Repayment) proceeds from loan

(174,861)

(176,427)

560,748

Advances from and (repayments to) related parties

566,360

-

(66,582)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

3,152,786

730,669

916,640

EFFECT OF EXCHANGE RATE CHANGE ON CASH AND CASH EQUIVALENT

(184,449)

(94,239)

(292,869)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENT

1,340,076

(203,860)

(8,599,790

CASH AND CASH EQUIVALENT AND RESTRICTED CASH-beginning of year

3,072,243

3,276,103

11,875,893

CASH AND CASH EQUIVALENT AND RESTRICTED CASH-end of year

$

4,412,319

$

3,072,243

$

3,276,103

SUPPLEMENTAL CASH FLOW DISCLOSURES:

Cash paid for income taxes

$

5,158

$

42,250

$

-

Cash paid for interest

$

147,900

$

91,917

$

75,704

Non-cash financing activities

Warrants issued to placement agent in connection with the Company's IPO

$

-

$

-

$

-

Payment payable to a related party for NiSun BVI acquisition

$

7,000,000

-

-

Issuance of shares for business combination

$

11,426,289

$

-

$

-

Issuance of shares for consulting services

$

-

$

239,500

$

-

Issuance of shares for equity investment

$

-

$

2,885,556

$

-

CASH AND CASH EQUIVALENTS COMPRISE OF THE FOLLOWING:

Cash and cash equivalent

$

3,452,647

$

947,588

$

3,220,781

Restricted cash

959,672

2,124,655

55,322

Total cash, cash equivalents and restricted cash

$

4,412,319

$

3,072,243

$

3,276,103