Crushmetric Group Ld: Final Results
11/07/2023 14:18
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RNS Number : 6888F CRUSHMETRIC Group Limited 11 July 2023
11 July 2023
CRUSHMETRIC Group Limited
(the "Company" or the "Group")
Final audited results for the year ended 31 December 2022
CRUSHMETRIC Group Limited (AQSE: CUSH), the AQUIS Stock Exchange quoted
consumer design and production group, presents its audited consolidated
financial statements for the year ended 31 December 2022.
Key financial highlights:
· Revenue for the year ended 31 December 2022: HK$10,826,825
(2021: HK$4,939,527)
· Loss for the year: HK$5,848,042 (Loss for 2021: HK$9,455,585)
· The basic loss per share for the year: HK$0.06 (Loss per share
for 2021: HK$0.06)
· The Group's cash position as at 31 December 2022: HK$128,658
(2021: HK$435,836)
Chairman's Statement
I am pleased to report the 2022 financial year results for CRUSHMETRIC Group
Limited.
The Company formerly engaged in TCM healthcare and skincare products in the
past years. The incidence of Covid forced a change in focus and therefore,
during 2022, the nature of the Company's operations and its principal
activities have changed to acting as the holding company of a group engaged in
(i) design and production that integrates shape changing technology ("CRUSH")
into a catalogue of products that is designed and invented by the artist and
co-founder of CRUSHMETRIC Limited, Noah Deledda. This technology is built on
his own series of dented aluminium can sculptures and (ii) the sale and
distribution of the CRUSHMETRIC products through online and offline channels
worldwide.
COVID-19
The continued outbreak of COVID-19 created a certain level of unpredictable
challenges to our Hong Kong and China office during the year. However, since
we have concentrated our resources in our product sales and our sales are
mainly generated from our online platforms, this has resulted in the business
being well placed to deliver services and products to its customers without
significant disruption and with no increase in operational risk.
Review of significant activities
(i) Convertible Bond
On 19 July 2021, the Group entered into an extension agreement for the
Convertible Bond. The maturity date extended to 19 January 2023 and the
coupon rate adjusted to seven-point five percent (7.5%) per annum for the
period from 20 July 2021 to 19 April 2022 and eight-point five percent
(8.5%) per annum for the period from 20 April 2022 to 19 January 2023. All
other terms remain unchanged. This Convertible Bond was further extended to 19
July 2024. Please refer to Note 29 in the non-statutory group financial
statements for details.
(ii) Executive Distribution Rights and Business Restructuring
In March 2022, the Company's wholly-owned subsidiary, MiLOC Biotechnology
Limited, was granted the exclusive distribution rights by CRUSHMETRIC
Limited ("CRUSHMETRIC") to distribute CRUSHMETRIC's designer products
including but not limited to the CRUSHMETRIC SwitchPen in all online and
offline platforms.
In June 2022, the Company announced plans to restructure the business of the
Group. Due to the Covid-19 pandemic in Hong Kong, following the suspension of
the Traditional Chinese Medicine Centre ("TCM Centre") since October 2021, the
Company decided to officially close the TCM Centre. The Company believes that
by closing the TCM Centre, it can better utilise the capital resources of the
Company and focus on more profitable business lines including, but not limited
to, the sale and distribution of designer products under the CRUSHMETRIC
brand. The Company has shifted more resources to the business of CRUSHMETRIC
SwitchPen, through online (currently mainly through www.crushmetric.com
(http://www.crushmetric.com) ) and offline platforms.
In November 2022, the Company changed its name from MiLOC Group Limited to
CRUSHMETRIC Group Limited, to better reflect the change in the Company's new
strategy. The Chinese name was removed until the Company decided a suitable
one. The ISIN of the Company remains unchanged as "KYG613521031". The Ticker
symbol was changed to "CUSH". The Corporate website address of the Company was
changed from www.miloc.com (http://www.miloc.com) to www.crushmetricgroup.com
(http://www.crushmetricgroup.com) .
In December 2022, the Company completed the acquisition of CRUSHMETRIC
Limited. It has completed the allotments and issue of 153,486,965 new
Ordinary Shares (the consideration shares) to the former owners of CRUSHMETRIC
Limited, ONG Ban Poh Michael (Chief Executive Officer and Executive Director
of the Company) ; Noah Deledda and Lim Yi Shenn. After the share allotment,
together with the shareholding through Megasia International Limited, Mr. Ong
holds a total of 80,993,808 Ordinary Shares in the Company, representing 33.7%
of the issued shares. Mr. Deledda holds a total of 69,683,082 Ordinary Shares
in the Company, representing 29% of the issued shares. Together with the
shares previously owned, Mr. Lim holds a total of 20,713,824 Ordinary Shares
in the Company, which represents 8.63% of the issued share capital.
(iii) Legal Proceeding of a fellow subsidiary - Star Collaboration
(Guangzhou) Limited
There were five litigations and legal proceedings in one of the Group's
subsidiaries, Star Collaboration (Guangzhou) Limited ("Star C"), where the
Group holds 57% shares of this subsidiary. Details as below:
Distributor Disputes
1. In 2021, a distributor of Star C failed to comply with the distribution
agreement, there was approximately RMB2,500,000 (Approximately GBP286,000) in
outstanding debts due from this distributor; the Civil Judgement is that the
distributor should return the amount to Star C. Status: The Company has
appointed a lawyer to follow up the outstanding debt.
2. In 2021, there was approximately RMB1,500,000 (equivalent to approximately
GBP166,000) sales under the sales agreement with another distributor in
dispute with Star C in relation to unit price of product per item. Star C has
received the result from the Civil Judgement that it has to return such amount
to the distributor. The Company is currently negotiating the payment terms
with this distributor.
Supplier Disputes
1 and 2. One of its suppliers commenced two legal proceedings, claiming a
total of approximately RMB1,748,000 (equivalent to approximately GBP202,470)
in trade payables from the Company, that are in dispute. Status: Star C and
the supplier have signed a settlement agreement for one of the legal
proceedings, whereby Star C has paid a total of approximately RMB500,000
(equivalent to approximately GBP60,714) by April 2023. Star C has also signed
a settlement agreement with this supplier in May 2023 in full and final
settlement of the second legal proceeding, whereby Star C will pay a total of
approximately RMB600,000 (equivalent to approximately GBP68,600).
3. Star C and Star C's immediate holding company (Richmond Group Limited which
is 57% held by the Company), has been notified by another supplier of the
commencement of a legal proceeding,
seeking RMB1,783,000 (approximately GBP216,500) in trade payables from the
Company, that are in dispute with regard to the amount. Status: Star C and the
supplier have signed a settlement agreement that Star C only needs to settle a
total of RMB600,000 (equivalent to approximately GBP65,000) by monthly
instalments.
(iv) Private Placings
In 2022, the Group raised approximately HK$1.59 million through private
placings. The proceeds of these subscriptions have been used for general
working capital purposes (please refer to Note 20 in the non-statutory
financial statements for details of private placings).
Financial review
(i) Revenue, gross profit and other revenue
The launch of the CRUSHMETRIC SwitchPens contributed a significant increase in
sales during the year. The Group's audited revenue for the year ended 31
December 2022 amounted to HK$10,826,825 which represented a 119.2% increase as
compared to the year ended 31 December 2021. It included sale of products
(mainly from CRUSHMETRIC SwitchPens in 2022) that amounted to approximately
HK$10,826,000 (2021: approximately HK$2,955,000 of healthcare and skincare
products). There was no revenue generated from clinic operations in current
year (2021: approximately HK$1,985,000).
The Group's gross profit and gross profit margin for the year ended 31
December 2022 amounted to HK$4,404,354 and 41 % (gross loss and gross loss
margin 2021: HK$213,597 and 4%) respectively. The Group's other revenue for
the year ended 31 December 2022 amounted to HK$1,646,139, a decrease of 34%
compared to the year ended 31 December 2021 because of payable amount written
off last year.
(ii) Operating expenses
The Group's distribution costs for the year ended 31 December 2022 amounted to
HK$393,306 which decreased by 2.3% as compared to the year ended 31 December
2021. The Group's administrative expenses for the year ended 31 December 2022
were approximately HK$11,050,000 compared to approximately HK$11,254,000 for
the year ended 31 December 2021, a decrease of 1.8%.
(iii) Profit and profit per share
The Group's loss for the year amounted to HK$5,848,042 (Loss for 2021:
HK$9,455,585). As a result, the Group's basic loss per share for the year was
HK$0.06 (Loss per share for 2021: HK$0.06).
The Directors do not recommend the payment of a dividend.
(iv) Balance sheet items
The Group's tangible fixed assets as at 31 December 2022 amounted to
HK$221,258 which mainly comprised leasehold improvements, furniture and
fixtures and office equipment. An increase of approximately HK$167,000 over
the balance as at 31 December 2021, was mainly due to the acquisition of a
subsidiary during the year.
The Group's other intangible assets as at 31 December 2022 amounted to HK$Nil
which represented a decrease of HK$2,857,142 compared to HK$2,857,142 as at 31
December 2021 due to fully amortisation for the year.
The Group's goodwill as at 31 December 2022 was valued at HK$293,993,592 with
an increase of approximately HK$293,994,000 compared with HK$Nil as at 31
December 2021 due to acquisition of a subsidiary during the year.
The Group's right-of-use assets and Lease liabilities-right-of-use assets as
at 31 December 2022 amounted to HK$370,640 and HK$391,180 respectively which
represented an increase of approximately HK$185,000 and an increase of
approximately HK42,000 respectively as compared to the year ended 2021. The
increase was due to the new lease agreement signed during the year.
The Group's inventories as at 31 December 2022 amounted to HK$341,561 with an
increase of approximately HK$342,000 over the balance as at 31 December 2021.
This was mainly due to purchase of inventories during the year.
The Group's other receivables and prepayments as at 31 December 2022 amounted
to HK$1,162,149 with an increase of approximately HK$186,000 over the balance
as at 31 December 2021.
The Group's trade payables as at 31 December 2022 amounted to HK$4,319,057
with a decrease of HK$516,000 over the balance as at 31 December 2021.
The Group's cash and cash equivalents decreased from HK$435,836 as at 31
December 2021 to HK$128,658 as at 31 December 2022. For details of these
movements, please refer to the Group's cash flow statement included in the
non-statutory group financial statements.
Outlook
The Company has changed its principal activities and restructured its business
during the year 2022. Despite the continuous impact of Covid-19 in 2022, the
Company has transformed its business to a consumer product Group that sells
various innovative products to the market.
In the coming year, the Group will continue to focus on promoting and generate
more sales from our online distribution of the CRUSHMETRIC series of products,
including but not limited to the CRUSHMETRIC SwitchPens and the Autohedron
Chairs which were launched. The Group will also continue to focus on R&D
and launch the CRUSHMETRIC tumbler soon.
The Board will continue to take all reasonable efforts to ensure that
sufficient working capital is maintained. The Board's objective is the same as
previous year, which is to protect and safeguard as well as improve the
business, to minimise cost and generate more sales income through online
products.
On behalf of the Board of Directors, I would like to thank our management and
staff for the great loyalty and dedication they continue to show through these
delicate times. I would also like to extend our utmost appreciation to all our
partners, shareholders, customers, business associates and suppliers, for
their continued support.
Ivor Colin Shrago
Chairman
10 July 2023
The audit opinion contains the following statement:
"Material uncertainty related to going concern
We draw attention to note 3 in the financial statements, which explains,
amongst other matters, that the Group is reliant on trading materially in line
with projections and, should it fail to do so, on further support from
shareholders, in particular the Directors who have agreed not to recall their
loans in a manner that would prejudice the going concern of the Group and who
have confirmed their ongoing support to the Group's business activities for
the forthcoming twelve months. As stated in note 3, these events or
conditions, along with the other matters as set forth in note 3, indicate that
a material uncertainty exists that may cast significant doubt on the Group's
ability to continue as a going concern. Our opinion is not modified in respect
of this matter."
The financial information in this announcement is derived from the Group's
audited consolidated financial statements for the year ended 31 December 2022
which are available at the Company's website www.crushmetricgroup.com.
The Directors of the Company accept responsibility for the contents of this
announcement.
For further information, please contact:-
Crushmetric
ONG Ban Poh Michael - Chief Executive Officer
Lo King Yu Lilian - Acting Chief Financial Officer Tel: +852 2110 4221
AQUIS Exchange Corporate Adviser
PETERHOUSE CAPITAL LIMITED Tel: +44 (0) 20 7469 0930
Guy Miller / Mark Anwyl
CRUSHMETRIC Group Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended December 2022
2022 2021*
From continuing operations in 2022 HK$ HK$
Revenue 10,826,825 4,939,527
Cost of sales (6,422,471) (4,101,932)
Impairment loss on inventory - (1,051,552)
Gross profit/(loss) 4,404,354 (213,957)
Other revenue 1,646,139 2,497,506
Distribution costs (393,306) (402,676)
Administrative expenses (11,049,827) (11,253,978)
Foreign exchange gain/(loss), net (266,084) 460,283
Adjusted Operating (loss)/profit (5,658,724) (8,912,822)
Impairment loss for intangible asset and goodwill
- -
Impairment loss on trade receivable (45,759) (143,550)
Operating (loss)/profit (5,704,483) (9,056,372)
Loss on disposal of subsidiaries - -
Finance costs (86,398) (399,673)
Interest income 433 460
(Loss)/profit before taxation (5,790,448) (9,455,585)
Taxation (57,594) -
(Loss)/profit for the for year (5,848,042) (9,455,585)
Other comprehensive income / (loss)
Exchange differences arising from translation 1,010,343 (280,737)
Total comprehensive result for the year (4,837,699) (9,736,322)
(Loss)/profit for the year attributable to:
The equity holders of the parent entity (5,595,532) (5,216,634)
Non-controlling interests (252,510) (4,238,951)
(Loss)/profit for the for year (5,848,042) (9,455,585)
Total comprehensive (loss)/profit for the year attributable to:
The equity holders of the parent entity (4,585,189) (5,497,371)
Non-controlling interests (252,510) (4,238,951)
(4,837,699) (9,736,322)
(Loss)/profit per share - from continuing operations (HK$)
Basic (0.06) (0.06)
*Balances in 2021 relate to discontinued operations
CRUSHMETRIC Group Limited
Consolidated Statement of Financial Position
As of 31 December 2022
As at 31 December 2022 As at 31 December 2021
HK$ HK$
Assets
Non-current assets
Fixed assets 221,258 53,872
Other intangible assets - 2,857,142
Goodwill 293,993,592 -
Right-of-use assets 370,640 185,826
294,585,490 3,096,840
Current assets
Inventories 341,561 -
Trade receivables 757,271 495,904
Other receivables and prepayments 1,162,149 976,100
Cash and cash equivalents 128,658 435,836
2,389,639 1,907,840
296,975,129 5,004,680
Total assets
Equity and liabilities
Equity
Share capital 1,870,234 666,358
Share premium 392,450,040 96,546,867
Retained earnings (141,569,009) (136,983,820)
Equity attributable to the parent entity 252,751,265 (39,770,595)
Non-controlling interests (541,646) (289,136)
Total equity 252,209,619 (40,059,731)
Liabilities
Current liabilities
Trade payables 4,319,057 4,835,437
Other payables and accruals 31,961,020 30,824,176
Taxation payable 57,594 -
Amounts due to directors 2,930,515 3,899,385
Lease liabilities - right-of-use assets 275,620 348,808
Borrowings 5,106,144 5,156,605
44,649,950 45,064,411
Non-current liabilities
Lease liabilities - right-of-use assets 115,560 -
Total liabilities 44,765,510 45,064,411
Total equity and liabilities 296,975,129 5,004,680
CRUSHMETRIC Group Limited
Consolidated Statement of Cash Flows
For the year ended 31 December 2022
As at 31 December As at 31 December
2022 2021
HK$ HK$
OPERATING ACTIVITIES
Cash used in operations (1,078,397) (188,879)
INVESTING ACTIVITIES
Purchase of fixed assets (4,253) -
Interest received 433 460
Acquisition of subsidiaries, net of cash acquired 3,185 -
Net cash used in investing activities
(635) 460
FINANCING ACTIVITIES
Issuance of shares 1,590,000 3,647,884
Proceed received for incorporation of a subsidiary - -
Repayment on leases (555,778) (2,708,303)
Interest paid (283,751) (548,809)
Net cash generated from financing activities
750,471 390,772
Net (decrease)/increase in cash and cash equivalents
(328,561) 202,353
Cash and cash equivalents at beginning of year
435,836 234,118
Effects of currency translation on cash and cash equivalents 21,383 (635)
Cash and cash equivalents at end of year
128,658 435,836
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