SOURCE: Takung Art Co., Ltd

Takung Art Co., Ltd

February 18, 2016 07:00 ET

Takung Art Co. Reports 2015 Net Income of $5.4 Million, EPS $.49, vs. Net Income of $1.4 Million, EPS $.15, in 2014

2015 Revenue Climbs 140 Percent to $11.3 Million

HONG KONG, CHINA--(Marketwired - Feb 18, 2016) - Takung Art Co., Ltd. (OTCQB: TKAT), an online platform for acquiring shared ownership in Asian fine art, jewelry and precious gems, today reported net income of $5,436,109, or $.49 per share, for the year ended December 31, 2015, a 297 percent improvement on net income of $1,369,537, or $.15 per share, in calendar 2014.

The company reported revenue of $11,335,941 for calendar/fiscal 2015, which represents a 140 percent increase on revenue of $4,719,862 in the prior year.

Weighted average number of common shares outstanding was 11,119,276 in 2015 and 9,332,276 in 2014.

The company's strong improvement in revenue compared to 2014 was primarily due to year-over-year increases of $3,059,665 in listing fee revenue and $3,313,103 in trading commission revenue. The improvement in listing fee revenue arose from a significant increase in the number of artworks listed on the company's trading platform, and the resulting increase in listing fees charged to artists. Takung's improvement in both trading volume and commission revenue was mainly the result of the commencement, in August 2015, of operations in Shanghai, which enabled the company to accept deposits in Renminbi and greatly increase the number of mainland China-based traders on Takung's platform.

Takung's improved profitability for 2015 compared to the previous year was primarily due to the company's aforementioned increases in listing fee and trading commission revenue, partially offset by an increase of about $1.2 million in operating expenses compared to 2014. This increase included $518,090 in legal and professional fees, $362,157 in salaries, $223,056 in office and rental expense, and $104,110 in travel expense.

"We are very proud of our 2015 results," said Takung chairman and CEO Di Xiao. "We believe that our sharp increases in revenue and profitability validate the soundness of our shared fine art ownership model, which we expect will continue to bring greater numbers of new investors into the marketplace."

As previously reported, Takung's trading platform generated fine art sales of over $299 million in January 2016, compared with $84 million in January 2015. In calendar 2015, the platform generated total trading transactions of about $2.33 billion, compared to $731 million in the prior year.

ABOUT TAKUNG ART CO., LTD: www.takungart.com
Based in Hong Kong, Takung Art Co., Ltd. is an online trading platform for acquiring shared ownership in Asian fine art, jewelry and precious gems. This proprietary platform allows collectors and investors -- including those with modest financial resources -- to buy and sell units of these assets and participate in the booming Asian art market. The company's shared-ownership business model significantly expands the number of interactions between sellers and buyers of fine art far beyond those generated by art galleries and auction houses alone.

Takung operates its online trading platform via three wholly-owned subsidiaries, Hong Kong Takung Assets and Equity of Artworks Exchange Co. Ltd., Takung (Shanghai) Co., Ltd., and Takung Cultural Development (Tianjin) Co., Ltd.

FORWARD-LOOKING STATEMENTS
This press release may contain projections or other forward-looking statements regarding future events or our future financial performance. All statements other than present and historical facts and conditions contained in this release, including any statements regarding our future results of operations and financial positions, business strategy, plans and our objectives for future operations, are forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). These statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risk and uncertainties and subject to change at any time. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Actual events or results may differ materially from those contained in the projections or forward-looking statements.

Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

Takung Art Co., Ltd.
Consolidated Balance Sheets
(Stated in U.S. Dollars)
 
             
    December 31,     December 31,  
    2015     2014  
             
ASSETS                
Current assets                
  Cash   $ 10,769,456     $ 2,355,839  
  Restricted cash     16,195,289       6,865,821  
  Deposit     191,575       73,852  
  Account receivables     184,537       291,496  
  Other Receivables     -       295,870  
  Prepayment     1,172,405       183,083  
  Due from director     502       -  
Total current assets     28,513,764       10,065,961  
                 
Non-current assets                
  Property and equipment, net     1,213,255       1,037,758  
  Intangible assets     22,194       20,547  
Total non-current assets     1,235,449       1,058,305  
Total assets   $ 29,749,213     $ 11,124,266  
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
LIABILITIES                
Current liabilities                
  Accounts payables and other accruals   $ 667,622     $ 1,891,525  
  Customer deposits     16,195,289       6,865,821  
  Amount due to director     -       2,730  
  Tax payables     1,564,370       249,092  
Total current liabilities     18,427,281       9,009,168  
                 
  Deferred tax liabilities     45,037       66,555  
Total non-current liabilities     45,037       66,555  
Total liabilities     18,472,318       9,075,723  
                 
COMMITMENTS AND CONTINGENCIES                
STOCKHOLDERS' EQUITY                
  Common stock (1,000,000,000 shares authorized; $0.001 par value; 11,119,276 shares issued and outstanding as of December 31, 2015; 9,332,276 shares issued and outstanding as of December 31, 2014)     11,119       9,332  
  Additional paid-in capital     4,465,217       2,570,098  
  Subscription receivables     -       (1,896,548 )
  Retained earnings     6,801,977       1,365,868  
  Accumulated other comprehensive loss     (1,418 )     (207 )
Total stockholders' equity     11,276,895       2,048,543  
Total liabilities and stockholders' equity   $ 29,749,213     $ 11,124,266  
                 

The accompanying notes are an integral part of these consolidated financial statements

Takung Art Co., Ltd.
Consolidated Statements of Income and Comprehensive Income
(Stated in U.S. Dollars)
 
       
    For the Year
Ended December 31,
 
    2015     2014  
             
Revenue   $ 11,335,941     $ 4,719,862  
                 
Cost of revenue     (805,684 )     (434,379 )
Gross profit     10,530,257       4,285,483  
                 
Operating expenses                
  General and administrative expenses     (3,795,429 )     (2,605,985 )
  Selling expenses     (42,183 )     -  
  Total operating expenses     (3,837,612 )     (2,605,985 )
                 
Income from operations     6,692,645       1,679,498  
                 
Other income     25,795       2,085  
                 
Income before income tax expense     6,718,440       1,681,583  
Provision for income taxes     (1,282,331 )     (312,046 )
                 
Net income     5,436,109       1,369,537  
                 
Foreign currency translation adjustment     (1,211 )     526  
                 
Comprehensive income   $ 5,434,898     $ 1,370,063  
                 
Earnings per common share - basic and diluted   $ 0.49     $ 0.15  
                 
Weighted average number of common shares outstanding -basic and diluted     11,119,276       9,332,276  
                 

 The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Stockholders Equity
(Stated in U.S. Dollars)
 
                                       
    Number   Common   Additional paid-in     Subscription     Retained     Comprehensive     Stockholders'  
    of shares   stock   capital     receivable     earnings     income     equity  
                                       
Balance, December 31, 2013   8,399,040   8,399   2,571,680     (1,896,548 )   (3,669 )   (733 )   679,129  
                                       
                                       
Reverse merger recapitalization   933,236   933   (1,582 )   -                 (649 )
                                       
Net income for the period   -   -   -     -     1,369,537     -     1,369,537  
                                       
Foreign currency translation adjustment   -   -   -     -     -     526     526  
                                       
Balance, December 31, 2014   9,332,276   9,332   2,570,098     (1,896,548 )   1,365,868     (207 )   2,048,543  
                                       
Shares for compensation   787,000   787   313,456                       314,243  
                                       
Issuance of shares   1,000,000   1,000   1,579,000                       1,580,000  
                                       
Net income for the period   -   -   -           5,436,109     -     5,436,109  
                                       
Receipt of subscription receivables   -   -   2,663     1,896,548     -     -     1,899,211  
                                       
Foreign currency translation adjustment   -   -   -           -     (1,211 )   (1,211 )
                                       
Balance, December 31, 2015   11,119,276   11,119   4,465,217     -     6,801,977     (1,418 )   11,276,895  
                                       

 The accompanying notes are an integral part of these consolidated financial statements.

Takung Art Co., Ltd.
Consolidated Statements of Cash Flows
(Stated in U.S. Dollars)
 
             
    For the Year     For the Year  
    Ended December 31,     Ended December 31,  
    2015     2014  
             
Cash flows from operating activities:                
  Net income   $ 5,436,109     $ 1,369,537  
Adjustments to reconcile net income to net cash provided by operating activities:                
  Depreciation     336,222       216,479  
  Stock-based compensation     314,243       -  
 Changes in operating assets and liabilities:                
  Account receivables     106,948       (232,140 )
  Other receivables     264,181       (295,817 )
  Deposit     (117,695 )     (300 )
  Prepayment     (989,374 )     (102,687 )
  Restricted cash     (9,327,160 )     (3,204,936 )
  Due to directors     (3,230 )     2,729  
  Customer deposits     9,327,160       3,203,726  
  Deferred tax assets     -       27,504  
  Deferred tax liabilities     (21,517 )     35,494  
  Provision for Profits Tax     1,316,656       249,048  
  Account payables and other accruals     (1,222,850 )     1,323,024  
  Net cash provided by operating activities     5,419,693       2,591,661  
                 
Cash flows from investing activities:                
  Deposit for property, plant and equipment     (512,144 )     (477,399 )
  Deposit of Intangible assets     -       (20,543 )
  Net cash used in investing activities     (512,144 )     (497,942 )
                 
Cash flows from financing activities:                
  Proceeds from subscription receivables     1,930,853       -  
  Proceeds from issuance of shares     1,580,000       -  
  Net cash provided by financing activities     3,510,853       -  
                 
  Effect of exchange rate change on cash and cash equivalents     (4,785 )     1,933  
                 
  Net increase in cash and cash equivalents     8,413,617       2,095,652  
                 
  Cash and cash equivalents, beginning balance     2,355,839       260,187  
                 
  Cash and cash equivalents, ending balance   $ 10,769,456     $ 2,355,839  
                 
  Supplemental cash flows information:                
    Cash paid for interest   $ -     $ -  
    Cash paid for income tax   $ -     $ -  
                     

 The accompanying notes are an integral part of these consolidated financial statements.

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