SOS Limited (“SOS” or the “Company”) (NYSE: SOS) today reported its full year financial results for the twelve-months ended December 31, 2021.
Revenue was $357.8 million, 612% over the twelve-months ended December 31, 2020. Gross Profit increased to $21.1 million from $13.0 million, over the same period.
Revenue
Net revenue was $357.8 million, up 612% over the prior period. The robust growth of revenue demonstrated the strong and effective execution of the Company’s strategy, mainly due to rapid market expansion and the addition of crypto-mining and commodity trading operations. Growth was driven by taking advantage of our block-chain expertise.
Our traditional business of insurance marketing increased 34% to $65.9 million year over year, as a result of rapid market expansion from regional to national customer base in China.
We added commodity trading to our product mix during the year. We buy and sell commodity products such as sesame, sulfur, asphalt and circuit modular units. Our trading business recorded revenue of $275.4 million, which represents 77.0% of total sales. We booked revenue of $15.4 million from our cryptocurrency mining business from a partial year of operation.
We started generating revenue from our mining pools in February 2021 and mined 174.28 units of BTC and 2,770.09 units of ETH by the end of the second quarter. In July 2021, due to the Chinese government’s ban on certain types of cryptocurrency mining activities, we shut down our mining operations in China and began transitioning our crypto mining operations to the U.S. The Company launched its U.S. mining operations in Wisconsin this April.
Operating Costs
Operating costs increased to $336.8 million for the period ended December 31, 2021, compared to operating costs of $37.3 million for the period ended December 31, 2020.
The increase in operating costs and expenses was driven primarily from the growth in our commodity trading inventory and data acquisition costs for our insurance marketing businesses and a share-based compensation plan. We also saw an increase from depreciation on cryptocurrency mining equipment, consulting and legal fees.
General and Administrative Expenses
General and administrative expenses were $62.4 million for the period ended December 31, 2021, representing an increase of approximately 21.5 times compared to general and administrative expenses of $2.9 million for the period ended December 31, 2020.
The increase in general and administrative expenses was mainly associated with employee and management’s share-based compensation expenses of $33.5 million, professional and consultancy fee of $17.1 million, wages & salary expenses of $5.3 million, $1.2 million of bad debt expense and significant increases in legal expenses related to class action lawsuit against the Company and its management.
GAAP Operating Loss and EPS
Our net loss for the period ended December 31, 2021 was $43.9 million according to GAAP, compared to profit of $4.9 million for the period ended December 31, 2020. The loss resulted from increased expenses related to increased operating expenses, legal and consulting fees and share-based compensation expenses. Gross margin dropped to 6% in FY 2021 from 26% in the prior year driven by the significant growth in the lower margin commodity trading business, increased operating expenses and the interruption of crypto-mining operations.
GAAP EPS Basic was $(0.020) per share for the period ended December 31, 2021, as compared to $0.0135 per share for the period ended December 31, 2020.
GAAP EPS Diluted was $(0.018) per share for the period ended December 31, 2021, as compared to $0.0090 per share for the period ended December 31, 2020.
Yandai Wang, the CEO comments that “In the past year, we have provided technical services through artificial intelligence and blockchain technologies by leveraging data-driven marketing, digital based commodity trading, digital supercomputer and emergency rescue technology. Through this we were able to realize revenue of $357.8 million as of December 31,2021, which represents 661% growth. over 2020.
In our data marketing business, we rely on artificial intelligence technology & comprehensive intelligent screening to acquire customers more effectively; we also utilize blockchain technology to solve the information security problems to provide customers with one-stop benchmark customer acquisition services; In our digital-based commodity trading segmentt, we make full use of the accurate traceability of blockchain technology, product quality assurance, smart contracts, Intelligent trading matching technology to provides a one-stop trust trading platform for customer trading; in emergency rescue, we team up with some industry experts to invest and design emergency rescue watches, Emergency rescue amphibious rescue boat.
We believe we are well-positioned to grow our business in all segments. Within China we are focused on data-driven insurance marketing, and commodity trading. In U.S. we have launched our supercomputing hosting center in Wisconsin.
Mainland China, as one of the world’s largest markets, demands huge amount of raw material products and food commodities to sustain its long -term growth. In 2020 we established our commodity trading business to bridge supply and demand by providing seamless trading exchange through our block-chain technology and plat-form. We started from green field and are proud to report that our commodity trading business generated revenue of $275million during the twelve -month period ended December 31,2021.
Our aspiration is to expand beyond China especially in North America. We are in the process of building a leading supercomputer center in North America which will provide customers with cryptocurrency mining capacity & hosting service.
One of the tools we used to accelerate this goal is the innovative mobile container data center. We believe it will improve user experience and be attractive to small to medium size customers. Our plans continue to proceed as we have secured a renewable energy supply of 25 MW at its facility in Price County Wisconsin, which is expected to be increased to 37MW.
About SOS Limited
