$GRFXY

Graphex Group Ltd

CIK:0001816723|SEC Filings

Consolidated Statements of Operations and Comprehensive Loss	12 Months Ended
	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2022 HKD ($) $ / shares shares	Dec. 31, 2021 HKD ($) $ / shares shares	Dec. 31, 2020 HKD ($) $ / shares shares
REVENUES
Revenues - third parties	$ 43,243,000	$ 337,296,000	$ 376,319,000	$ 369,809,000
Revenues - related parties	506,000	3,945,000	14,716,000	19,043,000
Total revenues	43,749,000	341,241,000	391,035,000	388,852,000
COST OF REVENUES	(28,369,000)	(221,279,000)	(242,690,000)	(231,834,000)
GROSS PROFIT	15,380,000	119,962,000	148,345,000	157,018,000
OPERATING EXPENSES
Selling and marketing expenses	689,000	5,375,000	10,159,000	13,823,000
General and administrative expenses	18,611,000	145,163,000	170,842,000	145,768,000
Research & development expense	2,108,000	16,439,000	22,727,000	16,942,000
Provision for doubtful accounts	1,500,000	11,699,000	18,938,000	22,975,000
Impairment losses			1,726,000	25,284,000
Impairment losses
Total operating expenses	22,908,000	178,676,000	224,392,000	224,792,000
LOSS FROM OPERATIONS	(7,528,000)	(58,714,000)	(76,047,000)	(67,774,000)
OTHER INCOME (EXPENSE)
Finance expenses	(9,187,000)	(71,656,000)	(74,795,000)	(51,565,000)
Interest income	188,000	1,465,000	1,199,000	1,692,000
Service income		7,656,000	6,575,000	1,832,000
Service income	982,000
Dividend income	8,000	60,000
Gain on disposal of an associate				573,000
Gain on troubled debt restructuring			4,934,000
Gain on waiver of short-term borrowings and related interest payable	50,000	392,000	1,850,000
Gain on waiver of interest on convertible notes	611,000	4,765,000	1,785,000
Government grants	1,001,000	7,807,000	4,730,000	5,818,000
Profit guarantee compensation	298,000	2,327,000	1,686,000
Fair value change - call option				(1,201,000)
Fair value change - equity investment	(148,000)	(1,151,000)	41,000	336,000
Investment loss in unconsolidated affiliates	(32,000)	(249,000)	(356,000)	(533,000)
Other income, net	709,000	5,539,000	3,217,000	2,420,000
Total other income (expenses), net	(5,520,000)	(43,045,000)	(49,134,000)	(40,628,000)
LOSS BEFORE TAX	(13,048,000)	(101,759,000)	(125,181,000)	(108,402,000)
INCOME TAX BENEFIT/(EXPENSE)	421,000	3,281,000	(320,000)	7,781,000
NET LOSS	(12,627,000)	(98,478,000)	(125,501,000)	(100,621,000)
Less: loss attributable to non-controlling interests	2,000	13,000	2,519,000	(4,296,000)
NET LOSS ATTRIBUTABLE TO GRAPHEX GROUP LIMITED	(12,629,000)	(98,491,000)	(128,020,000)	(96,325,000)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustment	(7,327,000)	(57,147,000)	20,836,000	41,930,000
COMPREHENSIVE LOSS	(19,954,000)	(155,625,000)	(104,665,000)	(58,691,000)
Less: Comprehensive loss attributable to non- controlling interest	(22,000)	(168,000)	(2,915,000)	4,124,000
COMPREHENSIVE LOSS ATTRIBUTABLE TO GRAPHEX GROUP LIMITED	$ (19,976,000)	$ (155,793,000)	$ (107,580,000)	$ (54,567,000)
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES (expressed in number of shares)
Basic and Diluted \| shares	572,592,877	572,592,877	487,825,400	472,358,725
LOSS PER SHARE (expressed in HK$ and US$ per shares)
Basic and Diluted \| (per share)	$ (0.022)	$ (0.172)	$ (0.262)	$ (0.204)

Consolidated Statements of Cash Flows	12 Months Ended
Consolidated Statements of Cash Flows	Dec. 31, 2022 USD ($)	Dec. 31, 2022 HKD ($)	Dec. 31, 2021 HKD ($)	Dec. 31, 2020 HKD ($)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$ (12,627,000)	$ (98,478,000)	$ (125,501,000)	$ (100,621,000)
Adjustments to reconcile net loss to net cash provided (used in) operating activities:
Provision for doubtful accounts	1,500,000	11,699,000	18,938,000	22,975,000
Depreciation and amortization	8,463,000	66,015,000	73,213,000	73,455,000
Impairment losses			1,726,000	25,284,000
Fair value change of call option				1,201,000
Fair value change of equity investment	148,000	1,151,000	(41,000)	(336,000)
Deferred tax benefit	(1,255,000)	(9,787,000)	(7,673,000)	(16,945,000)
Amortization of corporate bond discount	114,000	891,000	5,911,000	6,396,000
Amortization of Promissory Note discount			17,086,000	16,782,000
Amortization of convertible notes discount	6,573,000	51,279,000	22,285,000
Share of losses of equity-method investments	32,000	249,000	356,000	533,000
Share based payment for service			14,067,000
Gain on disposal of subsidiaries				(573,000)
(Gain) loss on disposal of property and equipment			195,000	(925,000)
Gain on lease termination	(474,000)	(3,694,000)	(867,000)	(83,000)
Gain on troubled debt restructuring			(4,934,000)
Gain on waiver of convertible note interest	(611,000)	(4,765,000)	(1,785,000)
Gain on waiver of short-term borrowings and related interest payable	(50,000)	(392,000)	(1,850,000)
Change in operating assets and liabilities:
Inventories	2,359,000	18,404,000	(8,521,000)	(2,227,000)
Trade and notes receivables	(217,000)	(1,689,000)	(64,990,000)	38,408,000
Trade and notes receivables -related parties	823,000	6,418,000	5,783,000	(6,131,000)
Prepayments, other receivables and other assets	850,000	6,630,000	7,478,000	(29,602,000)
Contract assets	42,000	325,000	3,619,000	(9,701,000)
Trade payables	836,000	6,519,000	(7,594,000)	(7,960,000)
Trade payables - related parties	(134,000)	(1,050,000)	31,000	820,000
Income taxes payable	(365,000)	(2,851,000)	4,737,000	2,637,000
Contract liabilities	(600,000)	(4,691,000)	(2,125,000)	(14,756,000)
Other payables and accrued liabilities	53,000	403,000	21,372,000	7,509,000
Net cash provided by (used in) operating activities	5,460,000	42,586,000	(29,084,000)	6,140,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of property and equipment	35,000	273,000	39,000	1,431,000
Capital contribution to a joint venture				(114,000)
Receipt of settlement of loan to related parties	1,816,000	14,163,000	14,990,000	24,623,000
Loan to related parties	(2,192,000)	(17,096,000)	(16,437,000)	(16,648,000)
Purchases of other intangible assets	(50,000)	(393,000)	(943,000)	(2,079,000)
Purchases of property and equipment	(55,000)	(429,000)	(811,000)	(13,214,000)
Repayment of consideration payable	(11,090,000)	(86,500,000)
Net cash used in investing activities	(11,536,000)	(89,982,000)	(3,162,000)	(6,001,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of ordinary shares, net	11,014,000	85,913,000
Proceeds from exercise of share options	822,000	6,409,000
Proceeds from issue of corporate bonds			8,000,000	84,500,000
Payments of debt issue cost			(560,000)	(5,565,000)
Repayment of corporate bonds	(5,606,000)	(43,728,000)	(80,900,000)	(55,500,000)
Proceeds from issue of convertible notes	845,000	6,588,000	62,698,000
Proceeds from deposit of convertible notes			46,965,000
Proceeds from bank borrowing	1,509,000	11,774,000	6,021,000
Proceeds from short-term borrowings - related parties	592,000	4,620,000	1,765,000	16,018,000
Repayment of short-term borrowings - related parties	(1,288,000)	(10,047,000)	(7,805,000)	(8,030,000)
Principal payments under capital lease obligation	(1,057,000)	(8,247,000)	(11,280,000)	(13,342,000)
Proceeds from short-term borrowings	2,536,000	19,782,000	6,375,000	24,445,000
Repayment of short-term borrowings	(1,507,000)	(11,756,000)	(2,500,000)	(52,448,000)
Repayment of bank overdraft	(746,000)	(5,819,000)	(3,445,000)
Dividend paid to non-controlling interests	(398,000)	(3,105,000)	(6,743,000)
Net cash (used in) provided by financing activities	6,716,000	52,384,000	18,591,000	(9,922,000)
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS	(639,000)	(4,981,000)	1,193,000	(174,000)
CHANGE IN CASH ADND CASH EQUIVALENTS AND RESTRICTED CSAH	1,000	7,000	(12,462,000)	(9,957,000)
CASH AND CAHS EQUIVALENTS AND RESTRICTED CASH, beginning of year	4,034,000	31,463,000	43,925,000	53,882,000
CASH AND CAHS EQUIVALENTS AND RESTRICTED CASH, end of year	4,035,000	31,470,000	31,463,000	43,925,000
Cash and cash equivalents	4,035,000	31,470,000	30,240,000	37,709,000
Restricted cash			1,223,000	6,216,000
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for income tax	1,199,000	9,356,000	3,256,000	6,527,000
Cash paid for interest expenses	2,467,000	19,245,000	17,398,000	25,327,000
Supplemental schedule of non-cash investing and financing activities :
Account receivables settled by financial asset		33,000
Recognition of ROU assets and lease liabilities	1,087,000	8,479,000	3,468,000	9,620,000
Termination of lease	4,373,000	34,112,000
Conversion of convertible debt into common stock	4,213,000	32,861,000	17,438,000
Beneficial conversion feature resulted from issuance of convertible notes	4,634,000	36,148,000	40,935,000
Warrant subscription rights allocated from convertible notes	2,231,000	17,405,000	12,490,000
Issuance of ordinary shares upon exercise of share options offset by short term borrowings	497,000	3,875,000
Conversion of promissory note into preference shares	23,652,000	184,485,000
Subscription right to the Subscriber of Promissory Note			2,166,000
Deposit received for convertible notes	6,021,000	46,965,000
Dividend payable to Non-controlling interest	$ 194,000	$ 1,511,000

Consolidated Balance Sheets $ in Thousands, $ in Thousands	Dec. 31, 2022 USD ($)	Dec. 31, 2022 HKD ($)	Dec. 31, 2021 HKD ($)
CURRENT ASSETS
Cash and cash equivalents	$ 4,035	$ 31,470	$ 30,240
Restricted cash			1,223
Trade and notes receivables, net	12,965	101,133	114,714
Trade and notes receivables – related parties	242	1,886	8,806
Inventories, net	2,167	16,901	37,809
Loan receivables – related parties	1,423	11,098	5,753
Prepayments, other receivables and other current assets, net	5,331	41,592	56,256
Financial assets	4	31
Contract assets	3,793	29,584	40,382
Contract assets	135	1,050	3,488
Tax recoverable	48	373	103
Total current assets	30,143	235,118	298,774
PROPERTY AND EQUIPMENT, NET	4,539	35,403	74,592
Goodwill	13,069	101,939	101,939
Other intangible assets, net	63,101	492,185	593,223
Investment in unconsolidated associates	29	227	521
Equity investment, fair value	12	94	1,312
Prepayments and deposits	628	4,902	131
Deferred tax assets, net	629	4,903	3,316
Total non-current assets	77,468	604,250	700,442
TOTAL ASSETS	112,150	874,771	1,073,808
CURRENT LIABILITIES
Current portion of corporate bonds payable	14,470	112,867	150,502
Bank borrowing	1,435	11,194	6,115
Convertible notes	2,227	17,373
Short-term borrowings	373	2,911	6,000
Short-term borrowings – related parties	189	1,478	7,259
Trade payable	1,718	13,398	7,772
Trade payable – related parties			1,103
Other payables and accruals	6,195	48,320	54,621
Other payables – related parties	88	686	1,154
Deposit received for convertible notes			46,965
Current portion of lease liabilities	660	5,146	7,918
Taxes payable	4,346	33,898	39,740
Contract liabilities	4,796	37,410	45,264
Dividend payable to Non-controlling interest	194	1,511
Total current liabilities	36,691	286,192	374,413
OTHER LIABILITIES
Promissory Notes	15,845	123,590	308,075
Corporate bonds payable	321	2,500	7,702
Convertible notes	1,944	15,166	14,121
Short-term borrowing	1,410	11,000	3,875
Noncurrent portion of lease liabilities	2,391	18,648	53,232
Consideration payable			86,500
Deferred tax liabilities	9,620	75,035	90,105
Total other liabilities	31,531	245,939	563,610
TOTAL LIABILITIES	68,222	532,131	938,023
TOTAL LIABILITIES	68,222	532,131	938,023
COMMITMENTS AND CONTINGENCIES
EQUITY
Ordinary shares, HK$0.01 par value; authorized 2,000,000,000 shares ; issued and outstanding 509,116,921 and 683,493,072 as of December 31, 2021 and 2022, respectively	876	6,835	5,091
Preference shares	415	3,236
Additional paid-in capital	101,406	790,966	428,850
Accumulated deficit	(58,277)	(454,557)	(353,296)
Statutory reserves	1,728	13,476	10,706
Accumulated other comprehensive (loss) income	(843)	(6,574)	50,728
Total Graphex Group Limited Shareholders’ Equity	45,305	353,382	142,079
Non-controlling interest	(1,377)	(10,742)	(6,294)
TOTAL EQUITY	43,928	342,640	135,785
TOTAL LIABILITIES AND EQUITY	$ 112,150	$ 874,771	$ 1,073,808